(Raleigh, N.C.) – The Local Government Commission (LGC) has approved a request from Wake County to finance nearly $600 million for school and community college construction and renovation.
The LGC, which is chaired by State Treasurer Dale R. Folwell, CPA, and staffed by the Department of State Treasurer (DST), signed off on Wake County’s application at its meeting on Tuesday, Aug. 3. Commission members also approved the State of North Carolina’s request to issue $300 million in bonds for major Department of Transportation construction projects across the state. Several other school, government building and infrastructure requests on Tuesday’s agenda also received approval.
“The Local Government Commission plays a key role in a low-key way to help North Carolina government units at all levels secure low-cost, tax-free financing for vital projects that serve taxpayers in every corner of the state,” Treasurer Folwell said.
“Whether the requests are for hundreds of million dollars or hundreds of thousands of dollars, our staff gives expert review and due diligence to every application. We take our obligation seriously to ensure taxpayers’ hard-earned money is protected through prudent borrowing, and the state’s valuable AAA bond rating that allows for low-interest borrowing is not put in jeopardy by unwise deals,” Treasurer Folwell said.
The LGC has a statutory duty to monitor the financial well being of more than 1,300 local government units. The commission also examines whether the amount of money units borrow is adequate and reasonable for proposed projects, and confirms the governmental units can reasonably afford to repay the debt.
Wake County’s request for slightly over $584 million in financing for school construction and renovation are part of the county’s seven-year capital improvement plan to provide sufficient public school facilities for more than 160,000 students. The school district’s student population is rising with the county’s continuing rapid growth. Wake County’s population increased 23.4% to more than 1.1 million people from 2010 to 2020.
New construction projects include Felton Grove High School; Wood Creek, Hilltop Needmore and Rex Road elementary schools; Fuquay Varina Middle School; and schools designated as E-53, ES, HS-15, and MS12. Major renovations, land acquisition, education equipment, technology infrastructure and devices and other items constitute about $300 million of the debt.
In a separate item, the LGC approved $171.9 million in bond anticipation notes for previously approved community college projects. Bond anticipation notes help to speed up the work, and will be paid off later with general obligation bonds.
Following Council of State approval in the morning, the LGC granted the state’s request for up to $300 million in Grant Anticipation Revenue Vehicle Bonds (GARVEEs) to perform NCDOT projects. The revenue bonds are issued with a pledge to be paid off later when the state receives Federal Highway Fund reimbursements, which helps to speed up projects. NCDOT officials expect to close on the bond bids between Sept. 7 and 10.
This will be the eighth issuance of GARVEE bonds since 2007, and would bring the total outstanding principal to $1.17 billion. There is currently $875.87 million in GARVEE debt. Seven of the nine projects are already under way. Widening of I-40 in Orange County is slated to begin this month, and one of three sections of the Winston-Salem Loop is targeted to get under way in December. The project list includes:
- Orange County, I-40 Widening, from the I-85 split at Exit 163 to the Durham County line, widening approximately 11 miles from four to six lanes to improve capacity and safety. It will also upgrade the NC 86 interchange (Exit 266).Forsyth County, I-74 Winston-Salem Northern Beltway, Eastern Section, from US 311 to SR 2211 (BauxMountain Road). Construction of a multi-lane, divided freeway to complete an additional segment of I-74.
- Forsyth County, I-74 Winston-Salem Northern Beltway, Eastern Section, from I-40 to US 421/NC150 (Salem Parkway), construction of a multi-lane, divided freeway.
- Forsyth County, I-74 Winston-Salem Northern Beltway, Western Section, constructing a new interchange between the Winston-Salem Northern Beltway and existing US 52 north of Winston-Salem to complete the connection of I-74 and provide connectivity to the Northern Beltway.
- Craven County, US 70 Havelock Bypass, from north of Pine Grove to south of Havelock, building a multi-lane, divided freeway to relieve congestion in and around the Cherry Point Marine Corps Air Station and the city of Havelock, separating through-traffic from military base traffic.
- Cumberland and Robeson counties, Future I-295 Fayetteville Outer Loop, from I-95 South in Robeson County to NC 24/87 (Bragg Boulevard). Construction of a multi-lane, divided freeway to relieve congestion in and around Fayetteville and improve access to the Fort Bragg military complex by separating through-traffic from local traffic.
- Franklin and Wake counties, US 401 widening, from NC 96 in Wake County to SR 1103 (Flat Rock Church Road/Clifton Pond Road) in Franklin County, widening the existing facility to a four-lane, divided roadway to improve capacity and safety of this key regional artery.
- Burke, Caldwell and Catawba counties, US 321 Widening, from north of US 70 in Catawba County to US 321A in Caldwell County, widening existing roadway to six lanes and constructing a new bridge over the Catawba River to improve the capacity and safety of this key regional artery.
- Buncombe and Henderson counties, I-26 Widening, from US 25 Business in Henderson County to NC 280 in Buncombe County near the Asheville Regional Airport, adding lanes to improve the capacity and safety.
Johnston County’s application for $52.5 million in revenue bonds for water and sewer improvements, including equipment and new lines, won LGC approval. The work will expand system capacity to allow for future growth.
The LGC also gave the green light to Durham County for $50 million in general obligation bond anticipation notes for school, community college, library and museum projects.
Wilson County received conditional approval for a $13 million loan to match lottery funds intended to build a new Wilson Academy of Applied Technology, and to remodel and repair other school facilities. After commission members raised concerns about the county’s financial bookkeeping, the motion included a requirement that county officials first submit documentation showing its accounts are being reconciled monthly.
Other financing requests were approved for:
In another matter, the LGC passed a resolution in accordance with the Local Government Budget and Fiscal Control Act requiring the town of Wilkesboro to contract with outside help within 30 days to assist in preparing town books and financial statements for audit, and to provide the commission a realistic timeline to complete its tardy 2019 and 2020 audits, as well as the 2021 audit due Oct. 31.
State law requires local government units to submit audits by Oct. 31 of each year, with a grace period through Dec. 1. Wilkesboro has failed to provide timely audits despite failed promises and revised deadlines, and repeated admonitions from the LGC staff. The last audit it submitted was for 2018, and it was received two years late.