The Robeson County town of Rowland has 30 days to establish a viable long-term financial plan or risk a takeover from the state, the Local Government Commission said Tuesday.
Rowland, home to about 900 people, has been on the commission’s watch list since 2020, and previously in 2015 and 2016. The commission, which provides oversight to local governments, said the town has missed audit deadlines, used restricted grant funds for day-to-day operations, did not have enough money in its water and sewer fund, and had “other financial management deficiencies.”
“We have significant concerns about the town of Rowland and whether or not it’s viable,” commission member Tracey A. Johnson said during a public meeting Tuesday.
Rowland Mayor Robert McDougald, who was elected in 2021, and Town Clerk John Lewis IV told the nine-member commission the town is considering raising its property tax rate and water and sewer rates. It also plans to reduce its public safety department from six to three employees to cut costs, they said.
“I would really like to begin by acknowledging that we do realize that decisions have been made that were detrimental to the town, and we also feel like those decisions that were made were unbeknownst to the leadership,” McDougald told the commission. “And it’s unfortunate, but it happened.”
The town has missed the state’s deadline to file financial audits for the last four years, according to the commission. The most recent audit was due December 31, and the town submitted it in June.
The 2025 audit shows the town spent more money than it had budgeted in several areas, according to the commission. Transportation costs exceeded the appropriated amount by nearly $519,000. Public safety costs went over by about $58,000.
Meanwhile, the commission noted, the town’s water and sewer fund has operated at a loss for the last four years. The fund had a negative $186,900 as of June 30, 2025.
In late April, the commission notified Rowland officials that the town owed the U.S. Department of Agriculture a debt service payment of more than $55,000 on June 1, documents show. But town leaders said they were “blindsided” when the money was taken from the town’s bank account, according to the commission.
“The Town’s failure to anticipate known debt service payments raises concern about whether it is adequately maintaining its debt records, planning for upcoming obligations, and ensuring that sufficient funds will be available to make future payments when due,” the commission said.
Audits in 2024 and 2025 showed the town improperly used nearly $202,000 in restricted funds–including more than $65,500 from a state downtown development grant–to pay for government operations.
Rowland’s general fund had a deficit of more than $167,000 as of June 30, 2025, and the town owed nearly $153,000 in unpaid bills as of last month, according to the commission.
The commission says its staff met with Rowland officials in October 2024, twice in 2025, and last February to discuss how the town could rebuild its fund balance. Commission staff provided financial training and supplied sample budgets.
Staff identified “additional concerns” about the town’s proposed budget in June and met with town leaders in late July, documents show.
McDougald said the town increased its water and sewer rate by 5% this year. More rate hikes are likely on the way, he said:
“We’ll probably need four or five increases in order to get up to where the standard level should be, and we are willing to do that.”
McDougald and Lewis IV also told the commission they hope Rowland will see economic growth now that the Lumbee Tribe of North Carolina became federally recognized late last year. In June, tribal members rejected a plan to amend the tribe’s constitution to build a casino along Interstate 95 near Rowland, but Lumbee leaders have said they are considering other ways to move forward with the project.
Town leaders are expected to meet with the Local Government Commission in 30 days from Tuesday’s meeting. The commission could decide to take over the town’s finances.
“I think the town has some semblance of a plan,” commission member Scott Hughes said. “It may or may not work.”