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HomeMy WebLinkAbout15. A4 Legislative Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager SUBJECT: Adoption of City Supported Legislative Resolutions for the 2015 Montana Legislative Session MEETING DATE: January 5, 2015 AGENDA ITEM TYPE: Action RECOMMENDATION: Adopt City supported Montana League of Cities and Towns’ Resolutions for the 2015 Montana Legislative Session. SUGGESTED MOTION: I move to adopt Montana League of Cities and Towns’ adopted resolution numbers [List Numbers], to be supported by the City of Bozeman for the 2015 Montana Legislative Session. BACKGROUND: In October the Montana League of Cities and Towns (MLCT) formally adopted 29 resolutions. By reviewing the resolutions and taking action, the Commission can formally clarify their position on legislation relevant to the City of Bozeman. City staff will come prepared to give an update on the status on each resolution at the Monday, January 5, 2015 meeting. ALTERNATIVES: As suggested by Commission. FISCAL EFFECTS: None. Attachment: MLCT Adopted Resolutions Report compiled on: December 22, 2014 249 2014 RESOLUTIONS MONTANA LEAGUE OF CITIES AND TOWNS • 2014-1 GENERAL PRINCIPLES • 2014-2 ENTITLEMENT SHARE PROGRAM • 2014-3 REMOVING CAP ON INCREASES IN MILL LEVY • 2014-4 SAFETY INSPECTIONS • 2014-5 LAND USE AND ENVIRONMENTAL REGULATION • 2014-6 EASTERN MONTANA IMPACT PROJECT – LOCAL GOVERNMENT INFRASTRUCTURE GRANT PROGRAM • 2014-7 STATE FUNDING FOR DEPLOYMENT OF ALL-HAZARD INCIDENT MANAGEMENT ASSISTANCE TEAM • 2014-8 LOCAL IMPACT FEE • 2014-9 IMPACT TAX FOR ALL CITIES AND TOWNS • 2014-10 LOCAL MOTOR FUEL TAX • 2014-11 PUBLIC INFORMATION AND RECORDS RETENTION • 2014-12 MS4 AND STORMWATER QUALITY • 2014-14 PARK DEDICATION • 2014-15 MUNICIPAL BROADBAND • 2014-16 GOVERNOR’S MENTAL HEALTH PROPOSAL • 2014-17 BUILDING CODES • 2014-18 COMPENSATION FOR RETIREMENT • 2014-19 COMMUNITY DECAY FUNDING • 2014-20 PUBLIC WORKS CONTRACTS • 2014-21 PROHIBIT DRIVING WHILE USING HANDHELD CELLPHONE • 2014-22 EXPANDING USE OF TSEP FUNDS FOR ALL QUIET ZONES • 2014-23 ALLOWING PUBLIC DISCLOSURE OF RTC’S • 2014-24 LOCAL GOVERNMENT STUDY COMMISSION ELECTIONS • 2014-25 ACCUMULATION OF BUILDING CODE FEE COLLECTIONS • 2014-26 IMPACT FEES • 2014-27 STATEWIDE AUTHORITY FOR PEACE OFFICERS • 2014-28 EXPANDED OPTIONS FOR FIRE DEPARTMENTS • 2014-29 AUDITING REQUIREMENTS 250 29 September 2014 Resolution #2014-1 GENERAL PRINCIPLES BACKGROUND Local governments provide the services and facilities that are the foundation of the Montana economy. Our cities and towns are among the best places in the country to live and work, raise a family and operate a business. The League of Cities and Towns is committed to preserving and promoting these qualities. ACTION For the 2015 Legislative Session, the League will stand by the following principles of fair, affordable and effective local government: 1. Protection of current state transfer payments and the promotion of new sources of revenue to fund essential local services. 2. Diversification of the local government finance structure, particularly laws allowing cities, towns, counties and consolidated governments to develop alternatives to property tax mill levies. 3. Maintenance of state grant, loan and investment programs to fund capital improvements and enhance the value of local tax dollars. 4. Adherence to the intent as well as the letter of federal and state laws and policies that prohibit unfunded mandates. 5. Effective planning and development policies that discourage sprawl and promote the more efficient delivery of water, sewer, transportation and other local services. 6. Opposition to all measures that limit or diminish municipal authority in contradiction of the Local Government Article of the 1972 Montana Constitution. 7. Recognition of the contribution of cities and towns to the history and culture of our state and a better understanding of the fact that all public policy should begin and end with those special places a majority of Montanans call home. 251 29 September 2014 Resolution #2014-2 ENTITLEMENT SHARE PROGRAM BACKGROUND Section 15-1-121, MCA, contains the formula for calculating the annual growth factor that is applied to Entitlement Share Payments. The Legislative changes in 2011 based the growth factor on the collection of gambling, motor vehicle, beer, liquor and financial institutions tax revenues over the most recent three-year period. It also includes a factor for personal and corporate income tax collections. During the 2013 Session, the Legislature amended 15-1-121, MCA, to provide that entitlement payments are intended to provide a secure and predictable stream of revenue with a growth adjustment tied to state collections, with a floor of zero. For Fiscal Year 2014, the growth factor on the Entitlement Share Payment Program was 3.5%, which added $2.15 million to cities and towns. ACTION The League will monitor the Entitlement Share Payments program to ensure its continuation and application of growth factor adjustments. 