eNews

 

In this issue:

• Register for VML regional legislative update sessions
• March for More for Virginia schools to be held in Richmond
• Newly Elected Officials conference registration now open
• VML essay contest for 7^th graders now accepting entries
• State seeks to conform with federal tax changes in time
• House recommendations for school safety
• Medicaid budget shortfall due to bad assumptions
• Health care commission pursues jail-based health/mental health service recommendations
• Fall edition of VDOT newsletter now available
• Virginia State Crime Commission discusses pretrial services
• U. S. Supreme Court to weigh in on Virginia redistricting case (again)
• New Federal tool for rural communities battling opioid addiction
• Grants training in Portsmouth
• Digital Cities Survey winners
• Hampton’s housing authority rated top performer

 

VML fall regional legislative update sessions are almost here

Time is running out, so register now to take part in one of these valuable learning experiences:

Northern Virginia:
Tuesday, November 27^th, 1:00-3:00 p.m.
The Barns at Rose Hill
95 Chalmers Court
Berryville, Virginia 22611

Southwest Virginia:
Wednesday, December 5^th, 6:30-8:30 p.m.
Anna’s Restaurant
100 Monroe Street
Narrows, Virginia 24124
$15 registration fee

Registration for the events is available via the VML website.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

March for More to take place in City of Richmond

Dec. 8 event aims to unite voices to fight for more money to make better schools for stronger students

Teachers, parents, students, community organizations, and elected officials from across Virginia are all invited to join this rally. Stand up, and let’s march to send a message to our state leaders that K-12 education needs more funding because students deserve a quality education regardless of where they live.

The march will start at Martin Luther King, Jr. Middle School, 1000 Mosby Street, Richmond, VA and end at the Bell Tower on Capitol Square.

Remember, in the last year for which figures are available (2016-2017), local governments statewide paid more than 51 percent of all operating costs for K-12 education and most of capital costs.  Local governments do their part; it’s more than time for the state to step up and do its part.

Find out more online at www.MoreBetterStronger.com

 

VML Newly Elected Officials conference to be held January 8, 2019

This conference is designed primarily for newly elected officials, but it is also a useful refresher course for incumbent officeholders and staff.  Topics to be covered include:

• Council-Manager Relations
• Freedom of Information Act
• Conflict of Interests Act
• Public Officials’ Liability
• Budgeting Basics

The cost is $65. Registration is available via the VML website.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

VML “If I Were Mayor” essay contest accepting entries

The Virginia Municipal League (VML) invites all Virginia 7th Graders to join its essay contest, “If I Were Mayor,” to tell others what they would do as mayor (or elected official) to make their city, town or county an even better place to live. Regional winners receive $150 and one statewide winner (chosen from the regional winners) receives an additional $250.

Contest rules and details available on the VML website.

VML Contact: Rob Bullington, rbullington@vml.org

 

Is time running out for the state to conform with federal tax changes?

The Virginia Association of Certified Public Accountants has made immediate tax conformity its top legislative priority to reduce complexity for both taxpayers and tax preparers.

Virginia’s Secretary of Finance Aubrey Layne, who also happens to be a Certified Public Account, agrees with his professional association’s priority.

In a recent appearance before the Senate Finance Committee, Secretary Layne warned the legislators that the Commonwealth could lose $370 million in income tax revenue if the state does not conform the state tax code to align with last year’s sweeping changes in federal tax law.

Based on work done by Minnesota’s tax agency to gauge the impact of state tax de-conformity from the federal Tax Cuts and Jobs Act, Layne told the Senators that taxpayers would have to complete new tax forms reflecting 20 adjustments for individuals and 30 for businesses.

The Secretary favors General Assembly action to conform the state and federal tax codes as the first order of business in 2019, putting off the debate on tax policy changes until a future legislative session. However, given the estimated $594 million windfall to Virginia as a result of federal tax changes, it is unlikely that the legislature will issue a pass on the tax policy debate.

Gov. Ralph Northam has already announced his preference to use half of the windfall to refund the full amount of the earned income tax credit to eligible taxpayers. Republican legislators are wary about conforming to the new federal tax policies, asserting that Northam’s proposal is a redistribution of tax money that should be returned to the taxpayers who paid it.

The political stakes and revenue implications are huge. In case anyone has forgotten, next year is an election year with all 140 seats in the General Assembly up for grabs and taxes will certainly be a campaign issue.

But, making policy changes to benefit taxpayers has its own risks. The federal tax breaks for individuals are temporary and will expire by the close of 2025. So, unless the tax cuts are made permanent, the federal tax bills for individual filers will then go up and the state tax revenues will likely go down. At that point, the General Assembly will be put in the position of choosing between cutting the state budget or raising state taxes – a choice most state legislators would rather avoid.

VML Contact: Neal Menkes, nmenkes@vml.org

 

House recommendations for school safety prioritize counseling and increased security staffing

In its last meeting before the upcoming session, the House Select Committee on School Safety presented a final list of 24 recommendations for school security enhancements across the Commonwealth. Foremost among these, the committee seeks to address concerns that counselors are overly burdened with administrative duties by recommending that counselors be required to spend an established percentage of staff time on direct services to students. The committee also proposes permitting retired law enforcement officers to take on full-time school resource and security officer positions without forfeiting retirement benefits. Currently, law enforcement retirees can work a maximum 80 percent schedule without losing benefits, limiting the pool of available highly-trained security staff. The full House will consider the complete list of recommendations during the upcoming General Assembly session.

When introducing the committee’s proposals, Speaker Kirk Cox emphasized the importance of mental health and early intervention as means of mitigating potential threats in schools. However, as Delegate David Toscano observed, the committee’s funding estimates appear misaligned with its priorities. While many of the 24 recommendations include indeterminate fiscal impact assessments, an estimated $5.3 million would support training and security versus $2.2 million backing mental health supports. Fiscal responsibility for other recommendations, such as the hiring of additional school staff to take over administrative responsibilities (i.e. test coordination) from counselors, could potentially fall disproportionately on localities.

