Wednesday, March 22, 2017

New rules affect Statement of Economic Interests filing: Easy-to-read flowchart explains changes

The annual Statement of Economic Interests disclosures are due on March 30 at noon. It’s a good time to finish gathering and organizing the information needed to complete the form because this year’s filing has a new requirement. 

Thanks to a bill passed in 2016, public officials are now required to disclose information about their income. This flowchart explains changes.

Officials must file their Statement of Economic Interests online covering the previous calendar year (January – December) by noon on March 30. Newly elected officials must also electronically file their SEI before being sworn in.

2016 legislation changes reporting requirements
The General Assembly made changes to the ethics laws during the 2016 legislative session. As a result, officials filing on or after January 1, 2017 must include the source and type of income the filer received. Income collected by the filer's immediate family during the past year must also be disclosed. Immediate family refers to the filer's spouse, any children in the household, and anyone claimed as a dependent on the filer's taxes for the previous year.

When determining whether something received in the last year qualifies as income, the filer should ask the following question: "Is it a thing of value reported or disclosed on an Internal Revenue Service form as income received?" 

If so, then the source and type of income should be disclosed on the SEI. This flowchart gives an easy outline to help officials determine what needs to be reported.

This new requirement does not require a public official to provide the amount or value of income received in the previous year, only the type (i.e. wages, tips, stock, etc.) and where it came from.

Some exemptions apply
Some sources are exempt from this new disclosure requirement. They include: deferred compensation as well as retirement, annuity, pension, IRA, disability income, and income received from a court order.

Officials may also exclude any savings, checking or brokerage accounts, as long they have not received special interest rates or other special terms as a result of their status as a public official, member or employee, as defined in Section 8-13-100(25)-(27) of the SC Code of Laws.

The Statement of Economic Interests must be filed electronically. The necessary forms are available from the South Carolina Ethics Commission.

Who is considered a 'public official'?
Among those affected include: 

  • anyone appointed to fill the unexpired term of a state or local elected official; 
  • candidates for state and local public office; 
  • the chief administrative official of each political subdivision, including water and sewer districts; 
  • city administrators, managers, supervisors or chief administrative official, by whatever title; 
  • chief finance and chief purchasing official of each agency, institution, or facility of state government, and of each county, municipality, or other political subdivision.

Thursday, March 16, 2017

FAQ: Impact of pension reform on S.C. cities and towns

The debate over the future of the state's pension systems has drawn substantial attention in recent weeks. 

This week, the House passed its budget that includes funding for 1 percent of the 2 percent increase in employer contributions. More details on the bills' status are in the March 3 issue of From the Dome to Your Home.


The FAQ below addresses many of the questions the Municipal Association staff has received from city officials and reporters about pension reform.

1 – What is the impact on South Carolina cities and towns of the proposal to increase employer contributions to the state pension programs 1 percent annually for the next six years? A conservative estimate is around $8.5 million annually for every 1 percent.*

2 – How many South Carolina cities and towns participate in the State Retirement System and the Police Officers Retirement System? Of the 270 cities and towns, 208 participate in SCRS and 181 police agencies participate in PORS.

3 – What does “unfunded liability” mean and how does it impact cities and towns? The unfunded liability means the difference between the amount that has been contributed to the system by employers, employees and investment gains and the amount that would be required to pay out benefits when due.

4 – How does the unfunded liability impact cities and towns? As required by the Governmental Accounting Standards Board (GASB Statement 68), the Public Employee Benefit Authority allocates a portion of the total unfunded liability of the state pension system to each member city, and the city must show that liability on its financial statement.

A city’s portion of the $20 billion unfunded liability is based on the employer contributions remitted to the particular retirement system (SCRS or PORS) in proportion to total employer contributions to the plan.

Example:  PEBA allocates $15 million of the $20 billion unfunded liability to City A. City A must recognize this liability on its books just as it would recognize bonded indebtedness to build a new city hall. However, just like the bond debt for city hall, the $15 million unfunded pension liability is not an amount that the city would ever have to pay in a lump sum. 

5 – Do cities participating in the state pension programs have the ability to limit the growth in the unfunded liability? No. City councils have no authority to set employee or employer contribution rates, determine investments or determine retirement benefits. Therefore, councils have no ability to change the amount of the city's unfunded liability. 

6 – Can participating cities get out of the state pension programs? No. There is no legal mechanism for an employer to exit the retirement systems.

7 - How are the state pension programs funded? There are three sources of revenue for the retirement systems – investment income, employee contributions and employer contributions. If any source of funding doesn’t meet assumptions, the other sources must be increased to keep the system stable. 

* estimate based on data from the Municipal Association’s compensation survey.

