2023
FISCAL YEAR ENDED JUNE 30, 2023
Citizens Financial Report TOW N OF WA K E FORE ST ~ NORTH CA ROLIN A
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Providing transparency about the Town’s financial operations The 2023 Citizens Financial Report provides citizens and other interested parties with an overview of the Town of Wake Forest’s financial results. This report is prepared to increase awareness and provide transparency about the Town’s financial operations. The financial information provided here is obtained from the audited financial statements in the Town’s 2023 Annual Comprehensive Financial Report (ACFR) which is audited by Cherry Bekaert LLP and has received an unmodified or “clean” opinion. The Citizens Financial Report is not required to present the same level of detail as the ACFR and, therefore, may not fully conform to generally accepted accounting principles (GAAP). This report is designed to provide a summary of the Town’s overall financial condition in a user-friendly format as well as serve as a supplement to the ACFR, not a replacement. To see the report, visit the Town’s website at wakeforestnc.gov and search “annual comprehensive financial report.” Or go directly to the webpage by visiting bit.ly/WFAnnualComprehensiveFinancialReport.
CONTENTS Town Leaders....................................................... 3 Strategic Plan........................................................ 4 Financial Results................................................... 5 Major Initiatives..................................................... 8 Debt Management............................................... 11 Budget................................................................ 13 Wake Forest by the Numbers.............................. 14
Finance & Budget Awards The Town of Wake Forest’s Annual Comprehensive Financial Report (ACFR) has won the Government Finance Officers Association of the United States and Canada (GFOA) award for 33 consecutive years. For the last nine consecutive years, the Town has received the GFOA award for the Distinguished Budget Presentation. To earn these awards, the Town must produce easily readable and efficiently organized budget and financial reports, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and accepted legal requirements. In addition, the Town’s Citizens Financial Report has received the award for Outstanding Achievement in Popular Annual Financial Reporting for the last six years. The award is valid for a period of one year. To view all Town of Wake Forest financial reports, including the budget, visit the Town’s website at wakeforestnc.gov and search “finance.”
Government Finance Officers Association
Award for Outstanding Achievement in Popular Annual Financial Reporting Presented to
Town of Wake Forest North Carolina For its Annual Financial Report For the Fiscal Year Ended June 30, 2022
Executive Director/CEO
Town Leaders A Message from the Town Manager We strive to make sure we retain that sense of character that continues to make Wake Forest the ultimate location to live, work and play.
The Town of Wake Forest is proud to present its Popular Annual Financial Report (PAFR). The Town is beginning to implement some of the projects from the 2022 voter approved bond referendum. Fred Smith Company was hired to begin Phase 1 of our street resurfacing program. Over the next few months, they will be preparing some of our roads to begin applying asphalt once warm weather returns. Additionally, Phases 3 & 4 of the Dunn Creek Greenway will be bid in the spring for construction. We have narrowed down a site for the construction of Fire Station No. 6. Staff is currently working to hire an architect to begin the design and build of the station to ensure adequate emergency response times for our growing community. This process will also include a potential renovation to Fire Station No. 1 on Elm Avenue originally built in 1985.
Our financial position continues to remain strong. The Town continues to face challenges with the supply chain and cost increases. In some cases, we have seen delivery dates go from a few weeks to two plus years. Cost increases for some products, especially in the electric department, have increased 50% or more. To help lessen some of the increases we continue to experience, the Town has participated in cooperative purchasing arrangements, publicprivate partnerships and other cost cutting initiatives. On behalf of our elected officials and staff, I want to thank you for your continued support of our efforts in Wake Forest. We strive to make sure we retain that sense of character that continues to make Wake Forest a great community.
Our Parks, Recreation & Cultural Resources Department is currently updating its master plan. This updated plan will guide the development of our parks system and athletic complexes over the coming years. While we have completed an 18-hole disc golf course in partnership with the Southeastern Baptist Theological Seminary, there remains a need for a skate park, multi-use sports complex, and additional greenways.
