2024 Citizens Financial Report: Town of Wake Forest, NC
TOWN OF WAKE FOREST ~ NORTH CAROLINA
Providing transparency about the Town’s financial operations
The 2024 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 2024 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.”
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 34 consecutive years. For the last 11 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 seven 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.”
We strive to make sure we retain that sense of character that continues to make Wake Forest a great community.
A Message from the Town Manager
The Town of Wake Forest is proud to present its Popular Annual Financial Report (PAFR).
Construction continues throughout town on several projects. Dunn Creek Greenway Phases three and four started this month and is expected to be complete by early 2026. Phase one of our street resurfacing program is winding down and we are moving into the phase two. With the passage of the stormwater utility fee, several projects are underway including: Juniper Avenue Culvert Replacement, Miller Park Stream Restoration, Flaherty Park Dam construction, and Bowling Green detention basin repair.
We have selected the site for fire station number six. We anticipate construction to begin in 2025. The site will also include a training center for our firefighters to train in fire suppression and lifesaving activities. These training activities are critical to protecting our residents and ensuring the safety of the firefighters.
Development remains strong and we are still seeing strong growth in the commercial areas within the Grove 98 development along Calvin Jones Highway and other areas throughout town. The announcement of a potential hospital in Wake Forest will result in positive impacts
Town Leaders
as it serves as a regional medical facility that attracts visitors to our town, but also ancillary and other commercial uses that typically locate near hospitals.
Our financial position continues to remain strong. Our AAA status was reaffirmed by the three credit rating agencies. This signifies the continued strong financial position of the Town. It also results in lower borrowing costs, including lower interest rates. In some cases, we have seen delivery dates go from a few weeks to two plus years. The Town continues to participate in cooperative purchasing arrangements, publicprivate partnerships and other cost saving initiatives to ensure the best return on taxpayer investments.
On behalf of our elected officials and staff, I want to thank you for your support of our continued efforts in Wake Forest. We strive to make sure we retain that sense of character that continues to make Wake Forest a great community.
— Kip Padgett , Town Manager
2024 Wake Forest Mayor & Board of Commissioners
Commissioner Ben Clapsaddle
Commissioner Nick Sliwinski
Commissioner R. Keith Shackleford
Commissioner Adam Wright
Commissioner Faith Cross
Mayor Vivian Jones
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:
Wake Forest’s vibrant, diverse, and welcoming community fosters its distinct character, thriving economy, and high quality of life.
The Town of Wake Forest is committed to delivering superior services and celebrating the diversity of our organization.
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
Total
Governmental Results
The Governmental activities section in the Town’s financial statements includes programs generally supported by taxes, capital contributions and 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.
The Town’s strong fiscal management remains its hallmark. Management acknowledges that 2024 was another successful year with fund balance increasing for the fourth 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 2023-2024, the Town’s net position increased $12,449,300.
Total governmental activity revenue decreased 41.88% from prior year while expenses increased 16.11%. Increases from previous fiscal year were recognized as follows:
n Ad valorem taxes – 8.51% over previous year due to strong continued growth in our region n Local option sales tax – 5% increase over prior year
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.
*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 2024 Annual Comprehensive Financial Report.
General Fund Results
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 66% ($56,059,809) 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 36% ($29,031,493) of the total expended. This is followed by general government at 32% ($26,070,760) which includes the governing body, legal services, 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
General Fund Expenditures
Proprietary Results
Proprietary or business type activities rely on fees charged to customers for services rendered. The Town operates Wake Forest Power which reports as the Electric Fund. It is operated in a manner
Change in net position for business-type activities increased $2,652,428 for the fiscal year.
similar to that of a 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.
Charges for services from the sale of power increased 14.42% from the previous year. This is attributed to rate increase in April 2023 and growth in customer base.
Income Statement An income statement provides 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.
Wake Forest Power serves 8,989 customers.
