MACo Amendments Ease Safety Plan Burden on Small Contractors and Procurement Officials

MACo Legislative Director Andrea Mansfield testified before the Senate Finance Committee today in support of SB 279 with amendments. A crossfile of HB 404 heard earlier this week, this bill would require a prospective bidder or offeror for a public works project over $100,000 to submit a public safety plan and an attestation that the plan meets certain requirements as part of the procurement process.

SB 279 is nominally the product of a workgroup that examined issues related to occupational safety and health plan prequalification and developed recommendations on these requirements during the interim. In speaking about the suggested amendments, Ms. Mansfield expressed concern that the bill’s requirements varied from the workgroup’s recommendations and that certain requirements could negatively affect small contractors and procurement officials. She further commented, “Larger companies may have staff to develop and monitor the rigorous safety plans envisioned under the bill, but smaller companies may not be able to afford staff or to contract out for this purpose, even if they engage in safe practices. The administrative burden of this requirement could make it extremely difficult for a smaller contractor to comply, disqualifying the contractor from bidding altogether.” MACo’s suggested amendment would increase the threshold to $1 million to better target higher risk projects and lessen the effect on smaller contractors.

Other suggested amendments would require the attestation of a safety plan be submitted to a procurement official at contract award, not as a part of the selection process; clarify that the completion of the safety questionnaire and additional safety measures do not impede work on a project; and protect local jurisdictions from any deficiencies in safety plans or safety-related issues that may occur at a worksite.

Ms. Mansfield urges the committee to accept these amendments to lessen the effects of this legislation on contractors and procurement officials.

Read MACo’s written testimonyonline, or visit MACo’s Legislative Database to see all county impact bills and MACo positions.

U.S. Communities Offers New Savings & Solutions for Utility, Transportation & Golf Vehicles

U.S. Communities has awarded Club Car and Columbia ParCar for the new Utility, Transportation, and Golf Vehicles and Related Accessories, Equipment, Parts and Services contract.

USCommunities 2015 verticalThe contract term is for three (3) years with a start date of January 1, 2015, and the option to extend the contract for two (2) additional periods of one year each.

To learn more about this new contract and the solutions available, webinars will be conducted and the recorded versions are posted on our webinars page. Learn about the webinars or contact U.S. Communities for additional information.

This contract delivers work vehicles that will help you improve safety, move people and transport loads while lowering your cost of ownership. Not only will agencies be able to save on the direct cost of vehicles, this contract provides a solution for agencies looking to lessen their environmental impact.

Club Car Unique Solutions & Features: gas and diesel with two-and-automatic four-wheel drive, golf cars and turf utility vehicles, and custom solutions for all your needs, such as trash units or hospitality van boxes.

Columbia ParCar Unique Solutions & Features: electric vehicles with zero tailpipe emissions, ability to haul up to 5200 lbs. or tow up to 7 tons, and people movers can move up to 26  people to move large groups quietly and efficiently.

MACo Amendments Mitigate Effects of Safety Plans on Small Contractors and Procurement Officials

MACo Legislative Director Andrea Mansfield testified before the House Economic Matters Committee today in support of HB 404 with amendments. This bill would require a prospective bidder or offeror for a public works project over $100,000 to submit a public safety plan and an attestation that the plan meets certain requirements as part of the procurement process.

HB 404 is nominally the product of a workgroup that examined issues related to occupational safety and health plan prequalification and developed recommendations on these requirements during the interim. In speaking about the suggested amendments, Ms. Mansfield expressed concern that the bill’s requirements varied from the workgroup’s recommendations and that certain requirements could negatively affect small contractors and procurement officials. She further commented, “Larger companies may have staff to develop and monitor the rigorous safety plans envisioned under the bill, but smaller companies may not be able to afford staff or to contract out for this purpose, even if they engage in safe practices. The administrative burden of this requirement could make it extremely difficult for a smaller contractor to comply, disqualifying the contractor from bidding altogether.” MACo’s suggested amendment would increase the threshold to $1 million to better target higher risk projects and lessen the effect on smaller contractors.

Other suggested amendments would require the attestation of a safety plan be submitted to a procurement official at contract award, not as a part of the selection process; clarify that the completion of the safety questionnaire and additional safety measures do not impede work on a project; and protect local jurisdictions from any deficiencies in safety plans or safety-related issues that may occur at a worksite.

