March 11, 2011 - 8:30 AM - County Board of Commissioners Meeting Minutes (Special)

10 313 Meeting of the Johnston County Board of Commissioners March 11 , 2011 Special Meeting Annual Work Session The Johnston County Board of Commissioners met in special session Friday , March 11 , 2011 at the Workforce Development Center located at 135 Bestwood Drive , Clayton , North Carolina The following members were present Present Allen L Mims , Jr , Chairman , Jeffrey P Carver , Vice Chairman , Cookie Pope , Wade M Stewart , W Ray Woodall , DeVan Barbour , and Tony Braswell Absent None Also Present Rick J Hester , County Manager , Paula G Woodard , Clerk to the Board , J Chad McLamb , Finance Director , Tyson Radford , Assistant Finance Director , Martha Lasater , Debt and Grant Management Analyst , David F Mills , County Attorney , Melissa A Daughtry , Paralegal Deputy Clerk , and Lu Hickey , Facilitator Chairman Allen L Mims , Jr called the meeting to order at 8 30 am 1 Approval Discussion of Agenda Opening Remarks Chairman Allen L Mims , Jr welcomed everyone to the work session and asked if there were any changes to be made to the agenda or any items that any Commissioners would like to discuss Chairman Mims also asked if any Commissioners had any opening remarks Chairman Mims asked everyone to remember the citizens of Japan as they are presently dealing with a major natural disaster of earthquakes and tsunamis There being no further comments , the Chairman called for the first update item to begin 2 Economic Development Updates Economic Development Director Peggy Anderson provided the Board with an update She reported that Northeast Foods will begin hiring in April with plans to startup in May of this year Becton Dickinson plans to startup their facility and should begin hiring possibly as early as September Ms Anderson stated Economic Development is working on four other large projects and if activity stays consistent , she expects a busy 2011 Allen Wellons , Chairman of the Johnston County Economic Development Advisory Board , thanked the Board of Commissioners for their past support to the Economic Development program He stated that Johnston County has had one of the best years in the State and he personally believes it is because of the policies and the Economic Development Advisory Board that the Commissioners have put in place Mr Wellons stated that the Board of Commissioners made an excellent decision in hiring Ms Anderson because she is able to effectively work with people which is one of the most important components when trying to recruit industry Commissioner Jeffrey P Carver noted that he read in the newspaper where Sysco Food Distribution has decided not to take advantage of their Jobs Development Investment Grant JDIG from the State of North Carolina and he asked if there would be any impacts to Sysco’s local Economic Development Incentive Grant EDIG with the County Ms Anderson confirmed that Sysco will not be receiving their JDIG from the State because they have not fulfilled the employment requirements they originally projected She stated that there would be no impact to the local EDIG with the County because job creation was not a part of the EDIG and it was based solely on investment Mr Wellons stated Sysco believes they will eventually fill the 600 jobs they projected ; however , because of the current economic climate , they may not create the jobs on the timetable they originally submitted to the State of North Carolina Commissioner Carver questioned if job creation is something that should be included as a component in the County’s EDIG program going forward Ms Anderson stated that job creation is something that the Advisory Board has discussed monitoring in the future Page314 March 11 , 2011 – Continued Chairman Allen L Mims , Jr commented that job creation as well as investment was taken into consideration on the County’s EDIG agreement with Talecris when negotiating their most recent expansion County Attorney David Mills reported that there are attorneys in the State of North Carolina that are of the opinion that constitutionally , the EDIG concept requires a job component Mr Wellons spoke on the importance of the tax investment by companies and stated he was unsure if the County wanted to add job creation as a component of the EDIG’s Commissioner Tony Braswell asked Ms Anderson if she was optimistic going forward in 2011 Ms Anderson reported that she is seeing larger projects with significant investments and job creation estimates evaluating Johnston County Ms Anderson noted that going forward the municipalities will have to work jointly with the County on locating projects Commissioner Braswell thanked Ms Anderson , Mr Wellons , and the Economic Development Advisory Board members for their work Commissioner DeVan Barbour asked about the climate of the existing industries in the County Ms Anderson stated there are a few projects being considered by existing industries in Johnston County to which the Economic Development Office is working closely with the industries to help them with their needs Commissioner Wade M Stewart commented that other places in North Carolina as well as other States are becoming more creative in trying to attract new industry and he asked if the Economic Development Office had enough tools to work with in order to compete with other areas Ms Anderson stated that there are not enough tools to remain competitive with other locales She explained that if Johnston County were to land all the active projects she is presently working with , then the Four Oaks Business Park would be filled to capacity Ms Anderson stated the County needs another scenario like the Four Oaks Business Park She added that not every company wants a freestanding site , but would rather locate in a business environment where utilities and roads are already in place and there are other existing industries Ms Anderson stated that Johnston County does not have enough options like the Four Oaks Business Park offers and she has expressed that need to the other municipalities in the County , but she noted that the towns are limited in their funds just as the County is Ms Anderson also noted that Johnston County does not have enough available buildings on the market She reported that she frequently gets calls asking for 50,000 and 60,000 square foot buildings , but Johnston County simply does not have such structures in place ready for the market Commissioner Braswell commented that the private sector also does not have the funds to create business parks or construct new facilities on a speculative basis Commissioner Cookie Pope noted that there is a lot of discussion with regards to future commuter rail plans ; however , she noted the importance of commercial rail Commissioner Pope asked about the sites in Johnston County that have access to commercial rail Ms Anderson stated Johnston County does have both Norfolk Southern and CSX rail lines and Johnston County is one of few counties where those rail lines cross each other in Selma Ms Anderson reported she will be meeting with North Carolina Railroad representatives next week regarding property