Committee Meeting Information

October 10th and 11th, 2007

State Capitol Building

Room 302

Cheyenne, Wyoming

 

Committee Members Present

Representative Roy Cohee, Chairman

Senator John Schiffer, Vice Chairman

Senator Ken Decaria

Senator Kit Jennings

Senator Phil Nicholas

Senator Bill Vasey

Representative Rosie Berger

Representative Debbie Hammons

Representative Marty Martin

Representative Mark Semlek

 

Committee Members Absent

None

 

Legislative Service Office Staff

Dave Gruver, Steve Sommers, Bill Mai, Dean Temte and Ian Shaw

 

Others Present at Meeting

Other legislators present – Senator Jim Anderson, Representatives Mary Throne and Colin Simpson

 

Please refer to Appendices 1a and 1b to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.

 


Executive Summary

The Select Committee on Local Government Financing met for two days in Cheyenne.  The Committee received additional information from state agencies, the Wyoming Association of Municipalities (WAM), Wyoming County Commissioner's Association (WCCA) and LSO staff in response to requests made at its July meeting.  The Committee also received additional testimony from WAM, WCCA and representatives of county and municipal governments regarding the distribution of state revenues to local governments.  The State Treasurer also presented testimony to the Committee on funding philosophy.  The Department of Audit presented information on local government expenditure and revenue reporting.  The Committee took no action regarding potential legislation or recommendations to the Legislature at this time, but requested LSO staff, WAM and the WCCA to provide additional information regarding the cost of maintaining operations at the municipal and county level.  The Committee set no additional meetings for this interim but outlined a meeting schedule for the interim after the 2008 budget session.

 

 

Call To Order and Opening Remarks

Chairman Cohee called the meeting to order at 9:05 a.m.  Please refer to Appendix 2 to review the Committee meeting agenda.  Approval of the minutes from the July 10 and 11 meeting was moved by Senator Jennings, seconded by Representative Martin and passed.

 

AML funding; Industrial siting information

Jim Uzell, Administrator with the Department of Environmental Quality (DEQ), addressed issues of impact assistance payments under the industrial siting act and abandoned mine lands (AML) funding.  Mr. Uzell's testimony is summarized in a letter from DEQ Director Corra to the Committee.  (Appendix 3)  At the beginning of the industrial siting act program in 1975, the project sponsor made impact assistance payments.  After 1981, payments have been made from the State’s general fund.  Mr. Uzell reviewed three permitted projects and the status of those projects in regards to their receipt of impact assistance funding.  LSO staff explained the impact of the optional sales tax passed last session.  The law increased the general purpose local optional sales tax from a maximum of 1 percent to 2 percent and increased the overall optional sales tax from a maximum of 2 to 3 percent.  The industrial siting impact assistance statute requires the imposition of the maximum general purpose optional sales tax (as restricted by the overall maximum) in order to receive impact assistance.  There was no amendment to that language when the bill increasing the maximum optional sales tax was passed last session.  There has been discussion regarding the introduction of a bill in the upcoming session to put the issue before the Legislature.

 

Mr. Uzell explained the issue of AML funding.  Under recent federal legislation, there is to be an additional payment to the State of previously withheld AML funds, along with the continuing annual payments the State has been receiving.  There is an expectation that the federal government will release the additional funds between 2008 and 2014, but the Office of Surface Mining is seeking clarification as to the timing of the release of funds and whether the distribution will be made in block amounts or as reimbursement to states after they have expended funds on projects.  It appears there will be $85 million per year released from 2008 to 2014.  Pursuant to legislation passed last session, those funds will be separate from the approximately $35 million annual continual funding.  Mr. Uzell noted there could be clarifying legislation on this issue.  Senator Nicholas stated that the separation was the intended in his bill.  LSO staff stated that the clarifying legislation could be included in the revisor's bill.  Mr. Uzell reviewed the requirements for expenditure of the annual funds.  First they must be used for coal or coal impact, then money can be used for other mines.  There is also a standard that health and safety must override other uses.  Thus a noncoal mine, threatening health can override a coal mine reclamation addressing non-health issues.  Regarding the release of the additional funds, Mr. Uzell stated that the DEQ is discussing the issue with OSM, with DEQ taking the position that the money should be released in a lump sum to the State; not on a project funding and reimbursement method.  Vice Chairman Schiffer asked that the LSO keep in contact with the DEQ and the Attorney General’s Office as to whether additional legislative action would be helpful, and to keep the Committee and Legislature informed.  Vice Chairman Schiffer noted that if the money is to be reimbursed to the State on a matching basis, there needs to be consideration to funding the account so matching funds are immediately available.  Senator Nicholas asked that staff add the issue to the JAC agenda and track the need for change to state law in light of proposed federal regulations.

