Local Government Day Bulletin

February 6, 2014

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VACo/VML/VAPDC Local Government Day

 

Easy lobbying: Just look for the card
Be sure to pick up one or more of the cards on chairs in Salons E-I. These cards outline several high-priority items supported by VACo and VML. All you have to do is sign the cards and distribute them to your legislators. Here are the high priority items:

Budget amendments on education funding

Fund more realistic costs for items such as transportation, insurance and utilities – Items: 136 #7h, 136 #14h, 136 #17s, 136 #18s and 136 #19s.

Restore cost-of-competing funding for nurses, secretaries, custodians and similar positions in Northern Virginia – Items: 136 #5h, 136 #6h, 136 #10h, 136 #8s, 136 #9s and 136 #10s.

Have the state accept a share of unfunded liability in the teacher retirement plan – Items: 136 #15h, 136 #4s, 136 #5s and 136 #6s.

Budget amendment and legislation to fund primary road reconstruction projects in cities and towns – Item 444 #3h. Also support SB 518 (Wagner) and HB 1048 (Rust), which accomplish the same purpose.

Budget amendment to authorize bonds for stormwater projects – Item C-43 #9s.

Support priority budget items
VML and VACo worked to have a number of budget amendments introduced that will address some of the fiscal issues contained in the introduced budget. Please be sure to express support for these important items.

 

Education funding: Recognize inflation for fuel, insurance and utilities. Every two years the State updates (rebenchmarks) the estimate of what it costs to meet the Standards of Quality.  Some of the updates are based on data that is two years old. The practice has been to apply an inflation factor to bring those 2012 estimates up to 2014, the beginning of the new biennium.  The introduced budget, however, did not recognize inflation for the purchase of what is called “non-personal support” costs, which are items such as fuel, health and workers’ compensation insurance, disability insurance, communications and utilities.

Four budget amendments (Items 136 #7h, 136 #14h, 136 #17s, 136 #18s and 136 #19s) have been introduced to bring those 2012 costs up to 2014 realities. These amendments add about $38 million in state funding in FY15 and in FY16 in non-personal support spending.

Talking points for delegates and senators

• Without the inflation factor, the state will base its share of funding for the next two years on 2012 data. By the end of FY16, state reimbursement will be based on data that is four years old.

• School divisions will pay their bills based on current prices while insurance companies, utilities and gasoline providers will base their bills on current prices, not those in 2012.

• The state should recognize reasonable increases in the payment of non-personal support costs. Otherwise, all the state is doing is shifting costs to local governments.

• The introduced budget reflects inflation in other areas. For example, proposed funding for increases in health insurance premiums for state employees assumes a 5 percent premium increase in FY15 and a 7 percent increase in FY16.

Staff Contacts: Mary Jo Fields (VML) and Dean Lynch (VACo)

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Education funding: Restore cost of competing for support positions in Northern Virginia. The State budget recognizes the higher cost of living in Northern Virginia (Planning District 8) and adjacent localities through a cost-of-competing adjustment for instructional positions and support personnel. Support personnel include nurses, secretaries, custodians and similar positions.

The introduced budget eliminated the cost-of-competing adjustment for support positions.

Six budget amendments (Items 136 #5h, 136 #6h, 136 #10h, 136 #8s, 136 #9s and 136 #10s) increase state funding by $32.4 million in FY15 and again in FY16 to restore the full 24.61 percent cost-of-competing adjustment for school support positions for the nine school divisions in Planning District 8 and at a lesser level for certain adjacent school divisions.

Talking points for delegates and senators

• The cost-of-competing adjustment is a reasonable recognition of the differences in the cost of living in Planning District 8 and adjacent jurisdictions as compared to salaries offered by competitors in Maryland and the District of Columbia.

• The Commonwealth includes a cost-of-living adjustment for state positions such as the State Police.