owned by Norfolk Southern in Clayton to hopefully come up with a plan for marketing the property Ms Anderson noted that the County must wait for the railroads to provide direction on how they wish to proceed with their property Mr Wellons reiterated that Johnston County must be proactive in identifying industrial commercial sites ahead of time and have them ready to show to prospective industries Chairman Mims stated that the County has recently begun offering EDIG’s to industries based on a 90 return in the beginning instead of 100 return and he asked if the Advisory Board was going to discuss the grant programs , including equipment grants , to come up with a more consistent program Chairman Mims stated he wants to make sure that everyone is treated the same Ms Anderson confirmed that the Advisory Board will be discussing the consistency of the EDIG program Page315 March 11 , 2011 – Continued Commissioner Braswell stated the key to eliminating the large inventory of existing available homes in Johnston County is through the efforts of the Economic Development Office by recruiting new industry and jobs for the County Commissioner Braswell added that a strategic plan needs to be put in place County Manager Rick Hester asked about the County’s inventory of existing vacant industrial land Ms Anderson stated the County has a few small sites in the 50 acre range as well as some larger sites She noted that she has received a few inquiries recently from people wanting to list their property around the I - 95 area in the 40 acre range She stated one of the obstacles of vacant land is often there are access issues with the site Commissioner Carver asked Ms Anderson to come to a future quarterly meeting with the municipalities and share Economic Development’s concerns with the towns 3 Financial Update – Davenport & Company , LLC Kyle Laux and Bob High , with Davenport & Company LLC , presented the annual financial update Mr Laux began the presentation by reviewing background information with the Board as well as providing an overview of the financial situation Mr Laux discussed the following bullets in his presentation with the Board Overview ? Despite the continued impact of the economic recession , Johnston County had several positive financial achievements during the latter half of Fiscal Year 2010 and beginning of Fiscal Year 2011 ie , Calendar Year 2010 ? That said , the balance of Fiscal Year 2011 and Fiscal Year 2012 promise to be challenging ? Multi - year strategic financial planning and adherence to financial policies will continue to be key to maintaining the County’s financial strength , financial flexibility , and credit ratings Recent Refunding Success ? First , as a result of pro - active monitoring of the County’s existing debt portfolio , Johnston County was able to take advantage of the historically low interest rate environment and lock - in over 59 million of targeted debt service savings in Calendar Year 2010 alone ? 2010A General Obligation Refunding Bonds • Refunded 539 million of Existing General Obligation Bonds for Debt Service Savings ; • Achieved over 27 million of Targeted Net Debt Service Savings ; • Reduced the Average Interest Rate on the Refunded Bonds from 485 to 312 ; and , • Achieved Net Present Value Savings of Approximately 44 ? 2010B General Obligation Refunding Bonds • Refunded 308 million of Existing General Obligation Bonds for Debt Service Savings ; • Achieved over 18 million of Targeted Net Debt Service Savings ; • Reduced the Average Interest Rate on the Refunded Bonds from 430 to 236 ; and , • Achieved a Net Present Value Savings of Approximately 58 ? 2010 Limited Obligation Refunding Bonds • Refunded 30 million of Existing Debt for Savings ; • Achieved over 124 million of Targeted Net Debt Service Savings ; • Reduced the Average Interest Rate on the Refunded Bonds from 414 to 336 ; and , • Achieved a Net Present Value Savings of Approximately 44 Versus industry standard minimum net present value savings of 25 to 30 Mr Laux noted that the County was able to achieve savings with the refundings due to the County staff and Commissioners being able to move quickly on such opportunities , realizing their importance to the future of the County Mr Laux presented a spreadsheet following , outlining the total savings achieved Page316 March 11 , 2011 – Continued Aggregate Debt Service Savings Achieved in 2010 Net Debt Service Savings Achieved in Calendar Year 2010 Fiscal 2010A GO 2010 LOB 2010B GO Total Year Refunding Refunding Refunding Savings 2011 974,523 974,523 2012 136,500 49,612 904,739 1,090,851 2013 140,700 1,794,950 306,405 2,242,055 2014 139,900 5,300 1,335 146,535 2015 136,350 4,400 340 141,090 2016 139,550 3,600 445 143,595 2017 137,100 4,150 100 141,350 2018 138,300 2,900 705 141,905 2019 141,350 2,800 1,685 145,835 2020 140,350 2,800 4,785 147,935 2021 138,300 3,400 645 142,345 2022 138,025 1,700 1,980 141,705 2023 137,750 4,100 2,965 144,815 2024 136,500 4,100 637 141,237 2025 4,500 4,135 8,635 2026 1,445 1,445 2027 4,630 4,630 2028 3,690 3,690 Total 2,775,198 1,888,312 1,240,666 5,904,176 Note The savings that were achieved via the calendar year 2010 Refundings is in addition to the savings from prior County refundings approximately 47 million and the savings that have resulted from Credit Rating upgrades approximately 13 million Mr Laux continued his presentation by reviewing the County’s credit ratings and highlighting comments from the rating agencies He noted that despite the past few difficult budget years , the County has been able to maintain consistent ratings Mr Laux stressed the need to continue good long - term financial planning with regards to capital planning and fund balances that will allow the County to maintain the ratings Calendar Year 2010 Achievements Credit Ratings ? Despite Challenging Economic and Financial Conditions , the County was able to Maintain Enhance its General Obligation Credit Ratings through Calendar Year 2010 A History of Johnston Countys General Obligation Credit Ratings Standard & Poors Moodys Year Rating Rating 1997 A A1 2000 A1 A + 2001 A + Aa3 2003 Aa3 AA - 2007 Aa3 AA 2008 Aa3 AA + 2010 AA + Aa2 Key Green denotes upgrade upward rating recalibration PagePage pageNumber5317 March 11 , 2011 – Continued Recent Rating Agency Commentary ? “ In our view the rating reflects … • the institution of programs designed at attracting and retaining specific employers , facilitating local economic growth … • The county’s strong and well imbedded financial management policies and practices , contributing to the maintenance of a healthy historical fund balance reserve position … ” - Standard & Poor’s ? “ For the long - term the County remains committed to complying with its adopted policy of maintaining legally available fund balance equal to at least 15 of the operating budget ” - Standard & Poor’s ? “ What would make the rating change UP … • Achievement and maintenance of financial flexibility in line with higher rating categories … ” - Moody’s ? “ What would make the rating change DOWN … • Inability to regain compliance with cash management policy within three year time - line • Depletion of General Fund balance … ” - Moody’s Mr Laux continued by discussing the County’s Fund Balance and reviewing the following information He noted that the rating agencies will most likely focus more on the County’s undesignated Fund Balance going forward Undesignated Fund Balance Trends 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund Balance vs County Policy General Fund As a of General Fund Fund Balance General 300 Fund Balance vs Expenditures Fiscal Operating Available for Fund County Policy 1 Appropriation Expenditures Year Expenditures 250 2002 108,954,496 26,698,835 245 2003 122,352,736 21,811,837 178 200 2004 127,658,517 26,044,373 204 2005 137,846,395 27,453,775 199 150 2006 151,036,780 33,370,254 221 2007 158,464,000 37,228,682 235 2008 174,752,973 35,055,264 201 100 2009 182,859,952 28,954,203 158 2 2010 173,152,358 23,239,367 134 50 3 2011 Budget 172,374,034 19,612,260 114 00 1 Calculated in accordance with GS - 159 2 Per 2010 CAFR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3 Per 2011 Budget 4 Includes Mental Health Existing Tax Supported Debt Service ? Johnston County Continues to Maintain a Very Strong Payout Ratio with Nearly 70 Repaid within the next 10 years PagePage pageNumber6318 March 11 , 2011 – Continued ? Targeted Debt Service Savings Reduced the Near Term Budgetary Impact of the County’s Last Round of New Money Funding to the Greatest Extent Possible Existing Tax Supported Debt Service Fiscal 10 Year Year Principal Interest Total Payout Ratio 2012 21,011,186 15,158,662 36,169,848 6 2013 21,776,186 13,513,289 35,289,475 12 2014 24,346,186 12,616,514 36,962,700 19 2015 24,976,186 11,692,014 36,668,200 26 2016 24,666,186 10,711,114 35,377,300 33 2017 24,726,186 9,710,314 34,436,500 40 2018 24,581,186 8,757,879 33,339,065 47 2019 25,341,186 7,830,544 33,171,730 54 2020 25,186,186 6,823,600 32,009,786 61 2021 24,491,186 5,860,050 30,351,236 68 2022 24,078,652 4,812,125 28,890,777 75 2023 21,105,000 3,818,575 24,923,575 81 2024 20,505,000 2,892,525 23,397,525 87 2025 17,375,000 1,996,750 19,371,750 92 2026 13,695,000 1,244,375 14,939,375 96 2027 8,910,000 639,500 9,549,500 98 2028 6,630,000 244,500 6,874,500 100 Total 353,400,512 118,322,328 471,722,840 Existing Tax Supported Debt Service 40,000,000 35,000,000 Interest Principal 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2012 2014 2016 2018 2020 2022 2024 2026 2028 Existing General Government Debt Service vs Budget and Pre - Refunding Debt Service Versus Equals Existing Tax Supported Debt Incremental 2011 Debt Service After Additional Revenues Service Budget Fiscal 2010 Refundings Required vs 2011 P + I Year P + I Budget 2012 36,169,848 33,839,177 2,330,671 2013 35,289,475 33,839,177 0 2014 36,962,700 33,839,177 792,852 2015 36,668,200 33,839,177 0 2016 35,377,300 33,839,177 0 2017 34,436,500 33,839,177 0 2018 33,339,065 33,839,177 0 2019 33,171,730 33,839,177 0 2020 32,009,786 33,839,177 0 2021 30,351,236 33,839,177 0 2022 28,890,777 33,839,177 0 2023 24,923,575 33,839,177 0 2024 23,397,525 33,839,177 0 2025 19,371,750 33,839,177 0 2026 14,939,375 33,839,177 0 2027 9,549,500 33,839,177 0 2028 6,874,500 33,839,177 0 Total 471,722,840 Most recent re - assessment will be effective PagePage pageNumber7319 March 11 , 2011 – Continued 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 Existing Debt Service After 2010 Refunding P + I 15,000,000 Existing Service Before 2010 Refundings 10,000,000 2011 Debt Service Budget 5,000,000 Compliance with Debt Policies ? As the County Continues to Digest the Last Round of General Obligation Funding , No Additional Debt Capacity is Projected versus the Debt Service vs Revenues Policy For Several Fiscal Years ? Revenue Growth that is Stronger than Currently Projected can also Help to Create Debt Capacity Debt Service vs Revenues 30 Existing Debt Service County Policy 25 20 15 10 5 0 2005 2007 2009 2011 2013 2015 2017 2019 Historical Revenue Growth 5 Year Average Annual Growth 371 Projected Revenue Growth FY 11 - 12 200 FY 12 - 13 300 FY 13 - 14 and thereafter 400 ? The County is solidly in compliance with its Debt vs Total Assessed Value Policy PagePage pageNumber8320 March 11 , 2011 – Continued Debt vs Total Assessed Value 600 Existing Debt County Policy 500 400 300 200 100 000 2005 2007 2009 2011 2013 2015 2017 2019 Historical Assessed Value Growth 5 Year Average Annual Growth 525 Projected Assessed Value Growth FY 11 - 12 200 FY 12 - 13 and After 300 Mr Laux pointed out that things can change once the economy begins to pick up and the County begins to see more growth in the projected revenues He stated that there will be challenges going into the FY 11 - 12 budget year and Davenport will continue to monitor potential refundings as well as watch the markets in order to share information with the County as quickly as possible that may help the financial situation Mr Laux noted that the rating agencies will be monitoring the County’s progress of bringing the Fund Balance back into compliance with the adopted Financial Policy Guidelines He offered to answer any questions Commissioner Wade M Stewart spoke on the rating agencies and he asked how the County’s bond ratings would be impacted if the Fund Balance were to drop to the 10 range Mr Laux stated the County’s Financial Policy Guidelines clearly state that the available Fund Balance at the close of each fiscal year shall be at least 15 of the total annual operating budget of the County and he noted the rating agencies are aware of the language in the policy Mr Laux explained that the County is presently below the established 15 limit ; however , he noted the policy also states that if the County goes below the 15 established limit then the County has three years to get back into compliance Mr Laux indicated that if the County’s Fund Balance gets as low as 10 , he does not see that action triggering negative consequences ; however , he stressed that the County would need to have a plan in place to come back into compliance with the policy and demonstrate that plan to the rating agencies Commissioner Stewart commented that such a plan would have to be realistic and acceptable to the rating agencies Commissioner Cookie Pope stated that an increase in taxation is not an option Chairman Allen L Mims , Jr asked how often the rating agencies evaluate the County’s bond ratings Mr Laux explained that technically , the rating agencies are supposed to evaluate the County annually He stated that because the County has been in a mode of either issuing new debt or refinancing debt in the past decade , the rating agencies have evaluated the County on each occasion Mr Laux noted that it is possible thatPagePage pageNumber9321 March 11 , 2011 – Continued if the County is not issuing any new debt or refinancing that it will not be visited by the rating agencies for a while Mr Laux added that it is good practice to visit with the rating agencies at least annually Mr High noted that the rating agencies receive a copy of the County’s audit and financial statements each year Commissioner Jeffrey P Carver stated that he did not see the County issuing any new debt or doing anything