 

Business council program funding

Bob Jensen, CEO, Wyoming Business Council, addressed projects funded by the business ready community program (BRC) by type and summarized the projects funded under the program on a per capita basis.  (Appendix 4)  He provided four additional written documents regarding funding under the BRC and community facilities program.  They identify the type of project funded and provide a geographical breakdown of the grants awarded.  (Appendices 5-8)

 

In reply to Committee questions as to whether location weighs into the grant process, Mr. Jensen stated it is not considered.  Mr. Jensen noted there is a good geographical distribution, but that is not part of the 18 criteria considered by the Business Council.  The criteria are based upon economic development issues and community development issues, none of which concerns the location of the project.  The Committee discussed the process, the number of applications being reviewed, the issue of funding under the programs and how to ensure that the money is used for public purposes.  Senator Nicholas expressed concern that there is no advocate for the taxpayer to ensure the State only provides as much assistance as is needed to encourage the business to expand or come to a community, without providing a windfall to the business; he was also concerned with funding being provided based upon the aggressiveness of the business' CEO, rather than on jobs created or retained.  Mr. Jensen responded that the Council is reviewing return on investment models and attempting to fine tune the process.

 

State loan and investment board (SLIB) grant and loan program funding.  Office of state lands comparison of sales tax distributions

 

Lynne Boomgaarden and Jeanne Norman, director and assistant director of the Office of State Lands and Investments (OSLI), addressed the Mineral Royalty Grant Program.  The program was initially intended to provide funding for capital facilities related to health and welfare of communities.  The program is funded with approximately $35 million per biennium (prior to 2004) from federal mineral royalties (FMRs) and severance taxes.  Beginning in 2004, the Legislature has supplemented the $35 million with additional general fund monies.  With the supplemental funding, the program also was moved from a competitive grant process to a consensus process, with entities within each county agreeing to proposed projects.  Ms. Boomgaarden noted the change is reflected in the spreadsheet provided to the Committee breaking down funding by county and other local political subdivisions.  (Appendix 9)  Sales tax distributions and hardship distributions were also provided.  (Appendix 10)

 

Representative Hammons distributed a letter from the Big Horn Regional Joint Powers Board noting that with the consensus process, joint powers boards covering multiple counties could not participate unless all counties agreed to that participation and the priority of the joint powers board's project.  (Appendix 11)  Ms. Boomgaarden stated that the legislation did not specify the process for participation of special districts and some counties invited them to participate and others did not.  Vice Chairman Schiffer noted that the legislation was tailored to allow the county officials to decide whether to invite the special districts, and that once that discretion is granted the issue is out of the Legislature’s hands.  He noted that the SLIB could have used its emergency funds to address special district projects for those districts excluded from the consensus process.  The Committee discussed the issue of how funds should be distributed.  Senator Nicholas asked if the SLIB could identify "impacted counties" and a proposed distribution recommendation before the appropriations process begins November 1.  Ms. Boomgaarden stated that could be done by OSLI staff, but to do so with a SLIB recommendation would be more difficult.  In response to questions concerning the previous determination of impacted counties, Ms. Boomgaarden noted the OSLI staff gave the SLIB information and the SLIB made the decision.

 

As to loans under the program, Ms. Boomgaarden suggested that while the statute provides for a loan program, there never has been political support for loans rather than grants.  Senator Nicholas asked that the OSLI develop information as to how to determine impacted communities and present to the JAC a list of impacted communities and the extent of “impact” on each of the communities.  He also suggested that if the OSLI wished to address the issue of hardship communities as well that information would be helpful to the JAC.  Ms. Boomgaarden asked for clarification as to whether the OSLI was being asked only to collect data or to present it for a recommendation from the SLIB.  Senator Nicholas stated that data is being requested of the OSLI.  In response to Ms. Boomgaarden noting that quantifying impact is a problem and part of the reason for the consensus process, Senator Nicholas requested information the OSLI deems appropriate to consider in determining impact.

 

Representative Semlek questioned whether the Legislature should look to a water development type process for local government capital construction needs.  Ms. Boomgaarden stated the OSLI is simply the administrative arm for the program, and the suggestion is a pure policy decision.  Senator Decaria questioned whether the issues of "hardship" and "impact" are being viewed as a dynamic.  According to Ms. Boomgaarden, the OSLI did conduct a "fresh look" after the initial determination of impacted counties; for last session there was not a "fresh look." There is no hardship category under the grant program, rather there was a legislative determination as to who was eligible for hardship funds under the 2006 budget bill.

 

Senator Nicholas asked for an estimate of funds needed for emergencies and funds needed for "under funded large projects" (based upon historical applications and allocations).  Representative Hammons noted that for very small towns one obstacle is the inability to carry funds forward in order to save for the entire project amount.  Ms. Norman replied that an entity is required to begin to draw on the funds allocated and approved.  But there is no ability for the SLIB to save for the next biennium – due to money reverting if not allocated (though it need not be expended).  Ms. Boomgaarden noted the SLIB is reluctant to fund projects if the entire funds are not then available, since the SLIB cannot give the entity assurance there will be funding available in subsequent years.

 

Vice Chairman Schiffer noted the information shows that, since 2004, the State has taken care of impacted counties but it also raised the issue of whether the State was addressing the program's original intent, i.e., basic health and safety issues.  He asked whether the OSLI could administer the program immediately if the Legislature chose to revert to the program as it was before 2004.  Ms. Boomgarden stated it could, as the rules for the program are still on file.  Vice Chairman Schiffer asked the OSLI to provide information on recommendations for matching requirements and the number of cross jurisdictional projects seeking funding for health, safety and unfunded mandate projects.  He clarified the request as one seeking historical information on the number of cross jurisdictional applications and how the relative wealth of the county should factor into the process; i.e., information to determine whether matching requirements and the current 87.5/12.5 split is the most appropriate.

