LGC Approves Affordable Housing Financing Request
RALEIGH – The Local Government Commission (LGC) approved nearly $280 million in requests for financing from housing authorities around the state during its meeting on Tuesday, Nov. 14. Housing financing dominated the meeting agenda.
It was the second consecutive month the LGC voted on large amounts of financing to increase the state’s supply of affordable housing. LGC members approved $775 million in financing in October. By comparison, the LGC approved just $418.5 million in affordable housing financing in all of fiscal year 2022.
Several housing authorities received the go-ahead to issue conduit revenue bonds. Proceeds from that type of bond are then loaned to third parties to acquire, rehabilitate, equip and furnish housing developments.
In one case, the North Carolina Housing Finance Agency was cleared to issue a $60 million bond to loan to Fitch Irick Portfolio, a Charlotte for-profit developer. Fitch will use the proceeds for 24 separate multifamily housing developments with a total of 769 units in Anson, Beaufort, Burke, Cleveland, Columbus, Davie, Edgecombe, Iredell, Johnston, Nash, Pitt, Robeson, Scotland, Stanly and Wake counties.
The LGC is chaired by State Treasurer Dale R. Folwell, CPA, and staffed by the Department of State Treasurer. 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.
The commission did not vote on a proposed appeals process related to local governments failing to submit required annual audit reports on a timely basis. The matter was delayed until the December meeting to allow for further review and revision.
Legislation passed in June allows the LGC to direct that a portion of a county or municipality’s sales tax revenue be withheld for missing audit deadlines. The law also requires the LGC to establish guidelines and criteria for local governments seeking to appeal the action.
Treasurer Folwell and other LGC members have raised concerns about delinquent filing of financial audits. Tardy reports frustrate the LGC’s ability to carry out statutory financial oversight of local governments. Among other issues, late audits could jeopardize fiscal discipline, mask misappropriations and provide an unreliable picture of revenues and expenses when making budget decisions.
The General Assembly enhanced enforcement of timely financial reporting by authorizing the state to withhold a portion of sales tax revenue distribution, up to an amount equal to 150% of the cost of a county or municipality’s most recently contracted audit. The money would be released when the audit is completed or two years after notification of withholding.