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League Bulletin

August 28, 2020

WHAT HAPPENED: Gov. Roy Cooper issued a recommended spending plan for the state’s remaining federal COVID-19 aid money. He’s marked local governments for $200 million directly. The League would administer a portion as a needs-based grant program. 

WHAT IT MEANS: It comes as cities and towns continue to press for direct recovery funds to avoid a prolonged recession as the coronavirus harms essential revenue streams that support community services and business growth. Below in this Bulletin you’ll find coverage of an op-ed that Shallotte Mayor Walt Eccard wrote for his local paper to bring more light to the severity of the issue and the importance of local economic health to the state overall. 

ON TAP: The General Assembly is coming back. On Wednesday, lawmakers will gavel into session once more and may take on budget adjustments and pandemic-related policy changes as top items. We’ve fleshed out what you can expect in this Bulletin. 

THE SKINNY: As the gears turn, don’t forget that you can catch up on what’s already happened this year at the legislature with our End of Session Bulletin, which we released last week as a sort of legislative yearbook highlighting all of the action that affected or would have affected cities and towns. We’ll update it right after the September session to make it complete. 

Budget adjustments and pandemic-related policy changes will top legislators’ agendas when they reconvene in full session next Wednesday. Legislative observers believe the session, a planned continuation of the short session that began April 28, may last only a few days. Topics city officials have their eyes on include an appropriation to provide rent and utility assistance for individuals with overdue bills. Additionally, N.C. Senate Republican leaders targeted child care regulations as another topic they hoped to address during the legislative session. Entities like local parks and recreation programs, and others like YMCA’s and Boys’ and Girls’ Clubs, now face regulatory challenges in providing alternate care settings to school-age children during remote school days. Senate leaders indicated a willingness to smooth those difficulties.

Other topics will certainly grab headlines when legislators meet, due to the significant amount of federal CARES Act funding that remains unappropriated. Unless Congress takes action, $900 million allocated to North Carolina for pandemic response must be spent by December 30. Budget writers are purportedly considering spending large sums from that pot to provide additional unemployment payments to out of work individuals. And House members on committees considering health and education needs prompted by the pandemic developed their own lists of spending requests for those CARES Act funds. Then, Gov. Cooper earlier this week issued his own spending recommendations, including $200 million for counties and cities directly (see separate article in this Bulletin). 

Back in July, when legislators set the date for this upcoming session, they anticipated two changed circumstances in the state’s budget picture that have not yet come to pass. First, they anticipated that Congress would loosen restrictions on how the CARES Act funds may be spent, extend the time in which states must spend the funds, and send additional relief dollars to states. But so far, negotiations in Congress have languished, despite intense efforts by groups including city officials in North Carolina and across the country. Second, legislators anticipated having in hand an updated revenue forecast for the current fiscal year, based on income tax returns received in mid-July. Instead, non-partisan legislative budget forecasters postponed a revised forecast until at least late September, citing uncertainty in revenues due to the vagaries of the pandemic. Therefore, legislators do not yet have figures on which to base any budget adjustments for this current fiscal year.

This coming Tuesday, Sept. 1, is the statutory deadline for municipalities to submit their plans for spending the Coronavirus Relief Fund (CRF) money that was sent to states by the federal CARES Act and which counties in N.C. are required to share with cities. Municipalities should be coordinating the submission of these plans with their counties. If you have not discussed CRF funds with your county yet please reach out to them as soon as possible. In advance of this deadline, the League and the N.C. Association of County Commissioners co-hosted two calls this week with the N.C. Pandemic Recovery Office (NC PRO). In addition to fielding Q&A from local government officials around the state, NC PRO walked attendees through its new FAQ document. The content of the document is largely the same as previous guidance from NC PRO, but it has been reformatted into what is hopefully a more user-friendly document. If you have questions about expenditures of these funds in advance of Tuesday’s deadline, please contact NC PRO directly or email League Director of Research & Strategic Initiatives Chris Nida.

Gov. Roy Cooper on Wednesday released a recommended spending plan for the state’s remaining federal COVID-19 relief dollars and “responsible investments in the state’s future,” marking $200 million for local governments and making the League a grant administrator, according to a press release from his staff. "The budget I propose takes on the challenges of today while building for the promise of tomorrow,” the release quotes of Governor Cooper. “We have to rise to the occasion of this pandemic response now and focus on ways to emerge from this crisis stronger than before.” North Carolina has more than $900 million in unspent coronavirus aid money from the federal CARES Act. 

Page 8 of the plan fleshes out the $200 million recommendation. It would provide $150 million directly to local governments pro-rata and direct counties to allocate a quarter of their funds to cities and towns. The League and the N.C. Association of County Commissioners would each administer a $25 million grant program “based on need, usage, plans, and ability to spend the funds,” the recommended budget says. “Counties and municipalities may use these funds for programs such as mortgage, rental, and/or utility assistance grants to residents; non-congregate housing needs; food security grants to nonprofits, houses of worship, and community organization; and childcare assistance.” Governor Cooper’s plan is 21 pages long and also covers areas like rural revitalization and high speed internet access.

Shallotte Mayor and League Board of Directors Member Walt Eccard brought the issue of coronavirus-related revenue losses to the op-ed page of the Brunswick Beacon newspaper this week. Right at the outset, he calls the impact “significant” and cites a League estimate in pointing out that municipalities “will suffer at least $600 million in lost revenues this fiscal year. If the pandemic worsens in the fall and winter, those numbers will likely grow.” COVID-19 has impacted consumer behavior and policy directives that each have kinked revenue streams that cities and towns -- “builders of infrastructure and major employers” -- rely on, Mayor Eccard explains. Ignoring these needs “threatens the entire economic health of the entire state,” he adds before urging Sen. Thom Tillis to continue working for increased flexibility with federal funds already provided to North Carolina, as they could not be used to offset revenue losses. 