other than refunding in the near term He commented that once new debt capacity is available , the County will have other needs beyond school construction Commissioner Tony Braswell stated he believed the key is for the County to accomplish what is adopted in the Financial Policy Guidelines and he noted that there will be difficult budget decisions to be made for FY 11 - 12 Commissioner Braswell stated he would like to share the financial information presented by Davenport with the Board of Education so they can understand what the County is facing Commissioner Braswell added that the County Manager and the County Finance staff have done an excellent job of cutting expenditures by 20 million over the past two years Commissioner Braswell stressed that the Board will not be able to use Fund Balance to balance the FY 11 - 12 budget and painful decisions will have to be made Commissioner Braswell spoke on the importance of coming into compliance with the Financial Policy Guidelines and having a 15 Fund Balance so as not to impact the bond ratings Chairman Mims noted that a joint meeting of the Board of Commissioners and the Board of Education may be planned during the budget discussions and perhaps it would be good for Davenport to come to the meeting and explain the budget situation 4 Budget Update County Manager Rick Hester stated that he hoped to have a proposed budget to present to the Board of Commissioners in approximately 60 days Mr Hester stated there are still many moving parts in the calculations as revaluation is taken into consideration He stated staff hopes to begin making some assumptions on the total tax base and work with those numbers next week Mr Hester commented that the 20 million reduction in expenditures , mentioned previously by Commissioner Tony Braswell , pertains to just the County’s operational expenditures and does not include the debt service or funding for schools Mr Hester thanked the Tax Office for their work on the property tax collections , noting those collections are right on target He stated that sales tax revenues are unpredictable He reported the County needs to average 2 million each month in sales tax revenues and last month’s figures were 17 million while this month they increased to 23 million Mr Hester noted the County must be cautious when budgeting sales tax revenues Mr Hester also spoke on the lottery revenue situation and recalled that last year after the FY 10 - 11 budget was adopted by the Board , the General Assembly reduced the County’s lottery revenue allocation by 22 million Mr Hester stated all of the other revenue sources associated with land use planning , inspections , etc are either flat or down Mr Hester noted that the County will have an increase in debt service of about 23 million for FY 11 - 12 Mr Hester stated the EMS Budget Workgroup has finished meeting with all the EMS Units in the County He noted the Workgroup consisted of Commissioners Tony Braswell , Wade M Stewart and Jeffrey P Carver Commissioner Tony Braswell stated the Workgroup was appointed by the Chairman to begin direct communication with the EMS Units on their budgeting needs He stated every EMS Unit budget was reviewed and many questions were asked which he feels has resulted in a better understanding by all Commissioner Braswell stated the Workgroup will be prepared to make recommendations to the Board of Commissioners on how to fund each EMS Unit Commissioner Braswell noted that some of the EMS Units are carrying significant fund balances and the EMS Units may be asked to budget some of their fund balance Mr Hester reported the Fire Tax Workgroup would begin meeting very soon He noted that with the revaluation , some of those discussions may be difficult , but he would keep the Board posted Commissioner Braswell stated it is important for the fire departments , because of the revaluation , to present a budget that shows their spending process The Board took a five minute recess Page0322 March 11 , 2011 – Continued 5 2011 Revaluation Update Tax Administrator Pat Goddard provided the Board with an update on the 2011 Revaluation She introduced Fred Pearson of Pearson Appraisals , the revaluation consultant for the County , and Sheila Garner , the Tax Department Real Estate Supervisor Ms Goddard began her presentation by expressing her appreciation to the following individuals and groups for their assistance during the revaluation process ? Site locations for hearings Town of Clayton , Town of Smithfield , Town of Benson , Kenly Fire Department , and the Ag Center for meeting rooms ? Technology Services for technical support ? Planning Department for “ loaning ” a staff member ? Public Utilities for water and sewer line data ? GIS for zoning data ? The citizens of Johnston County for understanding and feedback ? Human Resources for use of the training room for hearings ? Johnston County Board of Commissioners for continued support and funding ? Johnston County Board of Equalization and Review for land value input ? Tax Office staff for energy and commitment to the best job possible ? Pearson Appraisal for a good quality job finished on time Ms Goddard reviewed the following information with the Board Current Status ? Notices of new value mailed November 30 , 2010 ? Informal hearings conducted from 12 06 2010 until 2 11 2011 at five locations ? 6,375 appeals scheduled ? 3,132 appeals mailed in ? 1,193 appeals withdrawn ? 300 + - to complete Tasks Remaining th ? Mail second notices to citizens who requested an informal review by March 25 ? Advertise and conduct formal Board of Equalization and Review hearings ? Last day to appeal to Board of E and R is May 13 , 2011 ? Board hearings after that date for scheduled appeals only Property Tax Base by Type ? 55,315 parcels residential or 83 ? 1,954 parcels commercial or 3 ? 505 parcels industrial or lt; 1 ? 647 of total parcels are improved ? 353 of total parcels are vacant ? 22,426 parcels are vacant ? 2,475 parcels exempt Revaluation Update ? Parcel count 89,271 ? Number of appeals by unique account number - 5,577 of 66,344 accounts or 84 of taxpayers appealed - 3,707 appeals for vacant parcels - 5,876 appeals for improved parcels Selected Appeals by Property Class ? Vacant 3707 ? Residential 3515 ? Manufactured Homes 258 ? Condo Townhomes 132 ? Office Medical 155 ? Hotel Multi Family 55 ? Industrial 220 ? Commercial 258Page1323 March 11 , 2011 – Continued Appeals by Acreage ? 500 Acres and Less 6005 or 63 ? 501 to 1000 Acres 602 or 6 ? 1001 Acres and Greater 1,827 or 19 ? Lots 1,093 or 11 ? Unit 56 or 1 Present Use Value Program ? For 2011 taxation - 777,511,690 Deferred taxes value - 425,481,500 Taxable value - 1,202,993,190 Total market value - 118 New applications for 205 parcels - 15 Late applications for 29 parcels - For comparisons purposes 2003 - 717 new applications 2011 Sales Ratio Study ? Qualified Sales All ? Qualified Vacant All Count 1500 Count 77 Ratio 98 Ratio 98 ? Qualified Improved ? Qualified Vacant 0 - 5 acres Count 1423 Count 54 Ratio 98 Ratio 100 ? Qualified SFR ? Qualified Vacant 5 - 10 acres Count 1252 Count 6 Ratio 98 Ratio 100 ? Qualified Vacant 10ac + Count 17 Ratio 86 2010 Ratio Breakdown 2010 Qualified Sales by MonthPage2324 March 11 , 2011 – Continued Forced Sales 2009 – 2010 ? 