Applying for Debt
LGC approval is required for more than just issuing bonds; units of local government wishing to enter into certain contracts, MOUs, and other financing arrangements also require LGC approval. These helpful flowcharts below from the UNC School of Government will help you to determine if LGC approval is required prior to a unit of local government issuing debt or entering into contracts or other financing arrangements. For a full explanation of transactions requiring LGC approval, refer to Local Government Commission (LGC) Approval of Contracts, Leases, and Other (Non-Debt) Financing Agreements.
|Master Flowchart||Start with this flowchart to determine if LGC approval is required. Use the flowcharts that follow based on the findings of the Master Flowchart|
|Flowchart A||Installment Purchase (G.S. 160A-20) Financings|
|Flowchart B||Contracts Relating to Lease, Acquisition, or Construction of Capital Asset (G.S. 159-48)|
|Flowchart C||Borrowings by Other Entity on behalf of Local Government, or on behalf of Public Body, Agency, or Similar Entity Created by Action of Local Government (G.S. 159-153)|
|Flowchart D||Local Government, or Public Body, Agency, or Similar Entity Created by Action of Local Government Enters into Financing Agreement Similar to Incurring Indebtedness (G.S. 159-153)|
The LGC staff publishes guidelines for units of local government wishing to issue debt. These guidelines provide a summary of the fiscal management and debt management items that the LGC may consider, and are meant to assist applicants in receiving timely approval of financing requests.
Refer to the following North Carolina General Statutes below for information and requirements related to debt applications, approval, and issuance.
Local Government Bond Act
NCGS Chapter 159 Article 4
NCGS Chapter 159 Article 5
Capital Appreciation Bonds
NCGS Chapter 159 Article 5A
Project Development Financing Act
NCGS Chapter 159 Article 6
Issuance and Sale of Bonds
NCGS Chapter 159 Article 7
Financing Agreements and Other Financing Arrangements
NCGS Chapter 159 Article 8
Bond Anticipation, Tax, Revenue and Grant Anticipation Notes
NCGS Chapter 159 Article 9
Borrowing by Cities for Competitive Purposes
NCGS Chapter 159 Article 9A
Assistance for Defaulting Units in Refinancing Debt
NCGS Chapter 159 Article 10
Borrowing by Development Authorities Created by General Assembly
NCGS Chapter 159 Article 12
Interest Rate Swap Agreements for Governmental Units
NCGS Chapter 159 Article 13
Borrowing by Airport Authorities
NCGS Chapter 159 Article 14
Borrowing for Expansion of Existing Landfills and Construction of New Landfills in Certain Circumstances
NCGS Chapter 159 Article 15
Debt applications are required approximately one month before the date of the LGC meeting at which the unit wishes to appear on the agenda; see specific deadlines below. The application submitted by the due date should be substantially complete in all required documentation.
The deadline for the submission of audit reports falls several weeks before the date of the LGC meeting at which the unit wishes to appear on the agenda to ensure that LGC staff has adequate time to review the audit report and communicate issues to the unit, and that the unit has adequate time to respond to LGC staff's concerns. Specifically, when a unit seeking debt submits an audit report:
- LGC staff reviews the report, communicates with the auditor and unit on any necessary changes to the audit (particularly those that could influence our analysis of the unit's fiscal health), and drafts a unit letter if necessary.
- If a unit letter is issued, it is reviewed and shared with the unit, and the unit must provide LGC staff with a sufficient written response to the unit letter.
- Finally, LGC staff makes a determination if a unit visit is necessary; if so, that visit must be conducted and the results summarized in writing prior to the LGC meeting.
The guidelines and deadlines presented above ensure timely completion of the steps necessary prior to a unit being considered for inclusion on an LGC meeting agenda. Other factors related to the application and financial health of a unit are also considered, and timely completion of the above steps does not guarantee that a unit will be included on a specific LGC agenda.
|LGC Meeting Date||Application Due Date||Audit Due Date||Response Letter Due Date (if applicable)*|
|November 2, 2021||
October 15, 2021
|October 5, 2021|
|December 7, 2021||November 19, 2021
(June 30, 2021 audit)
|November 9, 2021|
|January 11, 2022||December 7, 2021||December 10, 2021||December 10, 2021|
|February 1, 2022||January 4, 2022||January 14, 2022||January 14, 2022|
|March 1, 2022||February 1, 2022||February 11, 2022||February 11, 2022|
|April 5, 2022||March 8, 2022||March 18, 2022||March 18, 2022|
|May 3, 2022||April 5, 2022||April 14, 2022||April 14, 2022|
|June 7, 2022||May 3, 2022||May 13, 2022||May 13, 2022|
|July 12, 2022||June 7, 2022||June 17, 2022||June 17, 2022|
|August 2, 2022||July 5, 2022||July 15, 2022||July 15, 2022|
|September 13, 2022||August 9, 2022||August 19, 2022||August 19, 2022|
|October 4, 2022||
September 6, 2022
|September 16, 2022||September 16, 2022|
|November 1, 2022||October 4, 2022||October 14, 2022 (June 30, 2022 Audit)||October 14, 2022|
|December 6, 2022||November 1, 2022||November 18, 2022 (June 30, 2022 Audit)||November 18, 2022|