Agenda - 10-04-1982 - Laserfiche WebLink

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Board Members -2- Economic Development Program tion of economic development. The sources include sales taxes, ABC profits, utility profits, or general revenue sharing money. If the County gives an appropriation to a private organization, it must be for a specific purpose. Each expenditure by the organization must be approved in advance by the govern- ment and an end-of-year accounting must be made. Finanling Public Facilities The financing of public facilities is another area of economic develop- ment that islrestricted by State law. The laws provide for several different financing me-;hods. Two of the more common methods used by Counties are current revenues and capital reserve funds. Current revenues usually are not used for capital projects because of the large sums of money necessary for these projects Capital rese-ve funds, as permitted under G.S. 159-18-through 22, allow local governments 4,:o save funds over several years in order to acquire or build a capital facipty. If such a fund is established by ordinance or resolution, four points should be approved: 1. Tile purpose for which the money is being reserved, 2. How long money will be accumulated, 3. The approximate amount of money to be reserved, 4. Tle sources of the money. This type of fund may also be inadequate for large capital projects. The most widely used financing method for capital projects in that event is borrowing. ocal governments may issue General Obligation (G.0.) Bonds; or , _Revenue Bond . The G.O. bonds are secured by the taxing power of the govern- ment; whereas revenue bonds are secured only by the revenues generated by the project. G. . bonds are generally less expensive and more secure than revenue bonds. Revenue bonds do not need voter approval for issuance; G.O. bonds w= '=' ^ - ly do. Other financing methods are described in the institute of Government booklet Local Government's Role in Economic Develn"ment: Lg•a7 and Financial Aspects by awl' Lawrence, May 1982. Assi tuncg to a Particular Business Ass4ance of the local government to a particular business may be accom plished through two financing methods. They are industrial revenue bonds and what red to as "63-20 financing". As with most programs there are adva - tages and di advantages. Industrial revenue bonds have been an available financing method since 1976 h pnstitutionol amendment reversed early court cases. The advan- tage f the e bonds is that the interest paid to purchasers is exempt from fed- eral income Itax and, therefore, the interest rate is lower tahn for commercial loans. In North Carolina the County agency which issues these bonds 1s the Industrial Facilities and Pollution Control Financing Authority. This board is set up by t e County Commissioners. The bonds are issued for two broad cate- gories: The first is for any industrial or manufacturing fmcflity. The dollar limit for financing a particular project is $10 million, The second category is for the financing of a pollution control facility for an industry or a publ c utility. There is no dollar limit on the amount for a particular project in th s