Recent Blog Posts

  • Raising the Federal Micro-Purchase Threshold: Self-Certification for Units of Local Government in North Carolina

    Authored by: on Friday, April 23rd, 2021

    On August 13, 2020, the Office of Management and Budget (“OMB”) published revisions to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 C.F.R. Part 200) (the “Uniform Guidance”).  Among other things, the revisions to the Uniform Guidance allow some non-Federal entities to raise, via annual self-certification, the generally applicable micro-purchase threshold of $10,000 to a “higher threshold consistent with State law.”

    This post provides background information for units of local government in North Carolina interested in self-certifying micro-purchase thresholds above $10,000, and contains a link to a sample resolution that a governing board may use to self-certify such higher thresholds. Read more »

  • Assessing and Collecting System Development Fees (SDFs): It’s All About the Timing

    Authored by: on Monday, April 12th, 2021

    As detailed in previous posts (here,  here, and here), the General Assembly has granted local government utilities (including municipalities, counties, water and sewer authorities, sanitary districts, county water and sewer districts, metropolitan water districts, metropolitan sewerage districts, metropolitan water and sewerage districts, and local government water and wastewater providers established pursuant to G.S. 160, Art. 20 or local act of the General Assembly, collectively “local utility”) explicit authority to charge capacity fees, referred to as system development fees, on “new development” to fund certain water and wastewater capital. See G.S. 162A, Art. 8. As more local utilities adopt and implement system development fees (SDFs), issues have arisen related to when the fees apply and when they must be collected. The difficulties are partially due to the fact that, by law, the fees are collected at a different time than they are assessed. But there are also questions about triggers for SDFs. This blog post walks through the circumstances under which SDFs may be assessed and when they must be collected. It also discusses what happens when the SDF law does not apply. The post incorporates recent legislative changes from S.L. 2020-61. Read more »

  • American Rescue Plan Act of 2021: Local Government Authority to Expend their Allocations

    Authored by: on Monday, April 5th, 2021

    Updated: April 25, 2021: The federal government has put out pre-award guidance for local governments. It is available here

    On March 11, 2021, the federal American Rescue Plan Act of 2021 (ARP) became law. There is still a lot to be deciphered in this $1.9 trillion stimulus package; the third such major relief act since the onset of the COVID-19 pandemic. We do know that the law includes substantial aid for state and local governments. With respect to local governments, some monies will be distributed directly to them (specifically, allocations to counties and municipalities with populations over 50,000). Other monies will be allocated to the State for distribution to qualifying local governments (all other municipalities). See Part 8, Subtitle M—Coronavirus State and Local Fiscal Recovery Funds of H.R. 1319 American Rescue Plan Act of 2021. The monies will be distributed in tranches, with the first payment made within 60 days’ of the law’s enactment. The second tranche will be distributed a year after the first. The monies may be used for costs incurred by December 31, 2024.

    Aside from their expected allocation amount, local government officials want to know the purposes for which the monies may be spent and whether or not the grant of funds from the federal government is sufficient to provide North Carolina local governments expenditure authority. This blog post addresses these two issues. As a caveat, this post is based on interpretations of the federal law and current state law. There may be different interpretations promulgated by the agencies charged with implementing the aid to local governments and there may be changes to state law to facilitate the receipt and expenditure of funds by local governments. I will update this post as more information becomes available, particularly guidance on reporting and accountability measures.

    Note also that this post only deals with monies allocated directly to local governments by the ARP. The General Assembly may appropriate additional monies from the State’s ARP allocation to local governments, and to certain special districts and public authorities, and will set the expenditure parameters for those funds. And the ARP provides funding for many other programs, services, activities, and projects, that will directly aid a local government’s citizens, utility customers, community groups, businesses, nonprofits, and other government entities. (For a brief overview of key provisions of the ARP, see this National Conference of State Legislatures’ summary.) Local government officials will want to understand how all of this targeted relief will impact their communities as they make their own appropriation decisions.

    Turning back to the purpose of this post, let’s look at local government authority to spend ARP allocations for the specified purposes. Read more »

  • The ARPA’s COBRA Subsidy Provisions: What You Might Not Know

    Authored by: on Monday, April 5th, 2021

    The American Rescue Plan Act (ARPA) requires that from April 1through September 30, COBRA health insurance continuation coverage be provided free of charge to employees and their beneficiaries who lose health care coverage because the employees have been fired or because their hours have been reduced. Insurers (including self-insured employers) will receive tax credits for the amounts that they have foregone in premiums. Read on to understand why employers are not required to pay the cost of COBRA health insurance premiums during this time. Read more »

  • Revenue-Neutral Rate Calculations for Multi-County Municipalities

    Authored by: on Thursday, April 1st, 2021

    Time for a North Carolina geography quiz!

    In which counties are these cities located: Chapel Hill, Durham, and Raleigh?

    If you said Orange County, Durham County, and Wake County, you are . . . only partially correct.  Each of those cities lies in two counties.  These municipalities and the many others in North Carolina that cross county lines face a variety of challenges relating to property taxes.  For starters, these cities need to work with multiple county assessors to determine their tax bases.  If they don’t collect their own property taxes, these cities need to contract with multiple county tax collectors for that service.  Individual real property parcels that are in the city but lie in two counties create additional assessment and collection headaches.

    Today’s post focuses on another potential property tax difficulty faced by multi-county municipalities: calculating the revenue-neutral property tax rate (“RN rate”).  Read more »

  • Give UNC: Support the UNC School of Government

    Authored by: on Tuesday, March 30th, 2021

    SUPPORT the UNC SCHOOL OF GOVERNMENT

    For the entirety of its 90 years of existence, the School of Government’s mission has been focused on the people of North Carolina. Through our commitment to offering high-quality education, advising, and support to public officials across the state, we improve the lives of North Carolinians. We firmly believe this work is more critical than ever.

    You can help us continue to fulfill our mission.

    Today is GiveUNC, the University’s annual giving day. No matter where you direct your gift to the School of Government, your generosity makes a tremendous difference. We are grateful for your support of both the School and the state of North Carolina.

    I hope you’ll join us and take part in GiveUNC. Thank you for your support as we celebrate 90 years of service to the state of North Carolina.

     

    Mike Smith
    Dean, School of Government

  • Correcting Taxpayer Mistakes

    Authored by: on Tuesday, March 30th, 2021

    How far will your tax office go to fix mistakes caused by taxpayers? Consider the situation in which a taxpayer mistakenly makes a payment on property owned by another party.  The tax office applies the payment as instructed.  Later, the taxpayer or the tax office discovers the mistake. Can the tax office move the payment to the correct property? Read more »