— Kip Padgett, Town Manager
2023 Wake Forest Mayor & Board of Commissioners
Mayor Vivian Jones
Commissioner Jim Dyer
Commissioner Chad Sary
Commissioner R. Keith Shackleford
Commissioner Nick Sliwinski
Commissioner Adam Wright
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Strategic Plan
Charting Our Course for the Future As we look to the future, Wake Forest must plan for how it will continue providing services in a manner that efficiently meets the needs of our growing and ever-changing community. The strategic plan charts our course for the next five years towards providing excellent and sustainable quality of life for our citizens. Updated for 2022-2027, the Town’s strategic plan has five goals as follows:
Our VISION Wake Forest’s vibrant, diverse, and welcoming community fosters its distinct character, thriving economy, and high quality of life.
Our MISSION Goal 1
Sustaining Excellent Town Services Goal 2
Creating Accessible Housing Opportunities Goal 3
Fostering a Safe, Diverse, and Welcoming Community Goal 4
Investing in Transportation and Infrastructure Goal 5
Advancing Community and Economic Prosperity
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The Town of Wake Forest is committed to delivering superior services and celebrating the diversity of our organization.
Our VALUES Caring: Demonstrating respect, honesty, understanding, helpfulness, and positivity Commitment: Displaying a strong sense of dedication to the organization and your fellow employees Character: Demonstrating integrity, perseverance, and ethical behavior Collaboration: Embracing the value of teamwork and interdepartmental cooperation to achieve common goals
FISCAL YEAR 2022–23
Financial Results
Governmental Results The Governmental activities section in the Town’s financial statements includes programs generally supported by taxes, capital contributions along with grants from federal/ state governments. Governmental revenue sources cover various services including: public safety, public infrastructure, general government administration and parks, recreation and cultural resources. Governmental activities also include special revenue activities, such as grants, and capital project activities, such as greenway and transportation projects funded by bond proceeds.
2023
2022
Change
Total Assets & Deferred Outflows
$475,966,915
$378,774,287
$97,192,628
Total Liabilities & Deferred Inflows
93,344,086
88,422,364
(4,921,722)
Total Net Position
$382,622,829
$290,351,923
$92,270,906
The Town’s strong fiscal management remains its hallmark. Management acknowledges that 2023 was another successful year with fund balance increasing significantly for the third consecutive year.
Balance Sheet A balance sheet provides a snapshot of what the Town owns (assets) and owes (liabilities). Net position represents the Town’s investment in the assets it uses in providing services to its citizens.
Over time increases or decreases in net position may serve as a useful indicator of whether the Town’s financial position is improving or weakening. During FY 2022-2023, the Town’s net position increased $92,270,906.
2023
2022
Change
Revenues
$163,285,534
$101,198,265
$62,087,269
(Expenditures)
(71,014,628)
(63,026,346)
(7,988,282)
Change in Net Position
$92,270,906
$38,171,919
$54,098,987
Total governmental activity revenue increased 61.35% from prior year while expenses increased 12.67%. Increases from previous fiscal year were recognized as follows: n
n
Income Statement An income statement provides a summary of amounts received (revenues) and amounts spent (expenditures). The difference between revenue and expenditures shows the Town’s change in net position. A positive change indicates the Town had enough revenues to cover its obligations and has the ability to save for the future.
Ad valorem taxes – 4.29% over previous year due to strong continued growth in our region Local option sales tax – 9.47% increase over prior year
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General Fund Revenues* Year Ended June 30, 2023 $70,465,563
General Fund Results
Property Taxes
36,894,134
52.9%
Sales Taxes
15,261,608
21.9%
Grants & Other Taxes
6,847,003
9.8%
Permits & Fees
3,809,719
4.4%
Sales & Services
4,481,901
6.4%
Other Sources
3,171,198
4.6%
*Includes General Fund and Debt Service Fund revenues. Does not include revenues from Wake Forest Business & Industry Partnership, Downtown District Special Tax Fund, Police Department Special Fund, Wake Forest Renaissance Centre Fund, or Public Arts Fund, which are included in the FY 2023 Annual Comprehensive Financial Report.
