Tuesday night, May 19, the Wake Forest Town Board will hear a presentation about the sale of the town’s assets in Duke Energy power plants, a sale that may lower the town’s debt for those plants. Whether the sale will also lower electric bills for Wake Forest residents and businesses will be determined through a planned rate study later this year.
The board will also hold a public hearing about the proposed budget for the 2015-2016 fiscal year. Mark Williams, who retired as town manager at the end of April, left a $59 million budget that leaves the property tax steady at 52 cents per $100 valuation – 41 cents for town operations and 11 cents for the Wake Forest Fire Department contract. It includes no new town positions but does provide merit pay and career ladder funds, and it retrenches in purchasing and new programs to replenish the fund balance (savings). The town is taking on a heavy debt burden, $320,040 this year, after selling $4.3 million in bonds to begin the street, sidewalk, parks and greenway improvements voters approved last fall. (The Gazette incorrectly said the town sold $5 million in bonds in an article last week.)
After the hearing and presentation, the commissioners are expected to approve an ordinance approving and authorizing the necessary contacts and agreements involved in the power plant sale.
Williams said this for a Gazette article on April 15: “The effect [of the sale] is that Wake Forest’s wholesale bill from NCEMPA (North Carolina Eastern Municipal Power Agency) will be reduced and we will be able to pass those savings on to our retail customers. Exact changes in rates are hard to pin down at this time and I would not want to promise something too early,” Williams said. “I am recommending that the town do a full rate study next budget year to determine the best way to pass on the savings to all of our customers, both residential and commercial. It is safe to say that rates will go down initially, probably sometime in 2016.”
He said the asset sale – selling the shares the 32 municipalities own back to Duke Progress Energy – will reduce NCEMPA’s debt by over 70 percent. The amount of debt the 32 towns and cities owe will then be between $400 and $500 million, Williams said, and the towns and cities will pay that debt off over 10 years after NCEMPA sells new defeasance bonds. The authority to issue those new bonds was included in the legislation that was just approved.
“The debt will last for ten years, so the pay off date is about the same as the old debt (2026). As with the old debt, all 32 towns will have a proportionate share of the new debt and will pay their share each month as part of the wholesale bill from NCEMPA.”
In addition to the budget and the sale of its power plant shares, the town board will consider the request for master plan approval of an infill subdivision, Olde Wake Forest, on an extension of North Wingate Street. The planning board recommended approval by a six to two vote on May 5. A second request heard May 5 was to amend the conditional use permit for 1.35 acres at 1628 South Main Street to allow for more than a plumbing company office, and the planning board recommended approval by seven to one.
The commissioners and mayor will go into a closed session at the end of the agenda to conduct the annual evaluation of the town attorney.
