October 21, 2022, Number 41

Download the full .pdf version here: TML Legislative Update Number 41

TML survey on general fund revenues and expenditures

Last week, TML sent out a survey related to general fund revenues and expenditures. The League is requesting your assistance in providing this data so that the results will be as comprehensive as possible. The full survey can be found here. You can also complete the survey online here. TML requests that the survey is completed by the person best suited to respond to the questions. Please complete the survey questionnaire no later than October 31, 2022.

If you’d rather fill out a paper copy of the survey instead of responding online, please email JJ Rocha the completed survey at jj@tml.org.

The Texas Municipal League has several motives in asking for your help on this survey. First, of course, is TML’s concern for the financial well-being of Texas cities. By collecting and analyzing information on revenues and expenditures, we can best serve the interests of the cities in our advocacy efforts.

In addition, we use software applications that will enable us to look at data from different perspectives; for example, comparing population levels with types of revenues. The results of this analysis will help cities, legislators, and others understand the complexities of municipal government.

department of labor issues proposed rules related to classification of employees or independent contractors

On October 13, 2022, the U.S. Department of Labor issued proposed rules to revise its analysis for determining employee or independent contractor classification under the Fair Labor Standards Act (FLSA) to be more consistent with judicial precedent and the FLSA’s text and purpose.  Specifically, the proposed rule would do the following:

  • Align the department’s approach with courts’ FLSA interpretation and the economic reality test.
  • Restore the multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor under the FLSA.
  • Ensure that all factors are analyzed without assigning a predetermined weight to a particular factor or set of factors.
  • Revert to the longstanding interpretation of the economic reality factors. These factors include the investment, control and opportunity for profit or loss factors. The integral factor, which considers whether the work is integral to the employer’s business, is also included.
  • Assist with the proper classification of employees and independent contractors under the FLSA.
  • Rescind the 2021 Independent Contractor Rule.

Comments may be submitted online through the Federal eRulemaking Portal at https://www.regulations.gov or in writing to the Division of Regulations, Legislation and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Ave. NW, Washington, DC 20210. Comments must be submitted by November 28, 2022.

puc proposes rules for purchasing municipally owned water or sewer utility

The Public Utility Commission (PUC) is proposing a rule governing the sale of a municipally owned water or sewer utility (MOU). The rule would, among other things, require a water or sewer service utility or corporation applying to purchase an MOU to show either: (1) the sale has been authorized by a majority vote of the qualified voters of the city in an election held by the city council and in the manner provided for bond elections in the city; or (2) the Texas Commission on Environmental Quality (TCEQ) has issued a notice of violation to the MOU and the city council finds by official action during an open meeting that the city is either financially or technically unable to restore the MOU to compliance with the applicable law or regulations.

Interested city officials may file comments electronically through the interchange on the PUC’s website. Comments must be filed by November 4, 2022. The PUC is specifically looking for comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule. All comments should refer to Project Number 54046.

The PUC staff will conduct a public hearing on the rulemaking if requested in accordance with state law. The request for a public hearing must be received by November 4, 2022.

puc adopts a new rule for weatherization of electric utilities

The Public Utility Commission repealed its rule relating to weather emergency preparedness reliability standards and adopted a new rule after receiving public comments from over two dozen entities, including the Texas Public Power Association. 

The adopted rules include winter and summer weather emergency preparation measures for generation entities and transmission service providers in the Electric Reliability Council of Texas (ERCOT) power region, as required by Senate Bill 3 (S.B. 3). The League previously reported on S.B. 3 here.

u.s. treasury issues closure for slfrf help center

Last week, the U.S. Department of Treasury announced that the State and Local Fiscal Recovery Funds (SLFRF) call center will be dramatically scaled back beginning on Monday, October 17. Previously, Treasury provided guidance and support through its call center and email communications. To help with the transition, Treasury has created the Self-Service Resources webpage. The next annual report for non-entitlement units of local governments (NEUs) is in April 2023.

nlc releases fiscal conditions

The National League of Cities released its 37th annual City Fiscal Conditions Report. The report presents a snapshot of where cities are financially each year. According to the report, cities had been on the right track for recovery in fiscal year 2021 due to a strong rebound of revenue sources coupled with federal dollars in the form of the American Rescue Plan Act (ARPA). The report finds that cities are in better shape today than compared to the onset of the COVID-19 pandemic in early fiscal year 2020, with nine out of ten finance officers reporting they are better able to meet their financial needs in FY 2022 than in 2021. Even as cities continue to face high inflation rates and a looming fear of an economic recession, the report remains optimistic for the fiscal conditions of cities in the future ahead.

The full report can be found here.


TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute and part of this document without the written authorization of the Texas Municipal League.