General Fund Expenditures Year Ended June 30, 2023 $64,926,515
The General Fund is the Town’s primary operating fund. Property taxes and sales taxes are the two largest sources of revenue making up over 78% ($55,155,742) of the total received for the fiscal year. These revenues provide services to citizens and businesses within Town limits. Public safety, which includes police and fire protection, accounts for 40% ($25,891,111) of the total expended. This is followed by general government at 29% ($18,913,053) which includes the governing body, legal services, administration, town manager’s office, communications, human resources, finance, downtown development, information technology, planning, inspections, engineering, public works administration, urban forestry and fleet maintenance. The charts on this page show the breakdown by percentage of General Fund revenues and expenditures.
Three Year Trends General Fund Revenues 2023 Actual
2022 Actual
2021 Actual
Property Taxes
$36,894,134
$35,375,578
$33,655,281
Sales Taxes
15,261,608
13,941,067
9,972,882
Grants & Other Taxes
6,847,003
6,281,852
6,353,591
Permits & Fees
3,809,719
4,771,131
4,099,595
Sales & Services
4,481,901
4,372,130
2,068,143
Other Sources
3,171,198
2,301,667
2,167,379
$70,465,563
$67,043,425
$58,316,871
2023 Actual
2022 Actual
2021 Actual
Public Safety
$25,891,111
$23,330,267
$21,463,379
General Government
18,913,053
16,973,007
13,844,684
Debt Service
7,335,215
7,545,339
6,619,209
Total GF Revenues
General Fund Expenditures
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Public Safety
$25,891,111
39.9%
General Government
18,913,053
29.1%
Debt Service
7,335,215
11.3%
5,367,974
4,956,666
4,379,114
Environmental Protection
Environmental Protection
5,367,974
8.3%
Cultural & Recreational
4,372,235
3,690,008
3,397,524
Cultural & Recreational
4,372,235
6.7%
Transportation
3,046,927
2,744,553
2,625,522
$64,926,515
$59,239,840
$52,329,432
Transportation
3,046,927
Total GF Expenditures 4.7%
FISCAL YEAR 2022–23
Financial Results
Proprietary Results Proprietary or business type activities rely on fees charged to customers for services rendered. The Town operates Wake Forest Power and reports as the Electric Fund. It is operated in a manner
2023
2022
Change
Total Assets & Deferred Outflows
$30,528,286
$30,478,909
$49,377
Total Liabilities & Deferred Inflows
8,840,452
9,305,919
465,467
Total Net Position
$21,687,834
$21,172,990
$514,844
similar to private business where the costs of providing the service are financed or recovered through user charges.
Balance Sheet A balance sheet provides a snapshot of what the Town owns (assets) and owes (liabilities). Net position represents the Town’s investment in the assets it uses in providing services to its citizens.
Change in net position for business-type activities increased $514,844 for the fiscal year.
2023
2022
Change
Income Statement An income statement provides
Revenues
$22,794,412
$22,483,922
$310,490
(Expenses)
(22,279,568)
(22,454,743)
175,175
$514,844
$29,179
$485,665
a summary of amounts received (revenues) and amounts spent (expenses). The difference between revenue and expenses shows the Town’s change in net position. A positive change indicates the Town had enough revenues to cover its obligations and has the ability to save for the future.
Change in Net Position
Charges for services from the sale of power increased 1.34% from the previous year. Total expenses increased slightly.
Wake Forest Power serves over 7,100 customers.
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Major Initiatives Notable Development Projects Loading Dock Wake Forest
Loading Dock Wake Forest
Loading Dock Wake Forest, a two-story coworking and business incubator, has created over 125 jobs in downtown Wake Forest since opening in December 2021. Built for entrepreneurs by entrepreneurs, this community-focused opportunity is set to transform the future of small business development in Wake Forest for years to come.
