This week’s questions are about money. What is your view of the town’s finances and its debt? Do you think the town should continue to finance large projects — near future projects include an east side fire station, new and large operations center, southside park, police station — through voter-approved bond issues? Are there any other big-ticket items you think should be added to this list?
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Liz Simpers: Town finances and budget questions are ones that require a lot of expert advice! I have met several expert town employees to seek understanding. Finance is an area where we have to rely on data collected by experts and not just feelings and stories.
The town has identified four goals in our strategic plan for our current fiscal year:
- Economic development.
- Enhance a safe and connected community.
- Culture that reflects our values.
- Maintain fiscal strength.
This is great news for us, as taxpayers, because it shows their thoughtfulness in making Wake Forest a place to live, work, and play. As the town finds ways to creatively structure staff, resources, and partnerships, we are making needed improvements while keeping our cost of living relatively low. For perspective, talk to a family that has moved here from the northeast and ask them about the property tax differences!
As big ticket items may come up, the town is looking at each item through the lens of those four goals. Thoughtfulness can be a slow process, but it is a needed process when involving so many key stakeholders!
If elected town commissioner, I vow to listen more than I speak, seek understanding from experts, and help the community to be informed about town decisions and plans. I would be honored to have one of your two votes on November 7th!
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John Van Ness: The mayor, board of commissioners, and town manager take a very conservative approach with regards to budget and town finances. As a resident, I applaud Mr. Padgett’s and his team’s management of Wake Forest. They are a big part of what makes this a great place to live. I will also take a conservative approach to spending and not lose sight that tax revenue is generated from the hard-working citizens of Wake Forest.
We have a “rainy day” fund that is equal to 35 percent ($15M) of our tax collected, where 8 percent is the minimum recommendation. We do an excellent job of living within our means, while still providing vital services to the community. Our debt service is less than 11 percent of our budget, which is reasonable. A few years ago, we passed a $25.1 M referendum for greenways, street improvements and parks and recreation of which $4.3 M has been issued. I would support using an additional portion of the greenway referendum to continue expanding our greenway system.
The first question I would ask regarding any large project is “How are we going to pay for it and how will it impact future budgets?” As for any new public safety facilities the board of commissioners needs to work closely with Kip Padgett and determine the best way to finance. As we continue to grow, these types of challenges will become more and more prevalent. We need leaders who have the experience and common sense to make decisions that will keep Wake Forest thriving. I have been solving problems for 25 years and want to use the skills that I have developed to serve the citizens of Wake Forest.
Working together we can insure that Wake Forests’ finances remain strong and are modeled after our core values, Caring, Integrity, Commitment and Innovation. Please support me on November 7.
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Thad Juszczak: In my discussions with the town’s manager and finance director, I have been impressed with their grasp of the issues involved in the town’s finances. The fact that the town has maintained a AAA bond rating since 2009 (at which time it was the smallest municipality in NC to obtain that rating) is third-party proof that the town’s finances are sound.
When it comes to financing a specific project, the first question to ask is whether the project is necessary and/or desirable. If it is and it will result in a capital asset (e.g., a building, park, etc.) that will last for many years, then it makes sense to incur debt to pay for it. This allows the users for years to come to help pay for it. If the town used current funds for the project, it would be making today’s taxpayers cover the entire cost.
The town has a Capital Improvement Plan (CIP) process to identify and prioritize capital needs for the town. This process allows the town to consider not only what to finance but how to finance it (e.g., bonds, installment purchases, grants, or current tax revenues).
If the town decides to sell bonds to finance items on the CIP, it will require voter approval. The citizens get a say in whether or not the project is really needed in the first place. We last approved a $25M bond issue in November 2014. There is still over $20M which has not been issued, but there will be another issue soon for the senior center expansion.
