As state Treasurer seeks to rescind moratorium on utility cutoffs, NC Auditor raises another red flag

Treasurer Dale Folwell

State Treasurer Dale Folwell pressed members of the NC Council of State Tuesday to rescind Governor Roy Cooper’s Executive Order that extended a prohibition of utility shut-offs and implemented a moratorium on evictions.

Folwell said the order was placing a huge financial burden on cities and municipalities as citizens have refrained from paying their utilities during the COVID-19 pandemic.

Folwell offered his own resolution to rescind the executive order, and return the decision-making power of utility shut-offs to local governments.

“My comments do not apply to stockholder-owned utilities. This resolution only applies to citizen-owned utilities,” Folwell explained. “If we don’t do this, I believe we are signing a death certificate for many rural North Carolina communities, especially those in the East.”

Folwell said local officials were better suited to know the financial hardships of residents, and provide compassion if a utility bill could not be paid on time.

Attorney General Josh Stein acknowledged that Elizabeth City recently received a waiver to the executive order, but extending it to others town at this time could be a problem.

Auditor Beth Wood

“People are struggling,” said Attorney Josh Stein in voicing continued support for the prohibition on utility shut-offs put in place during the pandemic.

Auditor Beth Wood called a continuation of the utility protections ‘unsustainable’ but added that many local governments are in no better position to manage the economic crisis caused by COVID-19.

“We have so many cities and counties that are not going to run well, and to say that they have the ability to make the right decisions is not a true statement,” advised Wood.

“I am investigating the goings-on in several cities right now, who have absolutely no financial controls in place. I will tell you in my investigation of the City of Rocky Mount, they have written off a million dollars a year in electric bills and the city council says they were never aware. A million a year for 20 years. That’s $20 million.”

Wood warned once the executive order expires, the state could not afford to simply walk away without offering some financial structure.

“We’ve got 150 local governments on a financial watch list, not because they can’t pay their bills, but because they are not being run well. We have finance officers who don’t have a clue what they are doing, city managers who don’t have a clue what they are doing.”

Wood said local governments need alternatives and guidance before the power to regulate utility shutoffs and delinquent bills is turned over to them.

“I see this month after month after month.I know exactly what I’m talking about when I say that many elected officials can’t run their local governments.”

(Click below to hear Auditor Beth Wood discuss the issue.)

Governor Cooper said his office would be willing to talk with the state auditor’s office after July 31st for additional recommendations for municipalities managing their utilities.

Cooper stressed the current order, which expires at the end of July, did not offer debt forgiveness.

Customers will still be responsible for the utilities that they used, and will have extended repayment plans of at least six months.

While no vote was taken on Folwell’s resolution on Tuesday, Governor Cooper and members of the Council of State expressed reservations that the utility shutoff moratorium would be extended beyond this month.

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