League Bulletin, Jan. 28, 2022

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Legislative Bulletin

Jan. 28, 2022 | nclm.org

The Weekly Recap

WHAT HAPPENED: The Board of Trustees of the Local Government Employees’ Retirement System (LGERS) voted Thursday to set the system’s employer contribution rate for fiscal year 2022-23 – keeping with its April decision to amend the Employer Contribution Rate Stabilization Policy (ECRSP).

WHAT IT MEANS: We have a breakdown of the changes below. The ECRSP methodology (approved in April) plans for increases to the employer contribution rate by .75 percent every year starting in fiscal year 2023 and includes guardrails that provide the potential for decreases in the contribution rate starting in fiscal year 2026. The ECRSP also aims to move the employer contribution rate for law enforcement officers closer to the actuarially determined contribution rate by providing an .25 percent increase every year in addition to the .75 percent. 

ON TAP: Local governments receiving directed grants through the N.C. state budget passed late last year can access a recent webinar that the League and N.C. Association of County Commissioners held on the matter. Representatives from the Office of State Budget and Management (OSBM) joined nearly 400 local government representatives to share information on what to expect in terms of accessing, spending, and reporting on state directed grant dollars

THE SKINNY: Look also for another update on the American Rescue Plan and the use of its funds. Starting off a series, this week we're highlighting how Mooresville is getting the job done, meeting both immediate needs and those down the road. 


ARP in Action: Mooresville Meeting Both Immediate, Long-term Needs

mooresville

When cities get support, they get the job done. This ongoing series will showcase the projects, plans and transformational investments our cities and towns are achieving through the American Rescue Plan, or ARP.

The ARP allows towns the opportunity to both recover from the pandemic and to prosper well into the future. Mooresville – a rapidly growing town that has seen its population balloon more than 53 percent over the last 10 years – is taking advantage of both categories.

Towards the long-term vision, the town is making much-needed infrastructure investments through its Liberty Park project, while also considering such areas as transportation and cybersecurity. "We have tremendous capital needs for the next five years as a growing community, so we look for opportunities where the ARP funds could fill in the gaps,” said Assistant Town Manager Beau Falgout. At the same time, Mooresville is addressing the most immediate concerns of the pandemic through employee premium pay, a vaccine incentive program, and providing funding to outside agencies that serve those most adversely affected by COVID-19.

Mooresville’s administration of the program thus far is a case study in local leadership, complete with transparency, public engagement, meaningful investments, and comprehensive preparation and oversight. Their full ARP story (including links to resources such as their Grant Project Ordinances) can be read here, and all of our municipal case studies can be found here.


LGERS Board Approves Employer Contribution Rate and Retiree Supplement

The Board of Trustees of the Local Government Employees’ Retirement System (LGERS) voted Thursday to set to the system’s employer contribution rate for fiscal year 2022-23 – keeping with its April decision to amend the Employer Contribution Rate Stabilization Policy (ECRSP). The board voted for employer contribution rates for general employees to increase from the current 11.35 percent in fiscal year 2021-22 to 12.10 percent for fiscal year 2022-23. Please note that these rates for general employees are only for the pension component of contribution rates; the death benefit contribution can vary from unit to unit for general employees and is in addition to these rates. The contribution rate for law enforcement officers (LEOs) increases from 12.10 percent to 13.10 percent. However, due to the “Court Cost Offset” and the Death Benefit, the contribution rate for LEOs for fiscal year 2022-23 will be 13.04 percent for most employers of LEOs.

The ECRSP methodology (approved in April) plans for increases to the employer contribution rate by .75 percent every year starting in fiscal year 2023 and includes guardrails that provide the potential for decreases in the contribution rate starting in fiscal year 2026. The ECRSP also aims to move the employer contribution rate for law enforcement officers closer to the actuarially determined contribution rate by providing an .25 percent increase every year in addition to the .75 percent. The decision to approve the future ECRSP was made to ensure the LGERS system stays well-funded and offer budget predictability for employers.

The LGERS Board also took action to provide a one-time 2 percent cost-living supplement to retirees of the LGERS system. This benefit increase will cost the system $59 million, but the supplement is being paid from money in the system, not through increases to employer contributions. The board’s decision matches a recommendation from State Treasurer Dale Folwell and the position of the League’s Executive Committee, recognizing that employers could not bear the cost of higher contributions after the significant increases they have seen under the recent ECRSPs. The League thanks the LGERS Board for their thoughtful consideration of the needs of retirees and employers.


OSBM Shares Guidance for Local Governments Receiving State Grants

The League and the N.C. Association of County Commissioners (NCACC) co-hosted a webinar this week for local governments receiving directed grants through the N.C. state budget passed late last year. Representatives from the Office of State Budget and Management (OSBM) joined nearly 400 local government representatives to share information on what to expect in terms of accessing, spending, and reporting on state directed grant dollars. If you are unsure as to whether your jurisdiction received a directed grant in the state budget, or you’re unclear as to the source of the funding or who to contact for more information on the grant, the state has set up a searchable database with that information and more. You can find the directed grants database on OSBM’s website here. You can also view a recording of the webinar and access the slides presented in the webinar. The League would like to thank OSBM for taking the time to share this information with League members and thanks NCACC for their partnership in hosting this event.


Voters Support Affordable Housing Initiatives; Charlotte Program Turns 20

Affordable housing continues to be a goal in North Carolina as the need persists. The Charlotte Observer this week profiled Charlotte's Housing Trust Fund to localize the issue. The fund turns 20 this year. "Despite a massive investment of nearly $219 million -- put toward 139 projects over two decades to build or save affordable housing in Charlotte -- the need keeps growing," the Observer reported, noting that's especially true for lowest-income residents. It's a voter-supported topic, the Observer indicates. In 2018, city leaders asked voters to approve $50 million in bonds to boost the fund. "The bonds have been popular with voters, passing with 2-to-1 margins or greater in 2018 and 2020," the newspaper reported. Better affordable housing availability is a legislative goal set by North Carolina cities and towns.  


ICYMI - Podcast: The American Rescue Plan and Local Infrastructure

Got 19 minutes? Take that time to check out our newest episode of Municipal Equation, where we cover the most pressing issues facing our cities and towns. Learn the basics of the American Rescue Plan. How it is a generational opportunity—to both recover from the pandemic and to prosper well into the future. How it's a chance to address critical areas of need, like water utilities and infrastructure. And how our towns' leaders are making it count.