Merritt Capital Business Park
Grove 98
Exciting commercial and residential development activity continue surrounding Wegmans located along the central corridor connecting downtown Wake Forest and U.S. Highway 1 (Capital Blvd). Grove 98 includes retail, restaurants, and multifamily residential development. The multifamily residential piece of Phase 2 involves 232 apartments that could be ready for occupancy by late Fall 2023. Phase 3, which includes plans for
a 30,000 square foot destination fitness center, is projected to be complete by 2024. Merritt Capital Business Park
Merritt Capital Business Park located at Ligon Mill Road and Unicon Drive offers up to six light industrial buildings totaling over 459,000 square feet to accommodate a variety of small and full-building and warehouse users. The park is positioned in a premier location minutes from US-1, US-401 and I-540.
Private Developments Spurred by Public Investments The Town of Wake Forest continues to make strategic public investments that will spur private development. Several developments in progress are direct results of that investment. Three significant projects in downtown Wake Forest include: ➤
Grove 98
Community Planning Updates
Housing Affordability Plan Adopted in September 2022, the Housing Affordability Plan examines existing local housing conditions, determines housing needs, establishes a vision and associated goals for housing in the community, and recommends policies to help achieve this vision.
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Major Initiatives
East Roosevelt Avenue & North White Street
The restoration of an 80-year-old building into a food hall space is underway on East Roosevelt Avenue. Completion is expected in Spring 2024. Magnolia Square, a residential development with 40 townhome-style condos, is nearing completion. The development of a planned park will follow. 353 South White Street
353 South White Street (former SunTrust building), located at the corner of South White Street and Elm Avenue, spans one acre in the heart of downtown. Triangle Real Estate Company (TREC) was selected as the developer for this project and negotiations are underway for the development agreement for the site. The project is expected to include ground floor retail, residential units, and a Town-owned parking facility.
A new park is planned for the space behind the Food Hall on East Roosevelt Avenue.
Transportation Improvements Food Hall
535 South White Street
535 South White Street warehouse is a project that will convert an existing 16,000 square foot building into a mix of uses including food and beverage along with private offices. The site is adjacent to Loading Dock Wake Forest. The groundbreaking ceremony was held in June 2023 and construction is underway on this adaptive reuse project.
The Downtown Plan The Downtown Plan kicked off during June 2023. Formerly known as the Renaissance Plan that was adopted in 2017, this update will be a blueprint for the future with a focus on the Downtown commercial center. The plan will be driven by community input and will result in a set of policies that direct future growth and development. Plan adoption is scheduled for Fall 2024.
The Pavement Management Program was presented to the Board of Commissioners in Spring 2023. Plans are to spend $18 million over the next three fiscal years to resurface and rehabilitate Townowned streets. Other improvements include: n
n
South Franklin Street Expansion. $3,525,000 Downtown Streetscape Improvements. N. White Street and E. Roosevelt Avenue $3,100,000
Unified Development Ordinance (UDO) The Unified Development Ordinance (UDO) and Manual of Specifications, Standards and Design (MSSD) are currently being updated to implement the policies and recommendations of the recently updated Northeast Community Plan and Community Plan. The UDO and MSSD were first adopted in 2013. The updated version is slated for adoption Summer 2024.
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Fiscal Year Highlights
Twelve additional positions were added to meet the demands of our growing community.
Our Police and Parks, Recreation & Cultural Resources departments received their reaccreditations from their respective organizations, CALEA, and CAPRA.
Partnership with Rebuilding Together of the Triangle and the Northeast Community Coalition completed the second year of its Housing Rehabilitation Program. Work continues with repairs to homes in the Northeast Community.
A stormwater infrastructure and criticality assessment was completed in 2022. At the direction of the Board of Commissioners, a Stormwater Advisory Group was formed and began meeting in May 2023 to discuss establishing a Stormwater Utility.
In July 2022, all full time and part time employees received across the board increases. This enables the Town to remain competitive and retain its highly skilled team.
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Debt Management
The Town issues debt to fund General Governmental and business-type capital needs. Total outstanding debt as of June 30, 2023, totals $37,763,883. This includes general obligation bonds (voter approved debt), revenue bonds (electric), leases, and installment purchase agreements. Also included this year are subscription-based information technology agreements due to the implementation of GASB 96. The chart below provides the breakdown of debt type at the end of the fiscal year.
