RALEIGH — At its Jan. 10 meeting, the N.C. Local Government Commission (LGC) approved financial requests made by Asheville, Chapel Hill, and the town of Cornelius.
The LGC is the statutory body that examines town finances, debt and borrowing ability for over 1,100 local government units. If the need arises, the LGC as the authority to assume control of a local governing unit’s finances. The LGC is chaired by State Treasurer Dale Folwell and staffed by the Department of State Treasurer.
The city of Asheville was given approval to issue $26 million in general obligation bonds which will pay off the short-term bonds issued under the city’s draw-bond program for parks and recreation and transportation projects.
A draw bond gives an issuer the ability to use proceeds from the bond sale over time and to pay interest only on portions of the principal of the funds that are being drawn down.
According to a press release by Folwell’s office, Asheville’s draw-bond program was “nearing its ceiling for borrowing.”
A request from the town of Chapel Hill for a “two-thirds general obligation bond” totaling $1.98 million was given the green light by the LGC. Two-thirds bonds do not require voter approval like general obligation bonds do.
Chapel Hill’s bond will go towards the majority of the cost for public safety radios and related equipment. The balance will be paid through other available revenues.
The LGC also approved a $2 million installment purchase allowing the town to avoid a single lump sum purchase for ballfield lighting and public safety vehicles for the town of Cornelius located in Mecklenburg County.
According to Folwell’s office, the town of Cornelius’ request has three components: $725,555 for replacing lighting with an LED system at Bailey Park; $795,924 for a fire truck; and half a million for police vehicles.
Cornelius’ population has grown from an estimated 14,000 in 2000 to just over 31,500 in 2020. The town has active construction bids and the debt service will come from the General Fund with no anticipated tax increase.
Updates were also received on the local government units that had been under financial control of the LGC but have since been resolved. Those units include East Laurinburg in Scotland County and Pikeville in Wayne County.
LGC control over Pikeville ended on Dec. 6, 2022, after the town successfully addressed its debt issues.
“Pikeville showed exceptional resiliency and resolve, working in full cooperation with our staff to find out what’s right, get it right, and keep it right,” Folwell said in Dec. 2022. “We have provided town leaders with the skills, tools and information they need to excel, and we have every expectation that is what will happen going forward.”
The LGC relinquished control over East Laurinburg on June 30, 2022, which involved the dissolution of the town’s charter – the first-ever charter dissolution conducted by the LGC.
“Although the dissolution of a town’s charter cannot be viewed as a “success”, work leading up to the dissolution of the charter of East Laurinburg provided for some positive outcomes,” the LGC financial control updates report reads.
Listed among the “success” factors for East Laurinburg were street repairs noted by the LGC that were completed prior to the dissolution of the town’s charter and a “valuable” partnership with Scotland County officials who worked alongside the LGC on the town’s charter dissolution.
Towns and government units still under LGC financial control include Eureka, Cliffside Sanitary District, Kingstown, Robersonville, and Spring Lake.
The Town of Spring Lake has had numerous controversies in the last year, such as the sentencing of the town’s former manager last December to two consecutive 24-month prison terms for embezzling over half a million from the town between 2016 and 2021.