March 6, 2015 - 9:00 AM - County Board of Commissioners Meeting Minutes (Special)

10 476 Meeting of the Johnston County Board of Commissioners March 6 , 2015 Special Meeting Annual Work Session The Johnston County Board of Commissioners met in special session Friday , March 6 , 2015 in the Johnston County Human Resources Building Training Room , 204 S Second Street , Smithfield , North Carolina The following members were present Present Chairman Tony Braswell , Vice Chairman DeVan Barbour , Cookie Pope , Allen L Mims , Jr , Jeffrey P Carver , Ted G Godwin , and Chad M Stewart Absent None Also Present Rick J Hester , County Manager , Paula G Woodard , Clerk to the Board , J Chad McLamb , Finance Director and Assistant County Manager , Tyson Radford , Assistant Finance Director , Martha Lasater , Debt and Grant Management Analyst , Jennifer J Slusser , County Attorney , and Dana Cuddington , Paralegal Deputy Clerk to the Board Chairman Tony Braswell called the meeting to order at 9 00 am and welcomed everyone to the meeting 1 Work Session Expectations Board Priorities for 2015 The Commissioners briefly discussed their expectations for the work session , as follows • Commissioner Ted G Godwin stated he would like to discuss and get some direction on solid waste disposal funding options as well as the services and related funding for the Johnston County Area Transit System JCATS • Commissioner Cookie Pope commented that Economic Development is at the top of her list for job creation • Commissioner Chad M Stewart agreed with Commissioner Pope on the importance of Economic Development and job creation Commissioner Stewart stated he is interested in discussing and better understanding the Atlantic Coast Pipeline project as well as the County’s finances • Commissioner Allen L Mims , Jr stated he would also like to discuss funding for solid waste disposal in the hopes of reaching some kind of consensus Commissioner Mims stated growth trends are a topic of interest to him and how future growth could impact the school system • Commissioner DeVan Barbour noted the items on the agenda are the same issues the Board looks at each year Commissioner Barbour continued that he would like to discuss the items and come to an understanding on some of them where the Board could possibly take some kind of action • Commissioner Jeffrey P Carver stated he is very interested in discussing the finances and how the County can achieve a “ AAA ” bond rating • Chairman Tony Braswell stated what the Board does in the next couple of years could define the County for the future He added the Board must look not only at tomorrow but ahead at 5 , 10 , and 15 years down the road Chairman Braswell commented he also feels the Board needs to look at ways of handling the courthouse space needs on a long term basis and establish a plan Chairman Braswell noted he feels the court system needs to look at their operations to see if there is a better way 2 Financial Update – Davenport & Company , LLC Kyle Laux , with Davenport & Company LLC , presented the annual financial update Mr Laux reviewed the following information with the Board Background • During the past several years Johnston County managed its finances through the Great Recession in a manner that allowed the County to – Maintain and or enhance its Credit Ratings ;Page477 March 6 , 2015 – 2015 Annual Work Session – Continued – Refinance for significant debt savings ; and – Maintain the County’s property tax rate • The County finished Fiscal Year 2013 and 2014 with a surplus in the General Fund owing to strong management from the Board and staff as well as gradually improving economic conditions • It is hoped that Fiscal Year 2015 will be better than the original budget as a result of continued strategic management and improving economic conditions • Despite growing revenues and improving economy , the County will continue to be faced with the challenge of balancing these revenues against increasing expenditure needs • A 64 million referendum for School and Community College projects was successfully approved by voters with over 70 approval in the Fall of 2013 • The first tranche of General Obligation Bonds for the Fall , 2013 Referendum was competitively sold in early calendar year 2014 The results were highly favorable with an all - in borrowing cost of 333 • As part of the process of updating the County’s credit ratings for the 2014 bonds , Moody’s gave the County’s rating a “ Positive Outlook ” A “ Positive Outlook ” typically means that a rating agency expects to increase a rating with two years if positive trends continue • The County was able to successfully refinance an additional 15 million of General Obligation Bonds in the Fall of 2014 This refinancing saved roughly 1 million in debt service over the life of the loan • In total , the County has saved over 26 million via strategically refinancing existing debt for savings since 2010 Mr Laux pointed out the 26 million in savings since 2010 through refinancing is to be commended He credited the County staff for staying on top of refinancing opportunities and noted Davenport continues to watch for more opportunities Mr Laux stated if the County’s credit ratings were not as good as they are , the savings would have been much lower He stated the higher the credit rating , the greater the ability to refinance existing debt for savings and or when borrowing new money it helps get the lowest interest rate Mr Laux continued his presentation by reviewing goals and objectives as well as a history of Johnston County’s credit ratings and rating agency comments He noted the County is one step away from a “ AAA ” rating with