252 29 September 2014 Resolution #2014-3 REMOVING CAP ON INCREASES IN MILL LEVY BACKGROUND Cities and towns are only authorized to impose a mill levy that is sufficient to generate the amount of property taxes actually assessed in the prior year plus one-half of the average rate of inflation for the prior 3 years. Cities and towns cannot financially survive this limitation on the mill levy to one-half of a rolling 3 year average of the rate of inflation. Expenses incurred by cities and towns are not limited to any similar cap. ACTION The League will sponsor legislation to remove the restrictions on the cities’ and towns’ mill levy authority currently imposed under Title 15, chapter 10, part 4, MCA. 253 29 September 2014 Resolution #2014-4 SAFETY INSPECTIONS BACKGROUND Many of the apartments and rooms that are rented to the public, particularly in college towns, do not meet basic safety standards or building codes. ACTION MLCT will support legislation recommended by the City of Missoula to allow municipal governments to regulate rentals in private residences offered for public rental for safety compliance. 254 8 October 2014 Resolution #2014-5 LAND USE AND ENVIRONMENTAL REGULATION BACKGROUND Cities and towns have worked many years to protect Montana’s land and water resources through wise community development policies that emphasize centralized water and wastewater systems, efficient delivery of services to concentrated populations and compliance with fair and affordable environmental standards. Now, most new development in Montana is sprawling beyond municipal boundaries, threatening our legacy of open space and clean water. Municipalities are dedicated to working with state and federal agencies to establish growth and land use policies that recognize property rights while preserving the natural assets of Montana. ACTION MLCT will support bills to: 1. Encourage the use of community water and wastewater systems to protect environmental quality and assure that cities and towns are not obligated for a disproportionate share of the cost of complying with Numeric Nutrient Standards and other regulations. 2. Promote alternative energy development and conservation through grants, loans, and technical assistance and education programs. 3. Allow cities and towns authority under the energy and building codes to promote conservation. 4. Expand authority of cities and towns to use tax increment districts and tax abatements for opportunities as part of an effective economic development strategy. MLCT will oppose bills to: 1. Restrict the annexation, zoning, planning and subdivision review authority of cities and towns or in any other way interfere with established community development practices. 2. Restrict the use of Special Districts but will consider measures to simplify protest procedures for property owners. 3. Limit the effectiveness of the options under the tax increment district statutes. 255 29 September 2014 Resolution #2014-6 EASTERN MONTANA IMPACT PROJECT LOCAL GOVERNMENT INFRASTRUCTURE GRANT PROGRAM BACKGROUND Eastern Montana is experiencing significant growth impacts related to infrastructure and public safety as a result of rapid population growth resulting from the resurgence of the oil and gas industry in Eastern Montana. Most Montanans welcome the economic opportunities connected to this development, but Eastern Montana does not have the resources and support necessary to proactively plan for and address the infrastructure and public safety needs of the growing population. Governor Bullock recently made changes to the State Revolving Loan Fund (SRF) loan programs which significantly reduced interest rates charged by the program and thereby provided immediate savings to the water and sewer ratepayers of communities taking advantage of the SRF loan programs. Governor Bullock has proposed the Eastern Montana Impact Project Local Government Infrastructure Grant Program, which includes $45 million to help meet the need for local water, wastewater, and public safety infrastructure to serve the growing population. Historically low interest rates will allow the state to use its sterling bond rating to provide cash to fund these long- term infrastructure projects. The $45 million Eastern Montana Impact Project Local Governmental Infrastructure Grant Program will provide Eastern Montana with additional resources and support to help plan and address the infrastructure and public safety needs of the growing population ACTION MLCT will: Support and promote Governor Bullock’s $45 million Eastern Montana Impact Project Local Governmental Infrastructure Grant Program, including up to $4.5 million for public safety infrastructure, and calls upon the 64th Montana Legislature to authorize $45 million in state bonding authority to fund the Program. 