Audit shows Valdese's fund balance is growing, but its infrastructure is aging

With enough money in its reserves to fund town operations for more than a year if needed and growth of $1.5 million in its governmental fund balance, Valdese had a great financial year in 2025, said Phil Church of Lowdermilk Church & Co.

Following the council’s joyful recognition of the Valdese Tigers Peewee and Valdese Tiger Mighty Might football champions and the cheerleaders for both teams, Church gave a presentation on the town’s annual audit.

The audit just found one issue: The town owns a lot of old equipment and infrastructure that is wearing out and losing value over time.

But this isn’t unusual or specific to Valdese. Many towns are dealing with the same problem because their roads, buildings, pipes, and other public assets are getting older, said Chief Financial Officer and Assistant Town Manager Bo Weichel.

At the end of the 2025 budget year, the town had about $12.1 million set aside across all its government accounts. That total includes money in the main operating fund plus a few special project funds like Old Rock School renovations, Hoyle Creek restoration, and other, smaller funds.

The total is about $1.5 million more than the town had at the end of the previous year.

But not all of that $12 million is money the town can freely use. About $1.36 million of it is locked up, meaning it’s either restricted by law or already set aside for specific purposes.

The unassigned fund balance for the general fund in the 2025 fiscal year was $8,123,452. This is 125.43% of the total general fund expenditures, meaning Valdese has more than a year’s worth of money in its reserves that could cover governmental operations if needed.

Mayor Pro Tem Rexanna Lowman said Valdese’s fund balance is because the town is putting money aside now to pay for future projects.

Church said Valdese’s capital asset ratio, which measures the remaining life of the town’s assets, was about 42%. Anything below 50% is flagged by the Local Government Commission (LGC).

“What it’s basically saying is that your assets are getting older,” Church said. “And they (LGC) want you to think about planning for the future.”

The audit also revealed that the town’s total debt decreased by 1.02%, falling from $8,177,860 in 2024 to $8,094,778 in 2025.

“You did have a good year this year, you really did,” Church said.

WHEN WILL THE POOL REOPEN?

Town Manager Todd Herms said work on installing the dome over the recreation department’s pool was delayed by the recent winter weather.

“We’ve had snow, we’ve had cold weather, we’ve had locusts,” Herms joked. “We’ve had everything you can think of. But right now, unless something else happens, we’re looking — fingers crossed — to have it up and ready to go before the second weekend in March.”

Herms said this amounts to a three-week delay. Two for the ice and snow, and a third because concrete cannot be poured in temperatures below freezing. The temperature must be above freezing for at least 24 hours, Herms said.

Herms said if the region experiences another winter storm, the project would be delayed again.

“There will be no one in this town more happy than I when I see that dome go up,” Herms said.

HOOK PROPERTIES SETTLEMENT

The settlement agreement with Hook Properties, LLC remained a consent agenda item, which the council voted to approve. However, two related consent agenda items were moved to the regular agenda at town attorney Timothy Swanson’s request.

Just south of a tract owned by Hook Properties is an unopened right of way. As part of the settlement agreement, the town will make moves to permanently close the right of way and call for a public hearing on the closure. That way, Hook Properties can purchase the right of way and resolve the multiple zoning violations associated with a brick building being constructed on the company’s land.

The resolution of intent to close the unopened right of way and call for a public hearing were removed from the consent agenda so the proposed March 2 hearing date could be changed to March 30.

Town Planner Michael Rapp recommended the change due to a state statute that requires advertising the public hearing for four weeks leading up to the hearing date.

Because the snow and ice postponed Valdese’s meeting by a week, the town would be unable to meet advertising requirements for a March 2 hearing, Rapp said.

OTHER ACTION

The council approved amendments to its Code of Ordinances modernizing Article B, Excavations and Repair for the needs of underground infrastructure from telecommunications providers and utility companies. Changes include clearly defining major and minor encroachments, creating standardized procedures for applications and reviews, restoration requirements, insurance and bonding provisions, and built-in documentation standards.