Applying for Debt

Tab/Accordion Items

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.

If you are a local government or public authority in North Carolina that:

  • Wishes to apply for LGC approval of debt
  • Is looking to determine if LGC approval of debt is necessary
  • Needs information on the process of applying for LGC approval of debt

Please complete the Debt Inquiry form below and LGC staff will follow up to discuss your project and answer any questions you may have.

Note: Under recent changes to North Carolina statutes (Session Law 2022-53), units on the most recently published Unit Assistance List must obtain LGC approval of financing contracts relating to the lease, acquisition, or construction of capital assets, with terms that exceed 3 years and $50,000  (and meet other criteria), and must obtain LGC approval of contracts for the purchase, lease, or lease with option to purchase motor vehicles where the contract amount equals or exceeds $50,000. Please see our Unit Assistance List webpage for the most recently published list and additional information. Questions on requirements for LGC approval of debt for contracts or other financings by units on the UAL should be submitted to LGC staff using the Debt Inquiry Form below.

Debt Inquiry Form

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)


On March 7, 2023, the Local Government Commission adopted updated “Guidelines for the Review and Approval of Debt Applications” 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. 

North Carolina Session Law 2022-53 was enacted on July 7, 2022. Sections 1 and 2 of the law modify provisions in North Carolina General Statutes, Chapter 159, Article 4, Part 2 (Procedure for Issuing Bonds) related to LGC approval of requests to issue general obligation bonds. The changes apply to bonds issued under bond orders introduced on or after October 1, 2022.

The Session Law added requirements related to the contents of the finance officer’s statement of disclosure, including “an estimate of the total amount of interest that will be paid on the bonds over the expected term of the bonds, if issued, and a summary of the assumptions upon which the estimate is based…” (G.S.159‑55.1(a)(1)). Further, the Session Law added a requirement to the list of LGC findings for approval of an application to issue general obligation bonds: a finding that the assumptions used by the finance officer in preparing the statement of estimated interest are reasonable (G.S. 159-52(b)(6)).

At its meeting on November 1, 2022, the LGC adopted a resolution establishing a Safe Harbor Policy related to reasonableness of estimated interest assumptions. The resolution is available below. Note that units are not required to utilize the policy for their assumptions of estimated interest, and alternate assumptions may be preferable in certain circumstances such as refundings, private placements, and issuance of “two-thirds bonds”. Finance officers wishing to use alternative assumptions are encouraged to consult with LGC staff prior to the introduction of a bond order to discuss the basis for the alternate assumptions.

Safe Harbor Policy Related to Reasonableness of Estimated Interest Assumptions

Section 36.3.(a) of Session Law 2023-134 (HB 259) amended G.S. 159-61(d), which sets forth the form of the ballot question to be used for local government general obligation bond referenda.  LGC staff has developed a memorandum to provide guidance to local government units in complying with the modified requirements in G.S. 159-61(d), specifically, the requirements of both clause (1) and clause (2) of G.S. 159-61(d), as amended.
This memorandum provides guidelines to express the views of the staff of the LGC and does not constitute legal or financial advice. Local government units are not required to utilize these guidelines and should consult with their bond counsels and financial advisors to ensure compliance with the requirements of G.S. 159-61(d).

Guidelines For Compliance With General Obligation Bond Ballot Question Requirements 

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

Revenue Bonds - 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.

Not sure if LGC approval is required?  

Information on LGC Approval of Debt 

Inquiry Form

Audit Reports:

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 and 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).  
  • The auditor reviews the audit and all Financial Performance Indicators of Concern (FPICs) with governing board of the unit.  While the unit has 60 days after the presentation to the governing board to respond to any FPICs, the unit seeking approval of debt must provide LGC staff with a sufficient written response addressing all FPICs no later than the Application Due Date.  
  • The FPIC response letter must be signed by a majority of the governing board, the unit manager and the finance officer.
  • 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 presented above and deadlines presented below 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 FPIC Response Due** Audit Due Date*
April 2, 2024 March 5, 2024 March 5, 2024 February 6, 2024
May 7, 2024 April 2, 2024 April 2, 2024 March 5, 2024
June 4, 2024 May 7, 2024 May 7, 2024 April 2, 2024
July 9, 2024 June 4, 2024 June 4, 2024 May 7, 2024
August 6, 2024 July 9, 2024 July 9, 2024 June 4, 2024
September 10, 2024 August 6, 2024 August 6, 2024 July 9, 2024
October 1, 2024 September 2, 2024 September 2, 2024 August 6, 2024
November 12, 2024 October 1, 2024 October 1, 2024 September 10, 2024
December 3, 2024 November 5, 2024 November 5, 2024 October 1, 2024
(Draft Audit with final due by October 31)

*This is the date by which the audit report must be submitted to the LGC for review as part of the debt application. Note that this date has no bearing on the audit report due date of October 31.

**Response Letter in accordance with 20 NCAC 03.0508, as applicable. Please see the Submitting Your 2022 Audit webpage for information on developing and submitting FPIC Response Letters.