There may be situations where debt other than long-term bond debt is appropriate. The state legislature has authorized municipalities to enter into installment purchases for less than $5M or a term of less than five years. The town does this only after considering the impact on the AAA rating. However, even for these, the town must obtain the approval of the Local Government Commission in the state treasurer’s office. For example, because the town needed to obtain financing quickly, they took a short-term loan to get the Holding Park Pool moving. I would have supported this because lining up a bond issue would have taken too long. The town also might consider financing some lower cost CIP items with current year tax revenues and include those funds in the town’s budget.
The town has a common-sense approach to capital improvements that requires a developer to finance or contribute to capital improvements when they develop a project adjacent to or impacted by the site of the capital improvement. Thus, it is common to require a developer to make some road improvements or other improvements near their projects. However, to deal with current problems, I would favor considering whether the town might sometime finance a capital improvement now (e.g., continuing Franklin Street to NC 98, greenway additions, etc.) with bond or installment agreement financing, rather than waiting some day for a developer to improve adjacent properties. The town could subsequently charge developers a fee for any capital improvements previously made, much as we already do with fire impact fees to pay for fire facilities and equipment already bought.
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Bridget Wall-Lennon: Based on my review of the town’s strategic plan, 2017-18 Annual Budget, Capital Improvement Plan for 2017-2022 and Comprehensive Annual Financial Report for Fiscal Year End 2016, I believe the town operates in a fiscally sound manner. Our tax base has grown from $2.0 billion in 2007 to $4.5 billion in 2016. Revenues for this fiscal year are anticipated to exceed $5.0 billion.For fiscal year 2015-16, the town’s tax base was approximately 23 percent commercial/industrial and 77 percent residential. Meaning revenues are primarily generated from property taxes. These general funds are typically used to operate the town – personnel, police, fire departments (funded 75 percent by the town) and general operations. Our general funds are also used to fund capital improvement projects. The town typically funds approximately $3 million annually for our CIP program. The town has several major bond-related projects that will soon be underway, such as the new operations center, fire and police station and south side park. Our debt service for past three years has been 12 percent. Meaning we have been steady and consistent from year-to-year in paying down our debt. The town anticipates paying off two previously bond-funded projects in 2018. I support funding major projects through voter-approved bonds and believe the town should continue with this funding source because it allows the town to not obligate a large portion of its general operating and CIP funds to finance these major projects.
In March of this year citizens had an opportunity to provide input on the CIP plan for the next five years. The CIP plan is reviewed and updated annually and the town manager presented at last night’s board of commissioners meeting that the status of current capital improvement projects will be updated and uploaded quarterly to the town’s website for citizens to review and follow. The new budget process for fiscal year 2018-19 will start in November and the public will be provided an opportunity through public hearings, usually starting in March, to be a part of the budget process.
I do not have any additional large projects to add at this time, and have not been told of any, specifically, from voters with whom I have spoken.
For more information on my platform, I invite you to visit my website at www.BridgetForWakeForest.com. I will also participate in three (3) Candidate Forums next week – Wake Chamber of Commerce Candidate’s Forum on October 24th, Greater Franklin Chamber of Commerce Candidate’s Forum on October 26th and Knightdale-Wake Forest Alumnae Chapter of Delta Sigma Theta Sorority’s Candidate’s Forum on October 28th.
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Ned Jones: First of all I hate debt. I try to avoid it. I would like for my town not to have debt. Now with that said in today’s economy debt is quite often necessary and even beneficial. If money is and paid back responsibly it improves your position. So debt can be good if you handle it responsibly.
The town has an AAA bond ratting which shows that has handed finances responsibly but an AAA bond rating is no reason to borrow.
If the town handles debt responsibly for large necessary projects that benefit the citizens of Wake Forest and are needed now then debt could be acceptable. However any future cases would have to be handled on a case by case basis given each case’s unique circumstances.
The east side fire station, new and large operations center, southside park, police station should be beneficial projects. Votes to approve bond issues have the potential to increase taxes. No one wants a tax increase.
At this time I do not know of any additional projects that would warrant a bond.