 

The Committee discussed the merits of a competitive grant program versus the block grant distributions, the need for a long term approach and principles underlying the approach taken and models developed.

 

State Treasurer recommendations

State Treasurer Joe Meyer addressed the Committee.  The Treasurer had previously provided suggestions to the Committee.  (Appendix 12)  He suggested the Legislature should not involve itself with the details of how water development and other such individual program funds are spent.  He noted the increase in State programs for funding local government projects through other means including, lately, direct distributions.  The SLIB competitive grant program works in his view.  His recommendation for the next fiscal year would be to appropriate an additional $40 to $50 million dollars to the SLIB and allow the SLIB to allocate the money without the recent strings that have been imposed.  The SLIB can make the determination based upon the current statute requiring that health and safety be considered first.  He also recommended that the Legislature should take a look into a uniform auditing of local governments.  It would be helpful to have an overlay of current special districts and taxes imposed in each county, to determine which local entities are taxing themselves.  Some counties levy 65 mills, some 80, which raises the question of taxpayer equity in his view.  Additional money should be for public health and safety and emergency needs in the Treasurer’s opinion.  He believes the current distribution system is not broke, but the Legislature has been lobbied extensively in the recent past and has attempted to devise a formula that will satisfy every entity's needs/desires, but there is no such formula.  The Committee should step back and take a global look at who is taxing themselves and where money is being expended.  The issue cannot be viewed as an entitlement for all cities and counties.

 

The Treasurer stated that the business council and other entities and programs have been established in recent years, creating a need for tracking where money is going under the various programs and for what purposes.  The SLIB has required local taxing efforts and does not prioritize based upon geography, it does so based upon need and project worthiness.  The royalty grant program is funded with a dedicated stream.  Using general fund dollars for local governments places them in competition with state agency needs.  He suggested the Legislature should review revenue streams and determine if they should continue as they are.

 

The Committee discussed approaches to the SLIB and Legislature jointly reviewing policy decisions and the best means for obtaining input from the SLIB.  The Treasurer committed personally to responding and having dialogue with the Committee and SLIB on options for funding.  He believed the dialogue would be productive.  In response to Representative Cohee's question as to whether there should be a legislative liaison with the SLIB, the Treasurer thought it would be incredibly useful to have at least one House member and one Senate member.  He recommended against the Legislature micromanaging the flow of funds and taking on the funding of local needs from a direct legislative funding approach.

 

 

Public comment

After lunch, public comment on the morning agenda was taken.  Dan Perdue, Wyoming Hospital Association, addressed the Committee.  Eighty percent of the Association's members are governmental hospitals (county memorial or special district).  The change from the old SLIB grant process to the consensus process has made it difficult for hospitals to participate in the process.  He asked for the Committee to consider that issue in determining future funding.  Vice Chairman Schiffer asked for a list of county hospitals that were not participants in the consensus process.  Mr. Perdue stated that he would survey his membership.

 

Use of census data in distributions

LSO staff reviewed a matrix provided to the Committee concerning the use of the federal census in determining distribution amounts.  (Appendix 13)  There are seven different phrases used to describe the federal census in the current statutes providing for distributions of State funds.  Staff also summarized an Attorney General informal opinion which, relying upon a Wyoming Supreme Court case, took the position that when the term "federal census" is used in Wyoming statute (other than for internal affairs of a city) the term means the last federal decennial census.  (Appendix 14)  LSO staff also explained how the distributions are actually handled.  Generally, State agencies use county population from the 2000 census.  For distributions to cities and towns, all but a handful use the census 2000 figures.  "Corrected" 2000 census figures numbers are used for four towns.  There were two subsequent incorporations of municipalities for which the 2000 census figure, with the new incorporated boundaries, are used.  Gillette was adjusted based upon a boundary change, but is still considered a 2000 census figure.  Star Valley Ranch requested a special census, and that new number is used rather than the 2000 census number.  The department of transportation uses the same data set with the exception of the Star Valley Ranch special census number; in accordance with the Attorney General's opinion the 2000 census number is used.

 

Buck McVeigh and Wenlin Liu, department of administration and information, addressed the Committee regarding the use of census data and how the census is conducted and updated.  Mr. Liu stated the "official census" is taken every 10 years.  The census bureau does adjust the decennial census for boundary changes and corrections.  The bureau's current plan is to adjust for annexation changes every year.  A special census is required to be requested and paid for by the local entity, which can be done between census years.  Corrections may be brought to the census for "geo coding" errors, but the census bureau does not allow for recounts based upon believed undercounts.  Mr. Liu also provided information regarding the annual estimated census and the use of "census" in Wyoming statutes.  (Appendices 15 and 16).

