DOS-19-07-00012-P Shared Municipal Services Incentive Awards Grant Program

5/9/07 N.Y. St. Reg. DOS-19-07-00012-P

NEW YORK STATE REGISTER

VOLUME XXIX, ISSUE 19

May 09, 2007

RULE MAKING ACTIVITIES

DEPARTMENT OF STATE

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. DOS-19-07-00012-P

Shared Municipal Services Incentive Awards Grant Program

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed action:

Amendment of Part 814 of Title 19 NYCRR.

Statutory authority:

State Finance Law, section 54(10)

Subject:

Shared Municipal Services Incentive Awards Grant Program.

Purpose:

To establish eligibility requirements and criteria for Shared Municipal Services Incentive Awards Program.

Text of proposed rule:

19 NYCRR Part 814

Part 814 of Title 19 of the Official Compilation of Codes, Rules and Regulations of the State of New York is amended to read as follows:

Section 814.1 Purpose.

The purpose of this regulation is to implement the requirements of State Finance Law Section 54 (10) [(H)] which established a competitive grant program for [“]two or more municipalities to cover costs associated with mergers, consolidations, cooperative agreements, dissolutions and shared services.[”] It directed the Secretary of State to adopt rules and regulations to implement the program.

Section 814.2 Definitions.

As used in this Part, the following words and terms shall have the stated meaning:

(a) Consolidation means two or more adjoining towns in the same county consolidate as one town pursuant to Article 5-B of the Town Law; two or more adjoining villages consolidate as one village pursuant to Article 18 of the Village Law, or; for the purpose of applications submitted prior to April 1, 2007 two or more school districts consolidate as one district pursuant to Article 31 of the Education Law. For the purpose of grant applications submitted after April 1, 2007, pursuant to State Finance Law § 54 (10) as amended by Chapter 56 of the Laws of 2007, consolidation shall also include consolidation of two or more special improvement districts or fire districts.

(b) Cooperative agreement means an agreement entered into by two or more municipalities pursuant to Article 5-G of the General Municipal Law or other authorizing statutes for the performance among themselves or one for the other of their respective functions, powers and duties on a contract or cooperative basis.

(c) Dissolution means the dissolution of a town pursuant to Article 5-A of the Town Law or the dissolution of a village pursuant to Article 19 of the Village Law.

(d) Merger means the transfer of functions, powers or duties of a city, town or village within the same county, to each other or to the county, pursuant to the Alternate County Government Law, or; pursuant to any other legislative authority which may be enacted after the effective date hereof for such transfers of functions, powers or duties or for the merger of a county, city, town or village with any of such other units of local government.

(e) Municipality means a county, city, town, village and school district[.] ; for the purpose of grant applications submitted after April 1, 2007, pursuant to State Finance Law § 54 (H) as amended by Chapter 56 of the Laws of 2007, municipality shall also include special improvement districts and fire districts, and provided that for the purpose of such applications a school district shall be considered a municipality only in instances where a school district advances an application for a grant to cover costs associated with cooperative agreements or shared services, and further provided that for the purpose of such applications, a board of cooperative educational services shall be considered a municipality only in instances where such board of cooperative educational services advances a joint shared service application on behalf of school districts and other municipalities within the board of cooperative educational services region; provided, however, that any shared services agreements with a board of cooperative educational services:

(i) Shall not generate additional state aid;

(ii) Shall be deemed not to be a part of the program, capital and administrative budgets of the board of cooperative educational services for the purposes of computing charges upon component school districts pursuant to subparagraph seven of paragraph b of subdivision four of section nineteen hundred fifty of the education law;

(iii) Shall be deemed to be a cooperative municipal service for purposes of subparagraph two of paragraph d of subdivision four of section nineteen hundred fifty of the education law.

(f) Secretary means the New York State Secretary of State.

(g) Shared services means the joint provision, performance or delivery of a service, facility, activity, project or undertaking by two or more municipalities which each may lawfully undertake separately.

Section 814.3 Eligibility.

(a) Applications for assistance under this Part may be made only by two or more municipalities which jointly submit requests on forms established by the Secretary.

