Credit crunch could delay some Wake school projects
Posted October 6, 2008 7:11 p.m. EDT
Raleigh, N.C. — Wake County commissioners said Monday they want to meet with school board members to discuss putting off some planned school construction projects until bond markets improve.
Twice last month, instability in the financial markets forced the county to back away from issuing $454.5 million in bonds for new schools and libraries and more buildings at Wake Technical Community College.
"What's happening on Wall Street does affect all local governments across the country – and indirectly certainly citizens of our county," County Manager David Cooke said Monday.
Cooke said the county could issue $300 million in bond anticipation notes in a few weeks to provide cash flow for the next year for various construction projects at a fixed interest rate. The county could then look to go back into the bond market, he said.
The proposal would put the brakes on any building project not already under contract, except most school projects.
"That just is bizarre that we're not getting similar treatment (for county projects), especially when school system construction is the majority of money that's being bonded," Commissioner Tony Gurley said.
School projects would account for more than 80 percent of the borrowing under the anticipation notes.
Gurley and other commissioners said they want to talk to school board members and district officials about delaying some projects to lower the amount the county needs to borrow in the unstable market.
A decision is expected in the next 10 days.
Commissioners also gave Cooke and other county officials the authority to replace Wachovia Corp. as the marketing agent for the county's debt. The troubled bank is in the middle of a takeover battle between Citigroup Inc. and Wells Fargo & Co., and county officials said they don't want any negative impact on Wake County's debt.