 

In response to Committee questions as to whether the annual estimates would be more useful, Mr. Liu stated that the estimation could be far from the truth.  He further noted the vast majority of funds which are distributed are sales taxes and they are initially distributed by point of collection, population only comes into play for distributions within the county and those estimates generally involve only relatively minor changes.  For the small towns the estimate might be very accurate; for larger ones, less so.  Senator Jennings noted that the information showed there are other means to estimate impacts (e.g., housing and tax returns).  Mr. McVeigh noted that there also needs to be consideration of what the census is counting (resident population) and there are other impacts caused by the “day population" (or transient population)  He also stated there is a process called LUCA which allows cities to provide updates to the census bureau based upon housing addresses which the city believes is incorrectly omitted from the census data.

 

The Committee was also provided a letter from Crook County Attorney Joe Barron.  (Appendix 17)  Mr. Barron urged the Committee to "keep the populations current based on sound population data" and suggested using the phrase "latest federal census as periodically updated by the bureau of census including any challenges approved by the U.S. census bureau."

 

County and city recordkeeping requirements and recommendations

Mike Geesey, director, and Pam Robinson, administrator, Department of Audit, addressed the issue of county and city record keeping requirements.  The Committee had previously been provided information on auditing of local governments and submissions by three counties in Wyoming.  Mr. Geesey stated the Department has issued an RFP to allow it to expedite data management in order to make information reported to the Department more readily available.  The hoped for implementation timeframe is within two years.  The information would be available to the public.

 

The Committee discussed the expense and availability of accountants to conduct audits and whether the State undertaking that function again would be in the best interests of local entities.  In reply to Committee questions as to helpful statutory changes, Mr. Geesey suggested there should be a single ending financial year (ending June 30) for all entities.  Currently, towns with population under 4,000 end in April unless there is an ordinance to the contrary (four towns end their financial year in April), and irrigation and drainage districts have a September year end.  Ms. Robinson noted that the current requirement for reporting would work with the uniform date and suggested a potential penalty for late reporting.  The Department agreed to work on language for suggested changes.  Regarding additional changes, Mr. Geesey stated the inconsistencies of interpretations and definitions in current reporting requirements can be worked out internally and with WAM and county officials.

 

Review of major local government revenues

LSO staff reviewed the chart of major revenues to local governments and an accompanying memorandum noting that not all revenue streams can be simply pooled and used for any use.  (Appendices 18 and 19)

Mark Harris, legislative director of WAM , stated that his organization believed the vehicle registration funds to cities should be $6.27 million, not the $1.1 million shown on the chart.  LSO subsequently acknowledged the number shown was a typographical error and in its view the amount should be $6.1 million (the $17.3 million to counties should be $15.3 million).  Mr. Harris noted that local entities were limited in allowable uses for some of the funds shown on the matrix.

 

The Committee adjourned at approximately 3:30 p.m.

 

 

Thursday, October 11.

 

County recommendations

Joe Evans, executive director of the Wyoming County Commissioners Association (WCCA) and Kent Connelly, Lincoln County Commissioner and President of the WCCA, addressed the issue of county finances.  Mr. Evans had previously provided the Committee with a response to a number of questions raised at the last meeting. (Appendix 20).  Laramie County Commissioner Jack Knudson addressed the issue of how hardship money was expended, using Laramie County as an example.  (Appendix 21)  The County moved 15% of the monies into operating funds instead of using them solely for one time purchases.  That was done after considerable debate because of fears the additional funding might not be provided in the next budget cycle.   He addressed the fifth cent optional sales tax and noted that Laramie County has historically voted to impose the fifth cent with approximately 70 to 80% of the vote.

 

The Committee discussed the SLIB grant program in the context of Laramie County.  Mr. Knudson stated that Laramie County fared better under the recent block grant program than it had under the SLIB grant program in the past.  He suggested that could be due to the projects presented to the SLIB or that the County had historically helped itself by imposition of the optional fifth and sixth cent taxes.  In reply to Representative Semlek, Commissioner Knudson stated Laramie County does have a capital construction process, with a five year planning process.

 

The Committee discussed the differences between the sizes of counties and the availability of funds for administration and works in each.  Representative Hammons queried whether there are "best practices" made available to all counties.  The Committee discussed the application of the sixth cent and whether a sinking fund can be built into a "sixth cent project."  Commissioner Knudson noted Laramie County had done so for the recent library project.  He stated it would be helpful if there were a way to develop a more consistent stream of revenue for counties.

 

The Committee discussed the general issue of revenues and additional taxes or tax cuts balanced against the need to provide services to citizens.  The Committee also discussed the hardship formula used last session and the merits of using year old final figures or estimated figures for the upcoming year of distribution.  Representative Hammons noted that a consideration is the size of the county’s budget and how the income will affect a county (with a greater proportionate effect on smaller counties).

 

Commissioner Connelly noted that depreciation is a difficult issue for counties and there needs to be a distinction between normal roads and industrial roads, as the latter cost twice as much.  Representative Berger asked for the amount of revenue generated by the coal industry in Commissioner Connelly’s Lincoln County.  He agreed to supply the information.  The Committee discussed the issue of dust abatement.  Commissioner Connelly spoke highly of a federal program, known as CMAQ (congestive mitigation air quality program), which is administered through the State with federal dollars directed for road maintenance – including dust abatement.  Mr. Connelly noted the program could be expanded to other counties in the State.  Mr. Connelly stated that the counties would appreciate the restrictions in the county road program, limiting expenditures to construction only, being removed; (the restriction to use for county roads would not be problematic in his view).