256 29 September 2014 Resolution #2014-7 STATE FUNDING FOR DEPLOYMENT OF ALL-HAZARD INCIDENT MANAGEMENT ASSISTANCE TEAM BACKGROUND Currently when an incident response results from activation of the state disaster and emergency plan, the Governor may by executive order use appropriated state money only for the incident response costs of the state and may not use any of it to reimburse local government or tribal government for incident response costs. The Montana State Fire Chiefs Association has been working to expand the incident management capabilities of Montana at the local level. In order to better fund local involvement in the costs of incident responses, they are proposing that the Governor’s executive order would allow for incident response costs incurred by an all-hazard incident management assistance team response, as governed in Title 10, chapter 3, part 12, MCA. The current provision that prohibits reimbursement of local government or tribal government would be removed. ACTION MLCT will support broadening the Governor’s authority to reimburse local government for its costs incurred by an all-hazard incident management assistance team. 257 29 September 2014 Resolution #2014-8 LOCAL IMPACT FEE BACKGROUND Some cities and towns experience sudden growth due to causes such as explosive natural resource development. This rapid, unforeseen growth challenges these cities and towns to meet the need for increased municipal services. Many times these impacts are unpredictable and the impacted municipalities cannot immediately afford the increased costs to enlarge their infrastructure and for expanding municipal services. This growth eventually generates increased property tax revenue but it is not immediate and impacted municipalities need a quicker revenue source. A local impact fee would fill that need for more readily available extra revenue. In the 63rd Legislature (2013 Session), House Bill No. 452 proposed a reasonable process allowing a local government the option to establish a local impact fee that could be imposed on overnight lodging facilities and campgrounds. ACTION MLCT will support a locally created and imposed impact fee. 258 29 September 2014 Resolution #2014-9 IMPACT TAX FOR ALL CITIES AND TOWNS BACKGROUND The Resort Tax, Title 7, chapter 6, part 15, MCA, has been an economic blessing for those resort areas that qualify under the limited definitions. The reality is all cities and towns would equally benefit from having a similar type of local sales tax on defined goods and services. Many cities and towns are being burdened with impacts from growth and economic development. Municipalities, especially those with robust tourist industry or those impacted by natural resource development, need the option to have an additional revenue source that targets the activity causing the impact. A local impact tax, imposed optionally by local government, would meet this need and ease the burden on local property taxpayers. A local impact tax could easily be based upon the models of the Resort Tax and the state sales tax (Title 15, chapter 68, part 1, MCA) on accommodations and rental cars. ACTION MLCT will sponsor creation of a local impact tax option that is available to all municipalities. 259 29 September 2014 Resolution #2014-10 LOCAL MOTOR FUEL TAX BACKGROUND This 1979 law allows voters of a county to authorize an excise tax of up to two cents per gallon on the retail sale of gasoline. This additional money would help cities and towns improve, expand and maintain their street systems. Cities and towns cannot get this additional excise tax money unless a majority of the voters in the entire county approves it. Cities and towns need the ability to present this issue solely to their individual electorate and not be at the mercy of the county voters not living within the corporate limits of the city or town. ACTION MLCT will support allowing cities and towns the authority upon approval of their respective electorates to impose an excise tax upon the retail sale of gasoline occurring within the corporate limits and having those funds available to use for purposes allowed by other gas tax proceeds. 