Labor Legislative Alert – What is SB 916 and Why Should You Care?

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Labor Legislative Alert

What is SB 916 and Why Should You Care?

By Diana Moffat

As of the writing of this newsletter alert, the Oregon legislature is still actively considering various legislative amendments and some new implementations that will directly impact your labor relations matters.

The biggest concern for our public sector employers, as it relates to labor negotiations, is SB 916. This bill has gone through a few changes, but is now pending House review on the version A-engrossed draft.

This Oregon Bill would give public sector employees, who are out on strike during a strike over benefits and wages, the ability to apply for and receive unemployment insurance benefits for a portion of their time while out on strike and away from work.

Senate Bill 916 passed by the bare minimum of 16 votes in the 30-member Senate chamber, with two Democrats voicing concerns that the legislation could harm cash-strapped cities and counties. That concern comes from the fact that many Oregon cities and counties are “direct pay” to the Employment Department for any approved unemployment benefits paid out by the Employment Department. This has been characterized as nothing less than a direct tax payer subsidy for striking workers.

Under the current law, rules and regulations (mostly under PECBA – ORS 243.650, et seq.) if a public sector strike-permitted group of employees goes out on strike, they are not eligible for unemployment compensation benefits. SB 916 would change that provision.

 

What’s Next With FEMA’s Pre-Implementation Compliance Measures (PICM)?

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by Armand Resto-Spotts

As many cities are aware, last year, the Federal Emergency Management Agency (FEMA) notified National Flood Insurance Program (NFIP) participating communities that certain “Pre-Implementation Compliance Measures” (PICM) must be implemented by December 1, 2024, to ensure compliance with the Endangered Species Act (ESA). Specifically, the PICM are intended to prevent “take” – or “harm” – of certain threatened and endangered species from permitted floodplain development.

FEMA provided three options for NFIP communities to select before December 1, 2024. In sum: 1) prohibit all new development within the floodplain; 2) evaluate impacts to the floodplain on a permit-by-permit basis, effectively requiring a habitat assessment for floodplain development permits to show what functions the floodplain in question serve to threatened or endangered species, and how the development would achieve “no net loss” to those functions; or 3) adopt FEMA’s 2024 Model Ordinance.

Since the December 1, 2024 deadline passed, we have seen NFIP communities throughout the state choose each of these different pathways in PICM integration. In contrast, other cities outright rejected FEMA’s PICM requirements, and instead adopted unique approaches, like requiring development applicants to affirm whether any “take” is likely from their proposal.

Model Ordinance and Code Amendments

Today, NFIP communities are working towards implementing their chosen PICM option. For those jurisdictions moving forward with the model ordinance, that ordinance must be fully adopted and in effect by July 31, 2025. Considering state and local requirements for notice and process, cities should begin this land use ordinance procedure no later than mid-February.

For those jurisdictions moving forward with permit-by-permit review, land use amendments are also likely required. Unless city code today authorizes imposition of FEMA’s new PICM standard – i.e., identifying floodplain functions and how the development would achieve a “no net loss” to those functions – cities will need to adopt minor code amendments to be able to require compliance with this new federal directive. FEMA and the Oregon Department of Land Conservation and Development (DLCD) have yet to provide any sample or template language that cities can reference for adoption under their floodplain ordinance, leaving NFIP communities to address this code authority question on their own.

If you are in this position, we recommend a few steps. First, review your entity’s current floodplain ordinance to ensure that it lacks sufficient authority to require this new “no net loss” assessment. Some older FEMA-approved ordinances actually include language requiring applications to comply with all applicable federal requirements, which may be enough to impose this new standard on applications for floodplain development. In most instances, however, our experience is that city codes today do not contemplate this new requirement. Those codes must be amended before applicants can be required to supply information required for a permit-by-permit review. We continue to monitor DLCD for publication of guidance or language that cities can use for said amendments.

In the interim, when permitting floodplain development, we recommend including disclaimer language. Such a disclaimer should notify the permittee of the change in federal requirements and law, and allocate responsibility for compliance to the applicant. This interim approach should provide at least some level of defense, if FEMA chooses to challenge any issued permit as violating the ESA.

If you have further questions about land use amendments for this PICM pathway or permit disclaimer language, please contact our office.