(b) Grants may be used to cover legal and consultant services, feasibility studies, capital improvements and other necessary expenses related to costs associated with mergers, consolidations, cooperative agreements, dissolutions and shared services by municipalities.

Section 814.4 Grant awards

(a) Subject to annual appropriations by the Legislature, grants will be made to successful applicants pursuant to the review and approval criteria set forth herein, in an amount not to exceed one hundred thousand dollars ($100,000.00) per municipality[.] , provided, however, for the purpose of grant applications submitted after April 1, 2007 pursuant to State Finance Law § 54 (H) as amended by Chapter 56 of the Laws of 2007, the maximum grant award shall not exceed two hundred thousand dollars ($200,000.00) per municipality.

(b) Applicants will be required to provide matching funds, equal to ten percent of the total approved cost.

(c) State assistance shall be available on a reimbursement basis. Grantees shall submit periodic invoices and requests for payment as work is performed and costs incurred.

(d) For the purpose of applications submitted prior to April 1, 2007,[G]grantees may request an advance payment in an amount not to exceed 25 percent of the total amount of State assistance for the project.

(e) No part of a grant shall be used by the grantee for recurring expenses such as salaries, utilities and fuel.

(f) Prior to the final reimbursement payment, grant recipients shall submit to the Secretary copies of studies, agreements and other products resulting from the grant award.

Section 814.5 Review and approval criteria

(a) All applications will be rated in accordance with the rating system established by the Secretary. Criteria used to rate applications will generally include the following:

(1) Demonstrated need for the project.

(2) The likelihood of timely completion of the project.

(3) The potential for municipal cost savings, productivity enhancement or streamlined administration.

(4) The number of municipalities involved or the size of the service area.

(5) The likelihood of instituting permanent changes to municipal structure or service delivery resulting in cost savings, enhanced productivity or streamlined administration over the long term.

(6) The ability of the project to serve as a demonstration program for other municipalities to reduce costs, enhance productivity or streamline administration.

(7) Whether the project would advance other State or municipal programs for municipal efficiency and cost savings.

(8) The geographic distribution of other fundable projects in any given application cycle.

(b) In the selection of grant awards for applications submitted on or after April 1, 2007, priority shall be given to applications that:

(1) Include a municipality that meets any of the following fiscal distress criteria;

(i) Full valuation per capita less than fifty percent (50%) of the average full valuation per capita for municipalities in New York state.

(ii) A population at least ten percent (10%) less than the population as reported in the nineteen hundred seventy (1970) federal decennial census.

(iii) Greater than sixty percent (60%) real property tax limit exhausted in the most recent local fiscal year as reported to the Division of the Budget by the State Comptroller.

(iv) A percentage of individuals living below the poverty level, as reported for a municipality in the most recent federal decennial census, in excess of one hundred fifty percent (150%) of the average percentage of individuals living below the poverty level as reported for municipalities in the most recent federal decennial census.

(2) Plan or implement the consolidation, merger or dissolution of municipalities.

(3) Share services between school districts and other municipalities, including applications submitted by boards of cooperative educational services.

(4) Share highway services, including joint highway equipment purchases, capital improvements that benefit two or more municipal highway departments, contractual services between two or more municipal highway departments or for the consolidation of two or more municipal highway departments.

(5) Consolidate health benefit plans offered by two or more municipalities.

(6) Encourage countywide shared services, where a county develops a countywide shared services plan under which municipalities in such county agree to participate in shared services, including, but not limited to, public safety, purchasing, payroll, and real property tax assessment.

(c) Awards shall be granted only for services that would otherwise be individually provided by each grantee and for which demonstrable financial savings result from such sharing, unless awards are for feasibility studies.

Section 814.6 Contents of application and procedures.

(a) Application for assistance shall be on forms prescribed by the Secretary. Applications shall contain the following:

(1) The names and contact information for each municipality applying for assistance.

(2) Designation of contact person or grant administrator.

(3) Identification of key personnel who will work on the project for the municipalities.