Standard & Poors and two steps away from a “ Aaa ” with Moody’s Goals & Objectives • Review recent rating agency commentary and results with the Board • Review the impact of the successful Fall 2013 referendum on the County’s multi - year capital planning • Estimate the County’s capacity to incur additional indebtedness for further capital investment beyond the Fall 2013 referendum • Provide suggestions as to ways that are directly within the County’s control to further strengthen County’s standing with the rating agencies and the credit markets History of Johnston County’s Credit Ratings • The County’s general obligation credit ratings have been increasing steadily during the past decade • Moody’s recently gave the County’s rating a “ Positive Outlook ” • The positive outlook typically means that the rating agency sees the potential for an upgrade in the next several years if the currently positive trajectory in key rating criteria continues Page478 March 6 , 2015 – 2015 Annual Work Session – Continued Moody’s Commentary • “ The Aa2 rating reflects the County’s diverse and growing local economic base part of a larger regional economy , a strengthened financial position , prudent management , and a somewhat elevated debt position due to rapid growth The assignment of the positive outlook is based on future economic growth potential , expected adherence to sound policies and growth and maintenance of reserve levels ” • “ Strengths – Large , diverse and growing tax base – Favorable location adjacent to Research Triangle Page479 March 6 , 2015 – 2015 Annual Work Session – Continued • Challenges – Resident income levels relatively low for rating category – Some reliance on unpredictable sales tax revenues – Slightly elevated debt ” • “ What would make the rating change – UP – Achievement and maintenance of financial flexibility in line with higher rating categories – Strengthening of tax base and demographic profile to levels more consistent with higher rating categories ” • “ What would make the rating change – DOWN – Depletion of General Fund balance – Deterioration of the County’s tax base and demographic profile ” Commissioner Ted G Godwin asked how the rating agencies define a “ strong tax base ” Mr Laux stated the rating agencies look at the size of the tax base relative to other entities that are rated within certain categories He stated another metric the agencies use is assessed value per capita which is the overall tax base relative to the population He stated they also look at how diverse the tax base is Mr Laux continued by reviewing commentary from Standard & Poors , noting when assigning a rating , Standard & Poors takes into account management , if there are policies in place and are those policies being followed , as well as multi - year planning Upon a question by Commissioner Chad M Stewart , Mr Laux stated by having a 20 fund balance it will not necessarily get the County a “ AAA ” rating He stated the fund balance is a significant part of the rating , but another big part of the rating is the economy which includes things beyond the County’s control such as unemployment , per capita income , etc S & P Commentary • “ The AA + rating reflects our opinion of the County’s – Adequate economy that benefits from its participation in the Raleigh metropolitan statistical area MSA ; – Very strong budgetary flexibility , demonstrated by a very strong available fund balance ; – Strong budgetary performance , reflected by operating surpluses in fiscal year 2013 and projected near break - even operations for fiscal year 2014 ; – Very strong liquidity , providing very strong cash to cover debt service and expenditures ; – Strong management , reflected by “ good ” financial management practices and policies under our Financial Management Assessment methodology FMA ; and – Adequate debt and contingent liabilities , driven primarily by net direct debt of more than 100 of revenue ” • “ The stable outlook reflects Standard & Poor’s opinion of Johnston County’s growing employment base and strong budgetary flexibility Due to continued population growth , we believe it is important for management to address any budgetary pressure that could occur from this growth while maintaining , what we consider , sound operations and strong reserves ” • “ All other factors remaining equal , we could lower the rating if growth or any other pressure were to contribute to operating deficits that weaken available fund balance ” • “ Conversely , we do not expect to raise the rating within the two - year outlook period because we believe the adequate economic score limits the rating ” • Note S & P indicated that formalized multi - year financial planning that takes into account Operating Revenues and Expenditures , Debt Service , and Fund Balance levels will be an expectation for local governments with the County’s rating going forward – especially for a growing local government Moody’s also takes into account whether multi - year financial planning is formally completed Fund Balance Trends • After dropping below the policy level during the height of the recession , the County’s fund balance is back above the policy level Maintaining or enhancing this level will be important for future credit rating improvement PagePage pageNumber5480 March 6 , 2015 – 2015 Annual Work Session – Continued • Preliminary estimates for fiscal year 2015 look positive in terms of the ability to further add to Fund Balance Comparative Fund Balance • The graph below shows comparative data from Moody’s for available general fund balance versus revenues • The eight listed North Carolina County’s show are all rated “ Aa1 ” ie , one notch