Read MACo’s written testimony online, or visit MACo’s Legislative Database to see all county impact bills and MACo positions.

MACo Defends Tax Sales For Fairest Collections

MACo Executive Director Michael Sanderson joined a panel of Baltimore City representatives to oppose HB 366, legislation that would eliminate local governments authority to collect water bills through the tax sale process. Mr. Sanderson spoke generally to the tax sale process as a strong assurance that taxes and charges are actually paid – promoting fairness to all taxpayers and service users. He also reinforced that “local governments are always at the table to support fairness in the tax sale process,” and recalled legislation supported by MACo and others to promote better notice and protections for property owners.

“This bill says we can’t use tax sale on water bills, and that will mean more unpaid water bills… and that’s not fair,” he concluded.

Read MACo’s written testimony online, or visit MACo’s Legislative Database to see all county impact bills and MACo positions.

Maryland Retains AAA Bond Rating, But Agencies Raise Continued Concerns

Maryland has again retained its AAA bond rating, however all three rating agencies continued to raise concerns with the funding level of state pension system and the effects of federal budget reductions. As reported by MarylandReporter.com,

Moody’s said “low retirement system funded levels” represent a credit challenge for the state and “failure to adhere to plans to address low pension funded ratios” could make the rating go down.

Fitch Ratings noted, “Despite pensions being a comparative credit weakness, the state has taken multiple steps to reduce their burden and improve sustainability over time.”

S&P noted “implementation of various reforms and some improvements in funded ratios,” But it said “the state’s below-average pension funded ratios and annual contributions that do not meet the full [annual contribution] also continue to represent downside risk to the rating.”

The rating agency reports can be found on the State Treasurer’s website.

MACo Opposes Mandated New Costs in Shared Projects

Today in the Health and Government Operations Committee, MACo Legislative Director Andrea Mansfield testified opposing HB 336, Procurement-State Funds- Energy Efficient Outdoor Lighting Fixtures. This bill would prohibit State funds from being used to install or replace a permanent outdoor luminaire unless specified energy efficient lighting requirements are met. This bill could limit qualified bidders and place more onerous requirements on the counties, increasing the costs of local contracts funded partially with State dollars.

MACo’s written testimony explains:

Counties have made concerted efforts to be more energy efficient. Many counties have dedicated sustainability offices and all have implemented energy efficient practices. Under current practice, counties have the flexibility to establish procurement preferences while meeting their fiscal goals. Imposing State requirements onto the local procurement process would ultimately limit local flexibility and the number of competitive bids, increasing project costs.

The Legislative Database has information on all of MACo’s 2015 positions.

Queen Anne’s Formally Joins MACo OPEB Trust

At the Queen Anne’s Commissioners meeting on February 9, the County authorized its Director of Finance to engage the county as a member of the MACo OPEB Investment Trust.

As previously reported on Conduit Street, the MACo OPEB Investment Trust is a newly developed offering to assist counties and other local government units to invest toward long-term liabilities of their retiree health insurance cost programs. Queen Anne’s County would be the fifth government to formally join the Trust, which is amidst its early actions of developing an investment strategy and oversight protocols.

For more information, see Conduit Street‘s previous coverage of the Trust creation, earlier this month.

MACo Supports Stabilizing Support for State-Owned Lands

MACo presented testimony today in support of SB 134, a bill to stabilize state funding to counties hosting substantial state-owned property such as State Parks. This is different from the payments that counties currently receive, which is a portion of revenues generated from the State forest and parks. Those funds have historically been “raided” by state budget reconciliation plans (and are targeted for a $2.5 million reduction for FY 2016), and would (under SB 134) be eliminated.

The written testimony states:

MACo believes SB 134 will serve as an incentive to counties to preserve their State forests, parks and wildlife management areas. As State lands or designated wildlife areas, these properties are exempt from the local property tax, which is the counties’ top revenue source. These revenues fund a large portion of county expenditures from which these lands benefit, including law enforcement, emergency management services, stormwater infrastructure, and roadways. Providing services to these areas without revenues for this specific purpose draws funds away from other parts of the county budget.

