Former Town Manager Mark Williams has left the building – his retirement date was April 30 — but he left behind a lean, conservative budget for his successor and the town. His budget was introduced Tuesday night by Finance Director Aileen Staples during the town board’s work session.
The property tax rate remains at 52 cents for each $100 valuation – 41 cents for town operations and 11 cents for the Wake Forest Fire Department – with no increase in personnel anticipated for the year and limited spending on capital projects. The budget is online on the town’s website, printed copies are available for view at town hall and there will be a public hearing for comments from residents on Tuesday, May 19, at 7 p.m. in the second-floor meeting room.
One low cost but closely watched part of the budget is funding for outside agencies. This year, after hearing the plea from Fourth of July Chairman Rob Mitchell, Williams increased the long-standing appropriation of $5,000 to $11,240 to cover the new cost of police protection for the three events: the stadium and fireworks show, the children’s parade, and the activities in Holding Park after the parade. Mitchell had suggested that the town take over the committee, but Williams disagreed in his budget message: “We recommend leaving the committee in charge because this event is truly a community event. It does not need to be run by Town staff.” He did recommend someone from the police department serve on the committee to help with planning for future needs.
Williams said the theme for this year’s budget should be “a new beginning” because:
— A new manager will be at the helm some time this summer after Williams’ 22 years in office.
— The mayor and commissioners have approved a new Strategic Plan which will be the road map for decisions in the next few years.
— Town voters overwhelmingly approved $25.1 million in bonds for streets, sidewalks, parks and greenways. For many of the projects, the town only has to match some funds, meaning the total investment from the grants and bonds will be about $50 million.
— After 30 years of paying off the town’s share of the high costs of power plants, an agreement between the power agency representing Wake Forest and 31 other municipalities and Duke Energy will reduce the debt and allow the town to lower the power rates customers pay after a rate study.
The tax base is $4,493,550,000 — $4,425,050,000 in Wake and $68,500,000 in Franklin County – and the town expects to collect $22,665,466 given a 97 percent collection rate. Wake County is collecting data for the eight-year revaluation process in 2016, a process that in 2008 resulted in higher property values at a time when the housing market and other troubles led to the recession. In a meeting with the press Wednesday morning, Staples said the growth in the town paid off an earlier bond issue debt, but even though valuations are rising again the revaluation process may not have a great impact on the town’s finances. In 2008, the tax rate had been 55 cents and, as a result of revaluation, Williams recommended a 46-cent rate, a penny more than a revenue-neutral rate. The board agreed with Williams during the work session but at their regular meeting three of the five commissioners voted for a 51-cent rate that folded monthly garbage and recycling fees into the budget and added a penny to the fire department contract.
What is having a great impact on this year’s budget is the debt service for the $5 million in bonds the town recently sold. It is being done without a property tax increase. The debt service this year for the debt service is $320,000, 9 percent of the $59,409,685 budget. Staples said the total interest cost for the $5-million sale was between 2.34 and 2.36 percent. Without the town’s triple-A bond rating that interest would have probably been more than 3 percent.
Williams anticipated the town will spend 32 percent of that $59 million budget on personnel, 28 percent on operating costs, 26 percent on the fire department contract, 22 percent on purchasing power, and 6 percent on capital outlay.
Wednesday Interim Town Manager Roe O’Donnell said the budget committee “had to make some very hard choices” because of the debt service. He said there were a number of requests for new positions from town departments. “We were not able to fund any of them.” Those requests included a five-person new traffic unit in the police department which would be helpful because of the traffic congestion anticipated as the state Department of Transportation replaces three bridges in town this year and next, including two next to the three Heritage schools. The planning, downtown and IT departments all asked for one position, and parks and recreation asked for five. Staples did they were able to find money for some more part-time employees for parks and recreation.
O’Donnell said there was a great spirit of cooperation demonstrated by the department heads in keeping the budget focused on paying the debt service, taking care of existing employees and rebuilding the town’s fund balance, its saving account.
The policy is to have the fund balance at 35 percent of budget expenditures, and it is currently $4,742,968 below that amount, standing at $13,344,013. Staples said the bond agencies looked very closely at the town’s fund balance, wanting to make sure that it was not balancing the budget by withdrawing from savings. “We want to keep our financial house in order,” she said, adding that the town is withdrawing about a third less this coming year than the current year to replenish the fund.
Staples and O’Donnell are very proud of the financial award the town recently received, the Government Finance Officers Association Distinguished Budget Presentation Award for the 2014-2015 year.
There are currently 227 authorized positions in town, and those that are currently empty and those that become empty during the year will be filled. Twenty-two of the 227 are in the electric department, Wake Forest Power, 84 are in the police department including 69 sworn officers, finance currently has 18 positions and inspections has 14.
The goals of the Strategic Plan – copies are available at town hall – are to stimulate economic development, enhance and support a safe and connected community, instill an organizational culture that reflects our core values, and enhance fiscal strength. The town board has set objectives and strategies for each goal. In the budget, there is a page for strategic plan funding with its goal and the department. For example, under the first goal, the commissioners’ funding of the economic development work done by the Wake Forest Chamber of Commerce is listed.
