The recent decision by the North Carolina Local Government Commission to approve Cabarrus County’s request to sell $186 million of bonds has sparked controversy within the commission. The commissioners voted seven-to-one in favor of the bonds, with Commission Chair and State Treasurer Dale Folwell being the sole dissenting vote. This decision marks a reversal from the July meeting, where a similar request for the $186 million bond had failed due to lack of a motion. The approval came after the commission staff recommended it, despite some reservations from members such as State Auditor Jessica Holmes.
Concerns Raised by State Auditor
State Auditor Jessica Holmes expressed her reservations about the limited obligation bond that Cabarrus County was proposing. She argued that it was not transparent and questioned whether it was in the best interest of the county. Holmes suggested that the decision to use a limited obligation bond should have been put to a vote by the county voters, as required by state law. She also hinted that the commissioners may face backlash from voters in the future if they felt they were not adequately informed about the bond issuance.
In response to the concerns raised by Holmes and Folwell, Cabarrus County Commission Chairman Steve Morris defended the decision to use a limited obligation bond. He pointed out that many other counties in the state had used similar bonds for financing school facilities. Morris also mentioned that the county currently held triple-A ratings on its general obligation bonds from major rating agencies, indicating strong financial standing. However, when questioned about seeking voter approval for future bond issuances, Morris stated that the commission had not yet discussed the matter.
LGC Commissioner John Burns weighed in on the debate, emphasizing the role of the commission in ensuring fiscal compliance and capacity of local governments. He argued that it was not the commission’s place to impose policy judgments on elected county officials. Burns echoed Holmes’ sentiment that county commissioners would have to face their voters if they felt they had not been transparent about the bond issuance. He highlighted the limited obligation bonds as a valuable tool for counties, acknowledging that different counties may have varying preferences for bond types.
Financial Information Request
The Local Government Commission had requested financial information from Cabarrus County regarding a separate request for a $42 million bond to acquire a building for a human services center and land for a regional behavioral health center. However, at the time of the approval of the $186 million bonds, this information was not yet available. Morris assured that the information would be provided in a workshop meeting scheduled in two weeks.
The approval of the $186 million bonds by the North Carolina Local Government Commission has stirred debate among its members. While some express concerns about transparency and voter approval, others defend the use of limited obligation bonds as a practical financing tool for counties. The decision highlights the complexity and importance of fiscal decisions at the local government level, and the need for transparency and accountability in bond issuances. It remains to be seen how Cabarrus County will proceed with future bond issuances and whether they will seek voter approval as suggested by some members of the commission.