New Lawsuit May Pause PICM Integration

Notwithstanding those ongoing PICM integration concerns, when and how cities ultimately implement their PICM choice may be a moot point, given a recent lawsuit filed by the Oregonians for Floodplain Protection (OFP). Early this year, OFP sued FEMA, and other federal agencies, requesting declaratory and injunctive relief from the PICM requirements. Among the many arguments presented, OFP argued that FEMA failed to follow requisite rulemaking procedures under the Administrative Procedures Act before requiring NFIP communities to implement one of the PICM options. OFP filed for a preliminary injunction, which asks the court to halt FEMA from enforcing the PICM.

Although the federal district court has yet to hear arguments or render a decision on the requested injunction, the lawsuit highlights underlying legal concerns with FEMA’s approach to PICM integration. Taking a “wait-and-see” approach before adopting the model ordinance or code amendments to implement permit-by-permit review now makes practical sense. Ultimately, if the court agrees with OFP’s arguments and issues an injunction, cities can pause their ongoing PICM work.

The risk of avoiding PICM implementation remains very real – namely, FEMA’s ability to revoke NFIP coverage. However, the cost to adopt a new code or amend an existing code is not insignificant either. This is especially the case without any formal guidance on code language or applicable federal regulation for cities to rely upon when imposing this new “no net loss” standard. OFP’s lawsuit comes at a time of widespread uncertainty and confusion about how to address and implement FEMA’s PICM requirements lawfully and – as FEMA has required of planning jurisdictions – very quickly.

We will continue to monitor the PICM landscape. Our team is here to work with you in navigating this unique federal and local issue.

The Budget Process in Four Simple Steps

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by Mark Wolf

It is hard to believe that it is already the beginning of February and budget season is upon us! For many of you, you are already off and running. This article explains the budget process in four simple steps. It also serves as a reminder that ORS 192.670 requires governing bodies (to the extent reasonably possible) to make public meetings accessible by telephone, video, or other electronic means and to allow written testimony by email or other electronic means.

Budget Process in Four Simple Steps

If you have not already done so, the first step in the budget process is to appoint a budget officer. Typically, the budget officer is the chief executive officer (i.e., the fire chief or the city administrator), but your finance officer or even your attorney may function as the budget officer.

Step two is to review the composition of your Budget Committee. Your Budget Committee consists of the members of your governing body and an equal number of appointed electors. The appointed members of the Budget Committee may not be officers, agents, volunteers, or employees of your entity. If for some reason you cannot find enough electors for the Budget Committee, you may still move forward with the budget process. Just make sure that your minutes reflect the efforts you made to recruit citizen members.

Your third step is to make a copy of your proposed budget available for public review immediately after the budget officer releases it to the Budget Committee. Your budget officer must publish notice of the Budget Committee meeting, as well as a notice of the budget hearing held by your governing body.

Both the notice of your first Budget Committee meeting and the notice of your budget hearing can be published in one of four ways. The most common method of publication is to publish the notice in a newspaper of general circulation, at least 5 and not more than 30 days prior to the budget meeting or hearing. If you choose to publish in the paper, the notice of the Budget Committee meeting must be published twice. Notice of the budget hearing only needs to be published once. If your entity is located within Washington County, you must also send budget information to the County.

The notice of your budget hearing must include a summary of the budget approved by the Budget Committee. The Oregon Department of Revenue provides forms you can use to develop and publish your budget. You can find these forms by clicking on the following link and scrolling down to “Local budget”:

http://www.oregon.gov/DOR/forms/Pages/default.aspx.

The fourth step is to adopt the budget. Remember, your governing body has the ability to make changes to the Budget Committee’s recommended budget. New information introduced at the budget hearing should be carefully considered by the governing body prior to budget adoption. If a proposed change to the budget includes an increase in taxes, or more than a 10% increase in a fund, additional notice is required. Changes to the budget after adoption also generally require action by the governing body and sometimes require additional publications and public hearings. For this reason, all available information should be collected and considered during the budget process.

Your budget must be adopted on or before June 30.

Two Final Thoughts

First, it is very important that the Budget Committee approve any proposed taxes as part of its approval of the budget. If a tax election is scheduled for March or May (especially May), the Budget Committee should include the revenue from any anticipated additional tax authority in its approved budget. Act like the proposed tax election will pass and budget for it. If it fails, the governing body may reduce the budget. But if a Budget Committee fails to plan on the tax passing, you can run into timing issues as the governing body must publish a revised budget summary and hold a second hearing on the budget, which might prevent the tax from being certified prior to June 30.