higher than the County’s current rating Commissioner Allen L Mims , Jr commented that he believes a 40 fund balance is too high and this Board believes that since it is the taxpayers ’ money , with a 40 fund balance taxes should be lowered Mr Laux stated at the end of the day , the Johnston County Commissioners must look after the Johnston County citizens and their best interests and run the County in the way the Board sees best for its taxpayers Mr Laux reiterated that although the fund balance is one of the first things the rating agencies look at , it is not the only piece Mr Laux stated he does not believe the County needs to be at a 25 fund balance to reach a “ Aa1 ” rating with Moody’s , although it may be a challenge Mr Laux continued his presentation by discussing the recent refinancing opportunities and debt capacity update PagePage pageNumber6481 March 6 , 2015 – 2015 Annual Work Session – Continued Refinancing Opportunities • Davenport continually monitors the County’s outstanding debt for refinancing opportunities • Given the historically low interest rate environment there may be additional opportunities to refinance for savings purposes • Davenport and staff are working to incorporate the ability to refinance for savings with the next planned GO Bond sale in late March Debt Capacity Update • The amount of new debt the County can responsibly take on can be separated into two concepts – Debt Capacity ? The ability of incur additional indebtedness and maintain important financial ratios in - line with County policies and municipal “ Best Practices ” especially as it relates to the rating agencies – Debt Affordability ? The budgetary impact of funding payments on additional indebtedness Capital Planning Key Assumptions • Existing tax supported debt service after completion of the Fall 2014 refunding is factored into the analysis • The balance of the Fall 2013 referendum is planned to be issued in two additional series , as follows – FY 2015 18 million planned to be sold on March 31 , 2015 – FY 2016 27 million – Payments on the remaining issuances for the Fall 2013 referendum are assumed to commence a year after issuance ie , payments begin FY 2016 for the FY 2015 issuance – Debt is structured with 1 year of interest only and 19 years of principal amortization within the 4 1 rule to achieve declining aggregate tax supported principal – The interest rate is assumed to be 5 Note Current borrowing rates in the tax - exempt marketplace are well below this level That said , there is no way to predict what interest rates will be into the future As such , Davenport’s estimates purposely use an above market rate for planning purposes • The Fiscal Year 2015 budget roughly 186 million is used as the base for purposes of projecting the debt service versus expenditures ratio Future growth is assumed to equal 25 per year • Assessed value of property is assumed to be approximately 141 billion for Fiscal Year 2014 Future growth is assumed to equal 25 per year except Fiscal Year 2020 which assumes 4 growth due to revaluation • 36 million of incremental additional property tax revenues tied to potential revaluation and potential new revenue from regional gas line project are assumed to be available for debt service beginning in Fiscal Year 2020 PagePage pageNumber7482 March 6 , 2015 – 2015 Annual Work Session – Continued • The 10 year payout ratio of County tax supported debt is projected to remain above 70 Cash Flow Impact of 2013 Referendum Debt Affordability • The positive result of the 2014 new money bonds and the 2014 refunding bonds has translated to a lower projected cash - flow impact for the entire 64 million 2013 referendum than was originally planned • The table below demonstrates the incremental annual cash - flow impact of the entire 2013 referendum with the actual results of the 2013 bonds incorporated Note Assumes 18 million issued in Fiscal Year 2015 and 27 million issued in Fiscal Year 2016 at an estimated 5 interest rate 2013 Referendum Impact on Debt Capacity • With the inclusion of the Fall 2013 referendum the County will remain in compliance with its debt related financial policy guidelines • The County’s capacity to issue additional indebtedness versus the debt service vs expenditures ratio is projected to increase over the next five fiscal years • The 10 year payout ratio never drops below 70 which is well above the County’s policy minimum of 50 Future Debt Capacity • Johnston County continues to be a growing and economically vibrant local government • As such , the need to continue to invest in and expand capital infrastructure will continue to be critical for the County PagePage pageNumber8483 March 6 , 2015 – 2015 Annual Work Session – Continued • The County has historically focused the bulk of capital investment on school infrastructure It is expected that other general government needs will also need to be addressed in the foreseeable future Key Assumptions for Future Debt Capacity • For purposes of projection it is assumed that the County – Issues roughly 15 million per year in new long - term debt beginning in Fiscal Year 2017 through Fiscal Year 2021 ie 75 million in total ; – It is assumed that the new long - term debt is structured within the North Carolina 4 1 rule with an estimated 5 interest rate ; – A single issue of shorter term debt is included in Fiscal Year 2016 The amount is estimated to be 36 million repaid over four 4 years at a 3 interest rate ; – An additional 14 million of annual expenditures is included to account for additional general fund expenditure pressures Cash - Flow Impact of Future Debt Issuance Debt Affordability • The table below demonstrates