Did the Legislature Redistrict in the Wrong Year? A Footnote

A short while ago I wrote about the state constitutional provisions on redistricting, noting the argument that for decades North Carolina might have been drawing legislative districts at the wrong time. The state constitution can be read to say that the General Assembly should have waited until the 2013 session to redistrict rather than going ahead in 2011 — because the 2013 session will be the “first regular session convening after the return” of the detailed population figures needed for redistricting.

A question asked at the end of that piece was whether federal equal protection law would preempt the state constitution. That is, would the one-person/one-vote requirement of the United States Constitution mandate that the state redraw its legislative districts as soon as possible after receiving the necessary census reports — and before the next election in 2012 — even though the state constitution might say wait until 2013?

It turns out that there is a case on this issue and it says go ahead and redistrict. The case is Desena v. Maine, 793 F. Supp.2d 456 (D. Me. 2011), from the federal district court in Maine. Read more »

City Wins Round Two in Internet Sweepstakes Tax Case – But the Fight Continues

[Update:  In 2013 the N.C. Supreme Court reversed the Court of Appeals decision discussed below.  See this blog post for more details.]

In the first of three decisions we are expecting on internet sweepstakes, the N.C. Court of Appeals ruled in favor of the City of Lumberton and its authority to levy substantial privilege license taxes on these businesses.  As predicted in prior blog posts, the Lumberton decision firmly establishes that municipalities have the authority to levy privilege license taxes on internet sweepstakes.  

But this fight is far from over.  The Lumberton decision leaves the door open for future plaintiffs to attack the amount of city privilege license taxes on internet sweepstakes.  And we are still waiting on two more Court of Appeal’s decisions: one involving privilege license taxes levied by Fayetteville and one involving a constitutional challenge to the criminal ban on internet sweepstakes that was intended to take effect in late 2010. 

The Fayetteville tax case is unlikely to undermine the conclusion that cities and towns have the right to levy privilege license taxes on internet sweepstakes. But it could provide more guidance as to what evidence is needed to prove that a city’s tax on these businesses are too high.  And the criminal case could moot the tax issue by banning the internet sweepstakes entirely.

Here’s an analysis of the Lumberton decision and what it means going forward. Read more »

Debt Financing Primer: Enhanced Security for Project Development Financings

Blight City is looking to revitalize a portion of its downtown. Over the past ten years the area has fallen into disarray and contains many abandoned, dilapidated buildings. Working with a couple of local developers, the city has developed plans to purchase and demolish one of the buildings and construct a large parking garage in its place. The city also plans to improve several of the existing roads leading into downtown and to pave a few additional side streets. The local developers intend to purchase the other buildings and either refurbish or replace them with modern, mixed-use structures. The local developers have secured several long-term leases with retailers to occupy the bottom floors of the new buildings. The new city parking garage will benefit these tenants (although no commercial entity will be guaranteed parking spaces for employees or customers.) The total projected cost to the city for the public infrastructure projects is $30 million. After exploring all of the debt financing alternatives, city officials believe that project development financing is their best option. That means that the city will pledge as security for the loan the incremental ad valorem tax revenue that is generated by the new development in the downtown area (project development district) that is spurred by the city’s investment in the parking garage and other infrastructure projects. The city also intends to use this incremental tax revenue to make its annual debt service payments on the loan. (To learn more about project development financing, click here.) However, after running the preliminary numbers with a financial advisor and the Local Government Commission, the city realizes that the interest rate on such a borrowing is likely to be too high to make the financing feasible. Is there anything the city can do to lower the borrowing cost associated with the project development financing? Read more »

Draft Records Under the Public Records Law

A really hot topic is occupying the city council: to allow food trucks or not to allow food trucks, that is the question. Local restaurants are opposed, but the trucks are really popular and may revive downtown foot traffic. The council finally decides to consider a proposed policy. They instruct the manager to develop a proposal for their review. The manager has completed the task. Knowing that it will be controversial, she decides to run it by the mayor before submitting it to the whole board. Just for good measure, she stamps every page “Preliminary Draft – For Internal Review Only.”  The mayor reviews the draft, makes some changes using “track changes” on the electronic version, and sends it back to the manager. The Chamber of Commerce, anxious to see what will be proposed, submits a public records request for a copy of any and all proposals, including any preliminary drafts, whether or not approved by or submitted to the council.