Another priority of the Town is to maximize return on Town funds. Maintaining or improving bond ratings results in lower interest rates on debt.
Town’s Credit Ratings
Installment Purchase Agreements:
The Town benefits from its outstanding credit ratings. A priority of the Town is to maintain public trust in the sustainability of the Town’s financial system. This commitment has resulted in the Town receiving the following credit ratings: n n n
Standard & Poor’s AAA Fitch Ratings AAA Moody’s Aaa
Debt Issuance The Town’s total debt decreased by $5,589,487 (12.89%) during the fiscal year. Along with retiring debt during the year, the Town issued the following debt:
n
n
$779,715 – Vehicles and Equipment, May 2023, 3-year term, 4.18% $363,275 – Police Vehicles, January 2023, 3-year term, 3.46%
The Town also recognized a liability for subscription-based software agreements in the amount of $192,724 with the inception of the GASB 96 accounting standard for five software subscriptions with terms ranging from 24 to 60 months and interest rates ranging from 0.331% to 3.135%.
Breakdown of Debt
During 2022-2023, the Town issued debt to purchase police vehicles and equipment.
Year Ended June 30, 2023 $37,763,883
General Obligation Bonds
$24,969,000
66.1%
Installment Purchase Agreements
$11,961,638
31.7%
Leases
$559,504
1.5%
Revenue Bonds
$273,741
0.7% 11
Debt Management
Town’s Current Debt* Town’s Policy for Debt North Carolina State Statute
Debt Policy Compliance
Future Debt Issuance
The Town actively monitors and manages its debt capacity and affordability. The Town has a formal policy which provides guidance and direction when considering the impact of future debt.
The Town utilizes a debt model to plan the issuance of future debt. The Town updated its debt model in May of 2022 in conjunction with the November 2022 bond referendum with projects totaling $75 million. A debt service fund with specific revenues including a portion of the tax rate, vehicle fees and downtown municipal service district tax funds are earmarked to repay general fund debt.
How the Town’s Debt Compares to Policy
In November 2022, voters approved issuing $75,000,000 in general obligation bonds for roadway and transportation, parks and recreation facilities, greenway improvements and parking facilities. The Town plans to issue these bonds in three installments over the next seven years with the planned issuances tentatively scheduled for 2024, 2026 and 2028 or 2029.
1.4753%** 2%** 8%** * includes authorized and unissued general obligation bonds in the amount of $75 million ** of assessed valuation
Debt Issuances Planned for Fiscal Year 2023-2024: n
n
$5.5 million – Installment debt for street improvements. $2.0 million – Installment debt to purchase replacement vehicles and equipment for Police, Streets, Parks & Recreation, Inspections, Planning and Electric departments.
During 2023-2024, the Town plans to issue installment debt to purchase replacement vehicles and equipment for Police, Streets, Parks & Recreation, Inspections, Planning and Electric departments.
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Budget & Planning Fiscal Year 2023–2024 Budget Highlights The budget represents the fundamental philosophy of being conservative with revenue projections and maintaining fiscal constraint on the expenditure side.
Much like an average household, the Town uses a balanced budget to ensure that it maintains a healthy financial position. North Carolina law requires local governments to approve a balanced budget each year. The Town plans for its financial needs of the future by utilizing a five-year capital improvements plan that is updated annually, financial forecasting, debt models, and various other studies and plans. Governmental Activities: The 2023-2024 Adopted
Budget increased 6.03% from the 2022-2023 Amended Budget. This also increased 14.29% over the 2022-2023 Adopted Budget.
Property Tax Rate The Town’s tax rate increased to $0.505 for the coming fiscal year.
The foundation of this budget is the updated strategic plan as approved by the Board of Commissioners in June 2022. The budget endeavors to achieve the five key goals in the strategic plan by maintaining excellent town services, creating accessible housing opportunities, fostering a safe, diverse, and welcoming community, investing in transportation and infrastructure, and advancing community and economic prosperity. Performance pay (merit), market adjustments and career ladder funds for eligible departments were included. Twenty-seven new full-time positions were included in the approved budget.
