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League Bulletin

May 26, 2017

House Budget Includes Much of Interest to Cities, Towns

The House is expected to unveil, debate and approve its proposed version of the state budget next week, though components have already surfaced in documents considered by budget subcommittees on Thursday. While House Speaker Tim Moore says the spending target is the same as that of the Senate's recently approved budget -- $22.9 billion -- his chamber proposes to allocate that money differently in many areas. The committee documents included several items of interest to cities and towns, and the League has assembled an easy to read chart to help you follow it all, by topic. Among items of interest (all subject to change with amendments):

  • Establishes a new Site and Building Development Fund, which will support site acquisition and onsite preparation for attracting major manufacturing employers, and appropriates a total of $12.7 million to the fund.
  • Provides additional funds to the Clean Water Management Trust Fund (CWMTF) to support grants to address water pollution problems. The revised net appropriation for CWMTF grants is $16.5 million in FY 2017-18 and $13.5 million in FY 2018-19.
  • Provides an additional $1 million in this fiscal year for Main Street Solutions grants, which are given to local governments for planning and small business assistance aimed at revitalizing downtowns.
  • Allocates a total of $43.5 million per fiscal year in CDBG funds for the following purposes: neighborhood revitalization ($10 million), economic development ($10.74 million), infrastructure ($21.72 million), and administration ($1.04 million). Disallows a re-allocation of the infrastructure-designated funds, even in times of emergency.
  • Calls for a study of local government water and sewer rates and interfund transfers of public enterprise services.
  • Appropriates $250,000 in each year of the biennium for a pilot project with the City of Wilmington to establish a Quick Response Team to address the needs of opiate and heroin overdoes victims who are not getting follow-up treatment.
  • Provides $2 million in 2017-18 for matching grants for local and county law enforcement agencies to purchase and use body-worn or dashboard cameras and for training and related expenses. Agencies can receive up to $100,000. Grants must be matched by agencies on a 1-to-1 basis.
  • Creates a new fund for immediate need construction projects and appropriates $30 million in recurring funds to it. $24 million of the fund will be divided equally among 14 Transportation Division Engineers, with the remaining $6 million provided to the Secretary of Transportation for economic development projects.
  • Includes a policy change that would achieve an NCLM goal to revise the weight given to state transportation engineers and local officials when selecting preferences for transportation projects funded through the State Transportation Improvement Program (STIP) process, as in HB 81 STI/Regiona & Division Weighting.

There are many more provisions of interest to read through in the League's breakdown chart (and here's the Senate version), while media coverage fleshes out some of the other big ticket items, themes and differences from the Senate plan. The House budget is expected before the chamber's Finance Committee on Tuesday and could be on the voting floor Thursday and Friday. The House and Senate will later have to reconcile differences between their overall proposals for a final version that the General Assembly can send to the governor.

Next Up For Small Cell Wireless Bill: House Vote

An industry-backed proposal to implement comprehensive procedures for local government regulation of small cell wireless facilities cleared its last hurdle this week before a vote of the full House. HB 310 Wireless Communications Infrastructure Act received a favorable vote from the House Finance Committee after a brief committee presentation and discussion, in which primary bill sponsor Rep. Jason Saine noted the League's willingness to engage in productive, extensive negotiations on the bill. The full House vote could come as early as next week. Small cell facilities typically consist of an antenna, utility pole, and ground-mounted equipment box. Throughout negotiations, the League sought to ensure that cities would retain oversight over matters of concern such as public safety, space between facilities, aesthetics and appearance, utility undergrounding policies, and historic districts. The League also negotiated other terms more favorable to cities than in the filed version of the bill. Contact: Erin Wynia

Billboards Bill Likely Up for Floor Vote Next Week

Legislation that would undermine local control of billboards and potentially raise costs for road and other public projects cleared a House committee this week and is likely to be considered for a floor vote next week. HB 581 Revisions to Outdoor Advertising Laws was approved by the House Finance Committee on Tuesday and could be considered as early as this coming Tuesday by the full House membership.

