RALEIGH — At its Aug. 2 meeting, the Local Government Commission (LGC) approved one billion dollars in funding requested by the city of Charlotte for infrastructure work related to water and sewer projects.
The LGC has statutory authority to monitor the financial well-being of over 1,100 local government units. The commission, chaired by State Treasurer Dale Folwell, also examines whether the amount being borrowed by local governments is enough for a given proposed project and whether or not governmental units can afford to repay the debt incurred.
“There is no workaround for environmentally safe infrastructure and treatment plants that are essential to avoid public health risks while boosting the potential for economic growth,” Folwell said in a statement. “Charlotte officials are making an important investment in vital public works. The Local Government Commission is pleased to assist with their efforts.”
“Charlotte and North Carolina continue to grow and attract new residents and our municipalities must work to keep pace. Charlotte Water is an integral part of the regional economy, so I appreciate the work of the Local Government Commission and its approval of these funds,” Charlotte City Manager Marcus Jones said.
Charlotte had asked to issue $500 million in bond anticipation notes for the city to obtain short-term funding over the next two years. The notes will be paid off later with long-term bonds. The funds would pay for an extension of existing water and sewer lines, rehabilitation of water and wastewater treatment plants, new water and sewer mains and equipment, according to a press release.
In addition to the $500 million, Charlotte received approval for $535 million in revenue bonds to for water, wastewater and sewer plants and lines. A portion of that money will pay for previous bond anticipation notes and to refund a previous bond issue.
Water and sewer rates are expected to increase 3.84% annually from 2023 to 2027 to help fund the city’s overall Capital Improvement Program that includes the items approved on Tuesday, according to a statement from Folwell’s office.
“First, when we talk about all of the infrastructure needs of our state, there is at least that amount of infrastructure needs below the ground,” said Folwell. “When someone talks about the need for billions and billions of school construction needs, whatever number you hear about infrastructure above the ground you can pretty much double it and talk about what our infrastructure needs are below the ground.”
“Secondly, I get concerned about some of these bond referendums,” Folwell said. “Even if they are voter-approved, for example in Guilford County I believe it is a $1.7 billion dollar school bond, and that school bond is going to be about the amount of state [general obligation] debt that is going to be outstanding three years from now.”
During a monthly call with reporters, Folwell was asked about the LGC’s activities at which time he expressed concern over large bonds being passed by voters in certain counties.
“So, here you have one school bond in one county – just that one bond, not including all the other debt that is outstanding for example in Guilford County – equal to the entire outstanding general obligation debt for the whole state of North Carolina in just three year from now.”
The LGC also approved over $210 million in “Viable Utility Reserve grants” for nearly 50 local governments.
The Viable Utility Reserve grants will fund asset inventory and rate assessments that lead to short-term and long-term action plans, and for projects to repair, maintain and manage public drinking water and wastewater systems, according to a press release from Folwell’s office.
Other projects that were approved include:
Bladen County – $4.4 million installment purchase contract to construct the 83,348-square-foot building to replace an outdated middle school. The county will also use $32 million in needs-based school grant funds for the project.
Buncombe County – $70 million in general obligation bonds; $40 million for low-income rental housing and home ownership programs and $30 million to preserve open space and farmland to develop greenways and trails for recreational purposes.
City of Concord (Cabarrus County) – $60 million in general obligation bonds to pay for parks and recreational facilities in underserved neighborhoods and to improve existing facilities.
Cumberland County Industrial Facilities and Pollution Control Financing Authority – $27 million in revenue bonds to help Cargill food corporation to build and equip an agricultural recycling facility.
Holden Beach (Brunswick County) – $4.2 million in special obligation bonds to replace 1.5 million cubic yards of sand lost during four major storms that raked coastal beaches.
Town of Fuquay-Varina (Wake County) – $9 million for a 15,898-square-foot building to house the Fire Department and Emergency Management Services.
Town of Waxhaw (Union County) – $21 million installment purchase contract to build the new Town Campus project to replace outdated town buildings and provide additional space.
Wayne County – $8.1 million installment purchase contract to build a 118,000-square-foot Freemont Elementary School to house 750 students. The county will also utilize a $30 million needs-based state lottery grant for the project.
