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League Bulletin

June 5, 2020

​WHAT HAPPENED: City streets across the U.S. and other parts of the globe filled with protest over the brutal death of George Floyd and the broader problem of racial injustice, forcing the conversation like no other time in recent history.

WHAT IT MEANS: Below in this bulletin is a full statement from our executive director, Paul Meyer, on what’s happened over the past week and what it means for us. Diversity is the strongest attribute of cities and towns, he says, and at its core the League’s mission is to fight for fair, equal opportunity for our 540 municipalities and their communities.

ON TAP: The protests, and the ongoing COVID-19 pandemic, will continue pushing new dialogue on how we can build a stronger society.

THE SKINNY: There’s nothing more prominent in the headlines. But we do cover other news relevant to cities and towns in this Bulletin, from the latest at the General Assembly, to the immediate need for Congress to appropriate direct relief funds for cities and towns as COVID-19 continues its financial impact, what we can expect in Powell Bill funding, and a look at part-two of CityVision 2020, a virtual summit of North Carolina cities and towns.

The following message was first issued on June 2:

Dear League members, 

I am writing to you during an immensely difficult time for our communities, our towns, our state and our country.

I will begin by highlighting perhaps our greatest attribute: diversity. We see its value across North Carolina every day. Our cities and towns have many differences. They are large and small, urban and rural, mountainous and coastal and agricultural. They are comprised of citizens of all races, ages and backgrounds. And it is because of—not in spite of—these differences that we thrive, both culturally and economically. At its core, the League’s mission is to fight for fair, equal opportunity for our 540 towns and their communities.

The crisis facing both our state and the country strikes at this very principle. Injustice and oppression run directly counter to our mission. They stand as obstacles to the goals we strive for. There is no more egregious example than the death of George Floyd. We condemn this act of brutality, and we stand firmly against all acts of racism.

This moment is one of rebuilding. Already, we faced the steep task of recovering from a global pandemic and the resulting financial disaster. Now, we face urgent efforts on several additional fronts. For our cities that have experienced escalatory demonstrations, we must repair main streets and downtowns and stand proudly as the economic engines of our state. For our police forces, we must restore community trust; we must develop relationships free of aggression and animosity. And in our rebuilding, we must not just return to the old status quo, but to a better, more equitable state of affairs for all peoples, all communities and all towns. 

The League, through its law enforcement trainings and ever-expanding collection of resources, is uniquely prepared to further these efforts. They are our top priority.

The challenges of local leadership, while seldom easy, are rarely more difficult than they are right now. And yet, having seen firsthand the capacity and talent of our local officials, I am certain that we will move forward. I am certain that we will emerge from this moment stronger than before.

The League stands ready to assist in any way possible.


Thank you,

Paul Meyer, NCLM Executive Director

​As COVID-19 continues to impact the municipal government coffers that fuel important daily services and minimize property taxes for the majority of North Carolinians, Congress should appropriate direct relief funds now, NCLM Executive Director Paul Meyer says in this brief, sharable video message. Because action is needed to avoid a prolonged recession, please contact your members of Congress.
​League members continue their campaign for funding along with the National League of Cities’ “Cities Are Essential” campaign (link) to help replace lost sales tax, occupancy tax and utility revenue caused by the COVID-19 virus. Mayor Bob Scott of Franklin shared the need in an op-ed published by the Asheville Citizen-Times this week. "Local governments and their financial health are crucial to economic recovery, and it is not just because we act as major employers," Mayor Scott said.

As NCLM’s campaign continues with its focus on both securing new and direct funding from Congress and encouraging state legislators to share federal funding already received, it is important to emphasize that cities and towns are the economic engines of the state. And, as was shown after the Great Recession in 2008, the longer cities go without revenue help, the longer the recession will continue for the state. Cities and towns build infrastructure that keeps business and jobs flowing. They bring in 75 percent of sales tax to the state, but receive only a third of the local sales tax revenues they generate. Read more from this flyer on the topic.

Last week, municipal leaders from around the state heard from U.S. Senator Thom Tillis and shared with him why cities need additional revenue at a virtual meeting organized by the League. To date, no direct funds have gone to cities, except for the city of Charlotte. On Thursday, city leaders heard from and shared concerns with U.S. Rep. Greg Murphy at a forum assembled by the League (with more to come). Meanwhile, city leaders are speaking with their state legislators about the need for revenue with hope that the General Assembly directly allocates recently received federal relief dollars to cities and towns. In the coming days and weeks, look for more North Carolina municipal voices making this case on a variety fronts.  

​Register now for Part 2 of CityVision Virtual Summit, June 16-18. Don’t wait – TODAY is the last day to register and still receive your mailed CityVision swag bag and conference packet for this FREE event.

We have convened a three-day lineup of live sessions featuring state government officials, industry leaders and on-demand sessions to help municipalities move forward. The conference agenda includes engaging and relevant sessions from:

  • Josh Stein, N.C. Attorney General, N.C. Department of Justice
  • Mike Sprayberry, Director, N.C. Emergency Management
  • Tracy Doaks, Director, N.C. Department of Information Technology
  • Michael Walden, Professor and Economist, NCSU
  • James H. Johnson Jr., UNC Kenan Flagler Business School
  • Pete Seeber, Chief Strategy and Risk Officer, CORVID Cyberdefense
  • Donald Gintzig, President and CEO, WakeMed Health & Hospitals
  • And more!
Register here.

