Applying for Debt

LGC Approval

LGC Approval

LGC approval is required for more than just issuing bonds; units of local government wishing to enter into certain contracts, MOUs, and other financing arrangements also require LGC approval. These helpful flowcharts below from the UNC School of Government will help you to determine if LGC approval is required prior to a unit of local government issuing debt or entering into contracts or other financing arrangements. For a full explanation of transactions requiring LGC approval, refer to Local Government Commission (LGC) Approval of Contracts, Leases, and Other (Non-Debt) Financing Agreements.

Master Flowchart Start with this flowchart to determine if LGC approval is required.  Use the flowcharts that follow based on the findings of the Master Flowchart
Flowchart A Installment Purchase (G.S. 160A-20) Financings
Flowchart B Contracts Relating to Lease, Acquisition, or Construction of Capital Asset (G.S. 159-48)
Flowchart C Borrowings by Other Entity on behalf of Local Government, or on behalf of Public Body, Agency, or Similar Entity Created by Action of Local Government (G.S. 159-153)
Flowchart D Local Government, or Public Body, Agency, or Similar Entity Created by Action of Local Government Enters into Financing Agreement Similar to Incurring Indebtedness (G.S. 159-153)

 

LGC Guidelines for Debt Issuance

LGC Guidelines for Debt Issuance

The LGC staff publishes guidelines for units of local government wishing to issue debt.  These guidelines provide a summary of the fiscal management and debt management items that the LGC may consider, and are meant to assist applicants in receiving timely approval of financing requests.

North Carolina General Statutes

North Carolina General Statutes

Refer to the following North Carolina General Statutes below for information and requirements related to debt applications, approval, and issuance.

Local Government Bond Act
NCGS Chapter 159 Article 4

Revenue Bonds
NCGS Chapter 159 Article 5

Capital Appreciation Bonds
NCGS Chapter 159 Article 5A

Project Development Financing Act
NCGS Chapter 159 Article 6

Issuance and Sale of Bonds
NCGS Chapter 159 Article 7

Financing Agreements and Other Financing Arrangements
NCGS Chapter 159 Article 8

Bond Anticipation, Tax, Revenue and Grant Anticipation Notes
NCGS Chapter 159 Article 9

Borrowing by Cities for Competitive Purposes
NCGS Chapter 159 Article 9A

Assistance for Defaulting Units in Refinancing Debt
NCGS Chapter 159 Article 10

Borrowing by Development Authorities Created by General Assembly
NCGS Chapter 159 Article 12

Interest Rate Swap Agreements for Governmental Units
NCGS Chapter 159 Article 13

Borrowing by Airport Authorities
NCGS Chapter 159 Article 14

Borrowing for Expansion of Existing Landfills and Construction of New Landfills in Certain Circumstances
NCGS Chapter 159 Article 15
 

Application and Audit Deadlines

Application and Audit Deadlines

Applications:

Debt applications are required approximately one month before the date of the LGC meeting at which the unit wishes to appear on the agenda; see specific deadlines below. The application submitted by the due date should be substantially complete in all required documentation.

Audit Reports:

The deadline for the submission of audit reports falls several weeks before the date of the LGC meeting at which the unit wishes to appear on the agenda to ensure that LGC staff has adequate time to review the audit report and communicate issues to the unit, and that the unit has adequate time to respond to LGC staff's concerns.  Specifically, when a unit seeking debt submits an audit report:

  • LGC staff reviews the report, communicates with the auditor and unit on any necessary changes to the audit (particularly those that could influence our analysis of the unit's fiscal health), and drafts a unit letter if necessary.  
  • If a unit letter is issued, it is reviewed and shared with the unit, and the unit must provide LGC staff with a sufficient written response to the unit letter.  
  • Finally, LGC staff makes a determination if a unit visit is necessary; if so, that visit must be conducted and the results summarized in writing prior to the LGC meeting.

Note:

The guidelines and deadlines presented above ensure timely completion of the steps necessary prior to a unit being considered for inclusion on an LGC meeting agenda. Other factors related to the application and financial health of a unit are also considered, and timely completion of the above steps does not guarantee that a unit will be included on a specific LGC agenda.

Deadlines:

Meeting Date Audit Due Date Application Due Date
January 7, 2020 December 13, 2019 December 3, 2019
February 4, 2020 January 13, 2020 January 7, 2020
March 3, 2020 February 14, 2020 February 4, 2020
April 7, 2020 March 20, 2020 March 10, 2020
May 5, 2020 April 17, 2020 April 7, 2020
June 2, 2020 May 15, 2020 May 5, 2020
July 7, 2020 June 19, 2020 June 9, 2020
August 4, 2020 July 17, 2020 July 7, 2020
September 1, 2020 August 14, 2020 August 4, 2020
October 6, 2020 September 18, 2020 September 8, 2020
November 10, 2020

October 16, 2020
(June 30, 2020 audit)

October 6, 2020
December 1, 2020

November 13, 2020
(June 30, 2020 audit)

November 3, 2020
January 5, 2021 December 14, 2020 December 1, 2020
February 2, 2021 January 15, 2021 January 5, 2021