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Wednesday May 17, 2017

2013 Legislative Wrap-up

The 2013 Legislative Session has been a success in achieving the majority of our top three priority items on the agenda. Below, please find the Issue and Outcome statement for our NCSFA Agenda.

Please take a moment and thank our bill sponsors for their hard work during the session. The list of bill sponsors and those instrumental in taking leadership with the budget provisions are:

Rep. Julia Howard
Rep. George Cleveland
Rep. Tim Moffitt
Senator Tommy Tucker
Senator Wesley Meredith 
Senator Fletcher Hartsell 

A Legislative Update was given at the 2013 NCSFA Annual Meeting by Kevin Gordon.  For a copy of that presentation, please follow this link.

Legislative Agenda and Outcome

Issue #1 –The Funding of the Volunteer Safety Worker’s Compensation Fund is our Number One Priority for 2013!

We must secure a dedicated funding source to maintain solvency of the fund. We are not asking for any tax or fee increases. Current law dictates a gross premium tax on insurance coverage, of which the original intent was to assist in paying for fire protection services.

Modifying this existing statute by allocating 100% of the funds to fire protection service, in lieu of the current 55% allocation, would provide a stable funding source for VSWCF. The balance of the 45% goes into the General Fund under current law. The change to appropriate the entire fund is in line with the original intent of the gross premium tax, and solves the current funding issues for the Volunteer Safety Worker’s Compensation.

Outcome of Regular Session (2013-2014 Biennium) – The current law was amended legislatively and changed the percentages of allocations of the gross premium tax {see G.S. 105-228.5 (d) (3)}. Allocations for the Volunteer Fire Department Fund were reduced from 30% to 25% and allocations for the Firefighters’ Relief Fund were also reduced from 25% to 20%. The amount going to the general fund was reduced from 45% to 35%. This aggregate 10% reduction in the fire programs and another 10% from the General Fund will create a 20% funding stream for the Volunteer Safety Workers’ Compensation Fund. The Volunteer Safety Workers’ Compensation Fund will finally have a dedicated annual funding stream of a minimum of $6.3 million. The Volunteer Fire Department Fund and the Firefighters’ Relief Fund will recover significantly over the next few years based on projections for increased dividends from the gross premium tax.

Issue #2 – Fire and Rescue Retirement Revision of 2013!

The North Carolina Firemen’s and Rescue Squad Workers’ Pension Fund is established to provide pension allowances and other benefits for eligible firemen and rescue squad workers in the State who elect to become members of the fund. In order to better reflect the structure of other Retirement Systems statutes, changes and technical corrections are needed. Issues to be addressed with filed legislation:

  • Renaming the Pension Fund and additional gender neutrality changes are made throughout the bill.
  • Creating a Definitions Section and additional definitions are being added to further clarify the administration of the fund.
  • Repeal of Archaic and Outdated Statutes and Code Provisions.
  • Changes to the Board of Trustees.
  • Administrative Changes and Technical Corrections of Wording. This section requires that all refunds be directed to members rather than to fire departments or rescue squads.

Outcome of Regular Session (2013-2014 Biennium) –
The North Carolina Firemen’s and Rescue Squad Workers’ Pension Fund (FRSWPF) is established to provide pension allowances and other benefits for eligible firemen and rescue squad workers in the State who elect to become members of the fund. In order to better reflect the structure of other Retirement Systems statutes changes and technical corrections were needed. With that, various pieces of legislation were passed during this session. Those bills were: HB 327, HB 357, and HB 358. Listed below are highlighted changes that will impact the fire service:

H.B. 327 Howard / SB 304 Meredith, Fire and Rescue Pension Revision of 2013

  • Firefighters must be 18 years of age to join the FRSWPF
  • Any and all lump sum withdrawals will be refunded to the members only
  • Governance will now be by the Local Governmental Employee’s Retirement System Board (LGERS)
  • Meetings and drill requirements were changed to 36 hours of training thus removing confusion on the requirements
  • The section of the original bill that would have allowed paid members (only those who are employed by local government) of FRSWPF to receive an in‐service distribution of their pension after attainment of age 55 with 20 years of membership service was removed during the process. This will remain a priority of NCSFA in the next session.
  • Detailed below are future funding forecast of the Fund –
    • The state funding today is almost a dollar for dollar match to the 1960 funding on a per dollar value of assessed property in the state. In 1960, every dollar the state spent on the FRSWPF was working to protect $69,000 worth of assessed property value. Every dollar spent on the fire and rescue pension fund today is working to protect $69,000 worth of value. The long-term average (from 1960 to today) is $65,000 per dollar.
    • ARC (Annual Required Contribution) – State 5-year forecast. In FY13 the ARC was 15.4 million and projected ARC for FY14 is 14.6 million. The ARC is projected to be 10.4 million in FY15, 10.7 million in FY 16, 11.1 million in FY 17, and 11.4 million in FY 18.
    • Funded Status – 5-year forecast. In FY13 the FR {funding ratio (Assests to Liabilities)} is at 88.2% and for FY14 is projected to be 89.8%. The FR is projected to be 90.4% in FY15, 91.1% in FY 16, 91.8% in FY 17, and 92.8% in FY 18.