583 sales in 2009 ? 605 sales in 2010 or 605 89,250 00677 ? Unable to determine all forced sales For example , a short sale between two seemingly unrelated parties with excise taxes on the deed Conclusions ? Market sales activity is much slower than 2003 ? Over 12,000 parcels decreased in value ? Citizens have heard of large numbers of foreclosures in other regions that they equate to Johnston County ? Citizens are concerned about what the tax rate might be “ The value is ok but what are the taxes ” ? The overall increase in taxable base should be 10 to 12 however all formals appeals remain to be heard Ms Goddard thanked the Board for their continued support to the Tax Office during the 2011 Revaluation 6 Public Utilities – Updates for Water , Wastewater , Solid Waste , and Decals Discussion Tim Broome , PE , Director of Utilities and Engineering , Chandra Coats , PE , Engineering and Construction Manager , and Rick Proctor , Solid Waste Manager , presented an update to the Board regarding Water , Wastewater , and the Solid Waste operations Water Mr Broome reviewed the following points of interest on the current water supply for the County Current Water Situation No of retail customers 23,710 connected 4,775 services available Average daily retail water consumption 37 mgd Average daily bulk water consumption 36 mgd Unbilled usage 12 mgd Total average daily usage 85 mgd Peak daily water demand 130 mgd Water Supply Capacity County water treatment plant 120 mgd Bulk purchase agreements Smithfield 20 mgd Benson Dunn 05 mgd Harnett County 25 mgd Wayne Sanitary Districts seasonal 06 mgd Subtotal bulk purchases 56 mgd Total Supply Capacity 176 mgd Projected year supply capacity 2019 rapid growth could be exceeded 2026 slow growth Mr Broome reviewed with the Board information pertaining to Funds 67 – General Water System and 69 – Water Districts He stated the FY 10 - 11 budget for Funds 67 and 69 is 206 million Mr Broome noted that Fund 69 – Water Districts is owed 674,000 in unpaid minimum monthly bills from 607 unconnected customers who signed water district user agreements The Board briefly discussed the unpaid minimum monthly water bills from unconnected customers that have signed water district user agreements Mr Broome and County Attorney David Mills reported they are looking into remedies to the situation Mr Broome continued his presentation , as follows Page3325 March 11 , 2011 – Continued Current Water Supply Matters ? Funds 67 and 69 are solvent ? All water district construction is complete ? Magnetic Ion Exchange process has been completed and is operating in “ test ” mode ? Construction of Division I of the Wilson’s Mills to Cleveland Water Supply Mains will be completed by early April ? All funding has been successfully arranged for the 20 ” East Clayton Industrial Area Parallel Water Main ? USDA funding has been secured for both divisions of Wilson’s Mills to Cleveland Area Transmission Mains and replacement of the 1010 Booster Pump Station ? Raleigh emergency water supply interconnection will soon be advertised for bids ? A bulk water supply allocation from the City of Raleigh is cost prohibitive ? USDA funding for a water supply allocation from the City of Wilson is not available this fiscal year Following a presentation of an aerial photograph of the water treatment plant , Mr Broome reviewed with the Board a map of the Wilson’s Mills to Cleveland transmission mains project He then presented and discussed the following challenges currently facing the County’s water supply ? Complete negotiation for Hanson Corporation quarry purchase ? Operate distribution system with two disinfectants ? Complete the second phase of Wilson’s Mills to Cleveland transmission mains ? Complete the East Clayton Industrial 20 ” transmission main ? Adjust bulk and retail water charges ? Adopt new policy for alternative bulk water capacity purchase ? Acquire additional 10 MGD supply from Neuse River at Wilson’s Mills ? Arrange funding for Wilson bulk water capacity allocation purchase ? Add staff in response to system growth ? Plan for sustainable future water supply ? Plan for continued improvement in drinking water quality Mr Broome stressed the importance of the County completing the negotiation of the Hanson Corporation quarry purchase for the future water supply needs of the County He stated staff is working diligently with the landowner and Hanson Corporation and he hopes to have a proposal for the Board to consider in the very near future County Manager Rick Hester stated that Mr Broome is trying to arrange a tour of the Hanson site sometime in the next couple months Mr Broome reported on the bulk water rate information as well as the residential water charges current and proposed and presented a comparison of Johnston County’s water rates versus other areas Bulk Water Rates Johnston County 190 per 1,000 gallons Town of Benson 203 per 1,000 gallons City of Wilson Proposed 285 per 1,000 gallons Harnett County 202 per 1,000 gallons Wayne Sanitary Districts 190 per 1,000 gallons Town of Smithfield 130 per 1,000 gallons Recommended Adjusted Bulk Rate 200 per 1,000 gallons or 52 increase Residential Water Charge Current water charge 1500 per month min and 305 per 1,000 gallons Proposed water charge 1500 per month min and 310 per 1,000 gallons Average monthly charge for 4,500 gallons - 2896 a 16 increase Page4326 March 11 , 2011 – Continued Comparisons based on 4,500 gallon per month Inside Utility Water Rate Outside Water Rate Four Oaks 1452 2367 Lillington 1550 3013 Clinton 1714 3427 Angier 1788 3575 Benson 2029 3240 Selma 2113 3723 Dunn 2175 4350 Fuquay Varina 2243 N A Pine Level 2325 3195 Smithfield 2415 4820 Goldsboro 2478 4206 Wilson 2524 4933 Clayton 2536 4321 Kenly 2547 3501 Newton Grove 2563 3434 2650 Fork Twp Sanitary District N A Princeton 2717 3561 Johnston County 2873 N A Raleigh and Garner 2878 5569 Harnett County 2888 N A Wayne Water Districts 3008 N A Knightdale 3061 7278 3164 Wendell 6328 Nash County 3610 N A Aqua America 3660 N A Wilson County 3775 N A Utilities , Inc 3931 N A Zebulon 4009 8013 Sampson County 4123 N A Commissioner Tony Braswell complimented Mr Broome on his management of the finances and spending for the Public Utilities Department Mr Broome thanked Commissioner Braswell for the compliment and stated that the Public Utilities Department has excellent staff that is conscientious and understands that every project must be justified Wastewater Chandra Coats , PE , Engineering and Construction Manager , reviewed the following points of interest on the current wastewater situation for the County ? No of retail customers 2,870 ? Average daily retail wastewater flow 09 mgd ? Average daily bulk wastewater flow 35 mgd ? Unbilled wastewater I I 02 mgd ? Total average daily wastewater flow 46 mgd ? Total average daily wastewater flow 59 mgd during wettest quarter ? Unused , but allocated wastewater capacity Town of Clayton by contract 075 mgd Aqua NC - Flowers by contract 050 mgd Carolina Water Service by contract 040 