 

The Committee discussed the issue of removing restrictions on funds directed for roads and the number of different formulae for road construction funds.  The Committee discussed pooling all of those statutes into a general road fund statute with one formula.  Mr. Evans noted the difficulty of changing the formulae since there will be "winners and losers" in any change.  Mr. Connelly believed that one formula for all roads would be welcomed by the county commissioners. 

 

Chairman Cohee asked the County representatives if it is responsible for the State to have short term savings.  Mr. Evans believed it was, but in his view the issue is how much. There are savings in maintaining roads and other items throughout their life, thus that must be balanced against the benefit of savings.  Mr. Evans noted it is for the Legislature to strike the balance.  Chairman Cohee also sought input on the suggestion for redistribution of mineral wealth in the state.  Commissioner Connelly stated there needs to be a discussion at some point as there must be some sufficient base for operations of county government throughout the State.  Vice Chairman Schiffer noted the use of the inverse of assessed valuation in a portion of the severance tax distribution for roads.  In reply to Committee questions, Commissioner Connelly stated the road funding should be limited to roads, not to equipment and the distribution formula for roads should be simple.  Vice Chairman Schiffer stated that if the single formula approach is taken, the various individual road programs would disappear.  Mr. Evans and Commissioner Connelly stated they were not speaking of the industrial road program in their comments.

 

The Committee developed the discussion into a more general debate of a total block grant for all counties and not for specific programs at the county level.  In reply to Committee questions, Mr. Evans noted there was currently complete flexibility for the 12 county mills; the special district mills lie outside of county commissioner oversight.  Representative Semlek asked the WCCA to provide recommendations regarding pooling of road funds as discussed above.  Mr. Evans stated that would be on the agenda for the November meeting of the WCCA.

 

Representative Martin asked whether county commissioners want more involvement with the operation of county memorial hospitals.  Currently the commissioners appoint the board and then the board runs the hospitals.  Mr. Evans stated that most counties do not become involved in the running of the memorial hospitals, but they become more involved in the smaller counties.

 

Niobrara County Commissioner Ron Pfister addressed the Niobrara County employee health insurance situation.  The County's assessed valuation is $66 million, which is an increase over the $30 million a few years ago.  The county has imposed the full 12 mills.  Under the lower valuation the employees were given a choice of a raise or health insurance (with the salaries being very low).  They chose the raise.  While the County now has more funds available, those are being used to meet serious delayed capital needs, such as a new roof for the hospital.  The County would like to provide health care insurance, but does not want to pull people from a current plan and not be able to provide health insurance in the future.  If funding were more stable, the County could provide health insurance.  Commissioner Pfister estimated about 50% of the county employees were uninsured.  The Committee discussed options available to the County, such as authorizing it to join the State plan.  Mr. Evans noted he previously spoke with the State plan administrator regarding county participation, but the State plan wanted all counties to participate and wanted the same payment as the State makes for its employees.  Senator Decaria noted lack of insurance will eventually reflect in uncompensated care at the hospital, costing the County hospital on the "back end" of care.  Commissioner Pfister stated that could happen but thus far they had not had a catastrophic health issue.  Senator Nicholas asked for a recommendation as to how much money is needed by Niobrara County to provide health insurance to its employees.

 

Mr. Evans reviewed the WCCA county proposed funding formula for the 09-10 biennium.  (Appendix 22)  He noted that it was difficult to develop a proposed formula agreeable to all counties.  The counties were proposing a total amount of $150 million in ad hoc funding.  The breakdown between the type of funding (direct, hardship, roads, impact and SLIB grants) was reviewed.  Most counties believe the block grant consensus program will not work well over the long term – since the amounts would be smaller if spread over all counties.  Mr. Evans stated that the county proposal for the SLIB program did not include special district or city funding under that program.

 

Mr. Evans stated the proposal had general support of the counties.  It was estimated that 19 or 20 counties were represented at the WCCA meeting when the vote was taken on the issue.  In reply to Committee members noting that jails were proposed to be funded under the SLIB grant program, Mr. Evans stated that in the larger counties they have not been so funded, but in the smaller counties the optional sales tax does not generate enough money to undertake such large capital construction projects.  Senator Vasey questioned why those projects would be funded under the SLIB program versus a direct legislative appropriation.

 

Further explaining his comments on the block grant consensus approach, Mr. Evans stated that most counties divided the block grant and with each entity receiving funding there were insufficient funds to fund the projects needed.  The process resulted in higher priority projects not being presented since they were too expensive to be proposed.  The WCCA would move the "consensus block grant program" funds to the SLIB under a discretionary grant approach.

 

The Committee discussed the pros and cons of the consensus process versus the SLIB "competitive grant" process.  While consensus among the entities in the county was required for the former, according to Mr. Evans the process worked because there existed a general consensus beforehand, the process did not create the consensus.  Commissioner Connelly stated the program worked well to build consensus.  But if the special districts were included, that would add a new dynamic that might make it difficult to build consensus.