The committee plans to release the full text of the final report no later than December 14.  Additional information on the committee and its work is posted at https://studies.virginiageneralassembly.gov/studies/462.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

Bad assumptions punch a hole in the Medicaid budget

Budget shortfall of over $460.0 million will challenge Gov. Northam’s and the General Assembly’s plans for the 2019 Session.

The state budget for the 2018-2020 biennium assumed the Medicaid budget would increase by 2.5 percent in FY19 and by 3.4 percent in FY20. These rates, which were approved by state decision-makers based on a November 2017 forecast, are significantly less than the 7 percent average annual growth rate over the past ten-years.

The state general fund commitment to Medicaid spending is driven mainly by enrollment growth, inflation in certain medical provider rates, and increased supplemental payments to hospitals. The state budget, which was signed into law in June, provided an additional $575.8 million of general fund dollars for the biennial forecast.

So, what happened?  The recently-released November 2018 Medicaid Forecast shows that spending in FY19 will increase by 6.2 percent — not 2.5 percent.  For FY20, the new forecast revises downward the spending increase from 3.4 percent to 2.6 percent.

Comparing the November 2018 forecast with the state budget passed in June, the general fund shortfall in FY19 is $202.2 million and in FY20 is $260.3 million.

Last year’s forecast underestimated the enrollment numbers of low-income children, overestimated utilization savings in Medicaid’s fee-for-service program and missed the growth in hospital claims and expenditures. Policy changes that pushed for greater managed care changes have not produced the dollar savings assumed in the forecast. Managed care rates also increased above the 2017 forecast.

In response to such significant changes, the Department of Medical Assistance Services (DMAS) replaced the actuary responsible for developing last year’s forecast. However, a presentation made at the House Appropriations Committee Retreat pointed out that several unresolved issues remain. DMAS has not completed the data analysis necessary to explain the reasons that cost savings have not been realized. House Appropriations staff did make clear that “better integration of Medicaid forecasting, actuarial analysis of managed care expenditures and rate development, and budget development is needed.”

For local governments, the Medicaid shortfall could hurt efforts to persuade the state to do more in K-12 funding and other high-priority programs, including the restoration of money taken from the Communications Sales and Use Trust Fund. Gov. Northam’s budget amendments will include his proposal to address the Medicaid shortfall. Those amendments will be submitted to the General Assembly’s money committees on December 18.

 

VML Contact: Neal Menkes, nmenkes@vml.org

 

Health care commission adopts recommendations for jail-based health/mental health services

On Nov. 7 the Joint Commission on Health Care considered 10 recommendations from its two-year study of the quality of health care services in jails and prisons, and the impact of requiring community services boards to provide mental health services in jails. Of these, the commission adopted three to pursue as legislative or budget actions in the 2019 General Assembly session:

• Amending the Code to require the Board of Corrections to adopt minimum health care standards for all local and regional jails, whether they were already nationally-accredited or not (the original recommendation would have addressed only those without national accreditation).
• Requesting the Compensation Board, Department of Behavioral Health and Developmental Disabilities, and Department of Corrections to create a single statewide HIPPA compliant release form to be used for all people served through community services boards and the state behavioral health system to allow for better information sharing.
• Requesting that the Secretary of Health and Human Resources, Secretary of Administration and Secretary of Public Safety and Homeland Security establish a “Local and Regional Jail and Mental Health and Substance Use Disorder Best Practice Committee.”

VML Contact: Janet Areson, jareson@vml.org

 

Fall 2018 edition of the Local Assistance Division Newsletter now available

The Local Assistance Division Newsletter communicates general information about local programs to both local governments and VDOT staff. The Fall 2018 Edition of the newsletter highlights the 2018 Local Programs Workshop and provides updates on the proposed qualifications program, a new CTB Policy for reporting on At-Risk SMART Scale projects and the pending federal rescission.

Other important updates and reminders for locally administered projects are addressed including LAP-MAP, NVAP (for collecting construction data for locally administered projects), local on-time advertisement trends and the importance of maintaining good project schedules. This edition also includes updates on several funding programs and the application cycle for the SGR and Primary Extensions, Revenue Sharing, and Transportation Alternatives Programs.

Address any questions to Julie R. Brown (Director, Local Assistance Division), julie.brown@vdot.virginia.gov

 

Virginia State Crime Commission discusses pretrial services

Stakeholders recommend expansion of services to all localities

Staff from the Virginia State Crime Commission and Department of Criminal Justice Services (DCJS) presented an update on the 2018 study of the pretrial services program and additional areas for study to the State Crime Commission on Nov. 8 in Richmond.

Both the Virginia State Crime Commission and DCJS have been studying pretrial services. The Virginia State Crime Commission gave DCJS recommendations for the program last December and conducted a statewide needs assessment. DCJS convened a stakeholder workgroup earlier this year to gather feedback and recommendations and began implementing a plan to improve administration and uniformity of the program in the pretrial agencies across the state.

Outcomes and recommendations from the stakeholder group included the following:

• Pretrial services should be expanded to all localities.
• Pretrial services should provide both investigations and supervision.
• The risk assessment tool (VPRAI) should include separate risk scores for risk level to public safety and risk level for failure to appear.
• The tool should guide the intensity of supervision.
• DCJS should work with stakeholders to develop training modules/coordinate training of local pretrial stakeholders.
• Training should focus on the importance of transfer of information between pretrial agencies, judges, prosecutors, defense attorneys and other stakeholders.

In addition, a workgroup is developing a new funding formula for the program because the current one is out-of-date with the growth in the program over time.

