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GREENSBORO - The financial crisis could put the brakes on local bond projects including school and jail construction and the expansion of GTCC.

Guilford County commissioners and their staff met with the school board Tuesday to discuss dwindling coffers and the outside possibility the bonds approved last spring may not sell in January.

"I've never seen a situation like this," county Finance Director Brenda Jones Fox told the group. "Typically, we don't even give it a thought that our bonds wouldn't sell."

On Jan. 13 the county will attempt to sell $232.6 million in bonds of the $651.4 million approved earlier this year and $23 million from the 2004 referendum.

That bond issue would pay for more than $39 million for the county jail project, $40.5 million for building GTCC facilities, $100 million for school construction and $45 million to rebuild Eastern Guilford High School.

Depending on the status of the municipal bond market - which stalled in the early days of the credit crisis - when the county tries to sell them, the following could occur:

l Interest rates are higher than expected - maybe 5 to 6 percent - but still low enough that lower construction costs - resulting from the poor economy and low oil prices - offset it.

l The market is so poor that the county can't find buyers, delaying all the projects.

l The market is so poor that it forces interest rates too high to make selling the bonds wise.

In response to a request to the state for information on bond anticipation notes, the state sent a letter Friday to Fox urging the county not to begin bond projects that it doesn't have money in hand for.

Fox, who was directed to explore the option, said the notes would have acted as a funding "Band-Aid" until the January bonds are sold.

Wake County received such a stopgap in October after several projects under way there were unfunded when it attempted to issue bonds as the credit market froze in late September.

However, Deputy State Treasurer Vance Holloman said in the letter that Guilford shouldn't look to issue the short-term notes.

And Guilford County doesn't need the special funds, according to David Grantham, the county property management director.

"Everything that we've got going, the bonds have already been issued," he said.

Fox believes the $100 million bond issue in January would carry school construction through spring 2010.

As for the money on hand, the schools have about $12 million from a 2003 bond issue that is not already obligated to projects under way.

At GTCC - where enrollment has nearly doubled since the 1997-98 academic year to more than 11,200 students this fall - stalled bond sales mean facilities won't keep pace with growth.

A $12 million parking deck with spaces for 400 cars at the Jamestown campus is the first casualty.

"The design is done and the surveying has started on the parking deck, but they haven't started moving dirt," GTCC President Donald Cameron said.

"We were hoping to have that deck up and ready by August '09, but if we have to delay on the bonds now we won't make that date. ... Any delay there, we would not be ready by next fall."

More important than parking spaces is a three- or four-building, $60 million project on the new GTCC Northwest campus. The 100 acres of land off N.C. 68 will someday house expanded automotive and welding facilities, a business and industry training center, and a supply chain and logistics institute.

"Architects are working on the plans right now," Cameron said.

If the bonds don't sell in January, Fox said it could be months before they attempt it again.

However, at least one municipal bond expert is optimistic about the county's ability to sell in January - partly because of its AAA credit rating.

"High grade securities like the county should have reasonably good market access," said Matt Fabian, managing director at Municipal Market Advisors. "The high grade securities market is recovering, it actually has pretty much won back all of the losses it had in October."

The bond market troubles are not expected to affect the city of Greensboro, which does not plan to sell bonds until 2010.

Staff writers Jeff Mills, Gerald Witt and Amanda Lehmert contributed to this report.

Contact J. Brian Ewing at 373-7351 or brian.ewing @news-record.com