260 29 September 2014 Resolution #2014-11 PUBLIC INFORMATION AND RECORDS RETENTION BACKGROUND HJR 2 (2013) established an interim committee to create and recommend a comprehensive public records bill. The intent was to reorganize the current laws dealing with public records maintenance, retention and public release. It was not intended to change current policy on making public records available for public inspection and copying. Unfortunately, the early drafts of this proposed bill may place an added burden on city and town staff in responding to requests for release of public information. MLCT was represented at one of the committee hearings and expressed concern that the draft seemed to require public agencies to do research on public information requests rather than simply making public records available for inspection and copying. The committee acknowledged concern about this unintended possibility. The reorganization of public records laws is admirable but it should not add an unnecessary burden and cost to cities and towns in responding to public information requests. ACTION MLCT will monitor the reorganization of laws dealing with maintenance and retention of public records and local government’s duties on requests for public information. 261 29 September 2014 Resolution #2014-12 MS4 AND STORMWATER QUALITY BACKGROUND More cities in Montana are being classified as Municipal Separate Storm Sewer (“MS4”) cities for purposes of stormwater regulations under EPA and MTDEQ. Under the federal law, MS4 cities are required to use best management practices to reduce pollution from stormwater runoff. MTDEQ is responsible for issuing general permits to the MS4 cities. In past years MTDEQ was more aggressive than the EPA BMP standards and required additional burdens such as monitoring and sampling of water quality in stormwater runoff. Though this initially only affected the larger Montana cities, the history of the MS4 designation has been to reach down into lower populated cities. Originally in 1990, only cities with populations over 100,000 were affected. By 1999, it potentially affected municipalities with 1,000 people or more. The MLCT and affected cities agree with protecting water quality and using BMPs for stormwater. What we do not agree with is having to do sampling and monitoring that is of no benefit. Sampling for the sake of sampling. The concern is that MTDEQ may interpret "state waters" (75-5-104(34), MCA) to include stormwater retention and detention ponds, which are the BMP’s means for trapping pollutants before reaching bona fide state waters. This interpretation would require retention and detention ponds, constructed as BMPs for stormwater, to have water quality compliance similar to lakes and rivers. Such an interpretation has resulted in difficulties conducting water main flushing, fire hydrant testing, water main repair and maintenance (non-stormwater discharges). That interpretation combined with the first 1/2" treatment requirement in the current discharge permit has also raised questions about whether it is permissible for stormwater leaving a site to enter the MS4 at all, and thus detention or retention ponds and basins, before the first 1/2" of water is treated. MTDEQ has established working groups with the MS4 cities to reach a mutually satisfactory resolution on these issues. This process is still on-going and will take more time and work to resolve the differences. ACTION MLCT extends its appreciation to MTDEQ for its efforts having a working group to work toward resolution of BMP requirements for mitigation for stormwater quality. The MLCT will consult with and work with DEQ if legislative changes may be needed for effective implementation of BMPs in a cost-effective and reasonable manner. The MLCT will monitor legislation dealing with stormwater quality and MS4 regulations. 262 29 September 2014 Resolution #2014-14 PARK DEDICATION BACKGROUND When a developer proposes a residential subdivision, the developer as part of the approval of that subdivision is required to dedicate either a percentage of the land for parkland or a cash-in-lieu payment that is equal to the fair market value of the unsubdivided, unimproved land. (76-3-621, MCA). The cash-in-lieu payment is restricted to use for acquiring or improving other neighboring parks that could serve the subdivision. Using the undeveloped, unimproved land value for determining the cash-in-lieu is usually insufficient to make substantial improvements in neighboring parks that would serve the newly created subdivision ACTION The League will monitor legislation to change the formula for determining “fair market value” for cash-in-lieu payments to closer reflect the value of the post-subdivision, improved tracts. 