DCJS staff said that its workplan includes more frequent visits to pretrial services program sites, and enhanced monitoring of each program (including quarterly analyses of agency data beginning in the spring) to ensure compliance with DCJS standards and guidelines. Additionally, modifications and enhancements to the case management system will address data issues and gaps discovered by the Virginia State Crime Commission study.

At the same time, the Virginia State Crime Commission has a project underway through Dec. 31, 2018 to follow a cohort of adult defendants charged during a one-month period (Oct. 2017) to capture data related to final case depositions, public safety factors (i.e. new arrests prior to final disposition) and instances of failure to appear.

A few members of the Virginia State Crime Commission expressed skepticism of the recommendation to expand the program to all localities when it was not yet clear from the study whether the program was effective in meeting its goals, or even if it was a better alternative to having no program at all.

DCJS staff answered questions from Virginia State Crime Commission members regarding the accuracy and effectiveness of the risk assessment instrument, the link between the level of supervision and safety issues, and policy regarding auditing of cases when something goes wrong. Staff also said that they would re-evaluate the recommendation to expand the program if the new data showed reason to do otherwise.

Additional information is posted on the Virginia State Crime Commission’s website at http://vscc.virginia.gov/meetings.asp.

VML Contact: Janet Areson, jareson@vml.org

 

U.S. Supreme Court to hear appeal in Virginia redistricting case

In the latest twist to Virginia’s ongoing redistricting drama, the U.S. Supreme Court agreed Tuesday to hear new arguments in the case, looking specifically at whether the GOP, led be Speaker Kirk Cox, has the standing to bring an appeal against the Fourth District’s June ruling. Traditionally, a court ruling can only be challenged by an individual or group it directly harms.

While this new development does not automatically affect the Fourth Circuit’s development of a new map, to be drawn by Dr. Bernard Grofman of UC-Irvine, House leadership could request that the Supreme Court place a hold on the proceedings until after the appeal.

This is not the case’s first appearance before the Supreme Court. Whereas the Fourth Circuit originally confirmed that the House’s use of racial thresholds in the 2011 map was acceptable, the Supreme Court instructed the court to reconsider the case in 2017 using a narrower legal standard. Upon review, the lower court determined that House leadership had improperly restricted minorities into fewer districts to allow for higher concentrations of likely GOP voters in surrounding areas.

The case is expected to be heard in the spring of 2019. The Supreme Court’s full order list can be found here.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

New Federal tool available to help rural communities address opioid epidemic

The Rural Resource Guide to Help Communities Address Substance Use Disorder and Opioid Misuse is a new resource for rural community leaders looking for Federal funding and partnership opportunities to address opioid misuse and build community resilience. It was developed by the Rural Opioid Federal Interagency Working Group.

In May 2018, the White House Office of National Drug Control Policy (ONDCP) convened the Rural Opioid Federal Interagency Working Group to help address the opioid crisis in rural communities by improving coordination and reducing potential overlap among federal agencies. ONDCP and U.S. Department of Agriculture (USDA) co-chair the group, which includes representatives of the Departments of Commerce, Education, Health and Human Services, Housing, Justice, Labor, Transportation, and Veterans Affairs; the Corporation for National and Community Service; and the Appalachian Regional Commission.

The Rural Resource Guide is the second tool announced this month in USDA’s Community Opioid Misuse Toolbox (available for free on USDA’s Rural Opioid Misuse Webpage) which is a suite of tools to support grassroots strategies to address the opioid epidemic. Earlier this month, USDA launched the Community Assessment Tool, an interactive database to help community leaders assess how and why the opioid epidemic is affecting their region.

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.

VML Contact: Janet Areson, jareson@vml.org

 

Grants Training in Portsmouth, VA – December 13-14

The Portsmouth Police Department and Grant Writing USA will present a two-day grants workshop in Portsmouth, December 13-14. This training is for grant seekers across all disciplines and is appropriate for beginning and experienced grant writers from city, county and state agencies as well as nonprofits, K-12, colleges and universities.

Click here for full event details.

Contacts:

Tammy Pitts
Grant Writing USA
888.435.7281 toll free
tammyp@grantwritingusa.com

Sgt. Dillon
Portsmouth Police Department
757.393.8088 x15
dillonb@portsmouthva.gov

 

2018 Digital Cities Survey Winners announced

Virginia Beach first place winner in its population category

In November, Virginia Beach was named the first-place winner of the 2018 Digital Cities Survey for cities with populations between 250,000 to 499,999 by the Center for Digital Government. This was the third year in a row that the city received this ranking.

The annual survey, which is in its 18^th year, recognizes cities that are using technology to tackle social challenges, enhance cybersecurity, improve transparency and more. Virginia Beach’s achievements included integrating Smart City priorities with the city council ‘s 10 strategic goals, installing 12 Internet of Things (IoT) sensors to mitigate the effect of sea-level rise and flooding and to support disaster preparedness and recovery, and appointing a chief data officer to improve open data and transparency.

Other first-place winners were Los Angeles, CA; Bellevue, WA; Westminster, CO and Coral Gables, FL. These cities were among ten recognized at an awards banquet held Nov. 8 during the National League of Cities’ conference in Los Angeles.

Other Virginia cities were also recognized for their use of technology, placing in the top ten of their respective population categories. Lynchburg tied for second place in the population category of 75,000 – 124,999.  Also placing in the top ten of their population categories were the cities of Alexandria, Norfolk and Hampton (125,000 – 249,999 population); Roanoke (75,000 – 124,999 population); Salem and Williamsburg (Up to 75,000 population).

 

Hampton’s housing authority rated top performer by HUD

The Hampton Redevelopment and Housing Authority (HRHA) has been rated a “High Performer” agency in both key measures used by the federal Department of Housing and Urban Development, according to a city media announcement released in early November.

HRHA scored more than 91 points of a possible 100 on the Public Housing Assessment System for the fiscal year ending Dec. 31, 2017.  That set of standards grades public housing — fiscal management, physical buildings, and construction and ongoing funding. The agency earned a perfect score on the Section Eight Management Assessment Program for the same time period.

