Johnston County voters will decide in November whether to borrow $64 million for public school and community college building projects.
Most of the money – $57 million – would go to the public schools, where enrollment is forecast to grow by 7,800 students by 2020. The $57 million would build two new middle schools – one in Clayton and another at McGee’s Crossroads. It would also add classrooms to a number of existing campuses.
In all, school leaders say they will need $113 million by 2017. The November bond issue would cover a little more than half of that.
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Johnston Community College is seeking $7 million to purchase land for new classrooms and laboratories as part of its master plan, drawn up in 2008.
At their meeting last week, county commissioners took the first formal step toward putting the school and college referendums on the November ballot.
“It’s pretty much on a path to moving forward,” said County Manager Rick Hester. “We’ll have a conversation with the bond-rating agencies in the fall.”
The county has been trying to strengthen its bond ratings so it can secure the best interest rates possible for the next round of borrowing. Hester said Johnston is on the verge of securing AAA ratings from two of the major bond-rating agencies – Moody’s and Standard and Poor’s.
That’s partially because the county has managed to maintain substantial cash reserves, which the rating agencies like because it means a government can continue repaying its debts even when revenue stagnates. Under a years-old policy, Johnston tries to keep at least 15 percent of spending in savings.
“I think the bond-rating agencies like those kinds of policies,” Hester said. “We’ve been a growing county and we’ve kept our financials in line.”
Commissioners still have to complete some paperwork needed to apply for higher bond ratings. If voters say yes to the borrowing, the county will begin selling bonds in early 2014 and would like to have the AAA rating by then, Hester said.
Hester is also moving to refinance $80 million in public-utility bonds. That could save up to $15 million in interest, which could help as the county embarks on 30-year plan to expand and improve its water system.
“It won’t help the general fund,” which repays school-building debt, “but it’ll help the water enterprise fund,” Hester said. “It’ll benefit that when the time comes to do the major improvements.”
State lottery funds
Johnston commissioners have been asking state lawmakers to restore lottery funding to counties – with little effect. Now they’re moving to increase the pressure.
A portion of lottery-ticket sales is supposed to go to counties for school construction. But the state began withholding the money in 2009 to help close a budget shortfall.
Earlier this year, commissioner sent letters to lawmakers asking them to restore the funding – about $2 million a year for Johnston.
Last week, Commissioner Cookie Pope said she wanted to apply more pressure by organizing other counties in a campaign to get their share of lottery dollars.
“Maybe it would make a stronger statement to our legislature to make sure they realize … that we mean business,” Pope said.