Second, when thinking about your budget, consider which projects and purchases are planned for this upcoming year. Not only will this process assist you in projecting your entity’s expenditures and revenues, this level of planning will also allow you to provide the required notice to the Bureau of Labor and Industries (BOLI). State law requires that at least 30 days prior to budget adoption, your entity must submit to BOLI a “WH-118 form,” listing each public improvement your entity plans to fund in the upcoming budget period. For example, if you are planning to budget and use public funds to build a new fire station in the next year, you must file a form WH-118 with BOLI at least 30 days before your budget is adopted. Form WH-118 is available on BOLI’s website at:

http://www.oregon.gov/boli/WHD/PWR/docs/wh118.pdf.

As always, if you encounter any legal issues during your budget adoption cycle (or if you learn of information or receive additional revenue requiring a change in your adopted budget) please contact your legal counsel as early as possible. An ounce of prevention is worth a pound of cure. It is much more cost effective and efficient to consult with your legal counsel before a problem develops.

Public Contracting Tips and Traps

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by Carrie Connelly

As we’ve previously advised, the 2024 legislative session did not mandate any particular public contracting rule updates. Given this “lull,” we wanted to share a few emerging trends with you, provide some public contracting basic reminders, and let you know of one change to our standard engineer and architect contract terms required by legislation that took effect on January 1, 2025.

  1. First and foremost, an ounce of prevention is worth a pound of cure. Our office can provide your entity with the best legal advice if you call before a project is advertised (and long before contracts are awarded and signed.) It is possible – even likely – that the minor repair or installation project you have planned for early 2025 is actually a public work, requiring a written procurement, particular contract provisions, Bureau of Labor and Industries (BOLI) oversight, and the payment of prevailing wages. Speaking of . . .
  2. BOLI, BOLI, BOLI!
    a. Be sure to prepare and submit to BOLI a list of the public improvements planned for the upcoming budget period. Pursuant to ORS 279C.305, you must submit this list at least 30 days before adopting your budget, and revise the list if your plans change. For further information on this planned project requirement, see Mark Wolf’s article, “The Budget Process in Four Simple Steps.”
    b. Once a public works contract is awarded, you must notify BOLI of the award and pay a fee within 30 days following award. The fee is 0.1% of the contract price, but in no event less than $250 nor more than $7,500. Use BOLI’s form WH-81 found at http://www.oregon.gov/boli/WHD/PWR/docs/wh81.pdf). In most cases, a copy of the Disclosure of First-Tier Subcontractors must also be submitted with this notice.
  3. For engineer or architect contracts entered into or renewed after January 1, 2025, standard defense and indemnification provisions must be modified. The engineering lobby (and insurance industry) are incredibly effective, and managed to slip in a legislative amendment that precludes engineers from having any duty to defend a public body against a claim for their professional negligence, unless and until adjudicated responsible.Do not, however, believe that this legislative change requires your entity to accept liability limits in the amount of the contract or otherwise. While regularly requested by architects and engineers these days, we find that most firms will back down when such requests are denied.
  4. In this charged political climate, remember that personal opinions play no role in public contracting evaluation or award procedures. In other words, an entity cannot refuse to award to the lowest responsible bidder because of a contractor’s objectionable bumper stickers. As long as all applicable laws are met, award is based on responsibility and cost.
  5. You may have heard of the Governor’s executive order (EO 24-31) requiring the use of project labor agreements (PLAs) for state and state-funded construction projects? Well, breathe a sigh of relief – Governor Kotek’s office has clarified that local construction projects are not covered or impacted by EO 24-31, even if state funding pays for the work in whole or in part. Instead, the EO is primarily intended to apply to state-owned facility improvements, such as state highways.
  6. And finally, we are seeing far too many incidents of “vendor impersonator” cybercrimes. Clients receive emailed requests “from” their contractor to send amounts owed electronically via an identified Automated Clearing House (ACH.) However, many such requests are not sent by your legitimate contractor, but by a fraudulent impersonator. In such cases, instead of reaching the intended contractor, payment is sent to the impersonator. These scams have become so sophisticated, they are tricking even the most seasoned skeptics. Impersonators can now hack vendor email systems, so requests are sent on prior email strings between staff and the contractor. Be careful. Electronic transfers should never be instituted without multiple methods of verification, pursuant to duly adopted local policies – and potentially amended contract terms.

Who knows what the 2025 legislature will approve. Stay tuned for our Fall update, when we’ll let you know whether new rules will be required to address any changes. Until then, the above tips and traps to avoid should help to keep you out of trouble.