263 29 September 2014 Resolution #2014-15 MUNICIPAL BROADBAND BACKGROUND Affordable broadband access is important for creating high-paying jobs in cities and providing internet access for educational institutions. Broadband connectivity, however, is only available at high prices, when available at all. A public broadband infrastructure investment would stimulate private sector service delivery. ACTION The League will support legislation to allow public-private partnerships to develop broadband infrastructure for development of affordable broadband access. 264 29 September 2014 Resolution #2014-16 GOVERNOR’S MENTAL HEALTH PROPOSAL BACKGROUND The Governor is proposing a plan to address critical issues in the state’s ability to provide mental health services to individuals with severe and disabling mental illness. The proposal creates a funding and programmatic framework for strengthening services. The specific items in the proposal span the continuum of care from community based health promotion, prevention, out- patient services, crisis intervention, and acute care services, to measures that support ultimate stability in the community. There are four distinct program components in the proposed framework: • Expanded Community Mental Health Services. • Behavioral Health Inpatient Facility site planning. • Forensic Unit D Wing Improvements at the Montana State Hospital. • Dementia Treatment Unit at the Montana Mental Health Nursing Care Center. ACTION The League will support legislation to develop and implement the proposal to provide mental health services to individuals with severe and disabling mental illness. The League also supports prevention and early intervention efforts by supporting children’s mental health and crisis diversion. 265 29 September 2014 Resolution #2014-17 BUILDING CODES BACKGROUND The Building Codes Division of the Montana Department of Labor approves the building codes for residential buildings that cities may adopt if the cities want to enforce and inspect construction of residential properties. (50-60-301(2), MCA) The Building Codes Division does not inspect or enforce building codes on structures with less than four living units. Currently the cities may not adopt a more stringent standard under the residential code. Some cities with the fire hazards from wildland-urban interface areas want to prohibit certain building materials, such as wood shakes, because of their higher flammability. The Building Codes Division takes the position that types of building materials is under its exclusive jurisdiction and that cities cannot ban the use of materials that are more inflammable. ACTION The League will support legislation to allow cities to adopt more stringent building standards under its enactment and enforcement of the residential building codes. 266 29 September 2014 Resolution #2014-18 COMPENSATION FOR RETIREMENT BACKGROUND The public employee retirement system has suffered in the past from not being actuarially sound. Some public employee bargaining groups want to include factors such as overtime, insurance premium payments and other special benefits as part of the “total compensation” used in determining retirement benefits upon retirement. Adding these other types of economic benefits as compensation for retirement purposes increases the cost to the public employer for paying the employer portion of the retirement withholding. Additionally, adding new peripheral benefit amounts to total compensation puts a strain on the public retirement system since the more recent retirees will not have contributed toward the higher benefit for most of their careers. ACTION The League will oppose legislation adding employee benefits and overtime as part of the compensation for purposes of determining retirement benefits. 267 29 September 2014 Resolution #2014-19 COMMUNITY DECAY FUNDING BACKGROUND In an effort to make a community safe and visually pleasing, cities and towns must eradicate blight from old, uninhabitable buildings and remove junk and abandoned vehicles. These actions cost money that the cities and towns do not have. The cities and towns must rely on constrained general fund money to take necessary abatement actions, which is often not there. The cities and towns need the authority to raise additional money beyond the property tax to eradicate blight. Sometimes the cities and towns can go against the property owner for the cost of removal of the blight but the city or town must first pay for removal of the blight. Having the initial seed money for a revolving fund to remove blight would be a good first step. ACTION The League will monitor legislation to give cities and towns additional authority to raise money for eradicating blight from vacant, unusable structures, junk and abandoned vehicles and weed removal. 