The rate is inclusive of $0.015 for transportation initiatives and $0.005 for affordable and workforce housing. The final budget for the General Fund totaled $75.3 million and the final budget for debt service totaled $8.1 million. In addition, the Downtown Municipal Service District tax rate remains unchanged at $0.14. The vehicle fee remains unchanged at $30. Despite the appearance of renewed fiscal growth and other positive changes in economic conditions, the Town continues to focus on financial sustainability. The budget represents the fundamental philosophy of being conservative with revenue projections and maintaining fiscal constraint on the expenditure side. Decision making will still require much care and prudence as we continue to focus on providing the core services our citizens expect. Prioritizing how our resources are utilized is critical as we make long term plans for capital investments, as well as addressing future debt service and additional upcoming legislative mandates. Business–type Activities: The Town’s Board of Commissioners approved an increase in electric utility rates to be implemented effective September 2023. The total adopted budget is $25.1 million for the Electric Fund.
The Town’s tax rate increased one cent to $0.505 for the coming fiscal year to provide additional revenue due to the passing of the 2022 Bond Referendum.
How Your Town Property Tax Dollars Are Spent
Total Budget FY 2023–2024 $110,309,395
General Government
38.1%
Public Safety Fire Services Transportation Environmental Protection
Personnel Costs
$46,570,915
42%
Operating Costs
$33,787,515
31%
Purchase for Power
$13,468,250
12%
Debt Service
$8,894,065
8%
Capital Outlay
$7,588,650
7%
18.9% 14.8% 4.3% 7.0%
Cultural & Recreation
8.6%
Debt Service
8.3%
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Wake Forest by the Numbers
56,681
$43,601
4 th largest municipality
$104,006
per capita personal income
town population
in wake county
38.6 yrs
median household income
median age
167.72 20.22 miles of town - owned streets
750
land area in square miles
building permits issued during fiscal year
12,941 acres within town limits
3.0%
106
full-time and part-time firefighters
wake forest unemployment rate
23
fire department volunteers
5
fire stations
87
full-time sworn police officers
6
police stations
14
413
town employees
7,125
number of wake forest power customers
MAJOR TAXPAYERS
Rank Taxpayer
MAJOR EMPLOYERS
Taxable Assessed Valuation
1
Legacy Wake Forest LLC
$52,810,680
2
Wake Forest Apartments LLC
41,361,099
3
Caveness Partners LLC
36,903,241
4
KE Capital Owner TIC LLC
35,171,335
5
Crescent1000 LLC
35,057,573
6
1747 Alexander Heritage LLC
34,028,943
7
WMCI Raleigh IV LLC
33,949,300
8
Wake EMC
32,948,266
9
Crossroads Holdings LLC
30,573,582
10
Wegmans Food Market
23,757,654
Total Total Assessed Valuation Source: Wake County Revenue Department
$356,561,673 $7,445,945,252
Rank
Principal Employers
Approximate # of Employees
1
Wake County Public School System
1,334
2
Southeastern Baptist Theological Seminary
470
3
Wegmans
450
4
Town of Wake Forest
413
5
Wal-Mart
400
6
Harris Teeter Heritage Lake
395
7
Chick Fil A
318
8
Lowes Foods
230
9
Target Corporation
225
10
Rex Healthcare (Wake Forest & Wakefield)
180
11
Lowe’s Home Improvement
175
12
Franklin Academy
170
13
Sam’s Club
158
14
Publix
155
15
Hillside Nursing Center of Wake Forest, Inc.
150
16
Texas Roadhouse
125
17
Kohl’s
114
18
Wake Preparatory Academy
99
19
Food Lion
90
20
Norse Brewing
45
Source: Wake Forest Economic Development projected employment estimates
15
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The 2023 Citizens Financial Report is a publication of: Town of Wake Forest FINANCE DEPARTMENT 301 S. Brooks St. Wake Forest, NC 27587 For more information about the Town of Wake Forest visit wakeforestnc.gov
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