League President and Zebulon Mayor Bob Matheny attended the committee hearing with League staff and was prepared to speak, but comments were restricted to two speakers, including Secretary of Transportation Jim Trogdon. Like the League, the state DOT opposes the bill.

The legislation would allow billboards to be relocated in ways that they currently cannot, creating the potential to disrupt carefully-crafted local visions and local plans designed to bring economic growth and jobs to cities and towns. By allowing for the future earnings of the signs to be considered -- rather than simple fair market value -- when one of the structures is condemned due to a public building project, the costs to taxpayers for those projects could rise substantially.

League staff has been making these concerns known to legislators, and continues to encourage members to contact their legislators to discuss the potential for the bill to create harmful effects for cities and towns.

The League would like to thank one of the bill's sponsors, Rep. David Lewis of Dunn, for acknowledging those concerns and Reps. Jay Adams of Hickory, Deb Butler of Wilmington and Scott Stone of Charlotte for raising issues related to the loss of local control during the committee hearing. Contact: Erin Wynia

Legislation to Provide Development Infrastructure Flexibility Progresses
A bill with League-suggested language to provide special financing mechanisms for building infrastructure received approval from the Senate Finance Committee this week after amendments. HB 158 Assessments/Critical Infrastructure would extend existing assessment authorities to allow cities and counties to fund infrastructure projects for private development. Existing authority allows local governments, at the request of property owners, to levy a "special assessment" on property owners who request the installation of infrastructure such as roads and water or sewer lines. The proceeds from that assessment are used to pay back revenue bonds that the local government issues to finance the installation of the infrastructure.

HB 158 would allow developers who enter into an agreement with the county or city to pay for the infrastructure installation themselves. The local government would then use the special assessment to reimburse the developer for its investment. League-suggested language was included to ensure that the action is voluntary and that a local government would only owe the developer the revenue that the assessment produces, less any administrative costs. An amendment approved this week would additionally allow a city or county to require that the developer provide a performance guarantee or bond through the adoption of a subdivision ordinance. The League thanks Sen. Tommy Tucker for that beneficial addition. Contact: Sarah Collins

Sen. Ballard Addresses Resort Towns; New Study Shows Their Economic Value, Challenges


Sen. Deanna Ballard of Blowing Rock discusses the value of local tourism in Raleigh on Wednesday. Photo credit: Ben Brown

For Sen. Deanna Ballard of Blowing Rock, and according to a brand new study on tourism impacts, resort towns are a mighty force for North Carolina's economy and provide a great revenue return for the state. "They provide tremendous comfort, recreational activities, Southern hospitality and unprecedented beauty that you will not find anywhere else," Senator Ballard told a gathering of League-affiliate group N.C. Resort Towns and Convention Cities (RTCC) on Wednesday in Raleigh. That allure added up last year to $22.9 billion in visitor spending in North Carolina -- coincidentally the same amount of money the General Assembly is proposing for the state's new budget. But while these small-population destination towns are paying big dividends, they also face unique budgetary and resource challenges locally in support of that visitorship.

Pulling from 2015 state- and county-level data (the most recent year for which complete figures are available), a new study from Carolina Demography, part of the UNC Chapel Hill Carolina Population Center, reports that travelers and tourists to North Carolina contributed $1.7 billion in state and local tax revenues for the year and directly supported 211,000 jobs generating $5.2 billion in wages -- numbers that may have increased in 2016. Officials from across the state -- Blowing Rock to Nags Head -- heard the figures on Wednesday in a presentation from report author Rebecca Tippet, director of Carolina Demography.

