The North Carolina Local Government Commission approved a request by the Fayetteville Public Works Commission in Cumberland County to issue up to $198 million in revenue bonds.
Proceeds would go toward installing water, sewer and electric service in areas the city annexed in 2005. The commission also approved the city’s request to refund existing bonds at a lower interest rate for nearly $4.5 million in savings.
In 2005, Fayetteville involuntarily annexed almost 43,000 residents. It promised to bring utility services such as water and sewer to 8,000 households in a timely manner. North Carolina is one of just a few states where involuntary annexations are allowed.
Proceeds from the $198 million bond sale will go toward paying for the infrastructure to provide these services.
The bonds, to be sold competitively on Oct. 19, would be structured as $102 million of Series 2021A tax-exempt revenue bonds and $96 million of Series 2021B taxable revenue refunding bonds.
The LGC said the deal is expected to be rated Aa2 by Moody's Investors Service and AA by both S&P Global Ratings and Fitch Ratings.
The financial advisor is First Tryon Advisors and the bond counsel is The Charleston Group.
The LGC is chaired by State Treasurer Dale Folwell and staffed by the Department of State Treasurer. It monitors the financial well-being of over 1,300 local government entities in the state. The LGC determines whether the amount of money that localities want to borrow is reasonable for the projects proposed and sees whether the municipalities or agencies are able to repay the debt.
Several other bond requests were also approved Tuesday.
The city of Greenville in Pitt County has been approved to sell up to $20 million in limited obligation bonds to build a new fire station and extend an existing bay, construct a swimming pool and park, remodel a community center and acquire public safety equipment. No tax increase was expected.
The LGC approved up to $16.8 million of limited obligation bonds for Hendersonville in Henderson County. Proceeds will be used to build a parking deck, improve streets, sidewalks, gutters, sewer and stormwater facilities and to refund an existing financing contract that could see almost $200,000 in lower interest payments. No tax hike is expected.
The town of Oak Island in Brunswick County has been approved to sell up to slightly more than $10 million of special obligation bonds to fix and maintain the town’s beachline, which was damaged by hurricanes Matthew and Florence. The bonds would be partially secured by future Federal Emergency Management Agency reimbursements.