 

 

In this issue:

• October issue of Virginia Town & City now available online
• Registration open for legislative update sessions
• Deadline to submit comments on proposed cable rule changes
• Funding for core services in the 2019 General Assembly session
• Deployment plan for NextGen 9-1-1
• NextGen 9-1-1 webinar
• SIEC meeting in Roanoke
• Small cell deployment update
• Recent economic news
• Unmanned Aircraft Systems group convenes
• Private special education day rates study commences
• 2008 recession continues to affect Virginia student performance

Fall treat: October issue of Virginia Town & City now available online

Subscribers to VML’s magazine may be wondering what happened to the October issue. Don’t worry, it’s in the mail, but was delayed by the work needed to put on our 2018 Conference. In the meantime, if you want to check it out – including all the great photos from the conference – we’ve posted it early to our website. Enjoy!

VML Contact: Rob Bullington, rbullington@vml.org

 

 

Register now for VML’s fall regional legislative updates

Did you miss the 2019 Annual Conference? Join us at one of our upcoming regional legislative update sessions for a review of VML’s 2019 Legislative Agenda.

 

Northern Virginia:

Tuesday, November 27^th, 1:00-3:00 p.m.

The Barns at Rose Hill

95 Chalmers Court

Berryville, Virginia 22611

 

Southwest Virginia:

Wednesday, December 5^th, 6:30-8:30 p.m.

Anna’s Restaurant

100 Monroe Street

Narrows, Virginia 24124

$15 registration fee

 

Registration for the events is available via the VML website.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

Local authority over cable companies preempted in proposed federal rule

Local governments have until Nov. 14^th to submit comments

The Federal Communications Commission has published a Notice of Proposed Rulemaking that proposes to limit state and local cable franchising revenues and preempt local authority over non-cable services and infrastructure that cable companies provide.  VML will submit comments and asks that you consider doing the same.  Comments are due by November 14^th; if you send a letter please copy VML as well.  This Senate Letter provides an overview of the issues, but the details are unique to each community.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Funding decisions related to core services will figure prominently in 2019 General Assembly session

People of a certain age who grew up in the New York City metro area during the 1960s remember a radio jingle for a men’s clothier that played relentlessly on late-night WABC AM radio. Dennison’s Clothes located in the median of Route 22 in Union, N.J. was open from 10:00 in the morning to 5:00 the next morning and promoted itself as the place “where money talks and nobody walks.” If you had $24.90, the friendly folks of Dennison’s could find you a new sports coat.

The General Assembly will have more than a little bit of money in the upcoming session, and local governments wonder if the legislature will spend more to help pay for core services such as public education and transportation. Let’s consider each in turn.

Education

In an editorial published last week in The Virginian-Pilot, Richmond Mayor Levar Stoney hammered home the point that the K-12 education system is woefully underfunded. “Old buildings, staffing cuts, stagnant salaries, outdated technology and dwindling school supplies are just a few of the issues plaguing the learning environments for students across the commonwealth.”

Since fiscal year 2009, inflation and budget cuts have reduced the level of state-funds-per-pupil support. As the budget gap between the state’s Standards of Quality and state appropriations increased to $600 million each year, Virginia localities have ponied up more local dollars to pay the true cost of education. In FY 2017, Virginia’s local governments spent $4 billion above the required local share for Standard of Quality (SOQ) programs.

Is anyone in Richmond listening? Well, the Virginia Department of Education submitted over a quarter of a billion dollars in budget requests in FY20 dealing with increasing teacher pay, hiring more school counselors, supporting local pre-school initiatives, and other items.

Transportation

Concerning transportation funding, a presentation made at the 2018 VML Annual Conference by Jim Regimbal of Fiscal Analytics showed transportation revenue growth as flat as a pancake from fiscal years 2019 through 2024.

 

Future Transportation Revenue Growth Expected to be Flat ($s, millons)
Fiscal Year	State*	Federal	Regional	WMATA Pass-Thru	Bonds	Total
2019	$4,251	$1,143	$472	$135	$147	$6,147
2020	$4,191	$1,087	$467	$135	$302	$6,182
2021	$4,288	$1,104	$477	$136	$397	$6,403
2022	$4,124	$1,122	$486	$137	$76	$5,946
2023	$4,108	$1,141	$495	$137	$296	$6,177
2024	$4,172	$1,159	$505	$138	$125	$6,099
*Includes local participation and toll revenue Source:  June 2018 VDOT budget presentations to the Commonwealth Transp Board

 

This unfortunate trend means fewer new construction dollars for roads and bridges and fewer dollars to meet the capital needs of Virginia’s transit systems.

The table below illustrates the state’s inability to meet construction needs based on Smart Scale applications. Smart Scale was approved by the General Assembly in 2014 as a process to evaluate road and transit projects and to remove politics from transportation decisions.

 

Smart Scale Process Indicates Transportation Needs Exceed Resources
FY 2018 Applications Round	Statewide
Total Project Costs Requested	$10.9 billion
Total Smart Scale Funding Requested for Projects Above	$8.6 billion
Project Costs Accepted	$2.4 billion
Smart Scale Funds Allocated	$1.0 billion
% of Smart Scale Requests Actually Funded	12.0 percent

 

Transportation projects to improve safety along the I-81 Corridor or to provide capital and operating assistance to transit systems other than Washington Metropolitan Area Transit Authority (WMATA) and Virginia Railway Express (VRE) will probably require revenue streams beyond those now in effect or significant state general fund resources or both.

The takeaway: Meeting the increasing demands and costs to fund and provide core services such as education and transportation should be a General Assembly priority in the 2019 session.

