Local Government Commission to Vote on Sales Tax Withholding Appeals Process | Eastern North Carolina Now

Press Release:

    (Raleigh, N.C.) - Legislation passed in June incentivizes local governments to submit timely annual audit reports by allowing the Local Government Commission (LGC) to direct that a portion of a county or municipality's sales tax revenue be withheld for missing audit deadlines. The LGC will vote on a resolution at its meeting Tuesday, Nov. 14, establishing guidelines and criteria for local governments seeking to appeal the action, as required by the legislation.

    State Treasurer Dale R. Folwell, CPA, chairman of the LGC, 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. Lawmakers tasked the LGC with establishing guidelines that counties and municipalities could use to appeal the LGC's action. The guidelines would become effective Jan. 1 if adopted by the LGC.

    Among other items on the meeting agenda are nearly $280 million in requests for financing from housing authorities around the state. It is the second consecutive month the LGC has received requests to approve large amounts of financing to increase the state's supply of affordable housing. Last month LGC members approved $775 million in financing. By comparison, the LGC approved just $418.5 million in affordable housing financing in all of fiscal year 2022.

    The LGC is 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.

    Housing authorities seeking the go-ahead from the LGC to issue conduit revenue bonds are:

• North Carolina Housing Finance Agency, $60 million to loan to Fitch Irick Portfolio, a Charlotte for-profit developer. Fitch will use the proceeds to acquire, rehabilitate, equip and furnish 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.
• Inlivian Housing Redefined (Mecklenburg County), $40 million to loan to HDP Alleghany. Proceeds will be used to acquire, build and equip Alleghany Crossing, a 220-unit, low- and moderate-income housing development. The authority also is seeking approval for another $21 million to loan to Fairhaven Glen to acquire, build and equip Fairhaven Glen, a 140-unit, low- and moderate-income multifamily housing development.
• Wilmington Housing Authority (New Hanover County), $23.5 million for Starway Village I and $13.6 million for Starway Village II. Proceeds would be loaned to Starway Village to acquire, build and equip low-income, multifamily residential rental facilities. Starway Village I comprises 176 units. Starway Village II consists of 102 units. Both developments include some units for disabled, homeless or mobility-impaired individuals. A third request, for $20 million, is set up to loan the proceeds to OAHS Tidewater LLC to acquire, build and equip Tidewater Townhomes, a 104-unit, multifamily housing development.
• Raleigh Housing Authority, $28 million, to loan to New Bern Harmony Housing or an affiliated entity. Proceeds will be used to acquire, build and equip New Bern Crossings, a 192-unit, low-income, multifamily rental housing development.
• Wake County Housing Authority, $25 million. Proceeds would be loaned to KB Garner or an affiliated entity to acquire, build and equip Tryon Station in Garner. The multifamily, low-income, rental housing development consists of 176 units.
• Winston-Salem Housing Authority (Forsyth County), $20 million, for loan to OAHS Salem Gardens. The proceeds would pay to acquire, rehabilitate and equip Salem Gardens, a 150-unit, multifamily residential rental facility.
• Fayetteville Metropolitan Housing Authority (Cumberland County), $15.5 million to be loaned to OAHS Fayetteville Gardens for 100 rental units in 16 two-story buildings known as Fayetteville Gardens. The money would be used to acquire, rehabilitate and equip the multifamily residential facility.
• Gastonia Housing Authority (Gaston County), $12.075 million, to be loaned to Rutherford Crossing Limited Partnership. Proceeds will be used to acquire, build and equip Rutherford Crossing, a 120-unit, multifamily, residential rental facility.

    In other matters, Spring Lake (Cumberland County) is on the agenda for a lease agreement for three trucks for meter reading and eight police vehicles totaling $547,500 in a lease with Enterprise Fleet Management.

    Stanly County is asking the LGC to sign off on a $2 million installment purchase to replace the countywide Computer Aided Dispatch and Records Management System for law enforcement and public safety. An installment purchase allows a government to take on debt with repayments over time, rather than up front.

    Tryon (Polk County) is asking LGC members to sign off on a $168,000 installment purchase for three police vehicles to replace older models in an aging fleet.

    What: Local Government Commission November meeting

    When: Tuesday, Nov. 14, at 1:30 p.m.

    Where: Department of State Treasurer, 3200 Atlantic Ave., Raleigh

    Online: GoTo Webinar https://bit.ly/3SFaqHw


   Contact:
   Email: press@nctreasurer.com
   Phone: (919) 814-3820