(Raleigh, N.C.) – The first round of study grants approved under a new program could lead to solutions for utility infrastructure woes threatening the financial stability of three distressed local governments.
At its meeting Tuesday, Feb. 2, the Local Government Commission (LGC) approved applications for grants to the town of Bethel (Pitt County), $100,000; town of Kingstown (Cleveland County), $250,000; and Cliffside Sanitary District (Rutherford County), $400,000. These grants were approved by the State Water Infrastructure Authority (SWIA) at its December 2020 meeting. Approval by both bodies is required.
Money for the grants comes from $9 million available under Viable Utility Reserve legislation passed by the General Assembly in an effort to begin attacking the mounting problem of aging and underfunded water and sewer infrastructure across the state.
Among other items on Tuesday’s agenda the LGC, chaired by State Treasurer Dale R. Folwell, CPA, and staffed by Department of State Treasurer personnel, also approved a draft list of 117 local government units that have been identified as distressed under Viable Utility Reserve criteria. The SWIA will vote on this same list at its Feb. 9 meeting. Again, approval is required by both bodies.
Placement on the list requires units to perform specific actions under the Viable Utility Reserve legislation. These actions include conducting an asset assessment and rate study, participating in a training and educational program and developing short-term and long-term action plans.
Viable Utility Reserve grants also can be used to provide connections and extensions of infrastructure to provide regional service, rehabilitate existing infrastructure or decentralize an existing system into smaller, viable components.
Bethel is in the final stages of completing a merger with Greenville Utilities Commission. Cleveland County Water has offered to take ownership of Kingstown’s sewer collection service but no agreement has been reached at this time. Solutions for Cliffside could include decommissioning the plant and connecting to Boiling Springs or Forest City, or expanding the user base to raise revenues. The grants will allow for study of those and other possible long-term plans.
In another matter, the LGC approved $378 million in limited obligation bonds to allow Wake County to secure permanent financing for capital projects in Wake County Public Schools and Wake County Community College, and to complete some unfinished work. County officials have said any tax increases to pay for the bonds will not be excessive. The county’s Debt Service Fund will be used to pay the bond debt.
Also approved were:
- New Hanover County, $90 million in limited obligation bonds to build and equip a new government center; acquire, build and equip a 200-bed addiction treatment center; improve storm water management; and miscellaneous capital improvements. No tax increase anticipated.
- Cumberland County, $25 million in limited obligation bonds to remodel a building to serve as an emergency operations center, and build a regional fire training center for Fayetteville Technical Community College to train students and firefighters from the region and state. No tax increase required.
- City of Kannapolis (Cabarrus and Rowan counties), $15 million in taxable limited obligation bonds to acquire a 475-spot downtown parking deck as part of a residential/commercial mixed-use development. The deck will serve attached apartments and the general public. No tax increase required.
- Various infrastructure projects for the city of Newton (Catawba County), and the towns of Southern Pines (Moore County) and Grifton (Pitt and Lenoir counties).
The LGC approved several requests to refund existing debt to reap savings from lower interest rates. They include Durham County ($70 million); New Hanover County ($64 million); High Point University ($56.2 million); Cleveland County ($38.6 million); city of Burlington ($12.3 million); Stanly County ($8.1 million); and the town of Chadbourn ($1.7 million).
The Local Government Commission monitors more than 1,300 units of local government and state government, and must approve borrowing by those entities. It oversees independent audits, and provides resources, guidance and oversight on topics ranging from annual budgets, internal controls and debt management to pension and other post-employment benefits such as health care. For more information click here.