Rocky Mount nears rare state financial takeover
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Rocky Mount is at risk of a rare state takeover of its finances after years of overspending and missed audits pushed the city toward insolvency.
Why it matters: State takeovers are extremely rare. It's only ever happened to 12 local governments, and they're all far smaller than Rocky Mount, a city of around 55,000 about 60 miles east of Raleigh.
What they're saying: "It almost never gets this bad. When it does, it's usually because it's terminal. It's usually because a business has moved, or a large population base has left," State Treasurer Brad Briner said at a recent hearing.
- "This is not that. This is simply a failure of will, and we are here to help impose that will."
Zoom in: Because Rocky Mount is on the verge of insolvency, city leaders were summoned to Raleigh on Wednesday to appear before the Briner-led Local Government Commission.
- The city's general fund was projected to go into the red this year, to the tune of several million dollars.
- Budget cuts and layoffs are underway, and utility rates are increasing 15%, but it's still unclear whether that will be enough to balance the budget.
How it works: The LGC is responsible for approving a local government going into debt, as well as reviewing the independent audits required annually.
- The board accuses Rocky Mount of overspending and repeatedly submitting late audits, putting it at risk of defaulting on bond payments.
- Secretary of State Elaine Marshall said the city has a culture of skirting oversight, contributing to the current crisis. "Repeatedly, this city has tried to finance big things at 59 months so that you didn't have to come to us," Marshall said. (Involving the LGC can be avoided in certain cases if all installments are paid in less than five years.)
The other side: City Manager Elton Daniels has been on the job for one year, and said he's working to change the culture and feels they're "on the right path."
- Mayor Sandy Roberson said the "situation is certainly embarrassing for the city. It's not a place that we wanted to be. However, we have the team in place, and I believe we have the responsiveness to be able to move forward."
Friction point: State Auditor Dave Boliek said he expects mass resignations from the Rocky Mount City Council. "It's not fair to the people," who will soon have significantly higher utility bills, he said.
- In an audit completed last month, Boliek criticized certain purchases, like $17.2 million for land intended for a casino, and $6.8 million to lease a fleet of vehicles, and said internal oversight was severely lacking.
- "Usually three decisions that need to be made in this [situation.] One, you got to cut. Two, you got to raise revenue. Or three, you got to close up shop. And three is not an option here," he said.
Between the lines: Rocky Mount has mostly Democrats in elected leadership, and Briner and Boliek are two of the state's most prominent Republicans.
- Taking over in a midterm election year could have unpredictable political consequences in the purple region of the state.
Catch up quick: Rocky Mount's 2024 and 2025 audits both were late, prompting multiple warnings, and the LGC initiated conversations in fall 2025 about urgently reducing spending to avoid running out of cash.
What's next: LGC Secretary Denise Canada said Rocky Mount's situation is fixable. A draft budget is being released in May, and the city will keep working with Canada and her team as it's debated and enacted.
- The board voted unanimously on Wednesday to issue Rocky Mount its final warning, and exercise its statutory authority to take over the city's finances "should the budget numbers slip again."