mgd Reserve for approved residential development 065 mgd Reserve for four municipalities 075 mgd Total – allocated , unused capacity 305 mgd ? Wastewater capacity available 965 mgd ? Surplus capacity – average annual basis 200 mgd ? Surplus capacity – wet weather basis 070 mgdPage5327 March 11 , 2011 – Continued Ms Coats stated the FY 10 - 11 budget for Fund 68 – Wastewater is 725 million Ms Coats reported on the current wastewater matters , as follows ? Construction of the Industrial Drive Selma relief sewer ? Construction of the Clearwater wwps upgrade and diversion force main ? Construction of improvements to Buffalo Creek wwps Smithfield ? Construction of federal energy stimulus grant project for power savings at the wwtp ? Construction of the 20 ” force main from Josephine Road to the landfill Cleveland Area Force Main ? Planning and funding for sewer interceptor in the Old Drug Store area ? JCC RCW facilities are designed and permitted but not completely funded ? Unexpected heavy maintenance cost at wwtp Following a presentation of an aerial photograph of the wastewater treatment plant , Ms Coats reviewed with the Board a map of the Cleveland area force main project She further presented and discussed the challenges currently facing the County’s wastewater supply and a comparison of Johnston County’s wastewater charges versus other areas ? Fund debt retirement for the 30 million Cleveland Area force main ? Arrange additional funding for the JCC RCW project ? Keep Fund 68 solvent under the current debt service load with low capacity allocation fee revenue ? Adjust bulk and retail wastewater charges Residential Wastewater Charge Current wastewater charge 1500 per month min and 425 per 1,000 gallons Proposed wastewater charge 1500 per month min and 435 per 1,000 gallons Average monthly charge for 4,500 gallons - 3458 a 13 increase Comparisons based on 4,500 gallons per month Inside Outside Utility Sewer Rate Sewer Rate Raleigh and Garner 1873 3563 Benson 2439 3956 Clayton 2653 4978 Knightdale 2742 N A Selma 2835 5000 Four Oaks 2895 4383 Wendell 3001 6003 Newton Grove 3188 N A Smithfield 3235 6482 Johnston County 3413 N A Harnett County 3435 N A Angier 3458 6338 Pine Level 3550 5350 Zebulon 3790 7579 Goldsboro 4009 8018 Kenly 4294 6205 Princeton 4647 N A Nash County 4975 N A Aqua America 6333 N A Bulk Wastewater Charges Current bulk wastewater charges Transportation charge Varies from 048 to 092 per 1,000 gallons Treatment charge 240 per 1,000 gallons Recommended adjustment in 010 per 1,000 gallons 42 increase bulk wastewater treatment chargePage6328 March 11 , 2011 – Continued Solid Waste Operations Rick Proctor , Solid Waste Manager , reviewed with the Board the following points of interest for the County’s Solid Waste Operation ? Municipal solid waste MSW flow stream is down 72 from FY 09 - 10 and 109 from FY 08 - 09 ? Construction and demolition debris C & D flow stream is down 25 from FY 09 - 10 and 405 from FY 08 - 09 ? Decal sales are up 2 over FY 09 - 10 and 47 over FY 08 - 09 ? State imposed plastic bottle ban with no revenue has increased Convenience Sites operating cost Co - mingling the recyclable materials has provided better hauling efficiency ? The State has provided funding for electronic equipment waste E - waste collection through an Electronic Waste Management Trust Fund The first annual distribution received was 12,130 ? The Landfill Gas to Energy Project is underway The Permit to Construct has been issued Construction is scheduled to begin in April 2011 ? Complaints on the decal program continue to be received ? Complaints about processing time through the landfill scale house on busy weekends have decreased slightly ? Phase 3 of MSW Cell should continue to serve the County for 4 years ? C & D landfill cell No 2 should serve the County for approximately 2 years ? C & D landfill cell No 1 closure construction is almost complete Mr Proctor reported the FY 10 - 11 Budget for Fund 66 - Solid Waste Division is 70 million Following a presentation of the Solid Waste Trends from 2006 through 2011 as well as an aerial photograph of the landfill operations , Mr Proctor reviewed with the Board the current solid waste matters and challenges Current Solid Waste Matters ? Unpredictable flow of e - waste materials due to upcoming e - waste ban ? Enforcement - Decal violations - Unsecured loads - Roadside littering - Prohibited wastes - Cardboard violations nd ? First household hazardous waste collection day Saturday , April 2 , 2011 ? Planning and permitting for next MSW cell No 6 ? Reacting to decreased revenue due to decrease in disposal tonnage Current Solid Waste Challenges ? Alternatives to decal program ? Roadside litter ? Construction of additional convenience sites ? Landfill equipment being rebuilt instead of being replaced ? New solid waste rules ? Out - of - County waste ? Public education ? Recycling in County offices County schools Alternative to Decal Program Mr Proctor reviewed the following alternatives to the decal program with the Board Option A ? Assess 60 per household for all dwellings in Johnston County including municipalities ? Generate approximately 345 million per year in revenue ? Allow household waste disposal at the convenience sites at no charge ? Waive household waste disposal fees at the landfill for all in - County wastes Option B ? Operate convenience sites using debit cards to pay a fee of 200 per load Page7329 March 11 , 2011 – Continued Mr Broome stated that the 60 per household assessment charge under Option A would be for all dwellings in Johnston County , including all households located inside municipalities as well as those that elect to have curbside service from private providers He explained that the towns and the private haulers would be allowed to bring their household waste to the landfill at no tipping charge and therefore , the towns and private haulers could pass those savings along to their customers , if they choose to Mr Broome stated under Option A , the County would generate enough revenue to operate the municipal solid waste division of the landfill as well as the convenience center sites He noted that construction and demolition waste would still be charged by the ton Mr Broome stated the decal program is broken and that none of Johnston County’s neighboring counties utilize the decal program Mr Broome stated the Public Utilities staff is recommending some kind of alternative to the decal program going forward Mr Broome reported that another alternative staff would recommend is Option B , - operating the convenience sites using debit cards to pay a fee of 200 per load Mr Proctor stated Option B would involve some upfront costs to accommodate the debit card system Commissioner Jeffrey P Carver expressed concern with implementing a household assessment fee , noting that those that pay a private hauler for curbside service would be subsidizing a service that they may not use Mr Broome stated if the private haulers refused to adjust their fee schedule in proportion to the tipping fee being waived for household waste , then the Board of Commissioners ’ recourse is to franchise the County for