Johnston County holds public hearing on proposed water and sewer development fees; hog farmer urges agricultural relief

Johnston County, N.C. — The Johnston County Board of Commissioners held a public hearing July 21 on proposed revisions to the county's water and sewer system development fees and bulk-capacity charges, hearing a detailed presentation from Utilities Director Chandra Farmer and public comment from a local hog farmer who urged an agricultural exception to the fees.

The utilities department presented an updated analysis prepared by Willdan Financial Services, using a 20-year capital improvements plan and the combined-cost method authorized by state law. Farmer told the board the analysis calculates the maximum fee the county may charge under the statute and proposed stepping rates toward that maximum over the next two fiscal years.

Why it matters: system development fees are one-time charges intended to recover capital costs for system capacity so that growth pays for growth. Changes would affect developers, builders and large users and could shift near-term costs for new residential lots, nonresidential meters and bulk customers such as towns and private utilities.

Farmer summarized the methodology and numbers the consultants produced. The analysis treats recoverable costs as existing and planned capacity-building projects (treatment plants, major transmission lines, elevated tanks, pump stations), applies a debt-service credit so new customers do not pay debt twice, and divides the net capital cost by available system capacity to produce a unit cost per gallon. Farmer said the analysis used the county's 20-year CIP and noted the county must update the analysis at least every five years.

Key figures from the July 21 presentation (figures cited by staff): - Combined water cost per gallon (value used in the analysis): $39.07 per gallon, which the consultant's calculations translate to a maximum single-family ERU fee of $8,980 (using 230 gallons per day per ERU). The county's current 3/4-inch residential system development fee is $4,750; Farmer proposed stepping to $6,000 for FY 2025'26 on a phased schedule toward the calculated maximum. - Sewer: unit cost used in the analysis is $14.84 per gallon (now calculated using 75 gallons per bedroom and 3.5 bedrooms per unit as the statute prescribes). That produces a residential ERU of $3,890 under the new method; the county's current sewer ERU is $4,020, so the proposed sewer ERU would slightly decline. - Bulk water and sewer customers: Farmer proposed computing capacity fees by hydraulic zone (the county has three zones: 323, 385 and 492) and removing projects that are retail-only from the bulk calculation. Treatment cost used in the bulk water analysis was $27.37 per gallon; combined treatment and transmission rates by hydraulic zone produce proposed interim FY 2025'26 bulk charges in the range of about $19.24 to $21.72 per gallon depending on zone. Farmer proposed an effective date of Nov. 1 for bulk fees (and Oct. 1 for system development fees), while allowing an interim phased increase and additional updates if the CIP changes.

Farmer described who normally pays the fee and how it is collected: the fee must be paid before a building permit or when applying for service, so typically the developer or builder pays at plat recording or before service. She also said the analysis must include a credit for outstanding utility-related debt that cannot be less than 25% of the aggregate CIP costs.

Several commissioners asked technical and implementation questions about the assumptions used (the City of Raleigh short-term supply contract, nonrevenue water adjustments, inflow and infiltration credits for sewer, ERU definitions and meter-size rules). Farmer said the county would continue to update the model as the CIP evolves and that larger meters (3-inch and up) would be assessed on a cost-per-gallon basis rather than by standard meter-size fees.

Public comment and concern about upsized taps

During the hearing, Princeton resident and hog farmer Eddie Rowe told the board he lost several on-farm wells this summer and that his operation now depends on county water for animal drinking needs. Rowe said county staff told him a 2-inch tap to replace a longstanding 1-inch tap would trigger a system development fee of about $38,000 and later indicated the fee could rise further under the proposed schedule.

"I feel like I shouldn't have to pay that 38,000 because I'm really just wanting to upsize my tap to a 2 inch versus a 1 inch," Rowe told the board. He said his farm pumps hundreds of thousands of gallons in hot months and that the fee as charged would be unaffordable and immediate.

Legal and policy response

County Attorney Jennifer Slusser told the board she would not recommend granting an individual waiver to a county policy because North Carolina law bars providing a private, exclusive financial benefit to a single individual. She said the board could direct staff to study a policy amendment for a defined class of customers and return with a legally defensible approach.

"I would never recommend waiver of a policy because, in the constitution, we're prohibited from doing what's called exclusive emoluments," Slusser said. She recommended staff study how other counties handle agricultural or large seasonal users and whether a class-based exemption or different rate structure would be legally permissible and fiscally equitable.

Board direction and next steps

Commissioners did not adopt the fees at the hearing. Farmer said today's presentation and public comments would inform final recommendations she would return with to the board in August. Commissioners asked staff to calculate revenue impacts under the proposed step-up schedule (for example, projected system development fee revenue at $6,000 vs. $8,980 under assumed growth rates) and to consult with bulk customers about the proposed hydraulic-zone approach.

Several commissioners asked staff to examine agricultural and other special-case treatments that would address situations such as Rowe's. The board asked staff and legal counsel to research how surrounding counties handle agricultural rates or tap-upsizing and to return to the board at its Aug. 4 meeting with options.

The hearing is part of the statutory process. If the board decides to adopt new system development fees, the adoption would be by resolution or ordinance after the required posting and hearing schedule and then reflected in the utility budget and rate schedules.

Provenance: The utilities presentation and hearing began with Chandra Farmer's analysis (presentation excerpted in transcript) and concluded with the board directing staff to bring final recommendations and an agricultural study for Aug. 4, 2025.

Ending: County staff will circulate the updated analysis to towns, private bulk customers and developers and will return to the commissioners with final rate recommendations and materials for formal adoption at a future meeting.