Bond agency strips Goldsboro of credit rating

The State Treasurer’s Office sent a letter to members of the Goldsboro City Council Oct. 29, warning that the city’s credit rating and its ability to borrow money are in jeopardy.

The letter also revealed that one of the nation’s leading bond credit rating agencies, an organization that ranks the creditworthiness of borrowers, including municipalities, has withdrawn its rating on Goldsboro’s General Obligation Bonds and General Obligation Street Improvement Bonds.

Moody’s Investors Service Inc. made the move due to “insufficient information” — a deficiency characterized by the office of State Treasurer Dale Folwell as a “serious matter” that is “a reflection on the quality of both governing board oversight and management practices of the city.”

In the letter sent to council members that was obtained by the New Old North, the state said the withdrawal of the rating “has potentially serious consequences including the inability of certain investors to hold these bonds and for potentially higher interest costs in future debt issuances.”

At issue are financial statements from June 2019 that have yet to be sent to the state. Should they be received by the end of the month, which is the expectation spelled out by treasurer’s office officials, they would have been delivered “13 months after the legal due date of October 31, 2019 and 17 months after the fiscal year end,” the letter reads.

“It is the governing board’s responsibility to ensure that audited financial statements are issued timely,” the letter continues. “Until the city complies with the legal obligations associated with existing outstanding bonds and reports financial information timely, we will not recommend approval of any additional debt to the Local Government Commission for the city.”

Attempts to reach officials at City Hall, including Mayor Chuck Allen, have not yet been successful. When a response is provided, we will update this story.