(Raleigh, N.C.) – The Local Government Commission (LGC) unanimously approved a resolution recommending that the General Assembly repeal the town charter of East Laurinburg. The action was taken after town officials failed to file state-required financial audit reports the past four years and failed repeatedly to comply with other requirements of the Local Government Budget and Fiscal Control Act.
It marks the first time the LGC has taken such action against a local government unit, and follows nearly 10 years of efforts to work with the Scotland County town of 281 residents to correct the problems. The resolution calls for the charter to be repealed effective June 30, with town assets to be liquidated or transferred.
“This is not an action we like to take, but the LGC’s staff is not positioned to take the keys from locally elected officials and get into the business of running towns that are not financially viable,” said State Treasurer Dale R. Folwell, CPA. He chairs the LGC, which is staffed by Department of State Treasurer staff. “We may have more of these going forward.”
Treasurer Folwell said the Scotland County legislative delegation, the N.C. League of Municipalities and N.C. Association of County Commissioners were informed of the resolution prior to the meeting. Representatives of East Laurinburg were invited to the meeting but did not participate.
“I think it’s long overdue for this to happen,” said State Auditor Beth Wood, an LGC member. “We have got to lighten the load on the LGC.”
In another matter, the LGC voted to impound the books of the town of Pikeville and assume control of its finances until its fiscal health is restored. The Wayne County town has not submitted an audit for fiscal year 2020, has failed to keep its accounts current and has demonstrated other failures to comply with the Local Government Budget and Fiscal Control Act.
Pikeville’s audited financial statements for 2019 show it had just 4.8% of unrestricted available funds to meet its $765,000 budget. It has five debt payments totaling more than $158,000 coming due over the next few weeks.
In addition to Pikeville, the LGC previously has taken control of the financial affairs of Cliffside Sanitary District (Rutherford County), Kingstown (Cleveland County), Eureka (Wayne County), Robersonville (Martin County) and Spencer Mountain (Gaston County).
The LGC approved two financing requests totaling $800 million that will pay for a series of construction projects at Charlotte Douglas International Airport. Those include a major expansion of the airport terminal, improvements to the concourse and airfield and other work. Some of the money will be used to refund previous financing.
The LGC approved a request from Durham County for $225 million in financing to build a new Northern High School and pay for other capital needs throughout Durham Public Schools district. Expansion and renovation of the Sheriff’s Office firing range, construction of a 36-room county youth home and wastewater management projects are part of the financing.
LGC Secretary Sharon Edmundson commended Surf City (Pender and Onslow counties) and Smithfield (Johnston County) for working to improve their financial condition, which positioned them to seek approval for debt before the Commission. The towns previously had been included on the DST Unit Assistance List for financial health or fiscal management concerns.
Smithfield secured approval for $784,572 to finance an expansion of the town’s police department building, and Surf City was approved for a $2.1 million financing for water meters. Secretary Edmundson also noted that the $38.5 million approval of multiple refundings for the Greenville Utilities Commission (GUC) allows the utility system to lower the cost of the Bethel system’s outstanding debt. The two systems, both in Pitt County, are merging to provide improved service and lower costs to Bethel residents.
A host of other financing requests was approved. Details can be found on the meeting agenda. The requests came from:
Ahoskie (Hertford County), $9.6 million; Asheville (Buncombe County), $14.4 million and $21 million; Columbus County, $11.1 million; Beaufort County, $34 million; Carthage (Moore County), $715,000; Iredell County, $8.8 million; LaGrange (Lenoir County), $6.7 million; Mooresville Graded School District (Iredell County), $16 million; Nash County, $10.1 million; New Bern (Craven County), $1.8 million; Polk County, $6.2 million; Randolph County, $39 million; Sampson County, $7.7 million; Wilmington (New Hanover County), $21 million; Wilson (Wilson County), $15.3 million; Chapel Hill (Orange County), $3.2 million; Greenville (Pitt County), $1.7 million; Catawba County, $36 million; City of Charlotte Housing Authority (Mecklenburg County), $20.5 million; Mooresville (Iredell County), $24 million; North Carolina Housing Finance Agency, $6 million; Elon University (Alamance County), $50 million; Murfreesboro (Hertford County), $1.8 million and $1 million.
The Local Government Commission monitors more than 1,300 units of local government, and must approve most 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 financial guidance related to pension and other post-employment benefits funds. For more information click here.