(The Center Square) – Approval of $1 billion in debt for local governments and authorities in the state was given Tuesday by a North Carolina commission, the first led by the newly-elected state treasurer.
Included was Mecklenburg County’s request to borrow $387 million for public safety, education and recreation projects and bond refinancing.
Under North Carolina law, local governments and public authorities must be approved by the Local Government Commission, which operates under the state treasurer’s office, before taking on new debt. Republican Brad Briner succeeded Republican Dale Folwell, the keeper of the public purse for two four-year terms that ended Dec. 31.
The commission approved $252 million in bonds to build or renovate Mecklenburg County buildings, including the Sheriff’s Office and detention center, library facilities and for parks and greenways.
Another $45 million was approved for solid waste facilities and infrastructure improvements.
The new debt won’t require any tax increases, according to the commission.
Mecklenburg was also approved for refinancing $90 million in bonds at lower interest rates, saving more than $1.8 million.
The commission approved $200 million in bonds for the city of Durham, with the money designated for projects including road paving and other street and sidewalk improvements as well as parks and recreation projects. A new swimming pool and aquatic park are planned.
Loans were also approved for fire trucks, sanitation trucks and various other equipment for local governments.
The Local Government Commission was created by the Legislature in 1931 to help local governments during the Great Depression. By 1933, 152 cities and towns in the state had defaulted on loans.
“Currently, the state of North Carolina has a larger percentage units rated ‘AAA’ by national bond rating agencies when compared to other states, and the debt of its local governments in general finds a significantly better reception on the national bond markets than the national average,” the commission says. “Many attribute this favored credit status, in part, to the work of the Local Government Commission.”
After approving local debt, the commission also sells the debt to investors on behalf of the local governments.
“It is the combination of the power of approval with the power of sale that makes the LGC unique in the nation,” the commission says on its website.
Five of the commission’s board members are appointments and join ex-officio members Briner in his role as state treasurer; Secretary of State Elaine Marshall; Secretary of Revenue McKinley Wooten; and state Auditor Dave Boliek. Gubernatorial appointees from 2021 are Vida Harvey of Charlotte, John Burns of Raleigh and Nancy Hoffman of Greensboro; appointed in 2021 by the leader of the Senate is Paul Butler Jr. of White Lake, and appointed in 2013 by the speaker in the House of Representatives is Michael Philbeck of Shelby.
