WHAT HAPPENED: The COVID-19 pandemic continues to profoundly impact all aspects of life throughout the state. North Carolina’s total number of cases surpassed 2,000 this week, and more than 355,000 unemployment claims have been filed. The Governor’s stay-at-home order is in effect until the end of the month, though the Governor noted to media outlets this week that "we have not gotten close to reaching our peak."
WHAT IT MEANS: As the crisis strengthens, so too does the work of the League. This week, NCLM presented to the N.C. House Select Committee on COVID-19, and shortly thereafter sent a letter of requests to the General Assembly. We’re in close contact with federal contacts as well, and are pushing hard for appropriations to offset lost revenues. Additionally, we are asking you to assist in these efforts by reaching out to your legislators. Details are below.
ON TAP: We are striving to be the best source of information possible throughout this situation. The FAQs at nclm.org/coronavirus continue to be updated, our staff is on call and ready to help, and briefings are being scheduled. Please do not hesitate to reach out, either by phone or at firstname.lastname@example.org.
THE SKINNY: As Executive Director Paul Meyer stated Friday morning, "We are here for you, and we are going to get you through this."
Presenting to the N.C. House Select Committee on COVID-19 Tuesday, NCLM Chief Legislative Counsel Erin Wynia spoke clearly on the situation municipalities face as they navigate this health crisis.
As laid out by Wynia to lawmakers, North Carolina cities and towns face urgent needs in three areas.
Financial: Sales tax revenue accounts for approximately $1.3 billion annually, or 28 percent of the general operating budget for the median city in North Carolina. Occupancy taxes, which result primarily from the tourism industry, account for another $300 million for local governments. Local water systems serve 89 percent of the state's population. All three will be severely impacted by this crisis—sales and occupancy tax revenue due to significantly diminished commercial activity, and utility revenue through non-payment and commercial/industrial customer loss.
Wynia also noted that 31 percent of municipal budgets go towards public safety, meaning that without support towards maintaining local cash flows, cities and towns will be forced to make budgetary cuts to critical areas.
Budget Development and Procedural Clarification: Municipalities, by law, must pass a budget by July 1, but the lack of reliable economic data for the present crisis has made it nearly impossible to project revenue, making the process immensely complicated, explained Wynia. Additionally, Wynia requested that the state provide clarity on the authority to meet remotely.
Broadband: “The need for reliable internet could not be more obvious right now," said Wynia. Yet, many parts of the state are disconnected. Passing the FIBER NC Act, which would allow for public-private partnerships to address the problem, must become a priority of the General Assembly.
Slides from the League's presentation can be viewed here.
Following NCLM's presentation Tuesday, lawmakers asked for the League to present a detailed list of requests for municipalities.
NCLM Associate Executive Director of Public & Government Affairs Rose Williams submitted that letter to the House committee today, outlining the following requests of the General Assembly:
The full letter can be read here.
The League urges you to contact your legislators this weekend and in coming days to let them know your needs and seek their support for the above requests.
Let them know that local services are critical in addressing citizen needs during this crisis, and that just like the state, municipal officials must balance their budgets even as economic activity suffers.
Also, know that NCLM does not consider the above list of needs to be complete, and recognizes that this is an evolving situation that will lead to additional challenges. We are committed to work with you and state and federal officials to continue to address these needs. We appreciate and are grateful for your unwavering leadership during this time.
Speaking to hundreds of local officials Friday morning, League staff detailed the financial fallout of the pandemic, listed immediate responses and actions that municipalities should take, and detailed the League’s present advocacy efforts as it relates to federal and state COVID-19 policy.
At the federal level, the CARES Act, a $2.2 trillion relief package signed into law last week, will appropriate $4 billion to North Carolina through the Coronavirus Relief Fund, with direct appropriations to local governments with populations greater than 500,000. NCLM Executive Director Paul Meyer noted that these funds, however, can only be allocated to expenditures related to COVID-19, and cannot be used to offset lost revenues. Further guidance from the U.S. Treasury is not yet available, but this limitation is clear.
The League’s chief advocacy goal is to get those replacement funds through additional legislation, Meyer explained. NCLM staff is in close communication with federal contacts and with advocacy partners at the National League of Cities. All updates regarding these efforts, as well as further clarification on the already-passed CARES Act, will be promptly communicated to members and listed on the League’s coronavirus webpage.
Regarding local finances, NCLM Director of Research and Strategic Initiatives Chris Nida walked through the League's annual Revenue Projects Memo, which was published last week. Unlike previous iterations of the report that provided a focused projection, Nida noted that this year’s memo projected a range of estimates, taking into account both the available information and the unprecedented economic uncertainty. Economic data from March will not be available until June. Thus, the League will be providing frequent updates to the memo as data becomes available.