But the desirable numbers don't tell the whole story, Tippett noted. "It's really easy to focus on the income and the revenue generated by tourism, but all of these benefits that are easy to capture at the county and the state level are typically (after) costs are incurred at the local level," she explained. Destination municipalities from the mountains to the coast have to make tons of room -- with significant spending -- for the services that seasonal population spikes need. The study quotes of Oak Island Assistant Town Manager Lisa Stites: "Our year-round population is less than 8,000, but we have to build sewer (capacity) to cover motels, large rental homes, and second homes/vacation homes at full capacity" during the week of July 4. The town's residential water usage, for example, triples for that period and must be satisfied by adequate infrastructure well beyond the needs of the permenant population. That's not an isolated example, nor is it the biggest. The high months are also sensitive for service delivery and public safety response, as calls can easily double. "All of these require personnel to be able to meet those needs," said Tippett, whose full study will be made available soon. Senator Ballard, in her separate remarks, underscored the importance of support for these communities. "It's healthy for us here in Raleigh to continue to support you for years to come," she said.

The challenges don't shake the dedication that cities and towns have to providing the best services and capacity possible for the benefit of jobs and quality of life and for the regional and statewide economies, as RTCC members communicated to their legislators during a visit to the General Assembly on Wednesday. One proposal currently under consideration at the General Assembly, HB 900 Safe Infrastructure and Low Property Tax Act from Reps. Stephen Ross and Jason Saine, would offer municipalities great help on resources. It would give cities and towns additional options to raise revenues for critical infrastructure and economic development investments. The bill would allow municipalities to seek voter approval for one of three new revenue streams: a municipal-only quarter-cent sales tax, a prepared meals tax, or an occupancy tax. If voters consented, any proceeds must be spent on local infrastructure projects or economic development. The Pilot newspaper of Southern Pines this week published an article that explains the need for the bill.

Senate Proposes New Property Tax Exclusion

The Senate on Thursday revealed its intent to add multiple provisions to a House omnibus environmental bill, including one to exclude from the property tax base portions of property that are subject to specific buffer rules required by the state, designating that property as a special class. This provision was included in the Senate’s proposed committee substitute to HB 56 Amend Environmental Laws, which was released for discussion only in the Senate Agriculture, Environment, and Natural Resources Committee. In addition to this provision being burdensome for property tax assessors to implement, the League is concerned the proposal acts as an unfunded state mandate that lowers property tax revenue without state compensation. The League thanks Sens. Angela Bryant and Mike Woodard for expressing similar concerns on behalf of local governments. The committee will likely vote on the bill next week. Contact: Sarah Collins

Adjustments to Municipal Election Schedule Rectify Timing Issues
A bill that would adjust municipal election schedules to address timing problems discovered by the State Board of Elections passed the House Elections and Ethics Law committee on Thursday. HB 843 Municipal Election Schedule & Other Changes proposes to adjust municipal election schedules in odd-numbered years to accommodate other state election requirements. Adjustments include changes to certain primary dates and candidate filing dates and the elimination of the right to demand a second primary. Contact: Sarah Collins
Senate Offers Up, Pulls Back Problematic Land Use Appeals Measure
Senators pulled back a problematic land-use appeals measure on Thursday after initially including it in this year's Farm Act bill. The provision, identical to one in SB 642 Burden of Proof -- Planning and Zoning, would upset more than a century of well-established law involving appeals of these types of local government decisions. In making changes to appeals procedures -- such as which party bears the burden of proof, as well as the evidentiary standard -- the proposal would make hearings at the Board of Adjustment inconsistent with and impossible to reconcile with appeals at the next level of review (being Superior Court). Prior to a vote on the Farm Act, bill proponents Sens. Brent Jackson and Andy Wells told members of the Senate Agriculture, Environment, and Natural Resources Committee that they recognized many concerns with this provision, and that they intended to address those concerns and present an alternate version of the appeals provision at a later time. Cities and towns appreciate these Senate leaders, as well as SB 642 primary sponsor Sen. Paul Newton, for their willingness to consider revisions. Contact: Erin Wynia
U.S. Mayors Prioritize Economic Development

Mayors across the U.S. continue to name economic development their top issue, according to the National League of Cities' latest annual analysis of state-of-the-city speeches. It's a continuing trend: economic development has been mayors' biggest state-of-the-city focus for the past four years or more. Public safety, like last year, was the second biggest topic in 2017 speeches. Infrastructure followed third. Other top-10 focuses this year were budgets, energy and environment, and data and technology.

