Greensboro Gets Thumbs Up for Bonds to Replace Aging Infrastructure

Local Government Commission OKs Nearly $800 Million to Finance Projects Statewide

Raleigh, NC

May 10, 2024

Greensboro (Guilford County) has been attacking the problem of infrastructure deterioration through its Water and Sewer Rehabilitation Program. Those efforts got a boost when the Local Government Commission (LGC) approved nearly a half-billion dollars to finance a series of projects earlier this week.

"Most of our city's 3,000+ miles of water and sewer lines were installed prior to the 1950s. Some were installed before 1910. Our biggest liability is our decaying water and sewer infrastructure," the city's website says. "If we do not maintain a healthy financial position through rate increases and begin to replace aging water lines, sewer lines, and other essential assets, we will see an uncontrollable increase in water and sewer system failures. The most visible of these failures are water main breaks, sewer line cave-ins, and treatment plant outages."

At a meeting on Tuesday, May 7, Greensboro received the LGC stamp of approval for $275 million in bond anticipation notes for water and sewer projects to improve service and operations. That method of financing is a short-term, interest-bearing security that allows work to go forward until a larger bond is issued in the future. Greensboro also got the OK for $175 million in revenue bonds to redeem previous bond anticipation notes for water and sewer projects. The city expects an 8.5% increase in water/sewer rates in Fiscal Year 2024 through 2028.

The LGC is chaired by State Treasurer Dale R. Folwell, CPA, and staffed by the Department of State Treasurer (DST). It has a statutory duty to approve most debt issued by units of local government and public authorities in the state. The commission examines whether the amount of money that units borrow is adequate and reasonable for proposed projects and confirms the governmental units can reasonably afford to repay the debt. It also monitors the financial well-being of more than 1,100 local government units.

Among other requests on the agenda was an application from Raleigh (Wake County) for $320 million in financing for various projects and interest savings on existing debt.

The Capital City was given a green light to issue $220 million in limited obligation bonds to refund previous variable rate certificates of participation and achieve savings through more favorable financing terms. The LGC members further approved $100 million in limited obligation bonds for a variety of general government projects on the city's Capital Improvement Projects list.

Baptist Retirement Homes of North Carolina was given the go-ahead for $86 million in conduit revenue bonds to finance and refinance the acquisition, construction, equipping and renovation costs of Ardenwoods, a 48-unit senior assisted living facility in Arden (Buncombe County); Taylor Glen, a 50-unit independent living facility in Concord (Cabarrus County); Brookridge, an independent living and assisted living facility in Winston-Salem (Forsyth County); and a continuing care retirement community in New Bern (Craven County).

The LGC approved an application from Carolina Meadows (Chatham and Orange counties) for $85 million in conduit revenue bonds to pay costs to acquire, build and equip an expansion and renovation of Carolina Meadows, a continuing care retirement community. Plans are to build a four-story, 121,000-square-foot nursing facility with 90 nursing beds. After residents are moved into the new building the existing facility will be demolished.

The city of Durham (Durham County) plans to improve service and operations of its water and sewer systems with $84 million in revenue bonds approved by LGC members. Utility rates will increase to service the debt.

Buncombe County's request for $81.5 million in limited obligation bonds was given the thumbs up. Of that total, $54 million will be used to acquire, build, equip and improve school facilities in Buncombe County and Asheville City school districts; $17 million will go towards county facility improvements including solar panel installation, fleet and general services complex upgrades; and $7 million will involve county vehicle purchases. No tax increase is anticipated.

The LGC took favorable action on an application from Durham County for $78 million in limited obligation bonds to renovate a shopping center - a portion of which will house the county's Board of Elections office - build a pump station on Snow Hill Road and a parking facility in the 500 block of East Main Street.

Dare County will use $29 million in limited obligation bonds approved by the LGC to perform multiple capital projects. Those include a new Kitty Hawk EMS station, replacement of the Manns Harbor EMS station and construction of a new Manteo Youth Center. Response times in northern Dare County should improve with the new facilities and replacement of old, inadequate facilities.

The village of Bald Head Island (Brunswick County) was approved to issue $13.5 million in general obligation bonds. Proceeds of the bond will pay for beach renourishment, replacing a groin field, and providing additional sand and sand dunes to aid in beach erosion control and for flood and hurricane protection. Voters approved the bonds by referendum, 74.4% to 25.6%. No tax increase is expected.

The LGC gave a green light to Henderson County for a $10.5 million financing agreement to add a third solid waste transfer station bay to meet a growing waste volume.

Southern Pines (Moore County), which is experiencing a development boom, successfully applied to enter into a $7.1 million installment purchase to acquire a new road connecting U.S. Highway 15-501 to Morganton Road. That will support a planned retail shopping center, apartments and other businesses. An installment purchase allows payment over time, instead of providing all the money up front. No tax increase is expected.

Other requests before the LGC receiving approval were from:

• Cape Fear Public Utility Authority (New Hanover County), $5.1 million revolving loan for sewer work. Two pump stations will be taken out of service. A new pump station will be built outside of the 100-year flood plain. Energy savings and improved collection are anticipated, as are a 22% increase in water rates and a 16% increase in sewer rates from the current fiscal year through the end of the project construction in fiscal year 2027.
• Granville County, $3 million installment purchase to build a senior services center.
• Newton (Catawba County), $1.9 million installment purchase to buy an automated leaf truck, automated side loading garbage truck, compact track loader, radio equipment and lighting at Westside/Jaycee Park.
• Lumberton (Robeson County), $1 million installment purchase to replace City Hall's 20-year-old HVAC system.

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