North Myrtle Beach, a city in South Carolina, is facing challenges in borrowing money due to its lack of a current audit and bond rating. The city’s manager, Ryan Fabbri, stated that no lender would extend money to the city until its 2025 audit is finished.
Financial Standing
The city’s financial standing is a significant concern, with its 2024 audit requiring corrections and its 2025 audit still unfinished. This has led to a situation where the city is effectively locked out of the credit markets, making it difficult to secure funding for its proposed $18 million expansion.
The city’s reserves are at around 37 percent, which is slightly above the required 35 percent. However, this cushion is not sufficient to alleviate concerns about the city’s ability to repay its debts. The city’s debt load is modest, but the lack of a current audit and bond rating is a major obstacle to securing new funding.
Constitutional Limits
The city is also facing constitutional limits on its borrowing capacity. Article X, Section 14 of the South Carolina Constitution caps the city’s general obligation debt at 8 percent of the assessed value of taxable property. The city has already committed a significant portion of its debt capacity to the Park and Sports Complex, leaving limited room for new borrowing.
The city is exploring alternative financing options, such as limited obligation bonds backed by an accommodations-fee pledge. However, even these bonds require a current audit and bond rating to be sold to investors.
The city’s situation highlights the importance of sound financial management and the need for transparency in its financial dealings. The lack of a current audit and bond rating has created uncertainty and risk, making it challenging for the city to secure funding for its projects.
Original reporting: MyrtleBeachSC News — read the source article.