VML Contact: Neal Menkes, nmenkes@vml.org

 

Localities urged to review NextGen 911 deployment plan

It is imperative that local officials review and understand the NextGen 911 Draft Deployment Plan that has been released by the Virginia Information Technologies Agency.  The state is funding the initial upgrade, but the cost of running the system will be up to localities after a certain period of time.  Here is a link to the Funding Formula changes so that you can see what the impact would be on your locality.  There will be an impact and the timing of the financial impact is based upon when deployment occurs in your area.  The proposed timing is outlined in the deployment plan.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Webinar regarding Next Generation 9-1-1 to be held on November 7

As many of you are aware, Public Safety Answering Points (PSAPs) across the country need to be upgraded to a digital or Internet Protocol (IP)-based 911 system, commonly referred to as Next Generation 9-1-1 (NG911).

According to 911.gov: “The transition to NG911 will involve much more than just new computer hardware and software. Implementing NG911 in states and counties nationwide will require the coordination of a variety of emergency communication, public safety, legislative and governing entities.”

Here in Virginia we are ready to move forward; it is time for each PSAP and locality to consider their options and decide how they would like to proceed with NG 9-1-1.

On Wednesday, November 7 at 2:00 pm, the staff of the Integrated Services Program (ISP) of the Virginia Information Technologies Agency (VITA), the commonwealth’s consolidated information technology organization, will host an informational webinar titled “NG9-1-1 the Next Steps, Options, and Your Decisions.”

The webinar will provide a brief overview of the current situation in Virginia and offer helpful suggestions how a PSAP may want to proceed with making NG9-1-1 decisions. Additionally, the webinar will cover the most frequent questions VITA ISP staff have encountered regarding next steps. If local decision makers have not yet been brought into the discussion about NG9-1-1, this will be a good opportunity for them to understand the background and the process going forward.

To take part in the webinar, interested individuals should call in just before 2:00 pm to 1-866-842-5779 and use PIN 8248087601. Then, when it’s time, use this link to join the meeting.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Statewide Interoperability Executive Committee (SIEC) meets in Roanoke

NextGen 9-1-1, FirstNet, COMLINC and use of federal interoperability channels discussed

A presentation on the NextGen 9-1-1 plan was made at the Oct. 23 meeting in Roanoke of the Statewide Interoperability Executive Committee (SIEC).  The SIEC, which meets quarterly, also had an update on FirstNet–with a lot of questions regarding coverage and the use of FirstNet in Virginia.  FirstNet is a public safety communications platform that is designed to enable public safety agencies and first responders to receive information more quickly and enable better decision-making. Also discussed was the Commonwealth’s link to interoperable communications (COMLINC) and its viability in Virginia. This is an old system for public safety agencies to better communicate with each other and is in desperate need of an update or change. The questions are how to fund it and what is the right solution?  This report is in draft form and will be rolled out in the near future.

Lastly, the SIEC voted to approve a memorandum of understanding between the US Department of the Interior and the Commonwealth regarding the use of federal interoperability channels by non-federal entities.  This agreement will allow state and local law enforcement to work with federal users of these channels at times when law enforcement of all levels need to be in communication.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Update on small cell deployment

VML joins in petitioning for reconsideration of new rules

VML, the Town of Middleburg, the City of New Orleans, the Kentucky Municipal League and the Government Wireless Technology and Communications Association are participating in a petition for reconsideration of the small cell rules recently released by the Federal Communications Commission.  At last count, there are six lawsuits in addition to what is expected to be numerous petitions filed on this matter.  However, unless either the FCC or a court acts to stop the regulations, these changes will be effective January 14^th. Localities should begin to prepare for the implementation of the FCC Order.

As background, in mid-October, the FCC issued a declaratory ruling, third report and order that sets the stage for a fight with local governments across the country. The ruling means that as 5G is deployed, many of our localities will be adversely affected in several ways.

First, the FCC proposes an extremely broad expansion of the definition of “effective prohibition” of cellular services that will almost certainly invite challenges to long-standing locally owned rights-of-way and usage requirements. The definition opens local governments to the likelihood of more conflict and litigation over matters such as aesthetics, spacing and undergrounding. VML feels strongly that localities should have the authority to prescribe the location and appearance of these small cells.

Second, the FCC’s proposed new shot clock categories (i.e. the time limits for local actions on permit requests) do not give localities enough opportunity to review applications; the categories fail to account for a pre-existing structure’s design or suitability for wireless equipment. Additionally, the lack of federal historical and environmental reviews places additional burdens on local governments to protect historic preservation sites and evaluate environmental and/or safety concerns.

Third, the proposal’s definition of “fair and reasonable compensation” means a maximum of $270 in compensation for every small cell installation in every locality across America regardless of circumstances. This mandated fee for one industry has the potential to discriminate against other industries that may use the same asset. Furthermore, local governments will lose the ability to negotiate fair deals with wireless providers which in many cases have provided additional benefits to the community.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Recent economic news comes in two varieties: good and troubling

First, we’ll have a taste of some good news. In September, Virginia’s seasonally adjusted unemployment rate fell by a fractional point to 2.9% — the lowest rate since June 2007. Statewide employment increased by over 5,000 jobs during the same month to a record level of 4,025,200, marking the ninth consecutive monthly rise.  Over the year, seasonally adjusted total nonfarm employment increased in all of Virginia’s metropolitan areas.

 

Job Growth from September 2017 to September 2018
Metropolitan Area	Job Gains
Northern Virginia	27,100
Richmond	8,900
Charlottesville	5,300
Virginia Beach-Norfolk-Newport News	4,700
Roanoke	2,300
Winchester	2,200
Lynchburg	1,600
Staunton-Waynesboro	1,200
Harrisonburg	600
Blacksburg-Christiansburg-Radford	300
Source:  VEC News Release, October 19, 2018

 

But not all the economic news is sweet; in fact, some of it is troubling and leaves a decidedly bitter taste. The recent ups and downs (but mostly downs) this week and last for the Dow Jones Industrials, Standard & Poor’s 500, and the tech-heavy Nasdaq composite index have investors shaking their heads. Are these simply benign market corrections or something more potent?

