Valdese manager Herms says finances are strong, but safety building will strain future budget

Town Manager Todd Herms presented a “State of Valdese” update last week to the Rotary Club of Valdese, detailing the town’s demographics, financial condition, major projects planned for 2025–26, and what he described as urgent facility challenges affecting police and fire operations.

Using a 31-slide PowerPoint projection to support his presentation, Herms spent most of his 20-minute talk discussing the town’s upcoming budget, projects, financial challenges and the emerging Emergency Services Building.

That project has been on the town council’s table in one form or another since early 2018. In December the council voted to move forward with the project.

Final costs of the facility, to be at 200 Massel Ave. SW, are still in development. Last year, before the recent municipal election, the council voted to hire Charlotte-based financial advisory firm First Tryon Advisors.

First Tryon, Herms said, is conducting financial analysis and budget modeling for the proposed police and fire facility.

“In October, Council directed staff to utilize Tryon Financial Advisors as the town’s financial consultant,” he said. “While their work is not yet fully complete, preliminary indications show that although Valdese’s current financial position is strong, within five to seven years the town’s revenues would not be sufficient to support a large loan for construction of the Emergency Services Facility.”

Construction loan aside, Herms said the town has already made a considerable investment in the project.

“The Town of Valdese has invested countless staff hours, debated these issues for years, and to date has spent more than $1.2 million on planning and related costs,” he said. “Yet we still do not have a finalized plan. … And we haven’t put a shovel in the ground.”

“This prolonged process has had a direct, long-term impact on our ability to provide effective police and fire protection for our citizens,” he said.

On debt service, Herms said Valdese previously secured a 30-year USDA loan in March 2023 not to exceed $7,241,900 at 3.75% interest for a new Emergency Services Building, with an annual payment estimated at about $402,000.

He said that while current construction costs are in development, lending rates are estimated between 4.5% and 5%, and the town expects to pull about $4 million from reserves and borrow the remaining amount for 20 years, with an annual debt service payment estimated at about $425,000. Herms said the town has no room for additional debt service in its General Fund budget.

“I don’t want to send the wrong message,” Herms said afterward. “Valdese is in great financial shape. We just have to position ourselves long term.”

Herms told the Rotarians that the town’s General Fund budget is $7,980,861. He said property taxes make up about 29% of that budget and the average residence in Valdese pays about $886 a year in town taxes, which he described as about $2.43 per day. He said Valdese’s current tax rate is $0.415 per $100 valuation.

Herms said the Water and Sewer Fund has a $9,667,000 annual budget, handled 1,512 work orders and received 329 after-hours calls. He said the system serves more than 14,000 people and maintains 164 miles of water lines and 64 miles of sewer lines. Herms said the town’s average monthly water and sewer bill is $54.05, compared to the state average of $68.78.

Herms also provided activity totals for emergency services in 2025, reporting 17,842 total calls, citations and reports for police, about 48 per day, and 1,127 total responses and inspections for fire and emergency services, about three per day. He said about 70% of those responses were medical calls.

Herms listed multiple projects planned for 2025–26, including Old Rock School upgrades, Tiger Gym lobby floor refurbishment, Fletcher Field scoreboards and wood posts replacement, Hoyle Creek restoration, a pool cover project, utility line replacement projects inside and outside town, the Cline Avenue basin and pump station, and upgrades to the wastewater treatment plant and water treatment plant.

Herms described several “current challenges,” including employee pay and benefits. He said Valdese is 18% below market in base salaries town-wide, 24% below market in the Police Department, and 29% below market in the Fire Department. He said Valdese does not offer a 401(k) to non-law enforcement employees.

He also cited an “upcoming Gray Wave” among North Carolina local governments, stating that about 53% of local government employees statewide can retire within the next seven years.

Herms began his presentation with a slide titled, “Who is this New Town Manager Anyway?”

The slide listed his 20-plus years’ experience in North Carolina local government, including the Public Policy Institute (college), Asheville-City Manager’s Office (internship), and manager of Badin, Maiden, Alexander County, and Valdese.

He is a graduate of Western Carolina University with a bachelor’s degree in political science and a master of public affairs from the University of North Carolina’s School of Government Public Executive Leadership Academy.

Additional municipal and county administration credentials include University of Virginia’s Weldon Cooper Center for Public Service Senior Executive Institute; International City/County Management Association (ICMA); Williamsburg Leadership Institute; and Gettysburg Leadership Institute.

Herms was hired as Valdese Town Manager in April 2025.