Major Initiatives
Community Planning
Stormwater Utility
In December 2023, the Board of Commissioners approved a new Stormwater Utility along with a fee structure that was effective July 1, 2024. The Town of Wake Forest is using a more proactive approach to stormwater management due to increasingly stringent unfunded stormwater regulations under the MS4 (Municipal Separate Storm Sewer System) Permit and NPDES regulations created by the federal Environmental Protection Agency and subsequently adopted by the NC
Notable Development Projects
The local economy continued to thrive over the last fiscal year. Development activity remained active in Wake Forest with 893 building permits issued for new construction, additions, and alterations. Of those permits, 801 were for residential construction and 92 were for commercial construction.
Grove 98
Existing commercial and residential development activity continue surrounding Wegman’s located along the central corridor connecting downtown Wake Forest and U.S. Highway 1 (Capital Blvd). The current phase of Grove 98 development includes retail, restaurants, and a multi-family residential development with a 230unit apartment complex which was completed in 2023.
Loading Dock
Loading Dock Wake Forest is a co-working and collaborative workspace incubator. This $2 million building revitalization project includes private offices, coworking space, conference rooms, dining space, and event space. Since opening in December 2021, 125 to 150 jobs have been created in the downtown area.
353 South White Street
353 South White Street (former Suntrust building), located at the corner of White Street and Elm Avenue, spans one acre in the heart of downtown. The Town has selected a developer for this project and negotiations are currently underway for the development agreement for the site. The project is expected to include ground floor retail, residential units, and a Townowned parking facility.
Department of Environmental Quality (NCDEQ). The new stormwater utility will also allow the Town to fund critical projects aimed to maintain and protect our vital watersheds, streams, and wetlands.
Unified Development Ordinance
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.
Housing Initiatives Fund
The Housing Initiatives Fund was established to assist with affordable and workforce housing as well as to support the Housing Affordability Plan adopted in September 2022.
Loading Dock Wake Forest
Grove 98
Stormwater Culvert
Private Developments Spurred by Public Investments
The Town continues to make strategic public investments that will spur private development. Several developments in progress are direct results of that investment and include the following:
535 South White Street
535 South White Street warehouse is a project that converts and updates the 16,000 square foot building into a mix of uses including restaurants and private offices. It is located adjacent to and shares open space with Loading Dock Wake Forest. Construction is nearing completion, and the first tenants opened in September 2024.
East Roosevelt Avenue & North White Street
Along Roosevelt Avenue and North White Street, an 80-yearold building is being restored into a food hall space. Completion is expected by Spring 2025.
Surrounding this space are 40 townhome-style condominiums recently completed. A downtown park/open space is to be developed.
Transportation & Road Improvements
South Franklin Street
South Franklin Street widening from Rogers Road to Artisan Park Drive is a joint development agreement. It includes expanding the street from two to four lanes with median, sidewalk, multi-use path and landscaping. A portion of the tax rate allocated for transportation initiatives is being used to fund this $3.5 million project. Construction is underway with expected completion by July 2025.
Road Resurfacing Project
The first phase of a three-year street resurfacing project commenced in 2024 with approximately 12 miles of streets completed with $5.5 million funding from an eight-year installment purchase agreement.
A new park is planned for the space behind the food hall on East Roosevelt Avenue.
Food Hall
Conceptual Drawing
South Franklin Street Conceptual Drawing
Fiscal Year Highlights
Twenty-seven additional positions were added to meet the demands of our growing community. Fifteen of the positions are firefighters. The additional fire staff is essential to maintaining the Town’s ISO rating.
A reorganization included adding a third Assistant Town Manager. The following departments/divisions were also added: Budget Management, Organizational Performance, and Risk Management.
The Police Department transitioned to a new facility at 745 Merritt Capital Drive in November 2023. The Town entered into a long-term lease agreement to consolidate police operations into one location.
Approximately 4.5 acres on Wait Avenue were acquired for Fire Station 6. The property was purchased for $1.5 million in March 2024.