The Dow Jones dove more than 600 points last Wednesday. As of the close of business on Monday, it had dropped 8.9% from its peak in early October. The benchmark Standard & Poor’s 500-stock index shed 3% last Wednesday, wiping out its gains for the year. It was down 9.9% from its peak as of Monday of this week.  The Nasdaq composite index was down 4.4% having fallen more than 12% since early September.

Many believe that the stock market is facing serious challenges due to interest rates slowly rising, doubts about the profitability of certain companies and growing fears that the U.S.-China trade squabble is worsening as the U.S. prepares to announce tariffs on all remaining Chinese imports if trade talks in December fail to break the impasse.

President Trump’s assessment of Wall Street is different, claiming that the stock market was taking a “little pause” amid anticipation for next week’s midterm elections. Political uncertainty can make investors twitchy.

Closer to home, the Governor’s Advisory Council on Revenue Estimates (GACRE) may also be getting nervous. Their meeting scheduled for November 19 will help determine the amount of revenue flexibility Gov. Northam has in funding his budget amendments for the 2019 Session.

The next few weeks of economic and political news could bring greater certainty or may increase the fuzziness about the country’s and Virginia’s economies. Stay tuned.

VML Contact: Neal Menkes, nmenkes@vml.org

 

Unmanned aircraft systems study takes off

VML to have a voice in exploring issues related to use by federal, state and local governments

Do you know the difference between an Unmanned Aircraft System (UAS) and a “model aircraft?” The Federal Aviation Administration parses the difference by noting that a model aircraft is a type of UAS that “is flown within visual line-of-sight of the person operating it” and “is flown for hobby or recreational purposes.” And, until relatively recently, “model aircraft” were the only types of UAS that the average person, business or local government would need to concern themselves with. However, the advances in technology for UAS platforms capable of being operated out of sight of the controller and for purposes other than recreation has made these sophisticated systems accessible to all. The possible benefits of these systems are numerous, as are the potential risks and complications.

To this end, the UAS work group, created to “explore issues related to unmanned aircraft system activities” (as stipulated by SB307), met on October 22 to discuss how to move this industry forward in Virginia. It was proposed that the effort be divided amongst 4 sub-groups with each handling a different aspect of the subject:

1. Business Development
   • State funding for UAS businesses, start-ups and consumers
   • Other funding sources for UAS businesses and start-ups
   • Central point of contact to develop, support, promote, reach out to UAS industry
2. FAA & State Regulation
   • Recommendations to the FAA, Congress
   • State Legislation
   • Effects of HB638 on commercial UAS operation in VA
3. Education
   • Public
   • Future UAS workers
4. Federal, State and Local Government use of UAS
   • Police, EMS, environmental, engineering, other
   • Higher education use and development of UAS

VML has been placed on sub group #4 with Shawn Talmadge, Assistant Secretary of Public Safety and Homeland Security as its chairman.  These sub-groups will meet in November with a report to the whole group in January of 2019.

Special Thanks for Mark Flynn, Director of the Department of Aviation and former VML General Counsel for including VML.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Consultant study of private special education day rates gets underway

The growing use and cost of private special education day school placements paid for through the Children’s Services Act (CSA) has caught the attention of local governments and state legislators in the last few years.

Language approved by the General Assembly since 2017 has initiated various efforts to increase understanding of the growing use and cost of these services as well as options for the state to pursue. These efforts include a study by the House and Senate budget staff and state agency staff to look at options to manage quality and costs of private day placements; an interagency workgroup to look at the barriers to serving children with disabilities in public schools; and a workgroup to look at outcome measures for student progress in private day education placements.  This latter workgroup is coordinated by the Office of Children’s Services and the Department of Education and includes state agency staff, private education providers, parents, and local governments.  The General Assembly also capped the increase in payments for day program services at two percent for FY2020.

Another effort underway is a private consultant study of private day program costs and rates, including the adequacy of those rates.  The goal is to provide a better understanding of the costs of providing private special education day programs in Virginia and to develop rate recommendations.  PCG, a management consulting firm headquartered in Boston with 46 offices nationwide, is conducting the study.  The study team met this week with various stakeholder groups to introduce themselves, give an overview of the study, and answer questions.  More than 50 CSA and other local staff from across the state participated in such a meeting on Oct. 29 in the Richmond area.

The PCG study will focus exclusively on the costs and rates of the private programs.  Participation by providers will be voluntary.  Given the level of detail of costs that will be asked of providers – including staff salaries and benefits, service and operating costs, lobbying costs, supplies, as well as fund raising and development revenue and overall revenue – it remains to be seen how many will want to participate, and to what extent detailed information will be released to the consultants.

Some local government participants at the Oct. 29 meeting expressed concern that no local costs (such as transportation, which for some localities include trips of more than 40 miles one way to transport children to and from private day schools) would be considered in this study.  And, while the study is supposed to look at a possible rate setting structure, some expressed concern that the results would be used to set a ceiling on the amount that the state would consider for shared reimbursement through CSA. Localities would then be left to pay the balance since services provided would not necessarily come in under that ceiling and no public entity can deny services called for in a special education Individual Education Plan (IEP).

The consultants are currently conducting national research to understand how special education day rates are handled in other states, how those costs are shared between state and local governments and school districts, how rates are developed and what costs are included, and how other states’ rates compare to Virginia.  A preliminary report will be issued this December; a final report is due in June 2019.

