Wake and Durham leaders say the national financial crisis is making it nearly impossible to borrow from banks to pay for schools and other projects. In the past two weeks, Wake County delayed plans to sell $454.5 million in bonds, while Durham County's attempt to borrow $30 million failed because no lenders bid on the offering.
Their struggles are notable because both counties enjoy the highest AAA credit rating -- meaning they are among the safest institutions to lend money to.
"That is an extremely cogent indication of how deeply this financial crisis has spread," said Jay Gladieux, a principal with Smith Breeden Associates, an investment firm in Durham. "Instead of just impacting Wall Street, this is impacting the very foundation of our economy."
Wake County Manager David Cooke said the county has enough cash that the delay in selling bonds will not have an immediate effect on projects already under way. The bulk of the bonds, $370 million worth, would be for school construction and renovation projects approved by voters in 2006.
If problems in the national credit market persist for months and the county is unable to borrow money, the planned construction of schools, county libraries and the expansion of Wake Technical Community College could be delayed. Continuing credit problems also may raise borrowing costs. Read the complete story at newsobserver.com