Local Government Commission Approves Cabarrus County Debt Request on Split Vote

A majority of Local Government Commission (LGC) members veered from longstanding staff guidelines to approve an incomplete $78 million financing request from Cabarrus County at their meeting Tuesday, Nov. 12. The 5-4 vote went against a staff recommendation to delay the vote while awaiting important information to complete the county's application. Commission members unanimously approved a separate Cabarrus County request for $73 million.

County officials originally had the two funding requests rolled into one package. But after questions arose at prior meetings, they split the request into two applications, with support and concurrence of LGC staff.

All LGC members voted in favor of the $73 million bond package for nine projects with completed application proposals. Those are: an addition to Fred L. Wilson Elementary School; HVAC replacements at Concord High School, Forest Park Elementary School, Weddington Hills Elementary School, and RCCC South Campus; roof replacements at Hickory Ridge High School, Cox Mill Elementary School, and Wolf Meadow Elementary School; and a public library and active living center at Afton Ridge.

However, commission members had been divided at previous meetings on whether to approve some applications from Cabarrus County officials. State Treasurer Dale R. Folwell, CPA, who chairs the LGC, said some of the projects had not been "cured," meaning plans were submitted without final cost documentation. That vital information allows staff to determine whether a financing request is sufficient to pay costs, whether it is excessive, or even unknown.

"Anything that is not cured could be considered half-baked," Treasurer Folwell said in the lead-up to the meeting and vote.

At Tuesday's meeting, a majority of the commission members decided to forego staff's recommended standard procedure, and precedent, to approve that $78 million financing application, which included a $52 million replacement of Coltrane-Webb/Beverly Hills Elementary School. Treasurer Folwell voted against the application in support of staff's recommendation.

The LGC, which is staffed by the Department of State Treasurer (DST), 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.  

On a 5-3 vote, with one abstention, the LGC passed a $250 million application from the Cumberland County Industrial Facilities and Pollution Control Financing Authority. Proceeds from the quarter-billion conduit revenue bonds will be loaned to American Titanium Metal, LLC, for what is being called Project Aero. American Titanium plans to use the money to acquire and build a 500,000-square-foot titanium reprocessing facility in Fayetteville (Cumberland County), with employment projected at more than 300 jobs. Total financing from all sources would be $1.6 billion.

Treasurer Folwell voted against the Project Aero application over concerns about the nature of the company's application.

"North Carolina has never engaged in such a complex, speculative and highly leveraged endeavor," Treasurer Folwell said. He also raised a red flag that N.C. Secretary of Commerce Machelle Sanders failed to give him confirmation that she endorsed the project.

Further, he said, the funding mechanism company officials were asking the LGC to approve generally has been used in the past for affordable housing projects through the N.C. Housing Finance Agency. There is a cap on the amount of tax-exempt, private-activity bonds the state can issue each year, and Project Aero is cutting deeply into that available pool.

In other matters on the agenda, the LGC gave a green light to Centennial Authority (Wake County) for $100 million in revenue bonds to perform improvements on the Lenovo Center, formerly known as PNC Arena. The project will expand and modernize the arena. Work will include a multi-purpose room, bunker suites and restroom, concessions bar, food and beverage space. No tax increase is anticipated.

The N.C. Housing Finance Agency (Wake County) received LGC approval for $750 million in revenue bonds as part of its mission to increase the state's stock of affordable housing. Proceeds will be used to purchase mortgage loans and other obligations that were made to low- and moderate-income households.

LGC members approved $179,624 for the Baton Water Corporation (Caldwell County) to inspect and inventory water lines. The work is required under the U.S. Environmental Protection Agency's Lead and Copper Rule Revision. The goal is to ensure more than 60,000 public water systems nationwide meet standards to prevent drinking water contamination.

The LGC signed off on two installment purchases requested by the town of Carthage (Moore County). The money will allow the town to pay back costs over time instead of up front on $171,801 to finance three 2025 Ford Police Interceptors that would replace aging vehicles in the town fleet. A separate project will finance $43,348 for a 2024 Ford F250 truck to replace the fire chief's quick response vehicle that was destroyed in an accident.

The LGC gave a thumbs up to Inlivian (Mecklenburg County) to issue $18 million in conduit revenue bonds. Proceeds of the bonds will be loaned to Grounds for Change Apartments to partially pay for ground leasing and construction of an 80-unit, multifamily residential rental facility on Park Road in Charlotte. The housing is designed for lower-income households.

LGC approved hundreds of millions of dollars in financing in October

The LGC also authorized about $400 million in financing on its October agenda including an application for $82.2 million from the N.C. Medical Care Commission to issue conduit revenue bonds. That type of financing allows bond proceeds to be loaned to a third party. Under the request, Penick Village will be loaned the money to build a 44-unit continuing care retirement community in Southern Pines (Moore County). The independent living campus will include a wellness center, and a security guard/welcome house. The existing health care center will be renovated.

Fuquay-Varina (Wake County) won approval of $70 million in revenue bonds for expansion of the Terrible Creek Wastewater Treatment Plant. Capacity at the plant will allow treatment to be increased from 3 million gallons to 6 million gallons daily.

Mebane (Alamance/Orange counties) was given a green light for $67.3 million in revenue bonds to expand sewer capacity from 2.5 million gallons per day to 4 million gallons daily. The work is needed to serve expected growth from projects currently under construction, projects approved but not started, and future construction plans that have been submitted but not approved. It also will address Jordan Lake water quality rules, new biological nutrient removal and other environmental components. A 10% rate increase has been approved for 2026-2030 to help pay for the project.

LGC members OK'd a $49 million application from Pender County to issue limited obligation bonds to build an 85,000-square-foot building to house the county's Health Department and Social Services office. No tax increase is anticipated.

Asheville (Buncombe County) officials got a thumbs up from LGC members to issue $42 million in limited obligation bonds for a host of capital improvement projects. Those include affordable housing, public safety, multi-modal transportation, repair and renovations to city facilities, parks and recreation, economic development and vehicle purchases. No tax increase is expected.

The Raleigh Housing Authority (Wake County) was granted the go-ahead to issue $23.7 million in conduit revenue bonds. The proceeds will be loaned to Cross Link Limited Partnership to build a 142-unit, low- and moderate-income multifamily rental housing development on Cross Link Road. The housing is targeted for low-income households.

Rocky Mount (Nash/Edgecombe counties) will acquire 13 parcels of land comprising 289 acres now that the LGC approved its request for $15.4 million in financing. The installment purchase allows for payments to be made over time instead of paying the full purchase price up front. The area is being considered for economic development. No tax increase is anticipated.

Wake County Schools' application for $9 million in financing was approved. The money will be used to extend a lease for the North Wake College & Career Academy in Wake Forest from July 2026 through June 2041. The 6.26-acre site includes a 52,474-square-foot building and 377 parking spaces. No tax hike is expected.