From the report:
The events of the past weeks have changed circumstances dramatically and in ways that the available data does not yet reflect. We have surveyed the available information and done our best to synthesize that in a way that we think reflects the current reality for North Carolina’s municipalities, but if there is one common thread that runs among recent analyses, it is that this period of economic activity is unlike any seen in recent decades.
What is unfortunately clear, Nida explained, is that cities and towns are facing substantial declines in revenue, due primarily to the drop in sales tax revenue, occupancy tax revenue, and utilities payments. Nida, responding to questions, confirmed that despite the lack of necessary data, the statutory deadlines for passing a budget have not been addressed by the N.C. legislature, and thus balanced budgets must still be ratified by July 1.
Additionally, NCLM Human Resources Consultant Heather James highlighted the Families First Coronavirus Response Act, which was signed into law on March 18, and specifically the Paid Family and Medical Leave and Paid Sick Leave within that act, which must be implemented by all municipalities on April 1. To further address questions surrounding the complexities within that legislation, NCLM will be conducting a free webinar for all members on Thursday, April 10. Further details can be found here.
Gov. Roy Cooper issued four executive orders this week, the most notable being Executive Order 124, which focuses on utility shutoffs, evictions, and financial flexibility for customers of telecommunications services and banks.
Executive Order 124 prohibits utilities (including all municipal utilities) from turning off services to residential users for nonpayment and prohibits utilities from billing or collecting fees, penalties or interest for late or untimely payment for 60 days or the duration of the EO 124.
The governor's office also issued an answers document in anticipation of questions that may come in.
Information on Gov. Cooper's other executive orders can be reviewed here.
CityVision 2020 has been revamped into a virtual conference, complete with both live and on-demand educational sessions, and the League’s annual business meeting—save the date for May 28. Agenda and session details are coming soon, but the business meeting will feature a similar lineup as year’s past and will include electronic voting results and a swearing in of the 2020-2021 Board of Directors.
The 2020 Nominating Committee has released a memo to the membership, which outlines the electronic nomination and voting process for this year’s unpredictable circumstances. Members seeking a board seat, should submit the Candidate Interest Form by 5 pm on April 30. All of the nominating and election information—including candidate profiles—can be seen on the “Election Central” website, www.election.nclm.org.
A coalition of private industry advocacy groups reached out to the League this week with a letter outlining concerns regarding local stay-at-home orders and enforcement of both those orders and Governor Cooper’s Executive Order 121 issued on March 27.
The League has been asked to share the letter, but also responded with a letter from Executive Director Paul Meyer outlining member city and town concerns regarding large, unseparated crowds at some retailers and the potential for a lack of enforcement of social distancing to spread the coronavirus. Meyer wrote that “it is important to recognize that locally elected officials are responsible for protecting the health and welfare of their residents, and that is of paramount importance today. Limiting the spread of this virus is the chief concern of municipal officials and it is important that they have the tools to do so.”
You can read the business coalition letter here and the League’s response here.
In late March, Gov. Roy Cooper and fellow state officials held a call with the League and more than 2,000 local government officials to brief everyone at once on the latest with the COVID-19 response. During the call, a chat window allowed the local officials to submit questions. The state has since responded to those questions, and we've published the answers on our coronavirus webpage. The full roundup can be found here, published on March 30.
Additionally, while we wait for final statutory clarification from the N.C. legislature on open meetings, State Attorney General Josh Stein has produced a guidance document on what law allows under these special circumstances.
Here's an excerpt:
Can local governments carry out their necessary meetings via electronic means during these exigent circumstances?"Yes, because electronic meetings are allowed under N.C.G.S. §143.318.13, and the requirements of notice, access and minutes can be met through electronic means. Due to the unprecedented circumstances we are all faced with, and the fact that local governing bodies conducting meetings remotely is not expressly prohibited by statute, I conclude that local governments can carry out necessary meetings electronically and remain in compliance with Open Meetings Laws."
Can local governments carry out their necessary meetings via electronic means during these exigent circumstances?
"Yes, because electronic meetings are allowed under N.C.G.S. §143.318.13, and the requirements of notice, access and minutes can be met through electronic means. Due to the unprecedented circumstances we are all faced with, and the fact that local governing bodies conducting meetings remotely is not expressly prohibited by statute, I conclude that local governments can carry out necessary meetings electronically and remain in compliance with Open Meetings Laws."
The full document can be read here.