"Cities are becoming more innovative when it comes to incorporating technology into government procedures," the report notes, with tech applications designed to streamline customer service or expand access to underserved areas while officials keep eyes on transformative technologies like autonomous vehicles (a recent topic on the League's podcast, Municipal Equation). The point of the analysis is to better understand the context and direction of American cities today, NLC says. The full 36-page report (and media coverage of it) provides depth to each of the U.S. mayors' top-10 focuses. The 120 state-of-the-city speeches analyzed this year included two from North Carolina: Wilmington (Mayor Bill Saffo) and Raleigh (Mayor Nancy McFarlane).

Podcast: What's 'Inclusive Innovation'?

We're back with a brand new episode of Municipal Equation, the League's biweekly podcast all about municipalities in changing times. The rundown: There are so many cities and towns right now on amazing rebounds in the spirit of innovation and entrepreneurship. But what's missing? As innovation economies grow, we keep hearing more and more about the need for "inclusive innovation" in cities. But are we clear on what that entails? On this episode, we head out to Durham -- an innovation-heavy city surging with activity -- to meet up with an authority on the subject. Christopher Gergen, an entrepreneurial leader and head of inclusive innovation collaborative Forward Cities, says the stakes are nothing to ignore. Listen and hear why. All past episodes of are at soundcloud.com/municipalequation and on iTunes, where you may leave a friendly review of the show. Send feedback and ideas for episodes to host/producer Ben Brown.

Report Your Internet Speed to Regulators; Interactive Map to Show Coverage, Gaps

The state has released an innovative new way to chart Internet speeds in localities across North Carolina, with a goal of improving situations for the underserved. "Reliable internet access is crucial for helping businesses grow, students learn, and communities connect to the wider world," Gov. Roy Cooper said in a press release on Wednesday. "This new tool will identify areas that need better access to broadband." People can report their Internet speeds at home and at work through this new mapping tool, launched by the N.C. Department of Information Technology's Broadband Infrastructure Office. Municipal leaders may inform their residents about this new tool, the homepage for which includes a tutorial for users. Basically, the user enters a home or business address and follows simple steps to report the Internet speed there. The data will populate a statewide map showing these varying speeds -- notably showing areas most in need -- and will help to report more accurate coverage information to the Federal Communications Commission. "Access to high-speed internet is crucial these days," said State Chief Information Officer Eric Boyette, "and I'm encouraged by the fact that this technology will bring us one step closer to making sure that North Carolinians receive the services they need, regardless of their geographic location throughout the State."

Cities Express Concern Over Trump Budget Proposal

Municipal officials from around the country are voicing concern with components of the Trump Administration's budget proposal and impacts it could bear on the nation's cities and towns with cuts to key funding programs. Groups like the National League of Cities are pointing out the potential for disproportionate harm to small towns that would have a more difficult time making up what's lost with the proposed rollbacks. "The White House ignored more than 700 city officials who urged the administration to protect crucial programs, including Community Development Block Grants, TIGER grants and the HOME Investment Partnership Program. These vital programs allow communities to invest in public safety, economic development and infrastructure, and create private-sector jobs," NLC President and Cleveland City Councilmember Matt Zone said in a statement. Route Fifty reported that President Trump’s $4.1 trillion proposal sticks with the framework he laid out in March to reduce funding for several programs that aid communities in the way of housing and infrastructure. The National Association of Counties also weighed in. “We are greatly concerned that this proposed budget essentially abdicates the federal role in the federal-state-local intergovernmental partnership that is essential to addressing our nation’s most pressing challenges," NACo Executive Director Matthew Chase said in a statement. NLC and NACo are asking Congress to develop a new plan.

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