 

Joel Schell, Converse County Treasurer and Mary Lankford, Sublette County Clerk and representing the County Clerks Association, presented testimony regarding reporting requirements.  They provided two written documents. (Appendices 23 and 24) .  Mr. Schell gave some examples of issues county treasurers have with current reporting forms required by the department of audit.  The county treasurers who met to discuss the issue noted they all reported the data requested in different ways.  Mr. Schell provided examples of how the form can result in inconsistent reporting and also provided proposed definitions which could help reporting in a more uniform manner.  The materials provided also compare current reporting with the reporting that would be done under a new proposed form using the suggested definitions.  Vice Chairman Schiffer questioned whether this proposal would be in addition to the current form 66 which is used since it is required by the census bureau.  Mr. Schell replied that the census bureau is seeking only three categories of information, all of which are on the proposed form.  Senator Nicholas questioned whether the same analysis is being applied to other parts of form 66; he also noted that the cash investment being shown in the proposed reporting is a snapshot of liquidity at a given time, but it does not show the cost of doing business over time.  Ms. Lankford stated that the conclusion of the clerks who met to discuss the issue believed form 66 is not functional for how counties operate on a day to day basis.  The County Clerks Association recommend that more information be submitted to the Legislature e.g., a budget with narrative explanation.  The Association would like to know what information the Legislature needs to make funding decisions.  The Committee discussed the cost of CPA audits; estimates of costs provided by Mr. Schell and Ms. Lankford ranged from $26,000 in Sublette County to $14,000 in Converse County, and $50,000 in Fremont County.

 

The Committee discussed the validity of the current "cost of government" publication.  Ms. Lankford thought the new reporting proposal would produce a valid document as it would provide a breakdown of costs with explanations of what the various reported categories consist of.  She gave examples of a lack of explanation and thus misinterpreted information on the current cost of government document.  She also noted the current form 66 is available to county governments on line, but not available to other entities required to complete the report.  Additionally it cannot be amended once submitted.  Mr. Schell noted that inconsistencies result when trying to report each county’s accounting forms in the form 66 terminology.  In response to Committee questions Mr. Schell stated he is not comfortable with using the information contained in the current reports for making funding determinations.  Committee members noted that the Committee needs to know the cost of providing county government, that it does not have that information and asked if it could it be supplied.  Mr. Schell responded that expenses can be delivered, but what is needed and how much in services are required are difficult and probably cannot be calculated in his view.

 

Municipal recommendations

Mark Harris, legislative liaison for the Wyoming Association of Municipalities (WAM) and Mayor Leonard Anderson of Pine Bluffs provided testimony based upon WAM’s model for mineral and surplus government revenue sharing.  (Appendices 24a, 24b, 24c and 24d)  Mr. Harris stated the plan is a work in progress.  He reviewed the documents which propose the base for distributions to city governments be approximately 11.9% of all federal mineral royalties and severance taxes ($372 million in the fiscal 09-10 biennium).  The Legislature could choose to address impact and hardship issues above the base funding proposed.  The consensus process is preferred by WAM over the old SLIB grant program.  There are also proposals for county block grant funding (under the consensus process) with a minimum of $5.3 million per biennium per county, plus $10.2 million in emergency funding awarded by the SLIB.

 

Mayor Anderson suggested the base amount could be raised a bit.  Senator Nicholas questioned why Sublette County, for example, should receive a subsidy under the proposal based upon a low population when it which has abundant revenues.  Mr. Harris stated the point was to develop a minimum for each county to cover county minimum needs for a biennium and there has to be some minimum to make a consensus allocation process work.  Senator Nicholas noted the minimums are based upon low population rather than need and asked if that is a rejection of the assumption that a base amount should rest upon a need.  Representative Berger questioned why the minimum was set at $5.3 million.  Bret Jones, Gillette City Administrator, noted the recommendation came from the city of Sheridan and attempted to represent a minimum amount to provide enough to allow all undertaking the consensus process to have enough funds distributed under that process for a project.  Senator Nicholas questioned whether the proposal was adopted by the entire WAM membership.  Mr. Harris stated it was adopted by the WAM board, but not by all 99 municipalities.  He noted there were unresolved issues of hardship amounts and revenues for impact.  The issue of food sales tax replacement is also unaddressed, although he believed that is a separate issue.  He also offered that other WAM members have suggested imposition of sales tax without a vote, and that the local property tax might be increased (recognizing that involves constitutional change).

 

Representative Semlek noted the proposal appears to be a shift from emergency needs and safety issues to a base block grant which will impact the ability of small communities to address large capcon needs.  The Committee discussed whether there has been an attempt to determine costs of basic municipal governmental services.  Mr. Harris replied there had not.  Vice Chairman Schiffer questioned whether cities are comfortable with taking roads and streets out of the process and providing that funding in a separate pool.  Mr. Harris stated that could be done.  Vice Chairman  Schiffer also expressed concern that need and local effort are not considered, citing the example of Jackson, where no property tax is levied by the city, since it has abundant funds by sales tax, and model calls for funding Jackson at $1.6 million.  Mr. Harris stated the proposal is a population based model.  Vice Chairman Schiffer suggested there can be base payments, but there needs to be more consideration to need than has been given (i.e., population is not a sufficient criterion).