H.B. 357 Moffitt, Retirement Governance Changes Act of 2013

  • This bill adds a seat to the Local Governmental Employee’s Retirement System Board for a Member of the Fireman’s and Rescue Squad Workers Pension Fund

H.B. 358 Moffitt, Retirement Technical Corrections

  • This bill amended the terms in G.S. 143-166.2 (d) to coincide with the changes in H.B. 327 Fire and Rescue Pension Revision of 2013. This amendment was needed to keep those under the age of 18 eligible for LODD benefits.

Issue #3 – VIPER Funding is crucial to the completion of the communications project as is the issuance of VIPER identification numbers for departments that have invested heavily in equipment and infrastructure to use the VIPER system and are not able to do so.

  • Priority 1- Fund P 25 migration of the VIPER system $23 Million –P 25 is a national standard and increases the number of users the system can have from 65,000 to 128,000. The current infrastructure has reached capacity of 65,000 users.
  • Priority 2- VIPER System Build Out $26 Million – This funding will help to complete the VIPER build out. While the system is currently at about 70% complete, there are several counties in the western part of the state that still do not have coverage.
  • Priority 3- Operational and maintenance funding $6.75 Million – Need to fund additional positions to help maintain the system. The system is still being maintained with the same amount of funding even though more towers have been added.

Outcome of Regular Session (2013-2014 Biennium) – VIPER will receive 25.0 million of nonrecurring money in FY 2013-2014 to upgrade the system to P-25 technology. VIPER will receive 7.0 million in FY 2014-2015 (next fiscal year) and again in FY 2015-2016 for tower construction. This amount will drop to 2.0 million of recurring money in FY 2016-2017 to fund operation and maintenance of the completed VIPER system. VIPER is also allocated 2.8 million as recurring monies for additional operation and maintenance cost of VIPER and there is an additional 580,000 of nonrecurring monies in FY 2014-2015 also for operation and maintenance.

Pending Studies affecting Fire-Rescue Programs

The Program Evaluation Division (PED) is a central, non-partisan unit of the Legislative Services Commission of the North Carolina General Assembly that assists the General Assembly in fulfilling its responsibility to oversee government functions. The mission of the Program Evaluation Division is to evaluate whether public services are delivered in an effective and efficient manner and in accordance with the law.

PED primarily supports legislative oversight by conducting independent evaluations of state government as directed by the Joint Legislative Program Evaluation Oversight Committee (JLPEOC). As legislators perform their oversight function, they often have questions about how policies are being implemented, how money is being spent, and what results are being achieved. PED addresses those questions from an unbiased perspective through program evaluations.

There are two pending studies requested by JLPEOC. JLPEOC has requested PED to look at all state funded fire-rescue programs to answer the following questions:

  1. Eligibility criteria and benefits of each fund?
  2. Financial status of each fund?
  3. How the funds are administrated and what are the oversights?
  4. How do the funds compare to other states?
  5. How do the grant oversights compare to grants management best practices?

The first report is due to JLPEOC during October of 2013. This project will examine state-administered funds that benefit fire, rescue, and emergency management services workers through the Firemen’s and Rescue Squad Workers’ Pension Fund, Firefighters’ Relief Fund, Rescue Squad Workers’ Relief Fund, and Workers’ Compensation Fund for Volunteer Safety Workers.

The second report is due to JLPEOC during December of 2013. This project will examine state-administered funds that benefit volunteer fire, rescue, and EMS departments through the Volunteer Fire Department Fund and the Volunteer Rescue/EMS Fund.

While these studies do not in themselves change benefits or operating practices, the General Assembly and other involved agencies will use these results to determine necessary administrative changes and potential legislative amendments. It will be critical for the fire and emergency services to follow the reports to insure that resulting changes yield positive actions that improve benefits for our members.

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