268 29 September 2014 Resolution #2014-20 PUBLIC WORKS CONTRACTS BACKGROUND Currently the standard prevailing rate of wages is required in public contracts for construction and nonconstruction services when the total cost of the contract is more than $25,000. (18-2- 401, MCA) Competitive bidding is not required on municipal contracts unless the amount is in excess of $80,000. Smaller contracts that do not require competitive bidding still require prevailing wages. ACTION The League will support legislation to increase the threshold for application of prevailing rate of wages to public construction and nonconstruction contracts to $80,000. 269 29 September 2014 Resolution #2014-21 PROHIBIT DRIVING WHILE USING HANDHELD CELLPHONE BACKGROUND A substantial number of cities have passed ordinances prohibiting driving while using a handheld electronic device. This was done because using handheld devices such as cellphones while driving distracts the driver from being fully attentive to driving. Though these ordinance are consistent in concept, there are differences in the details that makes enforcement varied between cities. Having a uniform statewide ban would give motorists one standard to follow rather than many variations between cities with an ordinance and the rest of state that is not regulated. ACTION The League will monitor legislation to establish a statewide prohibition against driving while using a handheld electronic device, including cellphones. 270 29 September 2014 Resolution #2014-22 EXPANDING USE OF TSEP FUNDS FOR ALL QUIET ZONES BACKGROUND Currently TSEP funds may be used by a city or town to create quite zones along railroad routes used by coal hauling trains. Primarily the trains hauling coal are on the southern route, but actually there is more overall train traffic on the northern route. Train noise is train noise and the type of cargo being hauled has nothing to do with the noise of train whistles at train crossings. ACTION The League will support legislation to expand use of TSEP funds for establishing quiet zones to any railroad crossing regardless of type of freight. 271 29 September 2014 Resolution #2014-23 ALLOWING PUBLIC DISCLOSURE OF RTC’S BACKGROUND Realty Transfer Certificates, which are documents required to be filed when recording deeds, contain sales information needed by the Montana Department of Revenue for appraisal purposes. These are considered confidential information and are not presently releasable to the public. ACTION The League will monitor legislation allowing public disclosure of sales information on Realty Transfer Certificates. 272 29 September 2014 Resolution #2014-24 LOCAL GOVERNMENT STUDY COMMISSION ELECTIONS BACKGROUND Every ten years the cities and towns call for an election on the question of conducting a local government review. (7-3-173, MCA) If the electorate of a city or town approves conducting a review, then the city or town has an election for study commission members. At times the electorate will vote for a review but no one files for election to be on the study commission. That requires the city or town to conduct an election with a blank ballot for write-ins. This is a fairly expensive and burdensome election process. A better option to conducting an election with no candidates is to allow the governing body to appoint the commission members. ACTION The League will sponsor legislation to allow the governing body to forego conducting an election when there are no study commission candidates and to appoint the commission members. 273 29 September 2014 Resolution #2014-25 ACCUMULATION OF BUILDING CODE FEE COLLECTIONS BACKGROUND For cities who are certified to enforce the state building codes, the cities are allowed to charge for plan approval and inspections. The fees charged, however, cannot accumulate for an amount needed to enforce the codes for twelve months. (50-60-106, MCA) With the cyclical nature of development, in some years a twelve month accumulation is insufficient to fund the costs of an enforcement program. A twenty-four month reserve would be a better cushion to weather the peaks and valleys. Some cities with certified building code enforcement programs are required by the Montana Department of Labor to have the building code fee collection fund audited separately rather than as part of the city’s annual audit. (ARM 24.301.208 and 2-7-503, MCA). This results in the building code fee fund being audited twice. ACTION The League will sponsor legislation to allow cities certified to enforce the building codes to accumulate fees and charges needed to enforce building codes for twenty-four months and to clarify that any audit of the building code fee collection fund may be part of the city’s annual audit. 