Must the city provide a copy of the preliminary draft? What about the version with Mayor’s comments?  What obligation, if any, does the city have to retain drafts, including the different versions of the proposed policy as it goes through the review and revision process? Read more »

Advertising Tax Liens: The Sequel

Having received lots of emails and phone calls after my earlier post on this topic, it seems worthy of a sequel.  Here’s a few of the more interesting questions from across the state this past week.

How creative can a tax collector be with the advertisement?

Many thanks to Anson County Tax Collector Joe Dutton for sharing the “most wanted” advertisement pictured above.  Joe asked what I thought of his idea to run this ad and hopefully get the attention of some of his county’s largest delinquent taxpayers.

I told Joe I loved the ad, with a few caveats.   Read more »

Can I Be Heard? Who Gets to Speak at a Hearing on a Quasi-judicial Matter?

The town council makes decisions on special use permit applications under the Macomb zoning ordinance. The council is in the midst of a hearing on an application from Malcolm Tucker for a special use permit to build a new shopping center. The town planner has summarized the nature of the project and the applicable town standards. Tucker’s project planner has testified about all the studies and reports they prepared to show compliance with the town standards. At this point Clara Edwards stands up and asks to be heard. Clara lives on the other side of town, but word is she plans to run for Mayor next time around. In any event, she has lately taken to showing up at most town council meetings and offering her views on whatever is before the council. Tucker, who has a long and acrimonious relationship with Edwards, objects to allowing her to speak. Addressing the council, Tucker says, “Madame Mayor, I submit that Mrs. Edwards has no right to testify about my project. She’s not the applicant. She doesn’t live or own property anywhere near the site. She is just a meddlesome busybody sticking her nose where it doesn’t belong. You and I know she just wants to irritate me and bollix up this process. So, I respectfully request we move along and that you ask Ms. Edwards to take a seat.”

Should the Mayor grant Malcolm’s request or should she let Clara speak on the application? Read more »

Water and Sewer Availability Fees

UPDATE October 5, 2015: The legislature enacted S.L. 2015-246, which, effective August 1, 2016, prohibits a city, county, sanitary district, and water and sewer authority from mandating connection to its water system (and prohibits a city from assessing an availability fee) under certain circumstances. Click here for more information about this law.

Roland Spring has lived in his house for over twenty years in the Town of Waterworks, NC. Over the past year, Roland has noticed town workers doing significant construction work in the town’s easement at the front of his and his neighbor’s properties. He has not paid much attention to the nature of the work, assuming it had something to do with the drainage problems his street frequently experiences. A few months after the construction finishes, Roland receives a notice in the mail from the town indicating that the town’s water system has been extended to Roland’s neighborhood and notifying Roland that, pursuant to some state statute and local ordinance, he now must connect his property to the town’s water supply. (The cost to Roland to connect will be $400.) Roland is incensed. He recently had a new well drilled, at significant expense to him, and he has no desire to receive water from the town. Roland immediately calls town hall and expresses his outrage. He informs the town manager that he will not be connecting his property to the town’s water lines.

A few months pass and nothing happens. Roland feels satisfaction at having “fought city hall” and won. Then one day he receives a bill in the mail from the town’s water department for administrative charges totaling $22. Assuming it to be a clerical error, Roland ignores the bill. A month later, he receives another bill for $45.10 ($22 administrative charge for the current month + $22 administrative charge for the past month + 5 percent late fee penalty). He once again calls town hall to complain. This time the manager informs Roland that the assessment is an “availability fee” that he legally is obligated to pay even though his property is not connected to the town’s water system. Roland is outraged. Could there actually be such a law? Read more »