(4) A resolution of each municipality's governing body requesting such assistance.

(5) A detailed description of the proposed activity to be funded.

(6) A work program including time periods for achieving stated objectives.

(7) A budget including identification of all funding sources and local matching funds.

(8) Any inter-municipal agreements entered into or proposed to be entered into to carry out the activity.

(9) A description of how the proposal responds to each of the rating and approval criteria described in this Part.

(b) Application information and procedures.

(1) The Department of State will provide outreach services to inform municipalities of the availability of funding and provide information to applicants concerning application preparation and submission.

(2) Project time periods and work programs may be adjusted by the Department of State as a condition of entering in to a contract for State assistance, to ensure the timely and successful completion of a project for which funds are awarded. The Department of State may, in its discretion, choose not to enter into contracts and cancel grant awards which do not contain mutually established time periods and work programs.

(3) All projects must be undertaken pursuant to a contract with the Department of State which shall require, in addition to the requirements of the Department of State, Attorney General and State Comptroller, that all contracts not to be performed by the officials and employees of the grantee be entered into in accordance with General Municipal Law sections 103 and 104-b.

Text of proposed rule and any required statements and analyses may be obtained from:

Richard L. Hoffman, Department of State, 41 State St., Counsel's Office 8th Floor, Albany, NY 12231, [phone], e-mail: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

This action was not under consideration at the time this agency's regulatory agenda was submitted.

Regulatory Impact Statement

1. Statutory Authority:

Section 54 (10) of the State Finance Law, enacted by the Legislature in 2005 as part of the Article VII budget bill (L. 2005, c. 63) established the “shared municipal services incentives award” grant program for two or more municipalities administered by the Secretary of State. It directed the Secretary to adopt regulations implementing the program prior to accepting applications from eligible municipalities and school districts. In 2007 the Legislature continued the program with some modifications, and again directed the Secretary to adopt regulations prior to accepting applications (L.2007, c. 56).

2. Legislative Objectives:

By enacting Section 54 (10) of the State Finance Law, the Legislature sought to establish incentives for two or more municipalities to share services, undertake consolidations, enter into cooperative agreements and study dissolutions. It enacted a voluntary program to cover the costs associated with such actions, including but not limited to legal and consultant services, feasibility studies, capital improvements and other necessary expenses. The legislature established a maximum grant award of $200,000 per municipality and required a 10% local match. For Fiscal year 2007–08 the legislature appropriated $25 million.

3. Needs and Benefits:

There are over 1600 general purpose local governments in New York and 677 school districts. Together they account for a significant portion of State aid ($15.9 billion school district aid in 2005–06 alone) and local property taxes. The Shared Municipal Incentives Award program encourages local cost cutting efforts by providing State funds for shared services, mergers and consolidations.

4. Costs:

a. Costs to regulated parties.

This is a voluntary program. Municipalities that are awarded a grant will receive up to $200,000 per municipality. A 10% local match is required. Municipalities are expected to realize cost savings from the program.

b. Costs to the agency.

The Legislature has appropriated $1,300,000 for administration of the program.

c. Cost information.

The Department of State consulted with municipal associations representing, counties, cities, towns and villages, in 2005 when the regulation was initially promulgated. As noted, this is a grant program which should result in cost savings to municipalities.

5. Local Government Mandates:

There are no mandates involved in this voluntary grant program.

6. Paperwork:

There are no paperwork or reporting requirements imposed except for standard documentation of expenses incurred in order to receive reimbursement, and documentation of results obtained by grant recipients.

7. Duplication:

The regulation does not duplicate, overlap or conflict with any other federal, state or local rule or statute.

8. Alternatives:

State Finance Law § 54 (10) requires the Secretary to adopt rules and regulations to establish eligibility requirements, application requirements and grant criteria.

9. Federal Standards:

There are no federal standards relevant to this matter.

10. Compliance Schedule:

This is a voluntary program which does not involve compliance requirements.

Regulatory Flexibility Analysis

Small Businesses:

The proposed rule establishes criteria pertaining to a municipal grant program and does not affect small businesses. Accordingly, a regulatory flexibility analysis for small businesses is inapplicable and was not prepared.

