Foundational Resources
This is broadband 101 for those looking for background on this issue and what counties can do.
This section is meant to provide a basic foundation of information about broadband, particularly focused on the state of broadband in North Carolina, how counties play a role on broadband projects and how counties can fund broadband projects. This section is meant for county officials, staff, and other stakeholders who may be new to the issue and want to understand what the county role is in broadband and how they can work on this issue. It also includes a definitions guide for commonly used words and acronyms in the broadband sector.
Broadband Definitions: A Cheat Sheet for Definitions and Acronyms Commonly Used in the Broadband Sector
Broadband 101
Broadband: Internet access that is always on and faster than dial-up, most commonly defined by a speed of at least 25Mbps download and 3Mbps upload.
Broadband Adoption: Subscription to a broadband service in a person’s home.
Cable Modem (Coax or DOCSIS): Transmits data through the same cables that generate pictures and sounds from someone’s TV set.
Data Limits: The amount of data you can download and/or upload based on an ISP’s standard.
Digital Divide: The gap between those who have access to technology, the internet, and digital literacy training and those who do not.
Digital Equity: A condition in which all individuals and communities have the information technology capacity needed for full participation in our society, democracy, and economy. Digital equity is necessary for civic and cultural participation, employment, lifelong learning, and access to essential services.
Digital Inclusion: Digital Inclusion refers to the activities necessary to ensure that all individuals and communities, including the most disadvantaged, have access to and use of Information and Communication Technologies (ICTs). This includes five elements:
- Affordable, robust broadband internet service;
- Internet-enabled devices that meet the needs of the user;
- Access to digital literacy training;
- Quality technical support; and
- Applications and online content designed to enable and encourage self-sufficiency, participation and collaboration.
Digital Inclusion must evolve as technology advances. Digital Inclusion requires intentional strategies and investments to reduce and eliminate historical, institutional and structural barriers to access and use technology.
Digital Literacy: Digital literacy is the ability to use information and communication technologies to find, evaluate, create, and communicate information, requiring both cognitive and technical skills.
Digital Subscriber Line (DSL): Runs over traditional copper phone lines, speed dependent technology and distance. DSL speeds range from 1.5 Mbps to 80 Mbps.
Download Speed: Speed of getting information from the web to your device.
Fiber-Optic Cable (Fiber): Converts electrical signals carrying data to light and sends the light through transparent glass fibers about the diameter of a human hair. Fiber transmits data at speeds much faster than DSL or cable, typically by tens or even hundreds of Mbps.
Latency: The delay in time (lag) it takes data to transfer data from the web to your device.
Megabits per second (Mbps): Speed in which small pieces of data (images and video) come from the web to your device.
Satellite: Speeds up to 25 Mbps, but is typically more expensive, may have data caps, or latency issues.
Unserved: A project area without access to wireline or fixed wireless broadband internet services of speeds of at least 25 Mpbs download and 3 Mbps upload.
Upload Speed: Speed at which you can send information from your device to the web.
Wireless: Can be mobile or fixed. Fixed wireless involves the wireless transmission of data from a local antenna to a permanent location such as a home or business. The service is similar to what is delivered over DSL or a cable modem, but the transmission is wireless. Mobile wireless connects users who are in temporary locations, such as coffee shops. Mobile broadband is transmitted through technologies such as portable modems and mobile phones.
Internet Infrastructure
Backbone: Large-capacity fiber.
Last Mile: Fiber network connections to end user.
Middle Mile: Segment of fiber linking core network to the local fiber.
Broadband Partners/Entities to Know
Affordable Connectivity Program (ACP): Administered by the Federal Communications Commission, and gives qualifying households a discount on internet services.
Federal Communications Commission (FCC): The Federal Communications Commission regulates interstate and international communications by radio, television, wire, satellite, and cable in all 50 states, the District of Columbia and U.S. territories. They are responsible for collecting and publishing internet access data.