Staff Contacts: Dean Lynch (VACo) and Mary Jo Fields (VML)

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Support proportional sharing of teacher pension liability. New national financial reporting requirements require that unfunded liabilities associated with pension plans be shown on the books of the government that transmits retirement contributions to the retirement system. School divisions currently send payments to VRS for teacher retirement contributions, using both state and local government funds to pay the bill. But because the school divisions make the payment directly to VRS, the $13 billion in unfunded teacher pension liabilities will be assigned to the school divisions and ultimately will appear on the financial reports of localities beginning next year.

Several budget amendments have been submitted to require the Department of Education to pay the state’s contributions to teacher retirement directly to VRS (Item 136 #15h (Davis), Item 136 #4s (McWaters), Item 136 #5s (Black) and Item 136 #6s (Locke). This mechanical change will demonstrate the state’s policy commitment to proportionally sharing responsibility with localities for the unfunded liability for the teacher retirement plan.

Talking points for delegates and senators, especially money committee members

• The state will not pay any more toward teacher retirement than it does now. It would just send its payments directly to VRS instead of shuttling those funds through the school divisions.

• The change would ensure that the state shows 36 percent of the $13 billion in unfunded teacher pension liabilities on its books; financial experts assert that this will not damage the state’s bond rating.

• Local governments face potential negative outlooks to their bond ratings and will become less competitive to potential business prospects if all of the unfunded liability is shown on their financial statements.

• Proportional sharing of the liability between the state and localities would demonstrate the commitment of the state and local governments to financing the costs of public education and to tackling this significant unfunded liability in a fiscally prudent, cooperative way.

Staff Contacts: Erik Johnston (VACo) and Mary Jo Fields (VML)

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Primary road extension funding. Legislation adopted by the 2012 General Assembly Session set up a new road construction formula, effectively barring reconstruction projects of primary roads in cities and towns. The budget amendment in the House (Item 444 #3h) makes clear that reconstruction of primary roads in urban areas can qualify as eligible projects for funding under the 2012 construction formula. There is no companion Senate amendment. Also, legislation — SB 518 (Wagner) and HB 1048 (Rust) — is moving through the House and Senate and includes provisions to accomplish the same aim as the budget amendment.

Talking points for all delegates and senators

• Primary roads running through cities and towns comprise 11 percent of the state’s primary road lane miles but carry nearly 27 percent of the state’s primary road vehicle-miles traveled each day. The need to reconstruct primary roads is related, in large part, to past problems in properly maintaining the roads because of fiscal constraints.

• State urban construction allocations were discontinued in FY 2009 because there was no money. Even with new revenue from last session, allocations are not scheduled to resume until FY17.

• 71 of the 86 cities and towns that receive state maintenance payments spend more on maintenance than the state allocations. And unlike VDOT maintained roads, urban localities deal with utility cables, bus stops and shelters, traffic lights, curbs, fire hydrants, storm drains, sewer lines, sidewalks, and water and gas mains.

• Urban localities, on average, spend more on pavement and drainage than VDOT does per lane mile.

Staff Contacts: Neal Menkes (VML) and Joe Lerch (VML)

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Bond authorization for stormwater projects. The budget as introduced allocates $20 million in Virginia Public Building Authority bond funding to pay for grants to be provided through the Stormwater Local Assistance Fund in FY16. The grants would provide 50 percent matching grants to localities with qualified projects that reduce stormwater pollution. Item C-43 #9s (Watkins) shifts the $20 million in VPBA bond funding from FY16 to FY15 and provides an additional $18 million for a total of $38 million in new bond authorization in FY15.

While legislation is moving through the General Assembly to make some significant changes in stormwater management for some parts of the state, many localities face significant obstacles in meeting the expensive, complicated challenges in stormwater reduction.

Talking points for all delegates and senators

• The bond authorization will provide needed contributions to help localities meet expensive stormwater management requirements.

• Localities have invested millions of dollars, and will invest millions more, to reduce stormwater pollution.

