Recent Blog Posts

  • American Rescue Plan Act of 2021 (ARP): US Treasury’s Reporting Requirements and Deadlines

    Authored by: on Tuesday, August 10th, 2021

    As discussed in previous posts, Part 8, Subtitle M—Coronavirus State and Local Fiscal Recovery Funds of H.R. 1319 American Rescue Plan Act of 2021  (ARP) provides significant funding for NC counties and municipalities. (These funds are also referred to as ARPA Funds, Coronavirus State and Local Fiscal Recovery Funds, CSLFRF, CLFRF, or Fiscal Recovery Funds. I use these terms interchangeably in this post.) Many counties and municipalities have already received their first distribution either directly from the federal government or from the State, which comprises one-half of their total allocation. (The second half will be distributed next year.) All other eligible local governments are likely to receive their first distribution within the next month.

    We are still awaiting final expenditure guidance from US Treasury for ARP funds. Local government officials are well-advised to wait until final guidance is issued, particularly because US Treasury may expand and refine the contours of allowable expenditures. (US Treasury closed comments in its Interim Final Rule on July 16, 2021. It likely will issue a Final Rule within the next month or two. In the meantime, US Treasury continues to update its FAQ document.) Local officials also may want to wait until the NC General Assembly enacts the state budget and/or enacts other legislation related to ARP. Among other things, the legislature may expand state law authority—allowing a local government to make broader use of its ARP funds. It also may establish or expand state law funding programs to enable a local government to better leverage its ARP expenditures. Local governments have until December 31, 2024, to obligate their ARP funds and until December 31, 2026, to expend them. This allows sufficient time for local officials to strategically plan how best to use their ARP funds before making final expenditure decisions.

    As local officials deliberate on ARP expenditure options, it is important to consider compliance requirements. All local governments receiving ARP funds must fulfill federal compliance and reporting requirements, as well as state law budgeting, expenditure, contracting, accounting, reporting, and auditing requirements. This post focuses on the federal reporting requirements (not to be confused with the annual audit requirements associated with these funds). It identifies the three report types and specifies which local governments must submit each and when. It then details the specifics of the Interim Report, which is the first report due for counties and metropolitan cities only. Finally, it outlines the contours of the other two reports. The post reflects the latest reporting guidance from US Treasury, released on August 9, 2021. Read more »

  • COVID-19 Law & Policy Updates

    Authored by: on Sunday, July 25th, 2021

    UPDATES (July 27, 2021): On Monday, July 26, Bloomberg Law reported on a July 6 U.S. Department of Justice memo that addressed whether public or private entities may require COVID-19 vaccinations while they are under emergency use authorizations. The memo concluded that the federal Food, Drug, and Cosmetics Act does not prohibit such requirements. Also on Monday, the U.S. Department of Veterans’ Affairs announced that VA health care personnel would be required to receive COVID-19 vaccinations. On Tuesday, July 27, the CDC issued updated recommendations for mask use by fully vaccinated people. The new guidance recommends that fully vaccinated people wear face masks in public indoor settings in areas experiencing substantial or high transmission, a designation that presently includes a majority of North Carolina’s counties. The guidance also recommends universal indoor masking for teachers, staff, students, and visitors to schools, regardless of the individual’s vaccination status.

     

    July has been a very busy month in COVID-19 law and policy, with activity on issues ranging from mask requirements, to new guidance for K-12 schools, to vaccine mandates. This post rounds up the latest information and resources, beginning with a snapshot of where we’ve been and where we are now with COVID-19 in North Carolina.

    Read more »

  • Property Taxes and Annexations

    Authored by: on Thursday, July 15th, 2021

    It’s been 10 years since the General Assembly limited the authority of municipalities to annex property into their municipal limits.  My colleague Frayda Bluestein explained the details of these changes here and here. The most consequential of those changes was preventing municipalities from pursuing annexations that were not requested by the property owners (aka involuntary annexations) unless a majority of voters in the affected areas approve the annexations. Read more »

  • Public Meetings After the Lifting of the State-Level State of Emergency

    Authored by: on Tuesday, July 6th, 2021

    In May of 2020, early in the pandemic, the legislature enacted a new law setting out provisions for remote meetings during a state-level state of emergency. See my blog post here, to see a review the statute, and my blog post here, to see a summary of the recent clarifying amendments to the new law – I’ll call it the “SOE law.” The Governor’s state of emergency is still in effect, and so is the SOE law, but it’s not too soon to think about  the conduct of meetings after the state of emergency ends. For example, before the SOE law, there were no specific rules about board members participating remotely.  The SOE law set out specific rules for remote participation, and the use of remote meetings has become a regular practice during the pandemic. Remote public access to meetings in many places has increased. But those SOE law rules expire when the state of emergency ends.