curbside pickup Mr Proctor stated that staff recommends the debit card system in that it is perhaps the best system which can pay for the program and will put the cost back on the ones that generate the waste At the inquiry of Commissioner Tony Braswell , Mr Broome stated he believes the municipalities would be receptive to Option A once they learned they would not have to pay tipping fees Commissioner Braswell noted that the municipalities have the same budget requirements as the County and they must be given adequate notice if the County decides to make a change in the decal system Mr Broome suggested giving a year notice if the Board decided to make a change so the municipalities as well as the private haulers would have time to adjust Mr Broome reported that under both options , the County would break even financially ; however , he stated under the current decal system , the County loses approximately 700,000 annually The Board discussed the pros and cons of both recommended options and how those options would impact the citizens Mr Broome shared with the Board the following spreadsheet of how solid waste and recycling services are funded in nearby counties Solid Waste and Recycling Program Funding by Nearby Counties 10 16 2009 County Type of Fee Fee Amount Mode of Waiver for Private Comments Invoice Collection Service Harnett Annual 4500 Tax bill No Fee assessed on every household amount per household Lee Annual 8000 Tax bill Yes Fee assessed in unincorporated areas only amount per household Wayne Annual 6000 Tax bill Yes Fee assessed in unincorporated areas only amount per household Wilson Annual 3500 Tax bill Yes Fee assessed in unincorporated areas only amount per household Nash Annual 9600 Tax bill Yes Fee assessed in unincorporated areas only amount per householdPage8330 March 11 , 2011 – Continued Wake Annual 2000 Tax bill No Fee assessed on every household amount per household Franklin Annual 4500 + 003 100 Tax bill No Fee assessed on every household amount per Seniors exempt from fees household Cumberland Annual 4800 Tax bill No Fee assessed on every household amount per household The Board took a five minute recess 7 Open Space and Stormwater Funds Discussion Open Space Fund Planning Director Berry Gray presented the following information on the open space fee - in - lieu fund He noted that the amounts represent the open space fee - in - lieu funds collected within the respective areas Township Fee In Lieu Amount Banner 12,000 Bentonville 6,400 Beulah 8,800 Boon Hill 19,200 Clayton 56,000 Cleveland 285,884 Elevation 50,400 Ingrams 6,000 Meadow 2,000 Micro 400 O’Neals 28,800 Pine Level 14,000 Pleasant Grove 277,000 Selma 2,800 Smithfield 64,040 Wilders 89,200 Wilson’s Mills 12,400 Total 935,324 Mr Gray stated the above funds have been collected since the program went into effect in 2001 and he noted that the majority of the funds have been collected in the past three to four years Mr Gray offered to answer any questions by the Board County Manager Rick Hester stated the open space fee - in - lieu funds are a part of the County’s undesignated Fund Balance Chairman Allen L Mims , Jr reminded everyone that according to current General Statutes , counties can only use open space funds for the acquisition of recreational land within the immediate area in which it was collected , unlike municipalities which can use their funds for acquisition or development of recreational , park , or open space property Chairman Mims stated he has asked the County Attorney’s Office to look into possibly drafting legislation that would give counties the same authority as municipalities have in regards to the use of open space funds County Attorney David Mills explained that the County would either need a local bill or an amendment of the Statute to add language so that counties would be able to use the open space funds in the same manner as municipalities Mr Mills stated the County would need to carefully consider any draft language of a local bill He noted municipalities can use open space funds to acquire or develop ; however , they are limited to the acquisition or development of “ recreation , park , or open space sites ” Mr Mills further noted that while the current Statute language does not allow counties to use open space funds for development , it currently does not restrict what a county can purchase property for Page9331 March 11 , 2011 – Continued Chairman Mims indicated that the intent of the open space funds has always been for the use of recreational or open space purposes Mr Gray agreed that all the discussions in the past with regards to open space funds have been directed towards the use of open space and recreational purposes Mr Mills stated that he has also researched the requirement of spending the funds within the “ immediate area ” from which the money was collected Mr Mills stated , in his opinion , if the Courts were called upon to interpret the term “ immediate area ” , they would not interpret the meaning to include the use of open space funds county - wide Mr Mills added that if the legislation had intended for the funds to be used across the entire county , then it would have specified the “ entire county ” in the statute language Mr Mills stated that , in his opinion , the use of funds by township would be a reasonable geographic interpretation of “ immediate area ” Chairman Mims stated that he believes if the County constructed a project that would benefit the residents of the entire County , such as a county - wide sports complex , then such a project should be allowed under the definition of “ immediate area ” because the project would be available for use by all residents of the County Mr Mills advised that it would be a matter of how the Courts interpret the Statute as well as the intent and use of the funds Commissioner Cookie Pope noted that Sonny Johnson , a developer in the Cleveland area , has expressed his desire that the funds be used in the immediate area in which they were collected from Chairman Mims stated he agrees that open space funds should be used within the same township as they are collected from , unless the County decides to undertake a large project that would benefit the entire County ; then the location of such a project may be limited to certain areas due to the availability of acreage Mr Mills recommended drafting proposed legislation that could be submitted to the legislative delegation for introduction to the General Assembly At the inquiry of Chairman Mims , it was the consensus of the Board to have the County Attorney draft a proposed local bill on the matter Commissioner Wade M Stewart stated he agrees to the act of drafting local legislation for the use of open space funds ; however , he questioned if the County should consider a moratorium on the open space requirement Commissioner Stewart stated in light of the current economic conditions , he sees a moratorium on the collection of open space funds as something to help the building industry Commissioner Stewart noted the program was originally put in place during a time when the County was growing rapidly ; however , the economy has slowed