Internet Service Provider (ISP): Internet service provider refers to a company that provides access to the internet to both personal and business customers.
National Telecommunications and Information Administration (NTIA): The Executive Branch agency that is principally responsible for advising the President on telecommunications and information policy issues.
North Carolina Department of Information Technology (NCDIT): The state agency responsible for issuing grant programs and guidance for broadband expansion across the state, as well as digital equity, inclusion and literacy efforts.
North Carolina’s Major Broadband Funding Programs
North Carolina counties may participate in certain state-administered broadband infrastructure programs by investing matching funds in projects supported by the Growing Rural Economies with Access to Technology, also known as the GREAT Grant program, and the Completing Access to Broadband program, also known as CAB. Below is a summary of the GREAT Grant and CAB programs and other major broadband programs in North Carolina.
As of April 2024, 79 counties provided matching funds for GREAT Grant projects and 36 counties committed to providing a matching contribution for CAB projects. NCACC worked closely with the North Carolina Department of Information Technology to advocate for waiving the county match requirement for CAB projects. The removal of the county match requirement will help counties that made early investments in GREAT grant projects to participate in CAB. It will also remove barriers to CAB participation for counties with lower populations. These less populated counties received a lower allocation of ARPA State and Local Fiscal Recovery Funds and had to balance urgent and other pandemic recovery needs within their communities. As part of coordinated advocacy efforts, NCACC wrote a letter (linked here) to the Joint Legislative Oversight Committee on Information Technology (JLOC) expressing support for waiving the county CAB match.
GREAT Grants ($350M)
Grant awards for unserved locations distributed to ISPs, with county partnership and matching funds optional.
January 31, 2022: Applications opened for GREAT grants.
May 4, 2022: Application deadline for GREAT grants.
As of June 23, 2023: 78 counties committed matching funds for GREAT grant projects, which were awarded in 2022.
July 6 2023: NCDIT awards nearly $80 million in GREAT awards to 33 counties connecting 25,000 N.C. households. NCDIT has now awarded all of the $350 million in American Rescue Plan Act funding available for the GREAT grant program.
Completing Access to Broadband (CAB) ($400M)
Awards begin after final round of GREAT awards.
Requires county participation and a financial match.
Updated guidance issued August 11, 2023, with applications expected Fall 2023.
NCDIT will prequalify providers and determine initial scopes of work for unserved and underserved locations eligible for CAB.
BEAD and Digital Equity ($1.5B to NC)
Federal funding from the Internet for All Initiative, as $45 billion national program administered through the NTIA.
Participating states must submit a letter of intent and a digital equity plan. North Carolina submitted their plan in July as part of the process.
North Carolina state legislation requires 50% of BEAD to GREAT; 40% to CAB; and 10% for Stop-Gap Solutions.
GREAT Grants
The Growing Rural Economies with Access to Technology (GREAT) grant program is a competitive grant program, administered by the North Carolina Department of Information Technology (NCDIT), which provides funding to private sector broadband providers to deploy last-mile broadband infrastructure to unserved areas of North Carolina. The state offers broadband planning maps to determine if an area meets the definition of “unserved” as outlined in NC G.S. 143B-1373(a)(14).
Click here to access the GREAT Grant Mapping Tool and Help Document.
In 2021, counties were granted authority in N.C. Session Law 2021-180 to participate in the GREAT Grant program by contributing matching funds to internet service providers that receive a GREAT grant award from the state. The state appropriated $350 million to the GREAT Grant program from North Carolina’s allocation of American Rescue Plan Act funds. The legislation also stipulated that county matching funds must come from federal funds the county received directly from U.S. Treasury under P.L. 117-2 – the American Rescue Plan Act, or from unrestricted general funds (see section on Eligible Sources of Matching Funds for Counties).
July 2023: NCDIT awarded second and final round of GREAT grants, totaling $80 million to 33 counties. See press release here. All GREAT grants have been awarded and projects are in various stages of the process.