 

Senator Jennings questioned whether consideration had been given to reducing funding if there is not a full effort for funding at the local level.  Mr. Harris replied that cities may not be able to reach consensus on that issue.  Mayor Anderson stated the issue might well be appropriate for the Legislature to address.  Committee members noted there still needs to be consideration as to the cost of running a city and county and work should continue to address the issue.  The Legislature should assist in that endeavor. 

 

Cheyenne Mayor Jack Spiker testified that the WAM model was not presented to the WAM board at any meeting before its September 29 meeting.  As a member of the WAM board he believed they had worked on a model that the membership thought, up until a week before the board meeting, would be presented to the board.  That model was different than the one voted on by WAM and presented to the Committee.  Mayor Spiker provided written information as to the "winners and losers" under the proposal presented in comparison with previous funding levels.  (Appendix 26)  He asked that the Committee task WAM with returning the issue to its membership for further consideration.  He suggested that the model presented did not include a needs assessment and there needs to be further discussion by WAM.

 

Vice Chairman Schiffer agreed that once a funding formula is in statute it is difficult to change and thus there should be a cautious approach.  He asked if there is a chance to reach consensus with most municipalities.  Mayor Spiker noted 22 of 23 counties voted for the county proposal.  He believed that cities can also reach a consensus.  Senator Nicholas stated the prior request by the Committee was for rich and poor and medium wealth cities to reach consensus; which apparently had not been reached and he was reluctant to send the issue back to WAM.  He also noted the request was not for a distribution model but the Committee had requested feedback as to what minimum amount was needed to fund cities.  Mayor Spiker stated that information is available and the city of Cheyenne will share it.  Chairman Cohee noted the comparisons provided by Mayor Spiker are based upon the 07-08 appropriations, and the story would be much different should there be a comparison to 05-06 appropriations.  He also noted there will be "winners and losers" in any reformulated distribution.

 

Leroy Schaffer, Mayor of Torrington, thanked the Committee for the legislative support provided in the past.  He stated there needs to be a funding model which allocates to cities a base amount needed to provide basic services.  The funding model should take into account the needs of the community and the ability of the community to tax itself sufficiently to provide basic services.

 

Klaus Hanson, Mayor of Laramie, stated the finance director of Laramie states on the city website that there is a cost to run the city.  Laramie voted against the proposed model presented to the Committee today.  The city would lose money as would 63 others under the proposal.  He urged any model to accommodate the replacement of lost food sales tax.  Each city should be able to provide basic services.  Mayor Hanson suggested a review of a cost based model such as used for schools might be an appropriate starting point.

 

Mayor Robert Sieveke of Pine Haven, testified that there was opportunity to attend meetings on the WAM model development.  Not all cities took advantage of that opportunity, but it did exist.  The model offers small towns a way to see a more consistent revenue stream, which is very helpful.  Continuity in whatever is developed is helpful.  Finally, he noted that a substantial base amount was a way to "jumpstart" those cities who have small revenue basis. 

 

Public testimony concluded and the Committee discussed its approach.  Senator Jennings suggested the Committee should start exploring "cost of government" by seeking experts who have conducted such studies.  Discussion points included what the components of the model should be, whether there should there be a capital construction component in the model, whether roads should be included, whether special districts should be included, and how the task compared or did not compare with school district funding.  Committee members discussed whether they have a sufficient idea of what the Committee would be requesting from a consultant.  Senator Jennings stated he was looking for a basic review of what it costs to provide basic services.  Committee members questioned whether counties and cities could provide information as to what it costs to provide basic services.  Mr. Evans stated it would be very difficult to do.  He was not sure of a timeframe nor what the results would be, but suggested counties could perhaps develop a bare minimum amount.  George Parks, WAM, stated his organization would be willing to attempt to develop a cost based model.  He noted that the issue for cities is not whether there are sufficient funds for minimum services, all cities are funded to that level.  He asked for additional guidance on what the Committee is requesting.

 

Senator Nicholas stated the first issue should be whether there are cities or counties who cannot afford to pay minimum salaries and provide basic services.  He asked for WAM and the WCCA to collect existing information regarding those cities and counties funded at the lowest amounts that cannot provide those services.  Mr. Parks stated that there is general information as to what it costs to run city and county governments and he will search for that, but also believed Wyoming is unique.  Mr. Evans echoed the same thought.

 

Representative Martin suggested the review should address the issue of duplication of services between counties and cities.  Consolidation of services should be considered.  Senator Jennings asked for the two organizations to develop a single format in order to compare "apples to apples" when reporting back to the Committee.  Senator Nicholas questioned whether there are "canned studies" that shed light on the minimum cost to operate cities.  He requested WAM and WCCA to determine if that information exists and to provide it to the Committee.  The same request was made of LSO staff.  He also requested of the cities and counties who cannot provide basic services to state distinctly what cannot be provided and the cost of providing those services based upon the service provided and the number of persons served. 

 

Senator Jennings moved to request that WAM and WCCA develop a report on their costs of government and provide it to the Committee in a uniform fashion which can be compared across the board.  The motion passed.

 

The Committee discussed modifying the county road construction account.  Mr. Evans stated that the WCCA intends to seek an individual sponsor for the bill.  No motion was made on the issue.

