The North Carolina Local Government Commission recently rejected Cabarrus County’s requests for bonds totaling $228 million, even though the panel’s staff had recommended approval. Some members of the board expressed concerns about the county’s use of bond anticipation notes and suggested that the bonds should be subject to a voter referendum before the commission considers them.
Several commission members objected to the county’s use of bond anticipation notes and were in favor of the county only taking out debt for projects once the project costs were finalized. Cabarrus County had sought $186 million in 20-year limited obligation bonds to replace variable rate 2022B bond anticipation notes, as well as an additional $42 million for the acquisition of a building for a human services center and land for a regional behavioral health center.
The county’s limited obligation bonds are highly rated by Moody’s Ratings, S&P Global Ratings, and Fitch Ratings. However, Commission Chairman Dale Folwell expressed concerns that the county had incurred additional costs by using bond anticipation notes, especially since interest rates and construction costs had increased since 2022. Folwell advocated for the bonds to be brought as general obligation bonds so that voters could have a say in the matter.
County Manager Mike Downs defended the county’s approach, stating that it was efficient to use bond anticipation notes since issuing bonds multiple times a year would be costly. However, Commission Member Jessica Holmes raised questions about the use of limited obligation bonds for financing the county’s projects. The commission staff vowed to provide guidance to the county in navigating these funding challenges.
Despite the rejection of the bond requests, county officials are working closely with the Local Government Commission to address the concerns raised by the commission members. The county remains hopeful that a resolution can be reached in the near future. In a recent statement to The Bond Buyer, the county confirmed that discussions with the LGC are ongoing, and they are actively seeking to clarify when these matters will be revisited on the agenda.
In other business, the Local Government Commission approved $226 million in revenue bonds for three municipalities in the Research Triangle Region. This approval highlights the commission’s willingness to support local government projects that align with their funding criteria.