Click here for more information on the GREAT Grant program from NCDIT. If you have questions about the GREAT Grant program, email greatgrant@nc.gov.
The CAB Program
The Completing Access to Broadband (CAB) Program is a new, state administered broadband infrastructure program, established by Section 38.6 of Session Law 2021-180.1 The General Assembly appropriated $400 million for CAB from the state’s allocation of American Rescue Plan Act funds. CAB gives individual county governments an unprecedented opportunity to partner with the NC Department of Information Technology (NCDIT) to mutually identify unserved and underserved areas for broadband infrastructure projects. The CAB Program complements the GREAT Grant program to provide solutions to areas not served by the GREAT Grant. As outlined in legislation, projects applied for and not funded under the GREAT Grant can be considered for funding under the CAB Program.
Matching fund requirements for the CAB Program are not related to scoring as they are under the GREAT Grant Program. The percentage of matching funds required for the broadband provider and for the county varies depending on the amount of federal ARPA funds allocated from the federal government directly to the participating county.
1 The CAB Program is codified in N.C.G.S. § 143B-1373.1, established by S.L. 2021-180, and amended by S.L. 2022-6.
The CAB legislation requires NCDIT to give funding priority to counties receiving less than an aggregate of $8 million in ARPA funds allocated from the federal government directly to the participating county. No county may receive more than $4 million in aggregate funding from the CAB Fund in any single fiscal year. In the event CAB Fund monies are insufficient to fund a project, a county may increase its share of the total estimated project cost, or the office may adjust the scope of the project to meet the level of available funding.
Eligible CAB Project Areas and Speed Requirements
Participating counties will work with NCDIT to identify eligible project areas that address “unserved or underserved” locations and the county will provide matching funds to the state for eligible construction, installation, and operational costs for broadband deployment targeting a mutually agreed and eligible project area.
Eligible CAB project areas must address “unserved or underserved” locations.
Eligible expenses for CAB include “infrastructure” and “infrastructure costs.”
CAB projects must meet all applicable federal speed threshold requirements.
Click here to view the definitions and details.
May 2024
NCDIT Announces Additional Rounds of CAB Scopes of Work
The North Carolina Department of Information Technology (NCDIT) published scopes of work for the Completing Access to Broadband (CAB) program in 35 participating counties, which were announced starting in late March 2024 and are being released on an ongoing basis. The CAB program is a partnership between the State of North Carolina, participating counties, and prequalified internet service providers (ISPs) to expand high-speed internet access to unserved and underserved homes and businesses in North Carolina. After CAB scopes of work are posted, prequalified ISPs may submit proposals to provide broadband to all or a portion of eligible locations within each of the participating counties. After a 45-day period, an ISP will be chosen based on the CAB evaluation criteria.
March 2024
NCDIT Publishes Scope of Work Template and Important CAB Program Information
The NC Department of Information Technology (NCDIT) published a Scope of Work Template, which provides detailed project proposal information for the Completing Access to Broadband (CAB) program. The document was provided as a guide to request responses from prequalified broadband providers (“vendors” or “respondents”) to build broadband infrastructure and provide broadband service to unserved and underserved locations within the county. Additional documents related to project submission requirements were also added to the CAB Program page.
February 7, 2024
NCDIT Prequalifies Vendors for Completing Access to Broadband (CAB) Program, Broadband Pole Replacement and Stop-Gap Solutions
On February 7, 2024, the NC Department of Information Technology (NCDIT) announced the internet service providers that have been prequalified to participate in multiple state broadband expansion programs, including the Completing Access to Broadband (CAB), Broadband Pole Replacement and Stop-Gap Solutions programs. The selection of providers for specific projects will be determined by the providers’ submissions of detailed proposals and application materials. The CAB Program is a new, state administered broadband infrastructure program, giving individual county governments an unprecedented opportunity to partner with NCDIT to mutually identify unserved and underserved areas for broadband infrastructure projects.
- Click here to view the press release on prequalified vendors.