Local Governments:

The proposed rule does not impose an adverse economic impact on local governments nor does it impose reporting, recordkeeping, or other compliance requirements on local governments. Therefore, pursuant to 202-b (3)(a) of the State Administrative Procedure Act, the Department finds that a Regulatory Flexibility Analysis does not need to be prepared, for the following reasons:

1. Effect of rule:

The rule would establish a voluntary grant program under which municipalities and school districts may receive funds for shared services and other intermunicipal cost-saving measures.

2. Compliance requirements:

There are no compliance requirements except for documentation of work performed by any grantee.

3. Professional services:

Professional services are not required to comply with the grant program. Costs for professional services engaged by a municipality pursuant to a grant would be reimbursed through the grant program.

4. Compliance costs:

No compliance costs are imposed. This is a voluntary grant program.

5. Economic and technological feasibility:

In as much as no compliance is required, there are no economic or technological feasibility issues.

6. Minimizing adverse impact:

There will be no adverse impact on local governments because this is a voluntary grant program designed to result in cost savings for municipalities and school districts.

7. Small business and local government participation:

Notwithstanding that there will be no adverse impact upon local governments, the Department previously consulted with municipal associations when the regulation was initially promulgated in 2005 who had no objections to the regulation. They would not be expected to object to this amendment which simply tracks the new provisions of the statute.

Rural Area Flexibility Analysis

Pursuant to § 202-bb (4) (a), the Department has determined that the proposed rule would not have an adverse impact on rural areas and would not impose reporting, recordkeeping or other compliance requirements on public or private entities in rural areas, and a Rural Area Flexibility Analysis need not be prepared for the following reasons:

1. Types and estimated numbers of rural areas:

The proposed rule would apply uniformly throughout the State.

2. Reporting, recordkeeping and other compliance requirements; and professional services:

The proposed rule does not impose any recordkeeping or other affirmative acts on municipalities and school districts. Municipalities and school districts that choose to submit grant applications will be required to provide documentation of work performed if they are the recipient of a grant award.

3. Costs:

This is a voluntary grant program which does not involve costs to grant recipients, who can be expected to realize cost savings as a result of the program.

4. Minimizing adverse impact:

Because the proposed rule would establish a voluntary grant program designed to assist municipalities and school districts with shared intermunicipal cost savings, there will be no adverse impact on public or private entities in rural areas.

5. Rural area participation:

The Department previously consulted with municipal associations representing counties, cities, towns and villages in all areas of the State, including rural areas in 2005 when the regulation was initially promulgated. It is unlikely these groups would have any objection to the amended rule, which tracks the new provisions of the statute.

Job Impact Statement

Pursuant to § 201-a (2) (a) of the State Administrative Procedures Act, the Department has determined that the proposed rule will not have a substantial adverse impact on jobs and employment opportunities, and that a Job Impact Statement need not be prepared, for the following reasons:

The proposed rule would implement a voluntary grant program whereby municipalities and school districts would be eligible for awards for intermunicipal cost-saving measures. Eligible grant activities include costs associated with mergers, consolidations, cooperative agreements, dissolutions and shared services. Covered costs include legal and consultant services, feasibility studies, capital improvements and other necessary expenses. In some cases this could result in municipalities performing functions jointly or sharing employees which could see a long-term stabilization of the municipal workforce, or a slight decrease through attrition. Any such losses, however, should result in cost savings to municipalities to allow them to continue to provide a sustainable level of services for residents and taxpayers, which will in turn prevent job and employment opportunity losses through annual budget reductions.

The Legislature enacted State Finance Law § 54 (10) to provide municipalities and school districts with incentives to find ways to counter rising municipal budgets and property tax increases. Increasing taxes or reducing services are the two options municipalities have to continue their role to provide public services. The proposed rule would implement the legislation by providing a third option — incentives to seek cost savings on an intermunicipal basis — which could prevent or minimize a reduction in services, thereby positively affecting municipal and school district employment.