(The Center Square) – North Carolina's Local Government Commission (LGC) has removed 38 government entities from its list of financially struggling units, State Treasurer Dale Folwell said Tuesday.
Folwell said 27 towns, eight counties and three utility districts are no longer on the LGC's Unit Assistance List, which monitors units in fiscal distress.
The General Assembly created the commission in 1931 to help oversee local governments' finances. According to the LGC's website, it is responsible for the oversight of more than 1,300 units of local government. Local governments must seek the LGC's approval to borrow money.
The commission is lead by Folwell and staffed by the Department of State Treasurer and the State and Local Government Finance Division.
Folwell said the removal of 38 units of government marked the largest single clearance of entities from the list. Most of the units on the list have issues with transparency, governance and competency, Folwell said. Units often get on the list because of their failure to reconcile their books or complete audits, he said.
Nearly 160 units of government are still on the list.
"It's our responsibility to make sure that we scrub these," Folwell said. "We need to make sure that there are examples out there for cities who are maybe in the first or second inning of uncertainty of financial viability. We need for them to be able to look to other people who are in the eighth and ninth inning of some of these issues who've actually had the discipline to make the tough choices to get through it."
One of the recovered units, the town of Ahoskie, was facing more than $21.2 million in debt in 2017 when the LGC placed it on the Unit Assistance List. The town of 4,048 residents in Hertford County has reduced its debt from 21 to 12 accounts, totaling $17.8 million.
Legislation signed into law by Gov. Roy Cooper on Aug. 30 will allow the LGC to take additional steps to help distressed units.
Senate Bill 314, dubbed The Local Government Commission Toolkit, creates a process that allows the LGC to dissolve municipalities and transfer their liabilities, assets and other obligations. It gives the LGC authority to mandate special training for officials from struggling units. It also requires a statement from the LGC be included in a petition to the General Assembly in plans for new municipalities.
"This toolkit was developed in an effort to make sure that when we did need a tool that we statutorily have the tool to do the job," Folwell said.