Board adopts water and wastewater system development fee study; final fee decisions deferred to Aug. 18

Johnston County commissioners on Aug. 4 adopted the county’s updated water and wastewater system development fee (SDF) study — a required technical analysis that establishes the maximum allowable development fees the county may charge to new customers. Commissioners voted to adopt the analysis document; staff said the analysis will be used to determine allowable fees but recommended phasing and further discussion before setting the final rates.

Lede facts: The board adopted the consultant’s updated analysis (dated July 25, 2025) and accepted the methodology used to calculate maximum allowable fees. Commissioners did not adopt new fee rates on Aug. 4; staff recommended returning Aug. 18 for additional deliberation and public notice to affected bulk customers and towns.

What staff presented Utilities staff said the county’s 20-year capital improvement plan (CIP), inflation and timing for large projects — notably a proposed Lower Neuse water-supply project slated for service by 2033 — drive the fee analysis. Miss Farmer said the county’s CIP contains large expenditures and that the SDF analysis must be updated again as projects and funding sources change.

Recommended structure and example numbers discussed - Residential water SDF (proposed phasing): staff proposed increasing the new-residential water SDF from the current $4,750 to $6,000 for fiscal year 2025–26, as a step toward a maximum allowable per-unit fee of $8,980 calculated in the analysis. - Sewer SDF: staff presented a lower residential figure for sewer in the updated analysis (the retail residential sewer figure used in the analysis was described as falling from a prior $4,020 to $3,080 per residential unit under new assumptions about average gallons-per-day per bedroom required by state guidance). - Meter-size and per-gallon options: For nonresidential or unusual institutional customers (for example, churches or schools with large meters but low actual average-day demand), staff described a per-gallon-per-day billing option that may better reflect actual system impact than a flat meter-size tariff.

Financial impact and tradeoffs Staff said phasing fees instead of moving immediately to the maximum allowable level would reduce near-term SDF revenue; they estimated that phasing toward the maximum over the next two fiscal years could reduce fee collections by roughly $8 million over that period compared with immediately adopting the maximum-fee scenario — funds that otherwise would subsidize capital projects and reduce borrowing.

Towns, bulk customers and capacity Staff recommended phasing bulk-capacity fees as well and noted that existing interlocal agreements and hydraulic zones affect how bulk customers (nine towns and two private entities) are charged. County staff proposed limiting additional bulk sales until capacity is available and aligning purchase triggers with an 80% threshold of existing available capacity (the county said that historically towns had purchased additional capacity later, at about 110% usage, and that aligning to 80% is more consistent with state planning norms).

Board action and next steps - The board adopted the SDF study and methodology on Aug. 4 (motion and second recorded in the transcript; staff requested time to refine the proposed rate schedule and town/bulk-customer notice). - Commissioners directed staff to return on Aug. 18 with proposed fee rates and recommended phasing; staff said the proposed effective date for fee changes, if adopted, would be Nov. 1 for most customers, with bulk and town notification windows noted in the staff memo.

What it means for residents If the board ultimately adopts higher SDFs, new development would pay more of the upfront cost of additional water and sewer capacity. Staff emphasized that system development fees are intended to have new growth pay for new capacity; if the board phases in fees, the county will collect less SDF revenue in the near term and could rely more on borrowing or existing customers to cover capital costs.

Speaker list and technical documents Presenters included Utilities Director Chandra Farmer and the county’s financial adviser; staff said the complete analysis, CIP and fee schedules were included in the meeting packet and that towns had been notified of the proposed changes. The board scheduled additional consideration of specific fee rates for Aug. 18 to allow further review and stakeholder notice.

Ending: The board adopted the technical study (the governance step required to set maximum fees) on Aug. 4 and will revisit proposed fee amounts at its Aug. 18 meeting before setting any new customer charges.