The Town of Valdese provided this financial information, which was laid out in this graphic using generative AI. Staff double-checked all information to ensure accuracy.
The Town of Valdese provided this financial information, which was laid out in this graphic using generative AI. Staff double-checked all information to ensure accuracy.
Valdese’s debt load is shaping how the town approaches its next major project: a public safety building that could cost up to $10 million.
Town leaders say how they borrowed in the past is now limiting how they can pay for the future.
Valdese currently carries 13 loans, three tied to its general fund and 10 to its utility fund.
Four of those loans are through the U.S. Department of Agriculture (USDA), which offers lower annual payments but stretches repayment over decades, driving up total interest costs.
Instead of another USDA loan, town staff aims to apply for a Local Government Commission (LGC) loan to cover the public safety building.
LGC loans are a state-approved loan for local governments, usually with lower interest rates, shorter repayment periods (often up to 20 years), and stricter financial review before approval.
Valdese officials, administrative staff, and department heads discussed this and other impactful financial matters during the town’s annual budget retreat on April 14.
Funding the public safety building was a central theme and inextricably linked to that was the town’s amount of debt.
A $1,826,500 loan was taken out in 2011 to build Town Hall. By the time it is paid off in 2051, Valdese will have paid $3,555,120 — an amount 94.6% higher than the original loan.
In 2018, two more USDA loans were taken out. Valdese borrowed $803,300 on a 20-year payment plan to cover a ladder fire truck, which will ultimately cost $1,055,220. Splash Park was funded through a 40-year financing plan under which the town borrowed $469,000 and is expected to pay $779,320 in total.
A $1,280,000 loan was taken out in 2008 to build new facilities for water and sewer operations. The interest is higher than the amount borrowed at $1,378,870, and the town will ultimately pay $2,658,870.
“If you do a USDA (loan), it stretches it out … but ultimately, you pay so much in interest over 40 years, it doesn’t make financial sense in a lot of cases,” Herms said. “So, you can handle one or two of those, but when they start stacking on top of each other, we get in the situation we’re in.”
Weichel said that applying for a USDA loan takes longer and can be more expensive.
When the town’s last application was approved, Weichel said the USDA required Valdese to pay an independent financial firm to conduct a financial study. It cost the town $8,000.
For Valdese, the challenge is not just building a new public safety facility. It is doing so without repeating the financial patterns that made earlier projects more expensive over time.
The town now faces a balancing act: keeping payments manageable today without creating even greater costs tomorrow.
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