Staff Contacts: Joe Lerch (VML) and Larry Land (VACo)

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Per diem payments for the current fiscal year: Amendments to HB/SB 29 (the FY14 caboose budget) have been introduced in the House and Senate (Item 69 #1h and Item 69 #1s) to pay the state share of per diem costs for housing inmates in local and regional jails for the remainder of the current fiscal year. The introduced budget did not include the required state share for per diems for the current year, which is estimated at $4.8 million. If left unfunded, local governments would be liable for the state’s obligation.

Talking points for all delegates and senators

• This shortfall in state funding affects every local and regional jail in the state.

• Per diem payments support daily jail operations, which are a basic and necessary public safety function of government.

• State payments are required by the Appropriations Act (Item 69: Financial Assistance for Confinement of Inmates in Local and Regional Facilities).

• This is the first time that a governor’s introduced budget has failed to fulfill the state’s responsibility to fund the state’s obligation for jail per diem costs.

Restoration of per diem payment levels for the next biennium. Amendments to HB/SB 30 (the 2014-16 biennium) have been introduced in the House and Senate to re-establish the $14 per day rate for state-responsible inmates housed in local and regional jails (Item 67 #1h and Item 67 #1s). The cost is $6.1 million in FY15 and in FY16. In 2010, the squeeze on state revenues led the state to reduce per diem rates paid to jails for local inmates from $8 to $4 per day, and from $14 to $12 for state-responsible inmates. This shifted $19 million in additional annual costs to local and regional jails.

Talking points for all delegates and senators

Local and regional jails hold approximately 4,900 state-responsible inmates each day.

• Restoring the $2 per state-responsible inmate per diem will support the daily basic operations of all local and regional jails.

This would return the state’s per diem payments for state-responsible inmates to the level paid in 2010.

Staff Contacts: Janet Areson (VML) and Dean Lynch (VACo)

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Fines and Fees: Amendments have been introduced in the House (Item 3-6.05 #1h) and Senate (Item 3-6.05 #1s) to eliminate state confiscation of a portion of local fines and fees. Language in the Budget Bill authorizes the diversion of local money to the state Literary Fund when local fines and fees exceed 50 percent of the total state and local fees/fines/penalties collected by local general district courts.

Talking points for delegates and senators

The State Inspector General says no conclusive evidence exists proving that money is being diverted from the Literary Fund because of localities writing more speeding tickets.

Two cities are now giving up local fines and fees because they tripped the formula threshold although they have no interstates, limited-access roads, or major highways, and have only a limited State Police patrol presence.

One county is giving up local fines and fees under the budget formula because their total includes fines and fees generated by the towns in their county.

The State Inspector General’s report says the combined efforts of the State Police and localities that operate enhanced traffic enforcement programs contribute positively to public safety.

Staff Contacts: Neal Menkes (VML) and Dean Lynch (VACo)

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Support removal of non-supplanting language. The introduced budget includes state funding for a 2 percent salary increase for two entry-level deputy sheriffs positions. The budget also includes a 4 percent salary increase for the entry level deputy court clerk position, and a 2 percent increase for the next level position.

The introduced budget also includes “non-supplanting” language that says cities and counties have to give the salary increase for these positions even if the locally-funded salary is above what the state will recognize, or forego the state reimbursement.

Two budget amendments (Item 66 #5s and Item 71 #5s) have been submitted to the Senate budget to remove the non-supplanting language.

Talking points for senators and delegates

If the locally-funded salary is already above what the state will recognize, including the salary increase included in the Appropriation Act, the non-supplanting language should be eliminated.

The non-supplanting language in effect punishes cities and counties that have been funding higher salaries all along.

Typically these Comp Board positions are at the same pay grade as other local positions. For example, an entry level deputy sheriff may make the same salary as an entry level police officer, and an entry level court clerk may make the same salary as an administrative assistant. Localities may not be able to give a salary increase to all the positions in these pay grades. A requirement to give a salary increase to just selected positions creates pay inequities and poor staff morale.