274 29 September 2014 Resolution #2014-26 IMPACT FEES BACKGROUND For cities and towns with impact fees, the fees must be recalculated every two (2) years. This period is too short for recalculation, especially since the fees cover a five year period. (7-6-1602, MCA) Also, the impact fee advisory committee is required to have a certified public accountant as a member. It is difficult and in many cases impossible to find a certified public accountant willing to serve as a volunteer on that committee. (7-6-1604, MCA) ACTION The League will support legislation to extend the impact fee recalculation to a longer period and remove the requirement that the advisory committee has a certified public accountant as a member. 275 8 October 2014 Resolution #2014-27 STATEWIDE AUTHORITY FOR PEACE OFFICERS BACKGROUND The Montana Police Protective Association is contemplating having legislation presented at the 2014 Session that would give Montana certified peace officers the authority to perform law enforcement duties beyond the limits of the officer’s normal jurisdiction in defined situations. The extended authority would give a peace officer statewide authority to enforce laws, make arrests and assist peace officers of another jurisdiction, among others. In this time of public fear over terrorism, this proposal for having expanded law enforcement has an appeal. However, this expanded authority raises concerns over liability exposure to the jurisdiction who employs the officer, workers compensation issues if the officer is injured, and whether the officer is entitled to compensation and if so from whom. ACTION The League will oppose legislation to authorize a peace office to exercise police duties beyond the limits of the officer’s normal jurisdiction. 276 8 October 2014 Resolution #2014-28 EXPANDED OPTIONS FOR FIRE DEPARTMENT BACKGROUND Third-class cities and towns may provide fire protection through either use of volunteer fire fighters, contract for fire protection services, or consolidation of its fire department with another fire protection provider. (7-33-4101, MCA). When a third-class city’s population is greater than 5000 people, the city can continue to be a third-class city so long as its population is under 7,500. (7-1-2112, MCA) Cities that have elected to continue as third-class cities may provide fire protection through contracts for services or as part of a fire district. These low-cost options are not available when the city becomes a second-class city. Second-class cities must provide fire service with a paid department even though it may be augmented with volunteers. The cost difference between contracted and paid department is significant and growing third-class cities cannot afford this substantial and sudden increase in costs of maintaining a paid fire department. This is especially onerous on the general budget that is funded by property tax revenue which are capped. HB 231 in 2011 Session would have allowed all cities, regardless of size, additional options in providing fire protection such as consolidating with fire district, using volunteers or contracting for fire service. ACTION The League will support legislation to allow second-class cities the expanded option to provide fire service through contracted fire protection services, a paid department, a volunteer department or combination of paid and volunteer, or consolidation with another fire protection provider. 277 8 October 2014 Resolution #2014-29 AUDITING REQUIREMENTS BACKGROUND Local government entities must undergo an audit if they receive revenues and financial assistance in excess of the threshold dollar amount established by the director of the office of management and budget pursuant to 31 U.S.C. 7502(a)(3). (2-7-503, MCA) At present the threshold dollar amount is $500,000. Local government entities include districts that barely exceed this threshold amount. They are required to have their relatively simple financial records audited and the cost of an audit is significant considering the amount of revenues and financial assistance they receive. ACTION The League will support legislation to increase the threshold amount for requiring an audit of a local government entity to an amount more in line with the total revenues and financial assistance. 278