the incremental annual cash - flow impact of the entire 2013 referendum PLUS the addition of 15 million per year for five years beginning in Fiscal Year 2017 Future Debt Impact on Debt Capacity • With the inclusion of the Fall 2013 referendum AND a potential 15 million per year beginning in Fiscal Year 2017 the County remains in compliance with its financial policies although little additional capacity remains • The 10 year payout ratio never drops below 70 which is well above the County’s policy minimum of 50 PagePage pageNumber9484 March 6 , 2015 – 2015 Annual Work Session – Continued Mr Laux summarized his presentation with the following bullets He commended the County on getting through the recession noting it actually came out stronger He noted interest rates are still favorable and they will continue to monitor the debt for any refinancing opportunities Summary • Johnston County managed through the Great Recession and is poised to continue to grow and deepen its economy • This strategic management has been a major factor in the County’s recent trend of positive rating results • In order to continue the positive rating trajectory there are several areas within the County’s control that could influence future rating improvement – Maintaining or enhancing existing fund balance levels ; and – Multi - year financial planning • Economic and demographic trends , which are not directly in the County’s control , will also be important to further rating improvement ie , income levels , unemployment levels The County’s Economic Development strategies will help in this area • Interest rates remain favorable Davenport will continue to monitor the County’s debt portfolio and include any viable refinancing with the County’s next planned issuance of General Obligation bonds in late March Mr Laux offered to answer any questions Commissioner Ted G Godwin asked when the rating agencies look at counties , how much is the tax rate level considered in that if the County were to lower the tax rate would it affect the rating Mr Laux responded the rating agencies ’ bias is if a County lowers the tax rate to lower revenues then it concerns them He continued the agencies care about competitiveness and looks at things from a regional standpoint Commissioner Jeffrey P Carver stated one thing the rating agencies look at is does the Board have the fortitude to raise taxes if something bad happens in order to pay the bills Mr Laux agreed that the rating agencies look at the ability to pay as well as the willingness to pay The Board thanked Davenport for the information Mr Laux stated Davenport would continue to monitor the finances and provide information as needed 3 North Carolina Department of Transportation – Subdivision Streets Discussion Commissioner Allen L Mims , Jr stated he asked for the subdivision streets item to be on the agenda because the Board has been receiving calls and e - mails from citizens regarding needed road improvements in a subdivision that had already been taken over by the Department of Transportation County Manager Rick Hester noted the County also receives many inquiries and complaints from citizens regarding improvements needed on roads that have not been taken over by the Department of Transportation Department of Transportation Division Engineer Tim Little addressed the Board He thanked the Board for inviting him to attend the work session Mr Little reviewed the following presentation with the Board regarding the subdivision street acceptance process Page0485 March 6 , 2015 – 2015 Annual Work Session – ContinuedPage1486 March 6 , 2015 – 2015 Annual Work Session – Continued Mr Little stated the law changed on October 1 , 1975 which specified that after this date , any roads to be taken over by the Department of Transportation must be in an acceptable form of maintenance He continued that for roads existing prior to October 1 , 1975 there is another set of criteria Mr Little explained in order for the Department of Transportation to take over a road , there has to be a minimum of two homes per tenth of a mile with a minimum of four homes He added that 80 of the homes have to be privately owned and if half of the homes are rented , then the road cannot be accepted into the State system Page2487 March 6 , 2015 – 2015 Annual Work Session – Continued At the inquiry of Commissioner Jeffrey P Carver , Mr Little stated it is his opinion that the logic behind the Department of Transportation not accepting roads due to rental houses is perhaps if everyone is renting the houses on the road then they would not have any stake in the matter , although he reiterated that is his opinion Commissioner Chad M Stewart stated if a developer chooses not to maintain a private road what would happen if the road deteriorated to the point where it became a safety hazard in emergency situations Mr Little responded the Department of Transportation did an assessment ten years ago of all the privately maintained roads in the State and just in Johnston and Wayne Counties alone which was his jurisdiction , there were over 1,000 privately maintained roads that fit the criteria of deteriorating to the point of a hazard situation Mr Little explained a lot of times these older roads were maintained by someone that lived there who owned a tractor and could keep the road maintained ; however , when those people move or pass away , no one is left to take care of the road Mr Little stated he can personally speak to the safety issue as a member of a local fire department that they often have to transport people on fire trucks to ambulances on such roads just to get them to safety because the road is in such bad