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League Bulletin

December 15, 2017

Members of the state’s water infrastructure funding authority on Wednesday explored a variety of ways to boost the amount of funds available to local government applicants. The primary responsibility of the State Water Infrastructure Authority (SWIA) is to prioritize projects for awards from federal and state sources. Noting that this fall marked the last funding awards associated with the more than $300 million in Connect NC bonds, SWIA staff pointed out that demand for remaining funds consistently outstripped availability, even with program improvements that had significantly increased the program’s efficiency in recent years. These improvements have resulted in substantially more funds available to local water system applicants.

One further improvement staff stated they would explore was the concept of leveraging state funds, whereby the infrastructure funds would issue revenue bonds, then loan the proceeds and repay the bonds through loan repayments. In another point of discussion, SWIA members considered yet another way to increase available funds: increased appropriations from the General Assembly. Staff recommended that such a request be targeted to specific issues, such as troubled water systems or projects that increased the resiliency of the water system. The League commends and thanks SWIA and its staff for their strong support of local water systems statewide, and for their efforts to maximize the dollars available for system improvements. Contact: Erin Wynia

​Members of separate legislative interim committees considered funding for certain municipal services this week. First up, the Environmental Review Commission (ERC) held a lengthy discussion Wednesday regarding use of the solid waste disposal tax by state and local governments. Then, the Joint Legislative Committee on Justice and Public Safety (JPS) heard yesterday from Wilmington Fire Chief Buddy Martinette regarding the need for supplemental state funding for search and rescue operations.

House and Senate leaders of the ERC dedicated the entire committee meeting to the solid waste disposal tax, which was the subject of an interim study ordered by the legislature earlier this year. The state’s environmental regulatory agency conducted the study, which delved into how the tax proceeds had been spent since collection of the tax began in fiscal year 2008-09. The last fiscal year marked the highest proceeds collected since inception of the tax, nearly $20 million. Of that total, 37.5 percent went to counties and cities on a per-capita basis for use on solid waste management programs such as collection, disposal, and recycling. Lawmakers asked presenters probing questions regarding both the state and local governments’ use of the tax, with some legislators questioning the value of spending the funds on local programs. Solid waste professionals from Harnett County and Mecklenburg County presented information regarding their local services, and they responded to legislators’ questions.

In the week’s second discussion of state-local partnerships to fund basic governmental services, Chief Martinette made the case to JPS members for matching local search and rescue operation expenditures. In his presentation, the chief reviewed the significant involvement of search and rescue teams from around the state during recent disasters, such as 2016's Hurricane Matthew and western North Carolina wildfires. He highlighted the great strides these teams had made since 1999's Hurricane Floyd, and credited the training and expertise of today’s teams in providing a high-level response to similarly large natural disasters such as Hurricane Matthew. He noted that post-911 federal grants, which helped to build the state’s rescue response capacity, were no longer available. Therefore, he urged legislators to partner with locally funded teams by providing a $2.39 million appropriation, an unfulfilled request also made during the last legislative session. Contact: Erin Wynia

​Members of a newly-established House committee kicked off a series of interim meetings Wednesday by scrutinizing the work performance of local building inspection departments. In his opening remarks, committee chair Rep. Mark Brody, a homebuilder, stated that residential and commercial builders across the state had experienced frustration, delay, and increased costs when local inspectors provided inconsistent interpretations of the building code. After reviewing recent legislation that sought to address this very concern, the committee heard presentations from representatives of the residential and commercial construction industry, building inspectors, and regulatory bodies such as the inspectors’ licensing board and the Building Code Council.

Generally, presenters representing homebuilding interests provided anecdotes of either delayed or illegal inspections by local departments, while presenters representing building inspectors provided anecdotes of efforts taken to build relationships with local homebuilders and respond to these concerns. After receiving this information, committee members honed in on possible remedies, including enhancing the ability of third-party licensed building inspectors to perform residential building inspections, requiring the N.C. Department of Insurance to standardize the building inspection application process used by local governments, and making further changes to the Building Code Council’s procedures. At the conclusion of the interim committee’s work next spring, it will likely recommend legislation for introduction in the General Assembly's short session that begins in May. According to Rep. Brody, future committee meetings will take place in locations around the state. Contact: Erin Wynia

It's time to meet your maker -- your talented, independent, local creator of tangible goods, like art, clothing, instruments, toys, knick-knacks, tech tools, anything. Your city or town might even have its own, motivated maker community that experts are increasingly calling a missing link in the local economic development strategy. Why? On the latest episode of Municipal Equation, the League's acclaimed podcast, we hear from four of these experts and dig in to a recent report about this "maker economy." What can your city make of it? Guests include Etsy, the National League of Cities, Recast City, and the Urban Manufacturing Alliance.

Haven't checked out the podcast yet? What are you waiting for? Just pick an episode, press play, and listen. The latest episode is our 40th, so we've got plenty of fascinating topics to choose from about cities and towns in the face of change. Subscribe on iTunes or Google Play or find it on your favorite podcast app. Want to pitch an idea for an episode? Contact host/producer Ben Brown.

