In a surprising turn of events, the North Carolina Local Government Commission has approved Cabarrus County’s request to sell $186 million in bonds. This decision comes after the county’s initial request in July was met with resistance and lack of approval. The vote on Tuesday resulted in a seven-to-one approval, with only the Commission Chair and State Treasurer, Dale Folwell, voting against it.
During the meeting, State Auditor and LGC Commissioner Jessica Holmes expressed her concerns about the county’s proposal to use a limited obligation bond instead of a general obligation bond. She questioned the transparency and effectiveness of the $186 million limited obligation bond, stating that it may not be in the best interest of the county. Holmes suggested that the voters should ultimately decide on the wisdom of the county commission’s decision to use this type of bond, especially when reelection time comes around.
State Treasurer Dale Folwell raised issues regarding the county’s decision to take on such a large amount of debt without seeking voter approval. He emphasized the importance of fiscal responsibility and stated that the county could have avoided potential risks if they had sought voter approval before proceeding with the bond sale. The concern was also raised about the timing of the bond sale, as interest rates could increase between the time the bond anticipation notes were issued and when the bonds are sold.
Cabarrus County Commission Chairman Steve Morris defended the county’s decision to use a limited obligation bond, stating that there was not a significant financial benefit to using general obligation bonds instead. He pointed out that many other counties in the state utilize limited obligation bonds for financing projects, especially for school facilities. Morris also mentioned that the county currently holds triple-A ratings on its general obligation bonds from all three major rating agencies.
LGC Commissioner John Burns emphasized that the Local Government Commission’s role is to ensure fiscal compliance and capacity of local governments, rather than imposing policy judgments on elected officials. He reiterated that it is ultimately up to the voters to hold the county commissioners accountable for their decisions regarding bond sales. Burns also highlighted the importance of providing counties with a variety of financing options, including limited obligation bonds, as a tool for local governments to utilize.
After the approval of the $186 million bond, questions were raised about the county’s plans to seek voter approval for future bonds. Chairman Morris stated that the commission had not yet discussed this matter and that financial information regarding a separate $42 million bond request was still pending. The information is expected to be presented to the LGC in a workshop meeting scheduled in two weeks.
The decision by Cabarrus County to sell bonds has sparked debate and raised concerns about transparency, fiscal responsibility, and the use of limited obligation bonds. The approval by the Local Government Commission signals a shift in approach to financing projects, but the ultimate impact of this decision remains to be seen. It is clear that there are differing opinions on the matter, and it will be up to the voters to determine the consequences of the county’s decision in the future.