Recent Blog Posts

  • Finance Officer Fidelity Bonds: When Are Multiple Bonds Required?

    Authored by: on Thursday, January 12th, 2012

    Prudence serves as a finance officer for a North Carolina county. As a condition of her initial (and continued) employment Prudence is required to obtain and maintain a “true accounting and faithful performance bond” with coverage of up to $50,000. (The county pays the annual premium on the bond.) Recently, the county agreed to handle the finances for the local tourism development authority (TDA). The TDA is a public authority that was created by resolution of the county’s governing board, as authorized by a local act of the General Assembly. The TDA is funded mainly through occupancy tax proceeds levied by the county. It has its own governing board, whose members are appointed by the county commissioners. Pursuant to the agreement between the TDA and the county, Prudence maintains the TDA’s accounts, deposits and invests its funds, and disburses TDA monies according to the directives provided by the TDA’s governing board. Prudence also prepares the TDA’s financial reports. Because of the nature of the relationship between the TDA and the county, the TDA is considered a component unit of the county and its financials are audited along with the county’s financials.

    Prudence is a cautious person by nature and a stickler for following all of the legal provisions that govern her job functions. She recently re-read the Local Government Budget and Fiscal Control Act (LGBFCA) and focused in on the “fidelity bond” requirement in G.S. 159-29. Upon a close reading of the statute, Prudence believes that she may need to obtain a second bond for the finance work she is performing for the TDA. Prudence raises this issue with the county attorney, John Q. Gambler, but he quickly dismisses her concerns. In his opinion, the $50,000 bond that Prudence already has is sufficient to cover all of her duties as the county finance officer, including managing the finances for the TDA.

    Who has the correct interpretation of G.S. 159-29, Prudence or Mr. Gambler? Read more »

  • Canceling and Rescheduling Meetings

    Authored by: on Wednesday, January 11th, 2012

    Sometimes there just aren’t enough board members to have a meeting. Suppose that a clerk for a North Carolina city or county learns in advance of a meeting that several governing board members have conflicts and will not be able to attend. There won’t be a quorum without these members. What should be done?  What is the process for cancelling and rescheduling meetings? Must the clerk provide notice of the cancellation to the public and the board members? What notice is required of the rescheduled meeting? Must anyone be present at the time and place of the originally scheduled meeting? Who can cancel a meeting? Surprisingly, there is hardly any law (statutes or cases) addressing these issues.  This blog post summarizes several relevant statutory provisions and suggests approaches that may be used when meetings can’t happen. Read more »

  • Happy Delinquent Tax Day!

    Authored by: on Friday, January 6th, 2012

    Don’t you just love the holiday season? We kick it off with a Thanksgiving feast, exchange presents on Hanukah and Christmas, and then celebrate a fresh start on New Year’s Day. But the fun doesn’t end just because we’ve all headed back to work and school. 

    Late last night, the Delinquent Tax Fairy visited local government tax offices across the state, leaving nicely wrapped presents filled with 2% interest and attachment notices.  It must be Delinquent Tax Day!

    That’s right: as of 12 a.m. this morning all unpaid 2011-2012 property taxes officially became delinquent.  In a nutshell, this means that interest accrues and enforced collection remedies can begin. 

    Please allow me to interrupt your holiday celebrations to provide a few details on what should and can happen after Delinquent Tax Day. Read more »

  • North Carolina in the Electoral College

    Authored by: on Tuesday, January 3rd, 2012

    Most North Carolinians understand that when we mark our ballots for Jimmy Carter or Ronald Reagan or George Bush or Barak Obama for President, we are not in fact voting for those candidates.  We are, instead, voting for a small set of “electors” who will cast the state’s official votes in the election of the President in the nation’s Electoral College.  But how does that really work?  There are 28 steps, start to finish. Read more »

  • Ensuring Local Policy Complies with New Residential Inspections Law

    Authored by: on Tuesday, December 20th, 2011

    The city manager of Tooltime, North Carolina, picks up the phone and calls Tim Taylor, the city’s minimum housing public officer and lead housing inspector. “Tim, I understand why you suspended all periodic inspections in Tooltime that did not comply with the new periodic inspections law.  I know we have much less flexibility now than we had before. But residential buildings still need to be inspected, and new complaints about neglected dwellings come in every week. I need a plan for moving forward that I can explain to the council. Can we modify our inspections program to comply with the law?”

    Tim had already been working on it. Earlier that week, he and city attorney Heidi Keppert had reviewed and discussed a School of Government (SOG) bulletin on the new law. Although the law now requires inspectors first to find “reasonable cause” prior to inspecting a residential building, there was no other guidance on the procedural aspects of an inspection program. Heidi explained that the lack of guidance offers some flexibility to the city, but there are pitfalls as well. In the absence of clear procedures, inspections might be conducted inconsistently, or similarly-situated owners and landlords might be treated differently, leaving the city vulnerable to equal protection or due process complaints. A written inspections policy would help in that regard.

    As Heidi and Tim work to revise their local policy, what aspects of the policy should they evaluate and modify? Read more »

  • Preoccupied with Occupancy Certificates: Part I

    Authored by: on Thursday, December 15th, 2011

    My current preoccupation (a temporary one, I hope) is certificates of occupancy. I don’t mean those permissions necessary to occupy public property in the Raleigh, New York, or Washington demonstrations that have been in the news. No, I mean those ordinary certificates of occupancy that local governments issue to allow new buildings to be occupied for the first time or the use of existing properties to be changed. The certificate of occupancy (CO) is a widely recognized certificate issued by code officials that represents a determination that work done on a building or development project has been completed in compliance with the law and may be occupied safely. Read more »

  • Locally-Collected Fines & Penalties: Calculating and Distributing Clear Proceeds

    Authored by: on Thursday, December 8th, 2011

    The Village of Paved Paradise is located on the North Carolina coast. It is a small municipality with a vibrant downtown. Because of its size and location, parking in the downtown area is scarce. There is a strict two-hour limit in the single town-owned parking lot, imposed by local ordinance. The ordinance assesses a $50 penalty for violating the parking time limit. (The ordinance is criminally enforceable under G.S. 14-4.) Despite the steep penalty, citizens and visitors regularly violate the parking ordinance—often parking in the lot for an entire day. The town employs a parking officer who issues multiple parking citations each day. However, the village has not been vigorous in its collection efforts, resulting in a measly 30% collection rate of the penalty amounts. In response to numerous citizen complaints about the lack of available parking, the village’s governing board decides to beef up its collection efforts in the hopes of discouraging violators. It hires DogtheBountyHunter, Inc., a local collection agency, to aid the village in collecting a variety of fees and charges, including the parking penalties. Pursuant to its agreement with the village, the collection agency retains 15% of the amounts collected, disbursing the remaining funds to the village.

    Having read this recent Coates’ Canons blog post, the village board is aware that by operation of N.C. Const. Art. IX, Sect. 7 and G.S. 115C-437 some of the monies collected by the agency, including the “clear proceeds” of the parking penalties, must be distributed to the local school administrative unit(s) in the county in which the village is located. The board members need help in calculating the amount that must be disbursed to the public schools, though. Assume that the collection agency reports that for the preceding month it collected $600 in outstanding parking penalties. After retaining its 15% fee, the collection agency forwards $510 to the village. What amount must the village disburse to its local school administrative unit(s)?

    (a)    $459

    (b)   $510

    (c)    $540

    (d)   $600

    (e)    None of the above Read more »