The Local Government Commission took action involving entities in the following counties: Avery, Caldwell, Chowan, Cumberland, Durham, Franklin, Granville, Wake, Watauga and Wayne.
Wednesday, December 13, 2023

$1.1 Billion Raleigh Outer Loop Financing Approved by the Local Government Commission

New Chowan County High School Funding and Fremont-Eureka Utility Agreement Also Approved
Raleigh, NC
Dec 13, 2023

The Local Government Commission (LGC) recently approved an application by the N.C. Turnpike Authority (NCTA) for revenue bonds and a Transportation Infrastructure Finance & Innovation Act (TIFIA) loan through US-DOT. Each is not-to-exceed $550 million and would be used to begin work on Phase 2 of the Complete 540 project, also known as Raleigh’s Outer Loop.  

The 10-mile Phase 2 project from I-40 to U.S. 64 in Knightdale is intended to connect Apex, Cary, Clayton, Fuquay-Varina, Garner, Holly Springs and Raleigh. The work is intended to relieve traffic on the Triangle Expressway extension from I-40/U.S. 70, which is the future I-42, to south of Rock Quarry Road, and then from Rock Quarry Road to I-540/I-87/U.S. 64/U.S. 264. Construction is scheduled to begin in Spring 2024, with the project opening to traffic in 2028.

The approval came as Fitch Ratings raised the NCTA’s outstanding senior lien turnpike revenue bonds, senior lien turnpike revenue bond anticipation notes and subordinated Transportation Infrastructure Finance and Innovation Act (TIFIA) loan from BBB to BBB+.  

Fitch also assigned BBB+ ratings to the authority’s $372 million of turnpike revenue bonds and $424 million of subordinated Series 2024 TIFIA loan. The increased ratings allow lower financing cost for the loans and is a sign of the state’s credit quality. Fitch’s outlook for both the bonds and TIFIA loans is stable.

The LGC is chaired by State Treasurer Dale R. Folwell, CPA, and staffed by the Department of State Treasurer (DST). It has a statutory duty to approve most debt issued by units of local government and public authorities in the state. The commission examines whether the amount of money that units borrow is adequate and reasonable for proposed projects and confirms the governmental units can reasonably afford to repay the debt. It also monitors the financial well-being of more than 1,100 local government units.  

Among other items unanimously approved at its meeting Tuesday, Dec. 5, was a memorandum of understanding for the town of Eureka to transfer administrative, financial and operational ownership of its wastewater system to the town of Fremont contingent upon successful fulfillment of several considerations. Both towns are in Wayne County.

Eureka, which has a population of 183, has been under the financial management of the LGC since July 2019. It has 108 sanitary sewer connections. Fremont, population 1,463, has 735 sanitary sewer connections. Fremont has been accepting and treating wastewater from Eureka, but both are designated as distressed utilities. Eureka was awarded a $20 million state appropriation for water and wastewater infrastructure improvements that will be used to address the issues with its system.  

The LGC also approved $181 million in bond anticipation notes (BANs) for the city of Durham (Durham County) to extend, add on, improve and replace utility infrastructure and equipment. A BAN is a short-term, interest-bearing security issued in anticipation of a larger bond issue in the future.

Chowan County got approval from the LGC for installment financing of nearly $35 million to support the replacement of John A. Holmes High School, which was built in 1950 and supports 600 students. It is the only high school serving the Edenton-Chowan School District. The county plans to build a 146,644-square-foot school in its place. An installment financing allows for repayment of the loan over time.

Raleigh Housing Authority (Wake County) had two items on the agenda that were approved totaling $56 million including $30 million in conduit revenue bonds to loan to KTJ397, a Minnesota limited partnership. Proceeds will pay for a 180-unit multifamily rental housing development to be known as Birch and Branch Apartments. A $26 million conduit revenue bond will be used to loan to Gresham Lake Family, a North Carolina limited partnership. They will use the proceeds to build a 156-unit multifamily rental housing development to be called The Preserve at Gresham Lake.

Also getting a green light for financing were:

  • Wake Forest (Franklin, Granville and Wake counties), a $5.5 million installment financing to resurface and rehabilitate 12 miles of aging streets.
  • Fayetteville Public Works Commission (Cumberland County), a $5 million revolving loan increase for water/sewer improvements at the P.O. Hoffer and Glenville Lake water treatment plants.
  • Sawmills (Caldwell County), a $1.3 million installment purchase to buy and install field lights and parking lot lights at Sawmills Municipal Park and Veterans Park.
  • Beech Mountain (Avery and Watauga counties), a $1.1 million revolving loan increase to identify sewer deficiencies, and rehabilitate or replace sewer lines and manholes.