SB 134 would provide a consistent revenue stream to offset losses in property tax revenues and fund the public services provided in these areas. For this reason, MACo would urge a FAVORABLE report on SB 134.

For more on MACo’s 2015 legislation, visit the legislative database.

State Will Evaluate Local Income Tax Reserve Account

In response to a budget analysis by the Department of Legislative Services (DLS), the Department of Budget and Management (DBM) has indicated that they are “evaluating the impact and implications of prior transfers and non-repayments from the Local Income Tax Reserve Account.”  This issue was raised during a budget hearing before the House Appropriations Committee on the State Reserve Fund.

To balance the State budget in two different fiscal years, a total of $916.8 million has been transferred out of the Local Income Tax Reserve Account to either the General Fund or the Education Trust Fund. In subsequent years, language in the Budget Reconciliation and Financing Act repealed the requirement that the State and local governments repay $716.8 million of these funds resulting in an unfunded liability in the Account.

From the budget analysis,

The State collects income taxes for local jurisdictions and makes payments to the counties and Baltimore City from this account. According to GAAP, the State is supposed to maintain a sufficient fund balance to pay future refunds, in case the income tax is no longer collected. If the account is insufficiently capitalized at the end of a fiscal year, the State is required to report the underfunding as an unfunded liability in the Comprehensive Annual Financial Report (CAFR).

As long as there is not a plan to replenish the funds that were transferred in fiscal 2011, the State will continue to have this unfunded liability. The concern is that the account has not yet been reimbursed and there is no plan to fully reimburse the account. This creates a GAAP balance that the State is disclosing in the annual CAFR and also will limit the State flexibility during the next recession. The Secretary should brief the committees on plans, if any, to reduce the unfunded liability in the Local Income Tax Reserve Account beyond the $100 million repayment proposed in the budget.

In response to DLS’s analysis, DBM responded that it is evaluating the account.

As noted in the analysis, Governor Hogan’s FY 2016 budget plan repays the proposed FY 2015 transfer from the Local Income Tax Reserve Account. The Administration urges the General Assembly to honor that repayment commitment. Beyond this planned repayment, the Administration is evaluating the impact and implications of prior transfers and non-repayments from the Local Income Tax Reserve Account. Any recommendations regarding the unfunded liability in the Account are forthcoming.

MACo Formally Launches OPEB Investment Trust

This week, working cooperatively with several local governments, MACo formally launched the MACo Pooled OPEB Investment Trust Fund – a new vehicle designed to help local governments invest current funds toward future obligations for retiree health insurance, a.k.a. “other post-employment benefits.” Recent accounting rule changes have highlighted these liabilities on government balance sheets, and many counties are amidst plans to save toward these future costs.

Investing through an entity like the MACo Pooled OPEB Trust offers governments an opportunity under state law to invest funds in a manner suitable for longer term assets, and outside the laws generally governing “public funds.” The Trust arrangement ensures that the funds may not be extracted for purposes other than the intended benefits, making that distinction clear. Some counties have created similar entities on their own, but others have sought a collective effort to make costs manageable and seek greater expertise from outside advisors.

This week, the initial Trustees were named, representing entities that have adopted the Trust to be among their options for investing current or future OPEB payments. They are:

Jason Bennett, Allegany County Finance Director – Chair
Angela Lane, Talbot County Finance Director – Vice Chair
Elaine Kramer, St. Mary’s County Chief Financial Officer
Rebecca Schick, St. Mary’s County Metropolitan Commission Chief Financial Officer
Michael Sanderson, MACo Executive Director – ex officio

The Trustees formalized the founding documents for the Trust, and then heard from the various advisors who were selected to help guide the Trust through its initial stages – including developing actuarial assessments of Trust members needs and risk profiles, and developing an investment strategy for Trust assets.

Among the advisors selected by the Trustees are:
Davenport & Company – offering Trust management and administrative services
McGuire Woods – offering legal services
Boomershine Consulting – actual services to the Trust and its members
Wilmington Trust – custodial and oversight services
Wells Fargo Advisers – investment consulting

Both county and municipal governments, and other county-funded entities (like libraries and community colleges), are welcome to join the MACo OPEB Trust – regardless of whether they currently have their own Trust, have current assets in use, or only have a plan to target this issue. Contact MACo Executive Director Michael Sanderson with any inquiries.