January 2024
CAB County Commitment Tracker Form
NCDIT released a CAB County Commitment Form tracker that tracks commitments completed by and received from counties who plan to contribute county funds to a CAB project. See the County Commitment Tracker form here, which is updated weekly.
January 3, 2024
New CAB Guidance
NCDIT released new CAB Program Guidance.
December 2023
New CAB Mapping Webinars
NCDIT releases new CAB mapping webinars and resources for mapping CAB projects. These updates can be found on the CAB website.
November 2023
CAB Awards Announced
NCDIT Announced first round of CAB Awards, serving 14 counties and over 6,000 households. See the Awards here.
August 14, 2023
Application Period to Prequalify Ends
The application period for internet service providers to prequalify for CAB closed August 14.
August 11, 2023
CAB Guidance Updated
NCDIT released updated CAB guidance August 11, 2023. This document replaces the guidance released on June 24, 2022.
June 30, 2023
Draft Request for Proposals
The N.C. Department of Information Technology’s (NCDIT) Division of Broadband and Digital Equity posted a request for proposals to prequalify internet service providers to participate in multiple broadband expansion programs, beginning immediately with the $400 million CAB program.
- Broadband Expansion and Access Request for Proposals Form
- Broadband Expansion and Access RFP Response Form
The application deadline for vendors to submit proposals has been extended from July 31 to August 14. Vendors may submit proposals via the State of North Carolina Interactive Purchasing System at www.ips.state.nc.us/ips. Counties are encouraged to connect with any potential vendors they’re interested in working with through CAB so that those vendors can submit an application for prequalification.
June 24, 2022
Preliminary CAB Program Guidance Published
NCDIT published preliminary CAB program guidance - Part 1, which is based on the enabling legislation for the CAB Program and applicable federal guidance. Part 1 guidance outlines the general parameters of the program for county governments and broadband service providers that are interested in participating. Part II of the guidance is forthcoming and NCDIT plans to fully roll out CAB in the fall of 2023, after the final round of GREAT grant awards are fully executed. NCDIT is in the process of identifying interested internet service providers who are eligible to respond to counties’ request for service expansion in unserved and underserved areas mutually defined by the counties and NCDIT.
Click here for more information on the CAB Program. Click here to access the CAB Planning Tool. Email cabprogram@nc.gov with any questions about the CAB program.
Broadband Equity, Access and Deployment (BEAD)
The Broadband Equity, Access and Deployment (BEAD) program was authorized by the Infrastructure Investment and Jobs Act of 2021, Public Law 117-58, also known as the Bipartisan Infrastructure Law. BEAD provides federal funding to expand high-speed internet access in all 50 states and U.S. territories. BEAD funding is distributed primarily based on the relative number of “unserved” locations and is provided to assist with broadband planning, infrastructure deployment, mapping, equity, and adoption activities.
The Bipartisan Infrastructure Law outlines several requirements for BEAD, including public engagement and close and ongoing coordination with a wide range of community stakeholders, including counties. The BEAD program structure consists of nine principal steps in a sequential process involving multiple stages of application review, a robust competitive subgrantee selection process, and ongoing reporting and monitoring. These steps are described in detail in the Notice of Funding Opportunity (NOFO) for the BEAD program. [Table below from pages 8-10 of the NOFO document).
Letter of Intent
July 18, 2022 is the deadline for an Eligible Entity to submit a Letter of Intent to participate in the Program.
Request for Initial Planning Funds
Either with its Letter of Intent or afterwards, an Eligible Entity that is a State (including the District of Columbia and Puerto Rico) may request up to $5,000,000 in Initial Planning Funds. American Samoa, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands each may request up to $1,250,000. Each Eligible Entity’s Initial Planning Funds will be drawn from that Eligible Entity’s Minimum Initial Allocation. If the Eligible Entity requests Initial Planning Funds, it must submit an application for Initial Planning Funds by 11:59 p.m. Eastern Daylight Time (EDT) August 15, 2022, and a Five-Year Action Plan within 270 days of receipt of Initial Planning Funds.