condition He stated at the end of the day , the Department of Transportation does not have the funding to bring such roads up to standard , even if the law provided for it Mr Hester noted the County has a residential road paving policy in place ; however , because it requires a majority of the people on the road to agree to be assessed to recover the construction costs , no one has taken advantage of the program Mr Little confirmed that 75 of the homeowners would have to agree to be assessed , but 100 of the homeowners on the road would have to pay the assessment Commissioner Ted G Godwin asked how the property owners are assessed Mr Little stated the property owners would be assessed on their property tax bills Planning Director Berry Gray confirmed the assessment is done over a five year period and the policy was written with no interest Chairman Tony Braswell asked how the Department of Transportation prioritizes maintenance of roads that are already accepted into the State maintained system Mr Little stated for roads that are already accepted into the State maintained system , the Department of Transportation has a three year paving program which shows every road in the County to be paved over the next three years He stated their maintenance program depends on citizens to call and report potholes and other issues as well as staff makes note of needed improvements when they are traveling Mr Little stated the improvements are prioritized according to their budget Commissioner Mims stated the Department of Transportation has been accepting a lot of roads into the State system and he asked if their schedule is behind on keeping the roads maintained noting the Commissioners have received e - mails with complaints and noted one in particular where the citizen reported they were told the Department of Transportation did not have the money to repair the road Mr Little stated 95 of the problems within subdivisions involve resurfacing issues and he believes the Department of Transportation is in good shape with the money they are getting for resurfacing He noted a lot of subdivisions are or are going to be addressed very soon Mr Little stated the worse the road is , the quicker they are going to get to it The Board took a 10 minute recess 4 Economic Development Update Economic Development Director Chris Johnson updated the Board on the activities of the Economic Development Office Mr Johnson stated the Economic Development Office has been increasing their presence with social media to promote Johnston County He thanked the Board again for relocating Economic Development to the Johnston Regional Airport noting he has been able to meet with site developers that flew in without anyone’s knowledge Mr Johnson reviewed the following presentation with the Board Page3488 March 6 , 2015 – 2015 Annual Work Session – ContinuedPage4489 March 6 , 2015 – 2015 Annual Work Session – Continued Mr Johnson introduced John Nelms , Economic Development Manager for Duke Energy Mr Nelms stated just this week Duke Energy has selected the Hargis Site in Johnston County to be a part of their Site Readiness Program He stated the Site Readiness Program was started in 2005 by Duke Energy because they saw a need to increase the inventory of quality sites for development Mr Nelms stated they are pleased to be working with Mr Johnson and Johnston County on this opportunity Jazz Tynell , Senior Manager of Government Relations for Piedmont Natural Gas , introduced Piedmont Natural Gas Vice President of Sales Bill Williams , Community Relations Manager for the Eastern Region Tammy Thurman , Leadership Associate Alicia Johnson , and Managing Director for Major Accounts Ron Mays Marty Clayton , Vice President of Corporate Public Affairs with Duke Energy , introduced Mike Hughes as the Duke Energy Vice President of Community Relations Mr Clayton stated they are pleased to be a part of the discussions regarding the Atlantic Coast Pipeline Project Mr Johnson spoke on the importance of natural gas for the future of not only Johnston County , but eastern North Carolina He stated it will build availability and capacity while being an environmentally more efficient and cleaner source of energy Mr Johnson stated more and more industries are looking for sites with natural gas and he wants to make sure Johnston County is in the best possible position to offer that service Chairman Tony Braswell stated the Board’s concern is how Johnston County can work with everyone involved with the gas line project to make sure Johnston County is best positioned for the future Bill Williams , Vice President of Sales with Piedmont , stated one thing that can be done to explore opportunities for Johnston County is to plan for the future together He stated the key is communication and working together Commissioner Chad M Stewart asked about capacities once the transmission line is constructed and would there be any limits on capacities Mr Williams stated the pipeline will be sized at 42 inches and there will be three compressor stations He assured the Board that there will be plenty of capacity in the beginning and opportunities for expansion when needed Commissioner DeVan Barbour stated if there are specific things the County could be doing to position itself better to take advantage of opportunities then he would like to discuss those Mr Williams stated he would like to sit down with representatives of the County and look at maps to determine specific areas of interest as a first step He stated once those areas are identified , then more in depth planning can begin Upon a question by Chairman Braswell , Mr Williams stated once a user is identified , although