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League Bulletin

November 13, 2015

Gov. Pat McCrory indicated this week that his push for a statewide transportation bond is not over. Governor McCrory, speaking at the North Carolina CEO Forum, said that, if re-elected, he plans to push for an additional $1 billion bond package to support road construction and transportation infrastructure. The McCrory administration had sought a larger bond package this year that included transportation funding, but the General Assembly could agree only on a $2 billion plan focused on state building and non-transportation infrastructure. That borrowing plan will be put before North Carolina voters on March 15. Read more about the governor's comments here.
The State Water Infrastructure Authority (SWIA) recently issued its 2015 Annual Report to several committees of the General Assembly, providing an overview of its work, concerns and issues regarding the state’s water infrastructure. The report also made  recommendations to address the issues raised. SWIA was created by the legislature in the 2013 budget to be an independent body with primary responsibility for awarding both federal and state funding for water and wastewater infrastructure projects through the administration of the State Clean Water and Drinking Water Revolving Funds and the Community Development Block Grant Infrastructure Grant Program. The authority has awarded $218 million in grant and loan funds in 2015. Among the issues raised in the report is the ability of utility revenues to provide for not only short-term needs but longer-term capital improvements.
The League congratulates Durham Mayor Pro Tem Cora Cole-McFadden for her recent election to the National League of Cities Board of Directors. Mayor Pro Tem Cole-McFadden's election was announced on Saturday at the NLC's annual Congress of Cities and Exposition held in Nashville, Tenn. She will serve a two-year term. Mayor Pro Tem Cole-McFadden currently serves on the NCLM's General Government Legislative Action Committee and was a member of the most recent League Board of Directors Nominating Committee. With her appointment, the NLC will gain a dedicated advocate for North Carolina municipalities with an established record of supporting municipal services that improve residents' quality of life. Read the NLC announcement here.
A report this week from Piper Jaffray indicated that, were municipal bonds to be defined as High Quality Liquid Assets (HQLA), the likely result would be banks purchasing an additional $1 billion of municipal securities per month and municipal borrowing costs dropping by an average of 15 basis points. The inclusion of municipal bonds in the definition of HQLA would be achieved by Congress passing H.R. 2209, which was recently voted out of the House Financial Services Committee with bipartisan support. Banks are required to hold a certain amount of HQLA, but regulators left municipal bonds out of the HQLA definition last year. Since that time, cities in North Carolina, along with the National League of Cities, have worked to have municipal bonds included in the HQLA definition. A letter of support for H.R. 2009 sent by NLC and a number of partner organizations can be found here. If you are interested in reaching out to your Representative or Senator regarding this legislation and would like any further information, please contact League Director of Research & Policy Analysis Chris Nida.
Lodging rental firm Airbnb, which allows homeowners to rent temporary lodging in their homes via web and mobile app, this week pledged to work with municipalities on regulations and to pay its fair share of hotel and other taxes. The Airbnb Community Compact also calls for working with municipal governments to prevent people from operating what are essentially permanent illegal hotels in the guise of residential housing, which has been a major criticism of the service. The announcement of the compact represents a fairly significant turn for the firm, which had been aggressive in fighting city regulation of its service. Read media accounts about Airbnb's actions here and here.   

Rep. Ken Waddell of Chadborn is the latest legislator to announce that he will not seek another term. The former Chadborn mayor, first elected to the House in 2012, cited the time commitment in deciding against seeking re-election. The League thanks Representative Waddell for his service in the legislature, looks forward to continuing to work with him there in the coming year, and wishes him well in future endeavors.

With a state law on the books requiring that tied municipal elections be settled "by lot," seven town council elections were recently decided by coin flips and other random means. Winners were chosen at random following tied town board elections in Clarkton, Godwin, West Jefferson, Sparta, Sylva and Garland. Bladen County Board of Elections chair Bobby Ludlum, who decided the Garland race with the flip of a 1881 Morgan silver dollar, told The News & Observer of Raleigh that no one "liked doing it that way, but that's the way the law reads." Read more about the deadlocked elections here.
Former 2nd District Congressman Tim Valentine died Tuesday at age 89. Valentine served in Congress from 1983 to 1995, and previously served in the state House for three terms. After leaving Congress, he helped form the Tar River Land Conservancy. The League sends condolences to his family. 
The N.C. Court of Appeals has turned down a request to reconsider its Oct. 6 decision upholding a state law that transfers ownership of the water system of the City of Asheville to a regional water and sewer authority.  The court turned down the request without explanation. The Asheville City Council has already indicated that it will appeal the decision to the state Supreme Court, although it is unclear whether the state's high court will agree to take up the case. The League had filed an amicus brief with the Court of Appeals in support of the city's case. The latest rehearing request was made because the Court of Appeals ruled that the city had waived its rights to argue aspects of the case that the lower court judge, who ruled in favor of Asheville, said were not necessary for consideration to rule in the city's favor. That aspect of the decision could have far-reaching implications for all appellate court cases.