Staff Contacts: Mary Jo Fields (VML) and Dean Lynch (VACo)

There’s more to the General Assembly than the budget…..

As important as the state budget is to localities, a number of other bills affecting local governments are working their way through the legislature. Here is an overview of some of the most significant.

FOIA bill increases burden on localities
Please attend House General Laws Subcommittee #2 after adjournment on Thursday afternoon to oppose HB 788 (LeMunyon). This bill would allow residents and businesses of other states to file requests and receive documents and information under the Freedom of Information Act. Currently, the state and localities have to fill FOIA requests from citizens of the Commonwealth and the media, but not for other persons who live out-of-state.

Companies that compile, repackage and resell data regularly make FOIA requests that require significant amounts of staff time to fulfill. While the bill would expand the costs localities can recover from non-residents, it cannot recover all the hours that staff spends in responding to these requests. These requests take away available time to provide services to the residents of the locality.

The subcommittee will meet in House Room C in the General Assembly Building. VACo and VML oppose HB 788.

Talking points to delegates, especially on House General Laws

• The FOIA Advisory Council declined to endorse legislation such as HB 788.

• This bill would increase workloads of localities.

• Localities never recover the full costs of complying with FOIA requests.

• This adds another mandate to already overburdened public entities.

Staff Contact: Phyllis A. Errico (VACo) and Mark Flynn (VML)

Stormwater bills make progress
The House and Senate seem to have settled on an approach to stormwater requirements that address some of the local concerns about this expensive, mandated program. VACo and VML support HB 1173 (Hodges), which was on the House floor for final passage on Wednesday afternoon.

The bill allows localities not subject to “MS4” permitting requirements to turn over responsibilities for managing their stormwater programs to the Department of Environmental Quality (DEQ.)

HB 1173 also has these beneficial provisions:

• Authorizes the State Water Control Board to create a procedure for approving permits for individual parcels in a common plan of development.

• Establishes a procedure by the State Water Control Board to relieve single family lot owners from requirements to obtain a registration statement when engaging in a land disturbance.

• Allows appeals to be conducted in accordance with local appeal procedures for a permit applicant or permit holder aggrieved by a local government decision. (Current VSMP regulations require more formal processes.)

In addition, HB 1173 extends until the end of the year the deadline for Augusta, Fauquier and Montgomery Counties to adopt their local Virginia Stormwater Management Programs (VSMPs). These counties were recently designated as “MS4” localities. Stormwater programs for these three counties would be managed by DEQ until January 2015.

The bill has an emergency clause, which means if it is passed and signed by the governor, it will give DEQ and localities immediate authorization to implement a significantly revised stormwater program.

On the Senate side, Senator Hanger is expected to conform his stormwater bills, SB 423, SB 425 and SB 530, to HB 1173. The bills will be before the Senate Agriculture Committee on Feb. 6.

Staff Contacts: Larry Land (VACo) and Joe Lerch (VML)

Support legislation affecting CSA policy-making process
SB 426 (Hanger) places the State Executive Council (SEC) for Comprehensive Services Act (CSA) under the Administrative Process Act (APA). The bill was on the Senate floor for final passage on Wednesday. Please talk to your delegates in support of this bill. This will not be an easy battle; a House subcommittee this week tabled a similar bill.

The SEC acts as a supervisory body that makes financial and policy decisions that affect local governments’ administration of services and access to the CSA pool of funds. Currently, the SEC has its own guidelines for handling public notice and comments when developing or revising policy. The administration of these guidelines has proven to be uneven at times.

Placing the SEC under the APA would put in place a formal, uniform process for notification, analysis, and approval of policies that affect local governments, families and private providers of services.

VACo and VML support the bill.

Talking points for senators

• Placing the SEC under the APA would enhance stakeholders’ preparedness and ability to provide input in a structured and meaningful way.