there are a lot of steps to go through for permitting , he assured the Board that process could be done quickly to meet the need Page5490 March 6 , 2015 – 2015 Annual Work Session – Continued Commissioner Allen L Mims , Jr asked who pays for the gas extension to serve the end user Mr Williams responded it depends on the amount of gas the industry would use , but he noted they have some flexibility and would work with the end user Mr Johnson stated the natural gas companies and the electricity companies are heavily regulated and from a staff’s perspective he needs to keep communication lines open and plan for opportunities on the front end The Board briefly discussed the possibility of installing natural gas line extensions to areas of the County for economic development purposes Mr Johnson cautioned the Board against installing gas lines on a speculative basis noting that the County could install a 6 inch line only to later learn that a prospective industry needs a 12 inch line Mr Johnson continued his presentation with the Board , as follows Page6491 March 6 , 2015 – 2015 Annual Work Session – Continued The Board thanked Mr Johnson for the information as well as the Duke Energy and Piedmont Natural Gas Company representatives for their presence and dialogue at the meeting 5 Johnston County Area Transit System JCATS Update Chairman Tony Braswell stated there has been a lot of discussion lately surrounding JCATS and how rides are determined which is why the Board invited Mr Davis to the meeting to better understand their operations since JCATS is an independent agency from Johnston County JCATS Executive Director Neal Davis addressed the Board and introduced JCATS Board of Director Jimmy Parker and Transportation Advisory Committee Chairman Steve Strickland Mr Davis explained in some counties the transportation system operates under county government ; however , in Johnston County JCATS is a separate 501 c 3 nonprofit corporation that operates federally and state funded programs on behalf of the County Mr Davis stated because JCATS is not a part of county government , they are eligible to seek private grant monies that otherwise they would not have access to Mr Davis stated over the last several years , JCATS has come a long way He explained that every three years , JCATS must undergo a tri - annual compliance review with the State and Federal government to make sure they are spending grant monies properly and are in compliance with all regulatory agencies Mr Davis notedPage7492 March 6 , 2015 – 2015 Annual Work Session – Continued counties are put on a schedule to let them know when their turn is coming up ; however , Johnston County was notified just six weeks prior that they would be the first on the schedule for review whereas most counties receive as much as three years notice Mr Davis stated even with the short notice , he is pleased to report JCATS came through the inspection with flying colors Mr Davis explained that a lot of their programs involve transportation contracts with other agencies such as the Department of Social Services and Johnston County Industries He stated under those contracts , JCATS is hired to provide transportation for specified clients to wherever they need to go and the contract spells out how JCATS is reimbursed Mr Davis also noted JCATS receives grant funds to support their general public transportation whereby transportation is provided for anyone He noted anyone under the general public contract anyone can receive a ride to get to work , school , doctor’s appointments , or anywhere else they need to go Mr Davis stated the source of money for the general public transportation has a lot less restrictions ; however , it is a much smaller source of revenue Mr Davis continued that Johnston County has grown , and in particular , the older population has increased with folks being a lot less mobile than they would have years ago He stated JCATS is under increased pressure to provide more general public transportation than ever before but they are facing a situation where those funds are decreasing each year Mr Davis stated when he speaks about the issue to stakeholders such as the Towns , the Towns ’ concerns are they do not want to allocate funds towards something that they are not sure will directly benefit their taxpaying citizens which is a valid point Mr Davis stated in trying to come up with solutions to the problems , JCATS is proposing an entirely new model for Fiscal Year 2015 - 2016 He stated the idea is to enter into a contract with the County , or other entities , just like JCATS currently does with the Department of Social Services and Johnston County Industries whereby the contract sets out who will receives rides and then JCATS provides the rides and in turn invoices the County or other entity that entered into the contract Mr Davis stated this is one way that could address the concerns of the Towns in that if a Town entered into a contract with JCATS , then JCATS would provide a ride to those specified in that Town’s contract and would bill the Town for the service Mr Davis stated he believes if the County would agree to enter into such a contract perhaps others would follow He offered to answer any questions At the inquiry of Chairman Tony Braswell , Mr Davis stated such a program would help to address the gap in the general public transportation which are people who are not on Medicaid and are not eligible for any other type of program , but do not have access to transportation Chairman Braswell asked how riders are currently prioritized Mr Davis stated riders are prioritized according to the specific requirements of the funding programs and