Over 8 acres on Devon Square Boulevard were acquired for future park and recreation facilities. The property was purchased for $1.3 million in December 2023.
During 2023–2024, the Town entered into a long term lease agreement for the new police headquarters on Merritt Capital Drive.
The Town also issued debt for a 3-year street resurfacing project that began in 2024.
The Town issues debt to fund General Governmental and business-type capital needs. Total outstanding debt as of June 30, 2024 totals $42,229,967. This includes general obligation bonds (voter approved debt), leases, subscription-based technology agreements, and installment purchase agreements. The chart below provides the breakdown of debt type at the end of the fiscal year.
Town’s Credit Ratings
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. In September, the following ratings were reaffirmed:
n Standard & Poor’s AAA
n Fitch Ratings AAA
n Moody’s Aaa
Debt Management
Another priority of the Town is to maximize return on Town funds. Maintaining or improving bond ratings results in lower interest rates on debt.
Debt Issuance
The Town’s total debt increased by $4,466,084 (11.83%) during the fiscal year. Along with retiring debt during the year, the Town issued the following debt:
Installment Purchase Agreements:
n $1,610,500 – Vehicles and equipment, May 2024, 4-year term, 4.22%
n $5,500,000 – Street resurfacing, December 2023, 8-year term, 4.41%
The Town recognized a liability for lease property for police headquarters in the amount of $3,715,816 with a ten (10) year term and interest of 3.097%.
Breakdown of Debt Year Ended June 30, 2024 $42,229,967
Debt Management
Debt Policy Compliance
The Town actively monitors and manages its debt capacity and affordability. In keeping with the goal of enhancing fiscal strength identified in the strategic plan the Town has a formal policy which provides guidance and direction when considering the impact of future debt.
How the Town’s Debt Compares to Policy
Future Debt Issuance
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 is earmarked to repay general fund debt.
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.
Debt Issuances Planned for Fiscal Year 2024–2025:
n $23 million in general obligation bonds and 2/3rd bonds for roadway and transportation, parks and recreation facilities, greenway improvements, and parking facilities.
n Installment agreement for vehicle rolling stock and electric generators.
During 2024–2025, the Town plans to issue debt for roadway and transportation, parks and recreation facilities, greenway improvements, and parking facilities.
The budget represents the fundamental philosophy of being conservative with revenue projections and maintaining fiscal constraint on the expenditure side.
Fiscal Year 2024–2025 Budget Highlights
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.
Budget & Planning
Property Tax Rate
The Town’s tax rate decreased to $0.42 for the coming fiscal year.
Governmental Activities: The Town’s tax rate was reduced from $.505 to $0.42 for the coming fiscal year. This reduction is the result of the property tax revaluation. There as a projected increase of expenditures between $0.03 To $0.04 related to public safety (police and fire), personnel costs, and other Town operations. In addition, $0.0275 of the tax rate is expected to be used to fund future public safety initiatives, including construction of a new fire station. The final budget for the General Fund totaled $86.93 million. The Downtown Municipal Service District tax rate remains unchanged at $.14, the vehicle fee remains unchanged at $30, and the solid waste fee increased one dollar to $23.
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: A slight increase in residential utility rates was included in the Electric Fund for the upcoming fiscal year. The total Electric Fund budget for the fiscal year ending July 30, 2025 is $26.1 million, which is an increase of 4% over the fiscal year 2023-2024 adopted Electric Fund budget and less than the fiscal year 20232024 amended budget.
Effective July 1, 2024, the budget includes the addition of a Stormwater Utility Fund which was approved by the Board of Commissioners in December 2023. The stormwater utility fee is based on square footage of impervious surface. The total budget for the Stormwater utility Fund for fiscal year 2024-2025 is $2,325,000, and the fees will be billed annually in conjunction with the property tax bill.
The Town continues to focus on financial sustainability. The budget represents the funadamental philosophy of being conservative with revenue projections and maintaining fiscal constraint on the expenditure side.