• This bill would allow time for a cost/benefit analysis of each proposed policy.

• This would be consistent with other regulatory and policy making entities currently under the APA.

Staff Contacts: Beau Blevins (VACo) and Janet Areson (VML)

Bills could improve fiscal relationship between the state and locals

HB 199 (Landes) requires the Division of Legislative Services to identify and forward to the Commission on Local Government joint resolutions introduced calling for a study of local government expenditures or revenues. The bill also authorizes the Department of Planning and Budget and the Department of Taxation to forward to the Commission bills introduced requiring additional local government expenditures or a reduction in local government revenues. VML and VACo support HB 199.

Talking points for delegates and senators

• The General Assembly should have the best information available before making decisions that affect local programs and budgets.

• Localities need as much time as possible to assess the fiscal impacts of proposed legislation as well as legislative studies affecting local spending or revenues. HB 199 jump starts the review process by increasing the number of parties that can request reviews by the Commission on Local Government.

• HB 199 was recommended by Gov. McDonnell’s Task Force for Local Government Mandate Review as well as the Task Force for Fiscal Impact Review.

 

SB 163 (Locke), HB 594 (BaCote), HB 1011 (Byron) and HB 1080 (Garrett) all extend the Task Force for Local Government Mandate Review. VML and VACo support the continuation of the task force. The differences are centered on the composition of the task force as well as determining appointments to the task force.

Talking points for delegates and senators

• The task force provides local government an opportunity to share with state government the challenges state rules, policies and regulations impose on localities.

• The task force has issued two reports thus far. The first and second reports developed and recommended a multi-part strategy: (1) establishing a framework for discussion between state and local government to improve the efficiency and delivery of services; (2) reforming the bureaucratic rules blocking the mandate review process; (3) identifying key mandates that require funding; and (4) continuing to recommend a reduction of state mandates.

Staff Contacts: Neal Menkes (VML) and Dean Lynch (VACo)

Special elections to fill local governing body seats moving forward
HB 1024 (Ingram) clarifies the rules for a court ordering a special election to fill a vacancy on a town or city council, county board of supervisors or elected school board. The bill states that the circuit court may only set the date for a special election at the time of the next general election for the seat in the locality.

The 2010 bill that rewrote the special election rules intended to require the election to be at the next general election, but was less than clear. A few circuit court judges have read the law to allow them to set the special election at some other date. Holding an election is expensive for any locality. If the special election is set at the date of the next general election, that is a significant savings to the locality, which foots the bill for holding elections.

There are circumstances that would push a locality to need to have a vacancy filled by special election earlier than the next general election. The bill gives localities the authority to ask for a different special election date.

HB 1024 is the request of VML. It applies to all local governing bodies or elected school boards and therefore saves counties, cities and towns money. The bill was before the House for final passage on Wednesday.

Staff Contacts: Mark Flynn (VML) and Phyllis Errico (VACo)

Farm brewery bill poses problems
SB 430 (Watkins) takes away local land use authority by allowing breweries in agricultural zones to operate as a by-right use. This would mean that a brewery could be operated without going through the process of obtaining a special use permit or special exception. However, the proposal is very different in its nature and scope. The farm winery statute focuses on the less intensive primary agricultural use of the growing of grapes on the property where the wine is made and adds some ancillary activities. SB 430 does the opposite by focusing on the more intensive commercial activities of operating a brewery and serving the product over the ancillary activity of growing products used in the making of the product.

The bill passed the Senate and will likely be first considered in the House General Laws Committee after Feb. 11. VACo and VML oppose this bill. Please contact your delegate and urge them to oppose this bill or seek amendments to scale it back so that it is truly in line with the farm winery legislation.

Talking points for delegates

• Unlike the farm winery legislation, SB 430 has no requirement that a farm produce a minimum amount of agriculture product in order to become a farm brewery. In fact, there is no definition of farm and no minimum product required to be grown so a brewery can be located in any zoning district and can be on any size lot/property as long as one plant is grown on the premises.