Also in newsprint this week was the issue of the sales tax distribution method and whether counties should be allowed to change it without providing prior notice to their cities and towns. A piece in the Richmond County Daily Journal examined HB 557 from the last legislative session, a bill that passed the House unanimously but didn’t clear the Senate. It sought to require counties to notify their municipalities of plans to change the method by Feb. 15 of the year the change would take effect. The issue was a local one for the newspaper, as the Richmond County Board of Commissioners had voted this past April to change their distribution method from per capita to ad valorem, and didn’t give area municipalities notice until the change was made, despite a big economic impact to those communities. “That’s just simply not the way to conduct the public’s business,” said Rockinham City Manager Monty Crump in the news piece. His town was among the affected. The newspaper also quoted the League’s Scott Mooneyham on the bill: “We look at (H.B. 557) as improving a problem — it won’t be a panacea but at least it would give some local municipal officials some notice that this is going to happen. We don’t think the system, as it’s set up, is a very good one.”

Mooneyham was also featured in mainstream tech magazine Wired this week. The publication wrote about bills in more than a dozen states that would allow delivery robots (such as for Amazon or FedEx) on sidewalks and in some cases preempt cities from regulating them. Mooneyham noted the openness of delivery companies to discuss the issue here and how the League successfully pushed back against bill language that would have kept cities and towns from setting their own rules. 

In national coverage this week, Route Fifty took a look at poll results indicating that public works could see less funding while the pandemic continues to hurt state and local budgets. Echoing the point Mayor Eccard made, the article makes clear that the longer cities go without direct recovery aid, the longer the recession will be. 

A big part of the role that cities and towns play with the League is in the shaping of policy positions on the issues facing North Carolina. The League is excited to announce an important next-step in that process -- it is now accepting applications for service on its new Legislative Policy Committee. The Legislative Policy Committee, a consolidation of four previously existing committees, will have 65 members appointed by the League’s president. “For years, the League has followed an inclusive, member-driven process to form policy positions on key issues for N.C. cities,” said League President Jennifer Robinson, a member of the Cary Town Council, in an email that went out to members this week. “This process is designed to take input from municipal officials in every corner of the state, and it reflects the diversity of opinion existing across North Carolina. The NCLM Board of Directors revised this process in 2020 to gain even broader participation by municipal officials.” 

President Robinson explained that the timing of the policy development process coincides with the start of each new legislative biennium. “During even-numbered years, all League members are invited to submit their ideas through focus group discussions and in writing,” she said. “Ideas should fit into the League’s overarching policy focus areas, which are determined by the NCLM Board of Directors. The League’s Legislative Policy Committee will then consider these ideas and recommend the top consensus positions to the Board of Directors. The Board refines the positions further before sending them to the full League membership for a final vote; moving forward, the vote is not required to be cast in person as in years past. At that point, the League membership will have a focused advocacy agenda to pursue at the state and federal levels.” 

All N.C. municipal officials are invited to apply to serve on the League’s Legislative Policy Committee. Municipal officials may apply for an appointment to the League’s Legislative Policy Committee; submissions are due Sept. 9, 2020.

If you had served on one of the previous four policy committees, and you would like to continue serving in this capacity as a member of the new Legislative Policy Committee, please re-submit your application. Membership will not carry over automatically from the old policy committees to the new committee.

It was Rural Broadband Week last week in North Carolina, and officials used it to highlight the work being done to bridge the digital divide, which has been a central mission of the League. One piece the state has highlighted is its map of free public Wi-Fi access spots across North Carolina during the pandemic. In an email this week to community partners, the state’s Hometown Strong program asked local government officials to review the map and add any school, business or community WiFi spots not already listed. Doing so will help individuals using the map to find what’s available locally.

A press release this week from the office of Gov. Roy Cooper notes a potential $175 million to help North Carolinians with rent and utility payments as the coronavirus continues its toll. The state is waiting on a federal approval before the funds can be distributed, but the plan includes $28 million of federal funding to be administered by local governments through the N.C. Department of Commerce. “Local governments are encouraged to prioritize the money locally to help their residents pay rent and outstanding utility bills. In addition, the funds may provide support for internet access, food distribution, COVID-19 testing and diagnosis and employment training for health care workers,” says the press release. The money comes from the federal Community Development Block Grant Coronavirus Program, or CDBG-CV, “and will be administered by incorporated municipalities under 50,000 residents and counties under 200,000 residents that apply to participate.” Direct all inquiries to CDBG-CV Program Manager Valerie D. Moore at (919) 814-4673 or

The League’s annual compendium of legislative action relevant to cities and towns is out now. It’s the End of Session Bulletin, which provides special, digestible context to explain the tone and focus of the session along with what happened with each bill we tracked this year -- a year like no other, our League Board of Directors officers explain in the intro. Read about the special considerations that influenced 2020 lawmaking. See the municipal-related legislative actions that garnered media attention. Review what went into the League's revenue replacement campaign as COVID-19 kinked the lines to our coffers. And find summaries and statuses of bills the General Assembly considered, whether they passed or not. 

NOTE: This document will be updated after the September reconvening of the General Assembly and will include an internally-linked bill appendix.

Read the 2020 End of Session Bulletin