RALEIGH — State Treasurer Dale Folwell (R) through the State and Local Government Finance Division (SLGFD) and with the approval of the North Carolina Council of State, announced the completion of its third refunding of bonds within the last six weeks.
The most recent refunding was of more than $243 million in GARVEE (Grant Anticipation Revenue Vehicles) bonds with almost $225 million Refunding Bonds issued, resulting in $19 million in debt service savings. The bonds were issued and sold to lock in lower interest rates.
With the completion of the GARVEE bonds’ refunding, Treasurer Folwell and the SLGFD have refinanced more than $1 billion in general and limited obligation bonds and GARVEE bonds, resulting in the reduction of debt service costs by more than $133 million.
“The refunding of the GARVEE bonds will allow additional resources to be available for important transportation projects across the state,” said Folwell. “The refunding of the general and limited obligation bonds will provide capital for the Solvency Reserve Fund. Legislation establishing the fund has already been passed by the N.C. House, and I expect approval soon by the N.C. Senate. Once it is passed, it will be the first step in reducing the state’s $50 billion in unfunded healthcare and pension liabilities.”
GARVEE bonds provide financing for various transportation projects and the State Transportation Improvement Program. Debt service on the bond is then paid from federal reimbursements to the state.
Folwell has also made progress in improving efficiency at the North Carolina Retirement Systems overall through process optimization.
The time it took to process a retirement application decreased from 40.2 days in July 2016 to only 5.3 days in July 2017, marking a nearly 87 percent decrease in processing times. Members calling into the Retirement Systems waited on hold for an average of only one minute and 17 seconds, a 52 percent decrease over July 2016 average wait times of two minutes and 44 seconds.
“We’re in the check-delivery business, so increasing our ability to streamline our processes and increase our responsiveness to members is key,” said Folwell. “We need to continue to sustain this effort as we get ready for what will be a dramatic increase in the number of state retirees over the next 20 years.”
In a 2015 report provided by Conduent, the number of retired public employees in North Carolina is projected to increase from approximately 295,000 members in 2017 to about 468,000 members by 2035.