Tuesday, March 14, 2017

Sunshine Week question: adding agenda items

In 2015, the General Assembly clarified how a public body can amend an agenda for regular, special, called or rescheduled meetings after the meeting has already begun. The new law, Act 70, addressed the posting of meeting notices, stating that meeting agendas must be posted on the public body's website if it has a website. 

The law pertains to all public bodies subject to the Freedom of Information Act. The Municipal Association and the S.C. Press Association developed this flowchart to illustrate the process. Additional information about this issue is available in the Handbook for Municipal Officials.​

PDF of the flowchart
 
Get more tips on FOIA compliance in the Sunshine Week issue of Uptown.

Monday, March 6, 2017

Let the sun shine in

Sunshine Week is March 12 – 18 focusing on the importance of transparency  and open government. The March Uptown includes five articles focusing on open government best practices.
Show your city’s commitment to open government during Sunshine Week by sharing these articles and this press release with your local newspapers, posting them on your city website and social media sites, and distributing them to councilmembers and city staff.

Also download this sample Sunshine Week resolution your council can pass to reinforce its commitment to transparency.

Read more about Sunshine Week in the March 2016 Uptown to get additional resources on FOIA training for local officials, download the S.C. Press Association’s FOIA handbook and learn more about court cases.

Use #SunshineWeek and tag @muniassnsc with any Sunshine Week social media posts.

Wednesday, March 1, 2017

Court case spotlights law enforcement and social media

Social media can be a blessing or a curse for law enforcement. A recent case in the U.S. Court of Appeals 4th Circuit ruled one police department’s social media policy infringed on an officer’s First Amendment right to speak.

In the case of Liverman v. City of Petersburg, the United States Court of Appeals 4thCircuit reviewed the discipline of two city police officers that was based on posts they made on Facebook.

In its review, the court overturned the discipline and concluded that the police department’s policy was “overbroad,” because it prohibited too much, and therefore infringed on the officers’ First Amendment rights to speak on a matter of public concern. The court further concluded the police chief failed to establish the officers’ social media comments meaningfully impaired the efficiency of the workplace.

This Washington Post article does a good job of laying out the issues in the case. Also get more detail from this post by Jack Ryan with the Legal and Liability Risk Institute. Ryan is a frequent presenter for law enforcement training sponsored by the SC Municipal Insurance and Risk Financing Fund. He recently worked with SCMIRF to review and update its law enforcement model policy on social networking.

All South Carolina public agencies should review their policies and training related to social networking in addition to any policies that limit employee speech/expression or policies that prohibit protected speech that would not impact agency operations.

March 12 - 19 is Sunshine Week, and the Association will feature more articles that week focusing on best practices for transparency and the public's right to know.

Friday, February 3, 2017

Lots happened at Hometown Legislative Action Day

This week's Hometown Legislative Action Day and the Municipal Elected Officials Institute programs brought more than 450 local officials to Columbia for one day of training and a second day of advocating for city issues. Attendees can share their feedback about the day with this survey.

Twitter posts from the day tell a good story:
The day started with a panel of House members who serve on the House Tax Policy Review Committee. Reps. Tommy Pope (chair), Mandy Powers Norrell, Chandra Dillard and Joe Daning weighed in on the data-driven work this committee is doing to analyze the state's tax system and make recommendations on changes. Committee members stressed they aren't looking for new revenue. Rather, the goal is making the tax system more fair.
Senators Luke Rankin, chairman of the Senate Judiciary Committee, and Shane Massey, Senate Majority Leader, talked about the political landscape and issues that will be top Senate priorities this year. Both senators noted they hope to pass legislation early in the session to make the state superintendent of education an appointed office.

Clarence Anthony, executive director of the National League of Cities, gave an analysis of the new political landscape in Washington and stressed NLC’s focus on the Hill is maintaining the tax exemption on municipal bonds.

A draft business license bill topped the list of advocacy initiatives the Association’s staff discussed. Executive Director Miriam Hair updated local officials about cities' concerns with this proposal.
 
The largest class in the 20-plus year history of the Municipal Elected Officials Institute graduated during HLAD. Forty-eight officials completed the MEO Institute while an 70 additional graduated from the Advanced Institute.
Christy Hall, the state Secretary of Transportation, gave the lunch address immediately following her testimony about the state of DOT in front of the Senate Transportation Committee. She shared the details of that presentation with city officials noting the agency’s recent successes as well as its looming challenges.
 
More than 200 local officials marched down Main Street to the Blatt Building where they told House members that cities support business license standardization but…authority for business licensing must remain with cities, there should be no special exemptions and the result must be revenue neutral for cities.

Business licensing legislation was introduced on Thursday. Read more in today's From the Dome to Your Home and stay tuned for details.

Get links to handouts and presentations here.