LGC will judge feasibility of county, city projects

The Local Government Commission is expected this afternoon to consider several multi-million dollar projects in Laurinburg and Scotland County.

The larger request comes from Scotland County for $24 million in limited obligation bonds for upgrades at two public schools; construction of a Richmond Community College satellite campus in Laurinburg; and to allow the refund of general obligation bonds to the county’s two water districts.

The second — and perhaps more controversial request — comes from the city of Laurinburg for approval of a financial agreement that would allow the construction of a $9.1 million City Hall and police station.

We are not positive how the nine-member body will vote on either request. But we have a pretty good idea that the projects will gain state approval.

An executive committee of the commission had already given the green light in September to the county’s proposal despite strenuous objections from Scotland residents, including the mayor of Laurinburg. An appeal by the mayor put the matter back before the whole commission.

The City Hall project has even more detractors. So many so, that the state commission has made a rare exception to let two representatives of the public plead their case.

While critics’ objections may carry some weight, the commission is likely to give more credence to whether the municipalities can handle the debt that will be incurred from the proposed projects.

When the town of Navassa’s sought a loan to finish a sewer project, the commission said no and asked that the town plug a budget gap first.

That is not to say our local municipalities have not had debt management issues.

Scotland was sent a letter pointing out internal control weaknesses related to a pre-audit function and a negative fund balance in the Landfill Fund. But after a visit in May, the commission’s fiscal staff determined that the county’s overexpenditure issue had been eliminated and the Solid Waste Fund is profitable.

The commission is also expected to look favorably on the county saying that no tax increase is required for its projects.

The city was advised that there were weaknesses in its internal controls with bank reconciliations. The city responded that it would fix the issue. When the commission staff visited Laurinburg in May, they “found everything to be in order.”

The city also assured the commission that no tax or rate increase is required to build City Hall. Officials said the debt service will be paid from revenues split into three parts from the General Fund, Water and Sewer Fund and the Electric Fund.

Established in 1931 on the heels of the Stock Market Crash, the Local Government Commission and its professional staff were charged with monitoring and ensuring the fiscal health of local entities. The agency, which also examines local governments’ financial reports to spot problems and recommend fixes, is no slouch when it comes to helping municipalities avoid financial downturns.

Members include the state treasurer, state auditor, secretary of state, and secretary of revenue; three members appointed by the governor; and two members selected by the lieutenant governor and the speaker of the North Carolina House.

If the county or city are truly unable to afford these major projects without overburdening taxpayers — as critics have suggested — the commission should be the first to say so.

We await its verdict.