Rep. John Bell gives a glimpse into his busy world serving as majority leader of the N.C. House in the latest issue of Southern City. Rep. Bell, who lives in the Rosewood community near Goldsboro, discusses how his time getting to know his fellow legislators and local leaders in his district has made him a buff in interstanding the nuances of the state. "I got to understand what's important to them, what's important to their district. What works in Wayne and Lenoir and Green and Craven counties may not work in Buncombe County or work out in Murphy or workd in Greensboro and Guilford County," Rep. Bell said. "You have to learn those dynamics. What does this member need to be successful?" He also discusses his influences, family, and his appraisal of the 2017 General Assembly. Read the full Q&A.

On the cover of this issue is Bethel Mayor Gloristine Brown, a longtime public servant and League Board of Directors member who's helping to wrest her town from the lingering tendrils of the recession in eastern North Carolina with the power of optimism and strong community planning. "I don't say 'if,' I say 'when,'" Mayor Brown emphasizes, adding: "I know now that things don't happen overnight.... But my thing is, you've got to get it started." Get to know Mayor Brown and what she's doing for Bethel.

And there's plenty more to read, including coverage of CityVision 2017, a look at how Salisbury is going on foot to engage with residents, a different take on hiring police officers, and how the League is connecting you with a "Ready Rating." Southern City, a bimonthly publication from the League, is available online and in print.

State transportation officials published a proposal this week that tackled how the N.C. Department of Transportation (NCDOT) would reimburse schools for required road improvements. Legislators inserted the requirement for the NCDOT to begin paying for schools’ road improvements in this year’s budget (Section 34.6A). Municipalities must meet this same requirement, which concerns both public, private, and charter school construction projects. A fiscal note previously accompanying the measure estimated the cost to NCDOT in the millions of dollars; cities and towns will likely incur similar costs to meet this requirement. In the past, schools paid for all road improvements connected with school construction.

The NCDOT proposal detailed the steps a school must follow to request reimbursement of required road improvements, as well as the limits of the department’s responsibility for costs. For example, the department would retain control of the engineering traffic analysis performed for the school, and it would only provide reimbursement for improvements required by the department pursuant to that analysis. Alternatively, NCDOT would allow a school to hire an independent engineer to complete this analysis, but use of an independent engineer is subject to limitations such as the department’s own bidding and prequalification requirements. Also, generally, NCDOT would limit reimbursement of any independent engineering analysis to no more than 10 percent of the average bid costs for work of similar type and scope.

Cities may wish to consult this NCDOT proposal as they develop their own criteria and processes for reimbursing schools for required road improvements. This requirement was effective Oct. 1 and applies to school openings, relocations, and expansions on or after that date. Contact: Erin Wynia

​City leaders across the nation are either digesting or reacting to the Federal Communications Commission's action on Thursday to repeal net neutrality regulations that required equal treatment of all Internet traffic. National League of Cities (NLC) President Mark Stodola, the mayor of Little Rock, Ark., said he and colleagues hope some resolution will come about that will ensure communities' access to good broadband service and choice. FCC's action, he said, broadly preempts state and local authority to regulate broadband and protect consumers. "The FCC has created an environment that will discourage, rather than spur, competition and good citizenship by internet service providers in local markets," he said in a statement after the 3-2 vote from commission members. "We hope that future action on net neutrality will restore and enshrine the ability of cities to protect their residents and promote robust broadband competition in their communities while expanding broadband access in underserved communities." NLC previously wrote to FCC Chairman Ajit Pai urging he reconsider his support for the rollback of regulations. The shift to what Pai calls a "light-touch framework" for governing the Internet might not be the end of the story. News outlets including the Associated Press note that several legal challenges have been announced to change or reverse the FCC decision.

​Work in Congress toward tax reform carries on, despite word earlier this week that Republican leaders had reached a deal and that votes could come early next week. With little wiggle room in the Senate, Republican Sen. Marco Rubio of Florida on Thursday said he may not support the bill without an expansion to the child tax credit for low-income families. Another Republican, Sen. Mike Lee of Utah, was reportedly undecided on his support of the plan at the time of this writing. Whatever the pace, municipal leaders nationally are keeping watch on the tax plan's treatment of Historic Tax Credit, the New Markets Tax Credit and other credits and programs of interest to cities that became uncertain during House and Senate negotiations. Republican leaders want to pass a reform bill before Christmas.

​There's another step ahead for Quality Built Homes v. Town of Carthage, a case that concerned the collection of water and sewer system development fees. The seven judges of the N.C. Supreme Court are scheduled to hear the case on Jan. 9. The issues now before the court are whether a statute of limitations should have applied to the claims against the town, and whether the builder, having paid the fees and then accepted the benefits that came from them, have a legitimate claim, something known as estoppel-by-benefit doctrine. In May of this year, the Supreme Court granted the town’s petition for discretionary review (from a December 2016 decision of the N.C. Court of Appeals). The briefing period in the case ended in September. Previous League publications provide background. The League separately worked with state lawmakers on the passage of legislation this year that met a key advocacy goal for cities and towns in ensuring their authority to collect these growth-enabling fees in the future and limiting potential local government liability from any future adverse court rulings related to these fees.