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League Bulletin

July 14, 2020

​WHAT HAPPENED: The legislature adjourned until September after a series of floor votes failed to override a series of Gov. Roy Cooper’s recent bill vetoes, including those focused on business reopenings amid COVID-19. Municipal business wasn’t a big part of the General Assembly’s week, but discussions did play out at the executive level regarding the pandemic-related order from the governor that prohibits utility shutoffs. 

WHAT IT MEANS: See the article below in this bulletin for a full take, but as it stands that executive order is set to expire at the end of this month. The Council of State spent lengthy time discussing it at a meeting this week, ultimately with Governor Cooper saying it’s unlikely he’ll extend the prohibition any further. The pressure to provide service under revenue gaps hit a major pain point for municipalities, discussed recently by NCLM Executive Director Paul Meyer on WRAL

ON TAP: It’s short notice at this point but there are a couple more opportunities to join an info session with the N.C. Pandemic Recovery Office. The call is free and will focus on spending of Coronavirus Relief Fund money, distributions from counties to cities, who’s responsible for expenditures, and more. The call is open to NCLM members, and is ideal for municipal managers, clerks and finance officers. 

THE SKINNY: Don’t forget -- you still need to press for revenue replacement measures. As the pandemic continues and trend numbers pose a difficult future, urge your members of Congress to support relief measures directly to cities and towns so we can all get through this as whole as possible. Remember, cities are essential.​

There is still an opportunity today (Friday, July 10) to join an info session with the N.C. Pandemic Recovery Office (NC PRO). Thank you to the more than 200 local officials who yesterday joined the webinars that the League is co-hosting with the N.C. Association of County Commissioners. These sessions are designed to provide an overview of the distribution and spending of money from the Coronavirus Relief Fund (CRF), which is being overseen by NC PRO. Information on joining this afternoon’s webinars is available here, and anyone is welcome to join. Under S.L. 2020-80, counties are required to distribute at least 25 percent of their total CRF allocation to municipalities. Municipalities will then need to submit a plan for how they plan to spend these funds to their county in advance of Sept. 1, when counties are required to submit these plans to the state. Current guidance does not allow for these funds to be spent on revenue replacement. However, the NC PRO website includes a wealth of FAQs and other information on how these funds may be spent, including guidance on using these funds to provide assistance to utility customers, small business grants, and much more. See this template for the required spending plan. If you have not done so already, League members are encouraged to reach out to their county counterparts now to make sure they are clear on the timeline and processes for receiving their CRF allocation and submitting plans for how to spend it. We would like to thank NC PRO and NCACC for their partnership in this important effort. If you have any questions, please contact League Director of Research & Strategic Initiatives Chris Nida at any time.

​The need for federal assistance remains for cities and towns as the pandemic’s effects continue, and could indeed worsen, the rough financial picture facing municipalities this year, with long-lasting ripples if relief fails to come from Capitol Hill. Statewide, municipalities are dealing with revenue and resource hits directly related to the pandemic, including a dive of more than 11 percent in sales tax distributions compared to last year. It’s a growing $65 million tax dollar loss through no fault of the communities so hard-hit, and will impact future projects that would otherwise support economic activity. This means the ingredients of prosperity will not be in place without help. As municipal utilities are currently prohibited from cutting service for nonpayment, resources are dwindling there as well. League Executive Director Paul Meyer recently explained how dire the circumstances are in an interview with WRAL News. He noted how big of a problem it can be, especially for smaller cities, whose utility offerings can make up half of their annual budget. "This economic downturn may be the straw that broke the camel’s back for those towns," Meyer told the news agency. Another article, from the Fayetteville Observer, gets into the specifics for small towns whose customers have stopped paying bills. 

Because cities and towns are such economic engines, the story is beyond local. The League has created a resource page where you can find N.C.-focused materials to make the case for revenue replacement, as well as news coverage, at Let’s keep making that case so that municipalities can continue to help drive economic recovery.