Notice of Available Amounts
On or after the date on which the Broadband DATA Maps are made public, the Assistant Secretary will notify each Eligible Entity of the estimated amount of funding that NTIA will make available to the Eligible Entity under the Program (Notice of Available Amounts) and invite the submission of an initial grant proposal (Initial Proposal) and a final grant proposal (Final Proposal).
Technical Assistance
Leading up to submission of the Initial Proposal and throughout the remainder of the process, NTIA will provide support and technical assistance to help ensure that the Eligible Entity’s proposals fully meet the requirements of the Infrastructure Act and the goals of the Program. This technical assistance will include iterative feedback on draft Initial and Final Proposals.
Initial Proposal
Eligible Entities will have 180 days from receipt of the Notice of Available Amounts to develop and submit an Initial Proposal, which will, among other things, describe the competitive process the Eligible Entity proposes to use to select subgrantees to construct broadband projects. Prior to submission to NTIA, the Initial Proposal must be made available for public comment, and the Initial Proposal must incorporate local coordination feedback for the Assistant Secretary’s review.
Challenge Process
After submission of its Initial Proposal and before allocating BEAD funds received for the deployment of broadband networks to subgrantees, an Eligible Entity must conduct a challenge process. Under this process, a unit of local government, nonprofit organization, or broadband service provider can challenge a determination made by the Eligible Entity in the Initial Proposal as to whether a particular location or community anchor institution within the jurisdiction of the Eligible Entity is eligible for the grant funds, including whether a particular location is unserved or underserved, and Eligible Entities must submit any successful challenges to NTIA for review and approval.
Initial Funding Availability
NTIA will review Initial Proposals as expeditiously as possible. Once an Initial Proposal is approved, NTIA will make available to the Eligible Entity not less than 20 percent of the total grant funds allocated to the Eligible Entity.
Subgrantee Selection
An Eligible Entity may initiate its competitive subgrantee selection process upon approval of its Initial Proposal and will have up to one year to conduct additional local coordination, complete the selection process, and submit a Final Proposal to NTIA. NTIA will provide support and technical assistance to help ensure that the Final Proposal fully meets the requirements of the Infrastructure Act and the goals of the Program. The Eligible Entity may, at this point, utilize the funding provided (not less than 20 percent of the Eligible Entity’s total grant funds) to initiate certain eligible activities (see Section IV.B.8) before submission and approval of their Final Proposals.
Final Proposal
After the Eligible Entity has selected subgrantees and otherwise executed its approved Initial Proposal, it will submit to NTIA a Final Proposal describing how it complied with that Initial Proposal and the results of its processes. NTIA will award the remaining funds allocated to the Eligible Entity upon approval of the Eligible Entity’s Final Proposal, and Eligible Entities will initiate their subgrants for the remaining 80 percent of funding and any portion of the original 20 percent that the Eligible Entity has not yet awarded as a subgrant. Prior to submission to NTIA the Final Proposal must be made available for public comment.
Ongoing Monitoring, Reporting, and Performance Management
Throughout the BEAD Program, NTIA will conduct ongoing monitoring of an Eligible Entity’s progress against its plans and ensure that the requirements of the Infrastructure Act are met. Eligible Entities will be required to comply with reporting requirements and monitor subgrantee compliance.
In June 2023, the National Telecommunications and Information Administration (NTIA), which administers the BEAD program, awarded North Carolina more than $1.5 billion in BEAD funding. The North Carolina Department of Information Technology (NCDIT) is leading North Carolina’s BEAD planning and proposal development process to align the state’s programs with BEAD requirements. NCDIT’s efforts incorporate various outreach, engagement, and coordination activities among stakeholders, including counties, to ensure that all North Carolina communities will benefit from broadband expansion and digital equity efforts.