down Commissioner Stewart stated he felt that a moratorium on the collection of open space funds for four years , or until the funds that have already been collected by the County are allocated for projects , would be an incentive to spur new growth in the building community Mr Gray stated that years ago when the open space program was first initiated , the fee was 800 per lot and very few developers chose the option of paying the fee Mr Gray stated that when the fee was reduced to 400 per lot , it became more reasonable for developers to pay the fee instead of providing open space and the County began collecting more open space funds Stormwater Fund Chandra Coats , PE , Engineering and Construction Manager , stated the stormwater fee - in - lieu fund is a land dedication fee that is paid by developers who choose to exceed impervious surface limits The Stormwater Manual states that the fund can be used for permanent conservation easements or passive recreation She stated that it is more lenient than the open space fund Ms Coats stated some of the funds have been used on a permanent conservation easement project in conjunction with the Triangle Land Conservancy She noted that a workgroup consisting of Commissioner Jeffrey P Carver , Public Utilities staff , Planning staff , Cooperative Extension staff , and representatives from the Triangle Land Conservancy has been working to come up with some type of policy or method of determining the best way to spend the funds Ms Coats reported the stormwater fund has approximately 600,000 and the vast majority of the funds have been collected in the Cleveland community The ordinance does say that developers have the option to dedicate the land themselvesPage0332 March 11 , 2011 – Continued within the same watershed or pay into the program if they exceed the impervious surface area limits Ms Coats reported the ordinance does not specify that the County has to spend the funds within the same watershed as they were collected Commissioner Jeffrey P Carver noted that the Triangle Land Conservancy proposed a project to the County whereby they were requesting to use the stormwater funds on a conservation easement where the landowner wanted to sell the easement to the Triangle Land Conservancy Commissioner Carver stated the property already contained an existing residence and the landowner would have been allowed to build another house and no one would be allowed to access the property other than the landowner The landowner would have continued to live on the property and farm the land Commissioner Carver stated Triangle Land Conservancy was asking the County to use the stormwater funds with no benefits to the County citizens and he did not see the project as a good use of the funds Upon a question by Chairman Allen L Mims , Jr , Commissioner Carver recalled that on the Joe Moore Farm Conservation Easement project that the County participated in with the Triangle Land Conservancy , the Moore Family donated the easement and the County was only asked to use the stormwater funds to help with soft costs such as surveying The actual easement was donated by the family and not purchased with any of the stormwater funds Commissioner Tony Braswell asked if the municipalities ’ stormwater ordinance mirrored the County’s ordinance Ms Coats stated that presently the Town of Smithfield has a stormwater ordinance and the Town of Clayton has a stormwater ordinance for their expanded ETJ area that the County administers She stated staff has been talking with the Town of Clayton and the Town of Benson on creating stormwater programs for their entire areas County Manager Rick Hester noted that stormwater funds are part of the Enterprise Fund for Public Utilities and are not included in the General Fund 8 Panhandling Discussion County Attorney David Mills stated he , as well as Planning Director Berry Gray , has reviewed various types of ordinances related to panhandling Mr Mills stated the County is authorized under the General Statutes to adopt an ordinance regulating panhandling Mr Mills noted that panhandling is also addressed in the United States Constitution He stated the United States Supreme Court has determined that soliciting charitable contributions is protected free speech under the First Amendment Mr Mills further noted that the North Caroline Supreme Court , the Fourth Circuit Court of Appeals , nor the North Carolina Courts have specifically addressed panhandling or begging as free speech However , other courts have ruled that panhandling is protected the same as any other charitable solicitation ; therefore , he stated that he has no reason to believe that a court anywhere would rule otherwise Mr Mills advised that while the County cannot prohibit panhandling , it can be regulated by ordinance An enforceable ordinance must ; 1 be content neutral , 2 serve an important governmental interest , 3 be narrowly tailored to serve that governmental interest , and 4 leave open ample alternatives for communication Mr Mills stated an ordinance could prohibit solicitation in the streets or highways , but most likely not on the sidewalks or median He added that an ordinance could prohibit panhandling within so many feet of an ATM machine , but probably not outside a shopping center Mr Mills pointed out that an ordinance could not prohibit panhandlers from standing on the side of the road but allow volunteer firefighters to stand on the road and request contributions through one of the “ boot campaigns ” that are sometimes held Mr Mills noted that an ordinance would have to apply to all individuals equally Finally , an ordinance could prohibit “ aggressive panhandling ” Mr Mills submitted a sample ordinance from another locale to the Board for their review Mr Mills stated , in his opinion , he felt this ordinance would be considered constitutional and an example that the Board could build upon if they choose to draft an ordinance Danny Thompson , 1104 S Pleasant Coats Road , Benson , expressed his concerns with panhandling in the I - 40 NC 42 area Mr Thompson spoke on the aggressiveness of the panhandlers at this location and safety concerns Mr Thompson asked that if the activities could not be prohibited that the Board consider regulating the matter Chief Deputy Bengie Gaddis , Johnston County Sheriff’s Department , stated that the Sheriff’s Department has seen an increase in the panhandling activity in the County He stated the increase could bePage1333 March 11 , 2011 – Continued attributed to the economic conditions in that there are those that are truly in need , while there are some that are scamming Chief Deputy Gaddis stated that if the Board of Commissioners decided to adopt an ordinance , the Sheriff’s Department would provide enforcement of the ordinance Upon further discussion , the County Attorney agreed to look at more examples of ordinances in other areas and report back to the Board with the information Following the conclusion that there was no further business , Chairman Allen L Mims , Jr declared the meeting adjourned The meeting adjourned at 12 45 pm Allen L Mims , Jr , Chairman Paula G Woodard , Clerk to the BoardPage