(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, and the State and Local Government Finance Division (SLGFD) announced today that they were “on track” to issue $700 million in Build NC bonds by the end of October. The bonds are part of a $3 billion transportation package approved by the North Carolina General Assembly in 2018.
The SLGFD, a division of the North Carolina Department of State Treasurer (DST), issued $300 million of Build NC bonds in June 2019. Under Treasurer Folwell, DST has issued more than $2.8 billion in general obligation bonds including for state, North Carolina Department of Transportation and North Carolina Turnpike Authority projects. All three major national bond rating agencies just reaffirmed North Carolina’s “AAA” bond rating, which allows the state to finance debt at the lowest possible interest rates.
The issuance comes despite controversy regarding NCDOT’s financial management of the department. In 2019, NCDOT spent nearly $7 billion against revenues of only $5 billion. In addition to the nearly $2 billion in overspending, NCDOT made $1.1 billion in “short-term” loans from the Highway Trust Fund (HTF) for the Highway Fund (HF) between April 2018 and April 2019.
A Memorandum of Agreement (MOA) between DST, the Office of State Budget and Management (OSBM) and the Office of the State Controller has been signed establishing formal oversight of and accountability for any short-term loans from the HTF to the HF during the life of the Build NC program. Additionally, the MOA details the specific responsibilities of the parties in managing the Build NC bonds proceeds, including continuing disclosure of all financial information regarding the HTF.
“The staff of the finance division [SLGFD] should be commended for their professionalism, patience and Herculean efforts,” said Treasurer Folwell. “For over two years, we’ve asked for three basic things: Cash flow, revenue and some plan to address the recent concerns raised by State Auditor Wood. The citizens of this state, taxpayers and road builders deserve to have a stable, transparent and accountable Department of Transportation. You can’t borrow your way out of a problem.”
In October of last year, Treasurer Folwell called on Gov. Roy Cooper to replace then-NCDOT Secretary James Trogdon and put NCDOT’s financial management under OSBM. Secretary Trogdon subsequently retired in February of this year and was replaced by Eric Boyette. Financial control still remains with NCDOT.
“I’m pleased to announce that the MOA has been signed so we’re able to move forward with the additional Build NC bond sale later this month,” said Treasurer Folwell. “We’re getting what we believe to be accurate information from DOT. I want to thank Secretary Boyette, his staff and industry leaders including the Carolina Asphalt Pavement Association for their diligence in getting the information we need to issue these bonds. The hardworking men and women at DOT and the hundreds of contractors across the state need sustainable and consistent funding to address current and future road-building and repair needs of North Carolinians.”
Treasurer Folwell added that in order to issue the bonds on time, the North Carolina Council of State needs to vote on the bond package at its Oct. 6 meeting.
The DST and the SLGFD handle the sale and delivery of all state and local debt and monitor the repayment of state and local government debt. More information can be found at http://www.nctreasurer.com/slg.