 

Senator Nicholas moved that information be requested of those communities that believe they do not have sufficient revenues at this time to provide basic services.  The information would include a cost estimate of providing those basic services.  The information is to be supplied by February 15.  The motion passed.

 

Senator Nicholas moved that WAM and WCCA be requested to investigate existing studies showing the cost for counties and municipalities to provide basic services.  The motion passed.

 

Senator Nicholas moved that LSO staff identify consultants who provide services calculating the cost of local government funding, and the charges and services that are provided by the consultants.  Staff is also to search NCSL and CSG sources for information on this issue and provide that to the Committee.  The motion passed.

 

Representative Hammons questioned whether any recommendation is to be forthcoming from the Committee regarding funding to local governments for this session.  Senator Nicholas suggested it is a JAC function.  There was no motion.

 

Representative Berger stated she would like a report on cost of local government audits and the possibility of conducting audits by the State rather than independent CPAs.  Ms. Robinson offered to collect information as to the cost by each entity and the cost of the State doing so.

 

Representative Berger asked whether the OSLI survey of unmet needs could be provided in an updated format.  Representative Hammons noted the survey was not productive.  No motion was made to update the survey.

 

LSO asked for clarification that all the above motions related to costs of government are only for minimum operational costs of providing basic services and do not include roads nor capital construction.  The Committee consensus confirmed that clarification.

 

Future Meetings

Chairman Cohee stated that for planning purposes the Committee would likely meet next year in late April or early May, late July and late October.

 

Meeting Adjournment

There being no further business, Chairman Cohee adjourned the meeting at 5:15 p.m.

 

Respectfully submitted,

 

 

 

Representative  Roy Cohee, Chairman

f:\aa\com\selcom\Local Government Financing\Minutes 10-10-07


 

 

 

 

 

 

 

 


Appendix

 

Appendix Topic

 

Appendix Description

 

Appendix Provider

1a and 1b

 

Committee Sign-In Sheet

 

Lists meeting attendees

 

Legislative Service Office

2

 

Committee Meeting Agenda

 

Provides an outline of the topics the Committee planned to address at meeting

 

Legislative Service Office

3

 

IDS and AML funding

 

Information on abandoned mine land accounts and industrial siting impact payments.

 

Department of Environmental Quality

4

 

Business Council

 

Business Ready Community and Community Facility Program funding

 

Wyoming Business Council

5

 

Business Council

 

Business Ready Community funding by development type

 

Wyoming Business Council

6

 

Business Council

 

Business Ready Community projects by purpose

 

Wyoming Business Council

7

 

Business Council

 

Community facilities grant and loan program by county

 

Wyoming Business Council

8

 

Business Council

 

Business Ready Community grant and loan program by county

 

Wyoming Business Council

9

 

SLIB grant and loan funding

 

Mineral royalty grant projects approved for FY 01 through FY 07

 

Office of State Lands and Investments

10

 

SLIB grant and loan funding

 

OSLI sales and use tax distributions to counties and towns and distributions under 2006 and 2007 budgets

 

Office of State Lands and Investments

11

 

SLIB grant and loan funding

 

Big Horn Regional Joint Powers Board letter concerning "consensus" grant process

 

Representative Hammons

12

 

State Treasurer's Recommendations

 

Letter addressing possible issues for committee consideration

 

State Treasurer Meyer

13

 

Use of census data

 

Matrix of statutory references to "census" for distribution of funds

 

LSO

14

 

Use of census data

 

Attorney General informal opinion regarding use of the term "census" in statute (June 1, 1995)

 

LSO

15

 

Use of census data

 

Annual census estimates for 2001 to 2006

 

Department of Administration and Information \

16

 

Use of census data

 

Use of "census" for distributions under Wyoming statutes

 

Department of Administration and Information \

17

 

Use of census data

 

Letter from Crook County Attorney with suggested statutory language

 

Representative Semlek as addressee of letter from Crook County Attorney Joe Barron,

18

 

Major local government revenues

 

Matrix of major revenue streams to local governments (updated as per minutes)

 

LSO

19

 

Major local government revenues

 

LSO memo on restrictions on use of revenue streams

 

LSO

20

 

County recommendations

 

Responses to requests for information

 

Wyoming County Commissioner's Association

21

 

County recommendations

 

Laramie County budget document (one page)

 

Laramie County Commissioner Knudson

22

 

County recommendations

 

WCCA proposal for legislative funding for the 09-10 biennium

 

Joe Evans, Wyoming County Commissioners Association

23

 

County recommendations

 

Examples of current and proposed county abstracts

 

Joel Schell, Converse County Treasurer

24

 

County recommendations

 

Summary of county clerks meeting and recommendations regarding reporting requirements

 

Mary Lankford, Sublette County Clerk

25a

 

Municipal recommendations

 

Summary of municipal recommendations relating to reporting requirements

 

WAM

25b

 

Municipal recommendations

 

October 3 letter to select committee regarding funding recommendations

 

WAM

25c

 

Municipal recommendations

 

Recommended total local government distributions

 

WAM

25d

 

Municipal recommendations

 

2007-08 Mineral and surplus – related local government revenue sharing

 

WAM

 

 

 

 

 

 

 

 


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