​The House Appropriations Committee considered individual funding bills this week, including a top priority of cities and towns. HB 1087 Water/Wastewater Public Enterprise Reform would provide $9 million in non-recurring state funds to create a new grant program – the Viable Utility Reserve – that supports financially distressed public water and wastewater systems by facilitating viable operations and encouraging regionalization.

The bill language was result of a yearlong legislative study and stakeholder process that focused on the more than $17 billion in water and sewer infrastructure needs statewide and also includes a study of the feasibility of authorizing historical charters for units of local government. Senate Appropriations chairs have shown support of the same bill language by introducing SB 810 Water/Wastewater Public Enterprise Reform; however, they have not listed an appropriation amount.

League Board President Jennifer Robinson sent letters to both House and Senate sponsors thanking them for their support of the Viable Utility Reserve. The letters highlighted that declining populations and manufacturing losses have dealt huge blows to many rural municipalities and their utility systems and noted that the new grant program is critical to addressing utilities that may be at risk of financial collapse.

The League thanks Rep. Chuck McGrady and Sen. Paul Newton for their leadership during the legislative study committee and stakeholder process. HB 1087, which provides for the Viable Utility Reserve and was filed by primary sponsor Rep. Donny Lambeth and 14 co-sponsors, was approved by the House Appropriations Committee and will likely receive a floor vote early next week.

​League Executive Director of Public & Government Affairs Rose Vaughn Williams moderated a panel this week assembled by the N.C. Rural Center on water and wastewater infrastructure issues. Part of the Rural Center’s “Rural Talk” virtual advocacy series, the panel included Bethel Mayor and N.C. Mayors Association Chair Gloristine Brown along with state Division of Water Infrastructure Director Kim Colson and Sharon Edmundson, director of the fiscal management section of the State and Local Government Finance Division of the N.C. Department of State Treasurer.

Discussion highlighted problems that rural systems faced after mills and manufacturing operations vacated those parts of North Carolina, worsening substantial population declines there, leaving far too few customers to support the systems. “Many of these systems, too, were created when there was more public grant funding available than there is today – or will be available in the future,” notes a fact sheet from the Rural Center on the event.

Panelists talked regionalization, mergers with other systems, and planning for the longterm instead of counting on short term stopgaps. Sen. Don Davis of Pitt County (and former mayor of Snow Hill) and Rep. Chuck McGrady of Henderson County gave updates on what the General Assembly is doing to help. Rep. McGrady had co-chaired the study committee that resulted in the Viable Utility Reserve legislation.

​The Powell Bill Unit of the N.C. Department of Transportation (NCDOT) recently notified the League that the state’s appropriation to the Powell Bill program is currently projected to decline by almost $4.4 million for fiscal year 2020-21. The $4.4 million reduction to the $147.5 million appropriation to all cities eligible for the Powell Bill leaves $143.1 million to be distributed and represents a 3 percent drop in Powell Bill funds. There is also still scheduled to be $7.375 million in additional Powell Bill funds distributed to all cities eligible for the program with a population under 200,000. The reduction in funds is tied to the passage last year of S.L. 2019-251, which states in part: “In any fiscal year, when all funds allocated for snow and ice removal, and emergencies are depleted, the Department may, in coordination with the Office of State Budget and Management (OSBM), reduce the budget for every departmental division, grant-in-aid, and category of expenditures…”

However, all these numbers are pending based on decisions that must be made regarding the NCDOT budget for next year. As previously noted in this Bulletin, financial issues at NCDOT exacerbated by the COVID-19 pandemic have left the agency with a significant revenue shortfall. NCDOT previously indicated to the League that this could lead to across the board cuts of 15 to 25 percent that would include the Powell Bill program. It remains to be seen how the General Assembly will choose to address this shortfall and whether any federal funds will be made available and sufficiently flexible to help fill this gap. The League will continue to be involved in these discussions and keep you informed as to the status of the NCDOT budget and the Powell Bill program.

​Results of the May Budget & COVID-19 survey conducted by the League and the N.C. Local Government Budget Association are now available on the League’s website. They can be accessed here, along with results from a similar survey conducted in April. The survey includes data on planned merit and COLA increases for the coming fiscal year and are intended to serve as a way for League members to compare their budget preparation plans with peer governments. The League thanks all of the local officials who took the time to participate in the survey as well as NCLGBA for its continued partnership.

​Two bills moved in the House this week that would make technical and administrative changes to statutes governing state-administered pension systems.

  • SB 379 Retirement Systems Admin Changes makes pension system changes to promote financial accountability and integrity, including changes to credible service purchase provisions and allowing the Treasurer’s Office to require an employing agency pay a portion of a return to work overpayment if the employer partially caused the overpayment.
SB 719 Retirement Tech./Protect./& Other Changes makes minor changes to the pension systems, including defining what constitutes an inactive employer.