Click here for more information on North Carolina’s BEAD implementation and Digital Equity Planning.
The BEAD program is part of the Internet for All initiative — a $45 billion national program established by the bipartisan Infrastructure Investment and Jobs Act — announced in May 2022 in Durham County. The Internet for All initiative was launched with three federal Notices of Funding Opportunity:
Broadband Equity, Access, and Deployment (BEAD) Program
The BEAD Program expands high-speed internet access by funding planning, infrastructure deployment and adoption programs across the country. To participate in the BEAD program, states and other eligible entities must submit a letter of intent and a planning funds budget, which will unlock $5 million in planning funds and allow states to begin creating their five-year action plan. Each participating state is guaranteed a minimum $100 million allocation, with additional funding determinations made based on coverage maps from the Federal Communications Commission.
Enabling Middle Mile Broadband Infrastructure Program
The Enabling Middle Mile Broadband Infrastructure Program will award grants on a technology-neutral, competitive basis to eligible entities for the construction, improvement, or acquisition of middle-mile infrastructure.
State Digital Equity Act Programs
Digital Equity Act programs invest $1.5 billion to heighten adoption and use, like digital literacy training for those who need it most, including communities of color, rural communities, and older Americans.
In July 2021, Governor Cooper announced the creation of the nation’s first Office of Digital Equity and Literacy, to expand digital literacy offerings and partnerships across North Carolina, lead the Digital Equity and Inclusion Collaborative, and promote the NC Digital Inclusion Playbook for local municipalities.
NCDIT is currently using federal planning funds to conduct needs assessments, identify digital barriers, and set policy priorities in order to develop various components of a multi-year strategy to help ensure all North Carolinians have access to an affordable, high-speed internet connection. The strategy will also include efforts to provide access to the devices and skills necessary to participate in the modern digital economy. NCDIT also aims to ensure North Carolina’s broadband maps reflect unserved and underserved locations and that residents know how to access state maps and submit challenges to the FCC’s National Broadband Map (See section on Broadband Mapping for more information).
NCDIT’s planning process began on February 7, 2023, and incorporates various outreach, engagement and coordination activities among stakeholders, including counties, to ensure that all North Carolina communities will benefit from broadband expansion and digital equity efforts. North Carolina is guaranteed a minimum of $100 million in BEAD funding with additional funding possible.
Click here for more information on BEAD and Digital Equity Planning and to access Digital Equity Resources, including a survey and promotional toolkit.
Infrastructure/Awareness and Digital Literacy/Administrative
Infrastructure ($971M)
Ensure availability of internet service at speeds of at least 100/20 Mbps for more than 98% of NC households.
Awareness and Digital Literacy ($50M)
Improve awareness and enable all NC citizens to realize the benefits of high-speed internet through digital literary allowing access to the digital economy.
Administrative ($15M)
Supplement existing NC capacity to support high speed internet efforts.
Stop Gap Solutions
This program invests $90 million in grants for the installation of broadband infrastructure to address certain last mile issues, such as line extension projects and broader technology types that require more thorough review. Eligible applicants include providers, counties, municipal governments, and non-profits. Program requirements are currently under development.
Broadband Pole Replacement
As of February 7, 2024, the NC Department of Information Technology (NCDIT) began accepting applications for pole replacement reimbursement from service providers back to June 1, 2021. The NCDIT posted its final guidance for the Broadband Pole Replacement Program on November 27, 2023. The program was established with $100 million in ARPA Funds to facilitate the deployment of high-speed internet service. The program allows utility pole owners to request reimbursement for pole replacement costs.
How Counties can Fund Broadband in NC
Counties can only invest in certain broadband projects in eligible areas, using funds from limited sources.
Counties have limited means to contribute funds toward broadband infrastructure projects. However, thanks to historic federal funding for pandemic recovery and new statutory authority granted by the North Carolina General Assembly in 2021, counties have new opportunities to partner with the state and internet service providers to expand broadband access to their residents.