    Once the state of emergency ends what will the rules be? They will be what they were before the adoption of the SOE law. For a summary of the law on remote participation before the SOE law see my bulletin and  blog post here.  This blog post sets out the things that local government boards can continue to do after the SOE law expires and the things that boards can’t continue do without obtaining legislative authority. Read more »

  • American Rescue Plan Act of 2021 (ARP): Local Government Expenditures of ARP funds for General Government Purposes

    Authored by: on Tuesday, June 29th, 2021

    As some local governments have received, and many will shortly receive, their first tranche distribution of ARP funds (also referred to as Coronavirus State and Local Fiscal Recovery Funds, Fiscal Recovery Funds, or CLFRF), local officials are trying to understand all their expenditure options. I have received several questions from local officials about the legality of using ARP funds for everything from buying police vehicles, to doing minor construction projects, to acquiring land, to providing general salary bonuses, to spearheading economic development projects, to hiring new employees, to upgrading software systems, to giving a rebate to taxpayers, to installing new playground equipment, and beyond. In short, local government officials want to know whether, and to what extent, ARP funds may be used for general government projects, services, and activities that do not directly relate to the pandemic (collectively general government purposes).

    The short answer to this question is that although most of the authorized expenditures for ARP funds relate to addressing the public health and financial impacts of the pandemic, there is authority to spend at least a portion of ARP monies for general government purposes. A detailed analysis, however, finds that this authority is more limited than it might first appear. A local government may use ARP monies to fund (most) government services, to the extent that the local government experiences a reduction in general revenue during the pandemic, according to a specified formula. Additionally, a local government may spend ARP monies for certain necessary public enterprise infrastructure projects. Finally, there is authority to spend a small portion of ARP monies (and investment proceeds of ARP monies) for general government purposes. More on each below. Read more »

  • Clarification of Rules for Remote Meetings Under State Level State of Emergency: No More Waiting 24 Hours After Public Hearings!

    Authored by: on Friday, June 18th, 2021

    At the beginning of the pandemic, a new statute regarding remote meetings– GS 166A-19.24— provided a roadmap for managing government business. Public officials have learned so much about how to do things differently. Shout out to all of you who have pivoted in so many new directions, to keep people safe and healthy, and keep the government moving.  The new rules for remote meetings, summarized in my blog post here, have worked well but they also raised a few questions. Luckily, several local government attorneys proposed some clarifying changes. [Special thanks to Mujeeb Shah-Khan (Monroe City Attorney) for shepherding the project.]  Three changes were ratified by the legislature and signed by the Governor in Session Law 2021-35 (House Bill 812). This blog summarizes the changes, which will become effective July 1, 2021, and apply to remote meetings held on or after that date. Read more »

  • American Rescue Plan Act of 2021 (ARP): Accepting Funds, Budgeting & Cash Management

    Authored by: on Wednesday, June 16th, 2021

    UPDATED June 18, 2021 to provide additional information on investment proceeds of ARP Funds, based on a June 17 update from US Treasury.

    As detailed here and here, the federal American Rescue Plan Act (ARP) provides significant funding for NC local governments. (These funds are also referred to as Coronavirus State and Local Fiscal Recovery Funds, CSLFRF, CLFRF, or Fiscal Recovery Funds.) Many counties and municipalities over 50K population (metropolitan municipalities) have already received their first tranche of funds directly from the federal government, which comprises one-half of their total allocation. (For counties and metropolitan municipalities who have not yet applied, you may do so here.) All other municipalities, referred to as nonentitlement units of local government or NEUs, should receive their first distribution from the state within the next month or so, which also will comprise one-half of their total allocation. The NC Pandemic Recovery Office (NCPRO) has important guidance for local governments, including a checklist of items to complete in anticipation of receiving the ARP funds. They also are compiling and addressing frequently asked questions here. The US Treasury has addressed NEU distribution FAQs here.

    Local government officials have many questions about when they’ll receive their funds and how much, for what purposes may they spend the monies, and what contracting, reporting, auditing, and other compliance requirements apply. Unfortunately, we do not yet have all the answers from the federal government. The good news is that local officials do not have to rush to spend the funds. According to the US Treasury’s Interim Final Rule interpreting the ARP, local governments have until December 31, 2024, to obligate the ARP monies and until December 31, 2026, to expend all the funds. As an immediate matter, though, local officials need to know how to accept the funds, what to do with the cash, and how to budget the monies under state law. Those are the topics of this post. Read more »