Johnston County gets roadmap for $524M in potential borrowing as advisers urge CIP adoption
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Summary
Advisers told the Johnston County Board of Commissioners they hold AAA credit ratings and could borrow for a roughly $524 million capital plan over five years; staff and commissioners agreed to adopt a formal CIP and phase borrowing to protect ratings and tax affordability.
Advisers from Davenport told the Johnston County Board of Commissioners on the second day of its strategic planning session that the county has the highest possible credit ratings and a runway for planned capital borrowing if the board decides to proceed.
Kyle Lux, a Davenport presenter, said the county’s audited results from 2020–2024 show recurring surpluses that have helped earn triple‑A ratings, but he warned the gap between revenues and expenditures has narrowed and that planning is necessary to preserve the ratings. "You have the highest possible credit ratings," Lux said, adding that those ratings reduce borrowing costs for taxpayers.
Davenport’s planning estimate for projects discussed — including school referenda balances, Clayton High School and county facilities — is about $524,000,000 over the next five fiscal years. Lux noted the county still has approximately $47,000,000 remaining from the 2022 school referendum and $150,000,000 from the 2024 referendum that have not yet been borrowed.
The presentation outlined a mix of cash funding, grants and debt as the recommended approach. Lux recommended conservative assumptions for planning and said the firm used a 5% borrowing rate in the model to avoid under‑estimating costs.
Commissioners and staff discussed how to use fund balance and debt policy in tandem. "That fund balance is what's going to have to keep things going" after a disaster and to cover down payments for major projects, the chair said during the fund balance discussion.
Board members agreed to adopt a formal capital improvement plan (CIP) as part of the budget process this year so staff and the markets have a clear roadmap. Staff said draft timelines anticipate market activity for general obligation bonds and limited obligation bonds this spring to combine financing processes where legally permissible.
Next steps: staff will incorporate these assumptions into the FY2027 budget process and present a draft CIP for formal consideration in the coming months, with the board signaling an intent to adopt a CIP tied to the budget cycle.