VML Contact: Janet Areson, jareson@vml.org

 

Report highlights lasting impact of 2008 recession on academic performance

The long tail of the 2008 recession is still being felt in Virginia’s schools. The Virginia Early Childhood Foundation (VECF) reports that children who were 4 years and younger during the recession experience lower performance on standardized tests later in childhood due to the higher rates of exposure to prolonged poverty. Furthermore, VECF’s Biennial School Readiness Report Card, released this week, suggests that Virginia will continue to see lower pass rates on third-grade Standards of Learning (SOL) tests over the next five to six years due to the higher-than-usual number of students who spent their first five years living in poverty.

VECF’s report also addresses more moderate trends. While early childhood poverty rates have nearly stabilized to pre-recession levels, a comparison of test scores over the past five years shows a small but steady increase in failure rates on both the third-grade reading and math SOLs. At the same time, while poverty levels have fallen, the breakdown of poverty rates among racial groups shows lasting and extreme disparities over the same period.

Read VECF’s full report here for a full outline of its conclusions.

VML Contact: Jessica Ackerman, jackerman@vml.org

 

In this issue:

• New and updated resources on VML website
• Interest rates on the rise
• State revenues jump 4.0 percent in September
• Small victory gained at FOIA Council
• Procurement process study gets underway
• DSS, DMAS continue health care expansion work
• Code Commission takes up Title 15.2 issues

 

New and updated resources on VML website

Some of you (you know who you are) have been clamoring for these items, so we are pleased to let you know that they are now available on the VML website:

• 2019 VML Legislative Program
• Presentations from the 2018 VML Conference
• 30th Annual Virginia Water and Wastewater Rate Report 2018

 

Interest rates on the rise

Interest rates are rising, and another hike, the fourth this year, is expected in December. President Trump has described the actions taken by the independent Federal Reserve Bank as out of control, threatening the nation’s economic growth.

Rising interest rates do have a substantial impact on the economy, influencing the stock market, government spending and job creation. According to a New York Times article, over the past year, the average rate on new 30-year mortgages rose by a full percentage point, from just over 4.0 percent to just over 5.0 percent. The cost of a new mortgage is at the highest rate since early 2011.

The impact on the housing market is already pronounced with existing home sales falling 6.6 percent from November 2017 and the sales of new homes dropping even faster at 11.6 percent.

At the same time the federal government’s budget debt is exploding, climbing to a debt load of more than $21.5 trillion. The U.S. Treasury reported earlier this month that the government paid $523 billion in total interest in federal fiscal year 2018, the highest on record. Interest expense is now projected to exceed spending for the Medicaid program in 2020 and by 2023, interest expense is projected to be higher than the entire cost of the U.S. military budget.

The Congressional Budget Office forecasts government spending will outweigh revenue by $973 billion in fiscal 2019 and more than $1 trillion the next year, meaning the situation is unlikely to self-correct.

In the international trade arena, the kerfuffle between the U.S. and its trading partners continues.  China’s trade surplus with the United States in September hit a new record. China enjoyed a record high $34.1 billion trade surplus, taking the surplus for the year-to-date to $225.8 billion. That’s significantly higher than the $196 billion recorded between January and September last year.

However, a quick end to the trade struggle is unlikely and as Mr. Trump’s tariffs take effect the statistics will change. Also, with the Chinese economy weakening for a variety of reasons, that nation’s ability to buy imported goods from the U.S. is also sapped.

The bottom line is that a short-term outlook for the U.S. (and by extension, the Virginia) economy remains positive. The long-term outlook in 2020 and beyond is less so.

VML Contact: Neal Menkes, nmenkens@vml.org

 

State revenues jump 4.0 percent in September

Total general fund revenues increased 4.0 percent last month with solid performance in payroll withholding and sales tax receipts. On a year-to-date basis, total tax dollars increased 2.7 percent, ahead of the official forecast calling for a 1.5 percent increase over FY 2018 collections.

Payroll collections account for over 60.0 percent of the state’s general fund. September’s individual income tax collections grew 3.6 percent which is a full percentage point above the projected 2.6 percent growth rate and reflects both job growth and wage gains. (The Federal Reserve Bank of Richmond reports that payroll employment increased by almost 1.4 percent in August although the state still lags the 1.6 percent increase in the U.S. labor market.)

The first FY19 installment of non-withholding tax revenues was due in September. The Tax Department reported collections of $530.3 million compared with $463.8 million in the first quarter of FY18. This increase of 14.4 percent soars above the official estimate calling for a 3.0 percent decline. Individual income tax non-withholding comprises roughly 17.0 percent of the state general fund.

Sales tax collections were 7.5 percent above last year’s collections and 5.0 percent higher than the 2.5 percent forecast for fiscal year 2019. This is the third consecutive month that sales tax collections hit a 7.5 percent increase over the same month a year earlier.

This budding trend, if it holds, may indicate that the bump expected from the collection and remittance of sales taxes from on-line retailers is occurring now. In other words, Internet retailers are voluntarily implementing the U.S. Supreme Court’s decision on Wayfair before the General Assembly even considers legislation in the 2019 Session.

As shown in the chart below, sales tax collections since the Great Recession have been sluggish and oftentimes have failed to meet even the most modest projections.

Recordation taxes account for some 2.0 percent of state general fund revenues. These taxes, however, are an indicator of the demand for real property. In September, these collections decreased 16.2 percent compared to a year earlier. Year-to-date collections have decreased 9.1 percent compared to FY 2018 and are seriously behind the official forecast calling for 3.1 percent growth in fiscal 2019. According to the Federal Reserve Bank of Richmond, both new residential permits and housing starts in August were down by double-digit percentages compared with August of 2017.

In his October 15 presentation to the House Appropriations Committee, Secretary of Finance Aubrey Layne expressed confidence that the FY 2019 official forecast will be met. Revenues must increase by 1.1 percent between October 2018 and June 2019 to make the estimate. For this same period last year, general fund revenues grew by 7.0 percent.