• The bill goes farther than the farm winery legislation in restricting local authority by prohibiting localities from adopting local ordinances to impose minimum parking, road access, or road upgrade requirements on any licensed brewery on land zoned agricultural, unless the brewery operations create a substantial impact on the health, safety or welfare of the public.

• This language is designed to circumvent local efforts to ensure that breweries on farms do not create unsafe conditions on rural roads and for private drives.

• The bill allows any part of the farm being used for agricultural purposes related to the brewery to be included in the license, which could open up the entire property to by right commercial uses.

Staff Contacts: Phyllis Errico (VACo) and Joe Lerch (VML)

Bill attempts to harmonize VDOT projects and local government authority
HB 978 (Rust) is aimed at creating a mechanism for Public-Private Transportation Act (PPTA) and Public-Private Educational Act (PPEA) projects to work out conflicts for locating and moving local government public utility lines. The patron filed the bill to override a decision of the State Corporation Commission (SCC) in a dispute between the City of Portsmouth and a private company building a new tunnel. The SCC ruled that the PPTA did not give the commission authority over the city’s utility lines.

The bill originally gave the SCC the authority to require a city to move its utility lines when the location conflicted with a project overseen by the commission. VML and VACo objected to the bill, based on the argument that the Virginia Constitution denies the SCC jurisdiction over local governments. The bill was significantly amended to make it clear that local governments are not included as public utilities, which helps resolve the constitutional problem.

One issue in the bill remains – the method to resolve a disagreement between a locality and VDOT or the PPTA/PPEA contractor on locating/relocating the utilities when they cannot agree on the location/relocation. In the current version of the bill, the SCC decides the dispute. VML and VACo continue to work with the patron and VDOT on a solution.

The bill has passed the House. Please speak with your Senate Commerce and Labor Committee members to ask them to support a resolution that does not give the SCC authority over localities.

Staff Contacts: Mark Flynn (VML) and Phyllis Errico (VACo)

Bill makes preliminary subdivision plats optional for homebuilders
Under HB 209 (Marshall, D.W.), localities would not be able to require the submission of preliminary subdivision plats for tentative approval if the developments involve less than 50 lots. This bill is a priority for the Homebuilders Association of Virginia, whose membership in some parts of the state want to eliminate entirely local authority to require a preliminary plat for developments of less than 50 lots, thus going straight to final plat submission. The bill is on the House floor. If it passes (as is expected), the bill will move to the Senate Local Government Committee for consideration after crossover on Feb. 11.

In many parts of the state most or all subdivisions are less than 50 lots. The preliminary plat process is intended to help developers and localities work out the basic design issues of roads, utilities, storm drainage and lot layout to prevent rework during the more expensive process of construction plan review.

Please contact members of the Senate Local Government Committee to express your concerns about HB 209 and suggest the effects of the bill be studied further in the Housing Commission.

Staff Contacts: Erik Johnston (VACo) and Joe Lerch (VML)

Conflicts/Ethics bills: Legislature moves to tighten ethics laws
The General Assembly is spending a significant amount of energy to tighten up the conflicts and ethics rules for public officials. HB 1211 (Gilbert) and SB 649 (Norment) are the primary bills under consideration.

Speaker William Howell assured VML at the beginning of the session that the joint bill was not aimed at local governments. That assurance has proven true as the bills have been discussed through the session. While some provisions will place some extra reporting requirements on local elected officials, the effects are not be severe.

Extra reporting requirements likely to be in the final version of the bills include a semiannual filing of the conflicts of interests form (annual filing is now required), reducing the minimum value of a stock or other assets that triggers a reporting requirement from the current $10,000 down to $5,000; and including gifts to family members in the restrictions/disclosure of gifts provisions.

Staff Contacts: Mark Flynn (VML) and Phyllis Errico (VACo)

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