how much of those funds are available Mr Davis noted the general ridership funds have been cut by 54,000 was caused JCATS to decline approximately 1,000 rides Upon further discussion , Mr Davis reiterated that JCATS provides rides according to their contract requirements and funding program restrictions while trying to arrange the scheduling to be as efficient as possible He stated he is proud to report that JCATS runs at about 94 efficiency Mr Davis stated the proposed contract model is something that could be offered to any organization such as churches , towns , etc The Board thanked Mr Davis for the information The Board took a 30 minute recess for lunch 6 Solid Waste Disposal County Manager Rick Hester stated there have been a lot of different scenarios discussed recently regarding solid waste disposal funding Mr Hester shared with the Board a proposal that involves three components 1 keep and increase the decal fees gradually over time ; 2 look at requiring a recycling fee to be phased in over a couple of years ; and 3 a general fund contribution that would decline to zero in about 15 years Mr Hester noted with this proposal , it does not address the eventual closure of the landfill and further , any general fund contribution would affect future debt capacity He stated under the current proposal , the debt capacity could be impacted by approximately 6 million Mr Hester asked the Board to also keep in mind that revenues could change if the County were to negotiate new contracts for outside waste Page8493 March 6 , 2015 – 2015 Annual Work Session – Continued Upon a question by Chairman Tony Braswell , Mr Hester confirmed if nothing is done to address solid waste disposal funding then the general fund would have to cover the costs Mr Hester noted staff does have data available to show that a 10 recycling fee is fair and he noted there is data to show that the County could actually charge 1175 to cover all costs associated with recycling Chairman Braswell stated he would like for the Board to discuss the proposal submitted by the County Manager , ask any questions they have , do their due diligence and be ready to take some kind of action at the May regular meeting Commissioner DeVan Barbour asked if the Board made a decision in May , would it give staff enough time to implement whatever is adopted Mr Hester stated under the current proposal , it keeps the decals but increases them to 70 for next fiscal year so there would be no issues with timeframe Chairman Braswell stated decisions can be tough but one has to be made and if not , by default the general fund will have to support the program Commissioner Cookie Pope asked for more detail on the recycling fee Mr Hester stated the recycling fee under this proposal would be 1000 on the tax bills for all improved property both in town and out of town Mr Hester submitted documentation to the Board showing the cost of recycling and how much the landfill revenue is offsetting those costs Solid Waste Director Rick Proctor reviewed with the Board the items that are accepted as part of the recycling program in Johnston County and the associated costs of their disposal Mr Proctor also shared information with the Board regarding items that are accepted by the County but not in the Towns He noted electronics is an example whereby the County has contracts in place with the Towns to accept electronics but what staff is seeing is that the Towns are collecting and selling the valuable electronics and then leaving the other items that have no value with the County to dispose of Mr Hester pointed out that anyone living in the Towns can visit the convenience sites to dispose of recyclables without a decal Mr Proctor agreed and stated while citizens are currently allowed to recycle for free , the County must pay to deal with those items At the request of Chairman Braswell , Mr Proctor explained that several years ago when the fees were set for solid waste , the County was looking at sliding increases ; however , since that time , multiple items have been added to the prohibited list which must be dealt with Mr Proctor continued the County has also seen a decline in the waste stream at the landfill which has impacted revenues which were being used to offset costs with the convenience sites and recycling Mr Proctor stated the County has a little less than 14,000 decal holders currently Mr Hester stated his proposal assumes the Board will keep the same level of services such as recycling and the convenience center sites Commissioner Ted G Godwin asked what the main reason is for the decline in the waste stream Mr Proctor responded competition is part of it , private haulers , waste minimization , as well as increased recycling Solid Waste Consultant Kim Rineer stated staff met with other waste management companies who all reported a decrease in waste flow She stated there is less packaging these days and more recycling Ms Rineer stated the difference between the private companies and the County is that the private companies do not have to offer recycling services Ms Rineer stated trends show that the per household waste will continue to decrease and the market will become more competitive She stated if the County continues to offer the public service program convenience sites and recycling program the County will not be able to compete with private haulers Ms Rineer stated in the past the landfill was able to subsidize the public service program ; however , she does not see where that can continue in the future with the decline in the waste stream Page9494 March 6 , 2015 – 2015 Annual Work Session – Continued Solid Waste Consultant Tim Broome stated the