Local Government Commission (LGC) officials on Wednesday agreed to postpone a potential state takeover of Rocky Mount’s finances, contingent on the city complying with specific requirements.
The city was the subject of a recent 257-page performance audit released earlier this month by State Auditor Dave Boliek’s office.
It said the lack of oversight and due diligence led to serious financial distress, including the mismanagement of millions of dollars.
State Treasurer Brad Briner, who oversees the LGC, said they have taken over 12 towns out of the state’s 1,100 municipalities in 94 years, and if things like this happen, it is usually because something is in a terminal condition.
“It’s usually because a business has moved or a large population base has left, and it’s not going to be fixed,” he said. “This is not that. This is simply a failure of will, and we are here to help impose that will today, so that to me is the simple punchline. I appreciate the leaders of Rocky Mount being here, but we need to get to a place where there is the will to fix a very, very serious problem.”
The audit stated that all of Rocky Mount’s financial woes could have been possibly avoided if the city council had vetted its pick for city manager in 2023.
The city hired an executive firm for $38,000 to recruit the former city manager without conducting any reference checks.
“What we found was red flag after red flag, including the fact that he had previously been the town manager of Dumfries, Virginia,” Boliek said at a press conference earlier this month. “And during his time there, we found recurring issues of poor management and poor decision making, including a pattern of unqualified, IRS questionable salary increases without council approval, inadequate segregation of duties, and structurally unsound budgeting. Those deficiencies in that community ultimately resulted in a $1 million overspend by the city manager, yet the Rocky Mount City Council voted unanimously to hire him.”
The former city manager was left unchecked from August 2023 to August 2025. During that time, the city’s cash and investment balances declined by approximately $80 million, falling from about $100 million to $21.8 million — 78% drop in two years.
At Wednesday’s meeting, city officials, including Rocky Mount Mayor Sandy Roberson, said they have been making cuts, hired a new finance director, and the city’s monthly reports match revenue projections. But Denise Canada, director of the State and Local Government Finance Division and Secretary of the Local Government Commission, said she was very concerned about the city being able to make its debt service payments and not default on its debt.
“As Treasurer Briner has said, we have not had a default in 80 years, and it’s not going to happen now,” she said. “Staff have talked regularly with the city manager and the finance officer since the Fall trying to track the process, making budget cuts, and tracking revenues, and those sorts of things, and I had originally believed that things were more or less on track. But then maybe about two months ago, the city raised concerns that they have the potential to run out of cash. Obviously hugely worrisome, and I became much more involved with the city at that time.”
Rocky Mount officials said they had enough funds to get through the rest of the year, but Canada raised concerns that the available cash in the General Fund continues to decline and will be depleted in July.
Cheryl Spivey, finance director for the city, said that while that is true, they should return to the levels they were at in June in terms of tax revenue.
Officials said they anticipate a possible tax hike and fee increases, with Roberson stating the hikes and expense reductions “are on the table,” and that they have reduced the number of people on the payroll.
Elton Daniels, city manager, said they are also looking to increase utilities by about $45 per month, noting they already have one of the lowest utility charges in the area.
Briner told city officials that one of the first things that they need to do is get rid of excess assets. Daniels said they are looking at doing that, and have already eliminated grants to third parties.
Roberson told the LGC that city officials “have seen the light” and are ready to move forward with their team in place.
“We have certainly gotten the memo, certainly understand the seriousness of this,” he said. “I didn’t run for mayor to come before y’all to have the situation that’s certainly embarrassing for the city.”
State officials, including Briner, were a little more skeptical.
“As Ronald Reagan said, ‘trust but verify,” he said. “So, I don’t think we collectively, and please correct me if anyone thinks differently, feel a lot of trust for the city of Rocky Mount right now.”
Secretary of State and LGC member Elaine Marshall, who stated that she was the longest-serving member of the board, said that she has a very thick file on Rocky Mount and has questioned the culture of the city’s finances and arrangements repeatedly, and has questioned in the past the city’s avoidance of getting high-ticket items approved by the LGC. She also called it a failure of leadership, which could affect the state’s AAA bond rating if not fixed.
Boliek, who also sits on the board, said if Rocky Mount doesn’t turn things around, “it would certainly be the largest failure of a municipality in the history of the state of North Carolina.”
“If the LGC finds itself in a position to have to assume control of the day-to-day finances and management of the City of Rocky Mount, and again I’m speaking for myself, not for this board, but I view that as a failure of the politically elected leadership and layout,” he said. “So if we get to the point that the folks who signed up to run, the councilman signed up to run to put your name on the ballot to make these hard decisions, and the LGC ultimately has to come in and take over, my recommendation and my expectation would be that we would have a mass resignation of city council members because it’s not fair to the people who elected folks to represent them and to make tough decisions.”
Briner noted that this is the most severe level of warning that can be given to a local government unit, and that the next step would be to take control of the city’s finances.
The board voted to have the city provide the LGC with bi-weekly reports, and if anything is questionable, a meeting will be convened.
City officials are also being required to come to the LGC meetings in May and June to see what progress has been made.