The Secretary also shared the concerns expressed to him by Wall Street bond raters.  Wall Street pointed out that their future calculations regarding a state’s credit worthiness will take into consideration demographic variables like aging population and out-migration of prime-age workers (ages 25-54) as well as a state’s resiliency to respond to major events like recurring floods, hurricanes and forest fires.

In addition, Secretary Layne gave the House committee an updated list of his known funding commitments and risks. The Secretary had added “Cash Reserves” as a new item while reducing the expected state funding commitment for Hurricane Florence expenses from over $60.0 million to $10.8 million. The reduction is based on the federal government picking up most of the tab.

On the budget front, state agencies submitted their budget requests last week to the Department of Planning and Budget (DPB).  Even as DPB scrubs the numbers, work on a new revenue forecast continues. The Joint Advisory Board of Economists met last week. Their analysis will be shared with the Governor’s Advisory Council on Revenue Estimates on November 19. Gov. Northam’s budget amendments are due to the General Assembly by December 18.

VML Contact: Neal Menkes, nmenkens@vml.org

 

Small victory gained at FOIA Council

The Freedom of Information and Advisory Council (FOIA) met Oct. 16 to take up 2018 legislation (HB1101 and SB336) relating to the right to speak at open meetings.  Both bills stated that all public bodies had to hold public comment periods (HB1101 only required it 4 times per year); VML and VACo argued that the definition of public body is extremely broad and includes the General Assembly! This concept has been a thorn in our side for a couple of years and VML is happy to say that the Council decided to develop guidance on the issue rather than endorse a bill.  That is not to say that the patrons won’t reintroduce the bills, but the issue did not get an endorsement from the FOIA Council this year.

The FOIA Council also has been working on guidance relating to electronic communications and social media.  The issue of the use of text messages during a public meeting was referred to the Council and everyone agreed that this also should be guidance rather than legislation. The questions that the Council proposes to provide guidance on include:

1. When the use of electronic communications by members of a public body can constitute a prohibited meeting?
2. When the use of electronic communications by public officials or employees become public records?

The Council also will provide practical guidance and best practices for each type of electronic communication as well as identify model polices.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

Procurement process study gets underway

A Joint House and Senate General Laws seminar was held Tuesday, Oct. 16, to discuss procurement.  During the 2018 General Assembly Session, several bills were left in House General Laws Subcommittee #4 and in the Senate General Laws and Technology Committee.  The goal this summer was to educate the subcommittee and committee members further on procurement issues so that those bills could be dealt with in 2019 or not at all. Joe Damico, director of the Virginia Department of General Services (DGS), presented for several hours on the Virginia Public Procurement Act, PPEA, PPTA and the Restructured Higher Education Act.  He also discussed procurement authority and responsibility on the various government levels.  While his presentation was very informative, many of the questions related to the lack of a common standard among state, local and higher education procurement.

Jeff Gore with Hefty Wiley and Gore, PC presented on behalf of local government and asked that consideration be given to remove the requirement that Requests for Proposal have to be advertised in a newspaper.  VML and VACo have been working with Gore and DGS on this request and are hopeful that it will be considered.  It was pointed out that Invitations for Bid do not have the advertising requirement and why not make them consistent?

The materials for this seminar are voluminous; Delegate Chris Peace, the chair of the House General Laws Committee, stated that they would be placed on the agenda page, but they are not there yet.  Please let us know if you would like a copy and we will email them to you.

VML Contact: Michelle Gowdy, mgowdy@vml.org

 

DSS, DMAS continue health care expansion work

While local departments of social services are responsible for eligibility determination/redetermination for Medicaid, state officials are counting on a number of portals to help with the expected influx of applicants for Medicaid expansion, which will go into effect Jan. 1, 2019. This was part of the message delivered by the directors of the Virginia Department of Social Services (VDSS) and the Virginia Department of Medical Assistance Services (DMAS) to the House Appropriations Committee earlier this week.

VDSS Commissioner Duke Storen and DMAS Director Jennifer Lee, M.D. presented status reports on the preparations for health care expansion and answered legislators’ questions about expansion. Also presenting with the two directors was Megan Healy, the Governor’s chief workforce development advisor, who is heading up the effort for work/community engagement components of Medicaid expansion. The work/community engagement components must first be approved by the federal government before Virginia can implement it in its Medicaid program.

Storen addressed the various pathways to determine eligibility, including the Cover Virginia Call Center and website (1-855-242-8282), the health care “marketplace” (healthcare.gov), an on-line application portal (commonhelp.virginia.gov), the VDSS enterprise call center (1-855-635-4370), and local departments of social services. State officials expect that these various pathways will help potential enrollees to get information about eligibility and use screening tools to determine whether they should apply for health care coverage through Medicaid.

The state is also identifying people who they believe will be automatically eligible for expanded Medicaid coverage and will proceed with the processing of those prior to January so that coverage for those populations can begin on Jan. 1. This includes people in the Governor’s Access Program (GAP) and other waiver programs. Storen also said that eligibility redetermination processes are being improved, primarily through expanded access to various state data systems.

Storen said that 300 positions were allocated to local departments of social services in anticipation of the added eligibility traffic, and that as of Sept. 30, 282 positions were identified within local departments. These additional positions were allocated to local agencies based on their current caseload levels and utilization; local agencies with larger numbers received more positions. The state is covering the cost of those additional eligibility workers for this biennium.

VML Contact: Janet Areson, jareson@vml.org

 

Code Commission takes up Title 15.2 issues

The Code Commission took up Code Sections not set out in Title 15.2 including their prior recommendations on which sections to place in the code and non-substantive changes to that need to be made to those sections.  A lot of these code sections deal with transportation or list a locality by population.  For most of the sections that list localities by population, the names of the localities will be used in the place of the numbers, which are outdated.  Further, Title 15.2 will become two separate volumes which should allow for these various code sections to be set out in the Code.

VML Contact: Michelle Gowdy, mgowdy@vml.org

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