public service program convenience sites and the recycling component has been bleeding 1 million a year from the landfill revenues Mr Broome stated in the past when a landfill cell needed to be closed out and a new one opened , the landfill could cover that cost ; however , today the County would have to borrow money to do that due to the landfill subsidizing the public service side of the program Mr Broome stated the subsidization can no longer continue Commissioner Godwin stated he believes at some point the Board must admit this is a public service and deal with it like that versus an enterprise fund Commissioner Allen L Mims , Jr noted the landfill operations could be leased to a private company Mr Proctor noted a private company would not operate the solid waste division like the County does or offer as many of the public services Chairman Braswell stated he supports a user pay system and he cannot see requiring the other county citizens to subsidize a service that they do not use Commissioner Godwin stated he sees solid waste as a public service much like education Commissioner Barbour stated the Board has discussed this issue and many proposals for years , but the bottom line is a decision needs to be made Commissioner Barbour commented it is obvious that no two Commissioners are on the same page at this point , but perhaps the Board needs to look at making a decision as a first step that can be modified later on He stated at least if a first step cannot be made , then the general fund will be affected as well as the debt capacity Mr Hester stated along with the current proposal staff would continue to look at potential contracts with outside entities to generate more revenue Chairman Braswell agreed with Commissioner Barbour that the Board needs to at least take a first step towards solving the solid waste funding situation He again stated he would like to put the item on the May regular agenda for some kind of action Commissioner Godwin stated everyone looks at the situation as to how it affects them personally when we need to be looking at how it affects the County in general Commissioner Mims noted there are a lot of government functions such as the Inspections Department , but that does not mean citizens get those services for free and they must pay for a permit when needed Commissioner Godwin stated he is a conservative and is not in favor of government doing everything , but when it comes to solid waste he believes it is a government function just like education and he feels the County is better off when there is a collective means to deal with trash Commissioner Jeffrey P Carver stated he is not in favor of putting anything on the tax bill and believes it should be a user pay system Commissioner Chad M Stewart spoke on the difficulty of the matter noting that he sees both sides of the issue Commissioner Stewart noted he hears from citizens that would rather have a fee on the tax bill so they would not have to deal with the decals , but he also hears from those citizens that believe in a user pay system Chairman Braswell asked if everyone was ok with putting the item on the April or May agenda He stated if no decision can be made , then by default it will go back to the general fund With no further discussion , Chairman Braswell instructed staff to put solid waste on the April agenda 7 Growth Trends Planning Director Berry Gray reviewed the following information with the Board Page0495 March 6 , 2015 – 2015 Annual Work Session – Continued Mr Gray stated growth trends are increasing and for 2014 there were 784 proposed units which are the lots that have been approved by the Planning Board but not yet on the ground He noted half of that 784 were re - submittals from where they were previously approved but expired after three years Mr Gray stated multi - family has been a new trend for Johnston County and those submittals are mainly in the Cleveland area of the County Mr Gray stated there is a lot of interest in multi - family He continued that the recorded lots probably reflect more of what is going on with the economy than the approved lots Mr Gray stated the recorded lots have increased from 2011 and 2012 Mr Gray stated there are 10,853 approved lots still valid with a lot of those being in the Flowers Plantation area , Cleveland Springs , Summerwind , and Tuscany Upon a question by Commissioner Allen L Mims , Jr , Mr Gray reported the County granted the Towns permission to extend their ETJs in 2007 and he noted Clayton took in a lot of places the County would normally have had jurisdiction over Mr Gray noted there are a few large developments in Clayton’s jurisdiction that are not counted in the County’s numbers Mr Gray reviewed population trends with the Board noting from 2010 to 2020 the County is looking at a growth rate of about 16 Mr Gray noted staff along with Commissioner Ted G Godwin continues to work with the Department of Transportation on plans for transportation improvements in Johnston County He briefly reviewed some ofPage1496 March 6 , 2015 – 2015 Annual Work Session – Continued the proposed transportation projects that are in the planning stages Mr Gray also noted the flood maps will be undergoing updates soon and the Board will be looking at that 8 Board Discussion and Adjournment The Board briefly discussed the financial situation of the County and the upcoming bond rating agency conference calls There being no further business , Commissioner Jeffrey P Carver moved the Board adjourn Commissioner Cookie Pope seconded the motion , which carried by unanimous vote The meeting adjourned at 1 45 pm Tony Braswell , Chairman Paula G Woodard , Clerk to the BoardPage