Even as Congress is struggling to reach agreement on a federal response, and the President three weeks ago denounced covid-19 as the Democrats’ “new hoax,” local leaders have been at the front line–with critical assistance from the Federal Reserve, which has expanded a lending operation that will accept municipal debt as collateral, as fears increase of the costs counties and cities could confront combatting the virus. The Federal Reserve’s changes apply to backstop the $3.8 trillion money market mutual fund unveiled last week–with the move coming as municipal bond prices tanked in the wake of investors pulling withdrawing a record $12.2 billion from mutual and exchange-traded funds. CFO Hazim Taib of the Connecticut Housing Finance Authority said: “A market that is supposed to be liquid and functioning is no longer liquid and functioning…)
U.S. Treasury Secretary Steven Mnuchin approved of the expansion, noting: “This will create additional liquidity for the states and municipalities!” His statement came in the wake of local governments and states cancelling cancelling their long-term municipal bond sales as their short-term costs of doing so tripled and doubled.
We will have an opportunity today to assess how grave a challenge can be for one city: Richmond, Virginia, where the Council meets today to vote on ordinances unrelated to the COVID-19 pandemic–but meets in this new covid world where the Council’s session cannot allow more than 10 people to the Council chambers, or else it would flout public health guidance meant to slow the spread of the coronavirus–not to mention proximity of both Councilmembers and citizens. It seems that in the Commonwealth, a fully remote meeting–that is a meeting format which would be the safest option, is not permitted under Virginia law, law because the business does not pertain to the state of emergency. Localities lobbied Gov. Ralph Northam and Attorney General Mark Herring last week for permission to skirt open-meeting law provisions requiring this, given the circumstances.
Councilmember Stephanie Lynch noted: “We literally can’t conduct normal city business, and it’s absolutely critical that we be able to do so.”
Richmond interim City Attorney Haskell Brown last week advised the Council by email that a fully remote meeting would not only violate the law, but also put Councilmembers at risk of civil penalties. Thus Councilmember Lynch and others on the Council joined other local officials asking the state to weigh in on the issue localities are now facing because of the pandemic.
Herring issued an opinion Friday night outlining flexibility localities have to conduct meetings electronically during the emergency. However, the opinion reaffirmed what Brown told council members last week: At least five of the nine members still must be physically present to vote.
On Monday, the council is set to vote on a $2.1 million budget transfer to the city’s affordable housing trust fund. Mayor Levar Stoney’s administration said it would use the money for more services for the region’s homeless population.
A second measure would extend the deadline to apply for the city’s tax relief program for seniors and people with disabilities until the end of April. Stoney is also expected to introduce legislation establishing a tax amnesty period on penalties and interest for most local taxes at the meeting.
To vote on the measures Monday without violating the 10-person rule, the council plans to implement a series of precautions.
All council members agreed the circumstances should not inhibit residents from giving input or tracking issues that are important to them, and a public comment period is still scheduled. Or, as 4th District Councilwoman Kristen Larson put it: “My priority is carrying out our duties and doing it in a way that has public transparency.”
The Council requested residents email comments about the agenda to the city clerk or their council member by noon today: the meeting begins at 6 p.m.
An informal session, routinely held at 4 p.m., has been canceled.