American Rescue Plan Act (ARP/ARPA)
The American Rescue Plan Act provided direct pandemic recovery funds to counties through two federal programs, the State and Local Fiscal Recovery Fund Program (SLFRF) and the Local Assistance and Tribal Consistency Fund (LATCF). Counties can use either SLFRF or LATCF to invest in broadband projects and both sources of funds may be used as matching funds for the GREAT Grant and CAB programs (these two sources of federal pandemic recovery funds have their own unique reporting and compliance requirements that the county must meet when spending these funds). Counties should work with the County Finance Officer and Attorney to ensure the county complies with all U.S. Treasury eligibility and reporting requirements and abides by all applicable federal uniform guidance administrative requirements. Counties should also ensure they maintain proper documentation supporting determinations of costs and applicable compliance requirements, and how they have been satisfied as part of their award management and internal controls.
All North Carolina counties can use up to $10 million of their ARPA SLFRF allocation to reimburse the county for general government services expenses, such as employee salaries and benefits and other operational costs under SLFRF’s Revenue Replacement expenditure category (E.C. 6.1). Using ARPA SLFRF revenue replacement funds to reimburse the county for these types of eligible costs frees up the county’s general fund monies. Once the reimbursement is made, these freed up general fund dollars are considered unrestricted general fund revenue and can be used for broadband investments. Similarly, counties may use LATCF funds to reimburse the county for eligible operational expenses and invest the freed up general funds in broadband projects. Using freed up and unrestricted general funds provides more flexibility with timing because once the reimbursement is made, these funds are no longer considered ARPA dollars. This means ARPA rules, including the obligation and expenditure deadlines, no longer apply to the funds once they are converted to unrestricted general funds.
Unrestricted General Funds
The portion of county revenue that is considered “unrestricted” is limited and DOES NOT include property tax revenue. Unrestricted general fund revenue can come from certain ARPA reimbursements, unrestricted portions of sales tax, recreation fees or transfers from another fund. Counties may invest unrestricted general fund revenue in eligible broadband projects either as a cost match for state-administered programs, or in separate projects in “unserved areas.” However, if a county takes a “go it alone” approach, funding a broadband infrastructure project outside of the state-administered programs, it will limit the county’s ability to leverage valuable state resources.
Freed Up General Fund Revenue - Counties that use federal ARPA funds to reimburse the county general revenue fund for eligible government operations expenses may use those freed up general funds for broadband investments (see section on the American Rescue Plan Act). Using federal ARPA funds to directly pay for other county priorities (outside the SLFRF revenue replacement category), or covering future salaries and benefits, may not result in freed up unrestricted general funds. The county would need to distinguish between activities funded through sales tax or property tax and if the ARPA funded activity is usually paid via property tax, it would be considered restricted.
Sales Tax Revenue - Counties may use the unrestricted portions of sales tax revenue for broadband investments. County revenue from local options sales taxes is a mix of restricted and unrestricted revenue. Under NC G.S. 105-487 and NC G.S. 105-502 (a), counties must use a portion of revenue from Articles 40 and 42 for public school capital outlay. Otherwise, the remainder of a county’s net revenue under these two articles is unrestricted, as is all net revenue from Article 39 and Article 46.
Transfers From Other Funds – While there is a mechanism outlined in G.S. 159-13(b)(14) for local governments to transfer monies from an enterprise fund to another fund to use extra revenue generated from an enterprise activity for other purposes, there are significant limitations and consequences to consider. For example, G.S. 159G-37(b) prohibits a local government from receiving loans or grants for water or wastewater purposes from the Clean Water State Revolving Fund (CWSRF), Wastewater Reserve, Drinking Water State Revolving Fund (DWSRF), or Drinking Water Reserve if the unit has transferred money from its water or sewer enterprise fund to the general fund to supplement the resources of the general fund.
- Click here to read the UNC SOG blog for more information about the limitations and consequences of transferring money from an Enterprise Fund.