City recognized for excellence of financial report for 31 years in a row
For the 31st year in a row, Lexington’s Finance Department has received the Certificate of Achievement in Excellence in Financial Reporting.
The award, presented to Finance Director John Overton at Monday’s city council meeting, was for the Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2022. The award comes from the Government Finance Officers Association of the United States and Canada. An independent panel judges submissions each year and once again, the city’s report met the criteria, which includes “demonstrating a constructive "spirit of full disclosure" to clearly communicate its financial story and motivate potential users and user groups to read the report. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.”
City Manager Johnny Taylor presented the plaque to Overton before Overton presented the Annual Comprehensive Financial Report to the council.
“We’re counting on continuing to receive this award,” said Taylor, so much so that he said they are having a plaque display made to hold all the awards.
The annual financial audit of the city’s financial report was again conducted by Martin Starnes and Associates, and overall there were no serious concerns and few large changes. The full report not only includes a full breakdown of the changes from 2022 to 2023, but a detailed overview of the growth, on both the residential and the commercial front, of the city. It also includes an overview of the city’s local economy over the past decade.
The city continues to maintain a healthy credit rating according to the introductory portion of the report, which states “due to the financial planning and responsible stewardship by the city of Lexington, the city has achieved and maintains bond ratings of Aa3 from Moody’s and AA- from Standard and Poor’s, a clear indication of the sound financial condition of the city of Lexington and key to keeping interest costs low on the city’s outstanding debt. These excellent ratings have helped to position the local government to invest in the community and spur growth.”
The report paints an encouraging picture of the future of Lexington based on changes over the past five years, and that information was detailed in the overview.
“The past decade has marked a period of recovery and growth in Lexington. As with many mill towns in the southeast, Lexington was vulnerable to shifts in the economy due to loss of manufacturing and recessions. The community began an intentional plan of redefining itself early in the Great Recession despite the challenges of soaring poverty, job losses, population declines and vacancies reaching nearly 70 percent in some neighborhoods. Courageous initiatives during that time are now bearing fruit for a community that has transformed. Previously vacant commercial and industrial buildings have been filled with new businesses. The city has transitioned from high residential vacancy rates to a housing shortage caused by job growth. Recent trends in the national and state housing market are strongly reflected in the Lexington market. Currently, nearly 2,500 additional housing units are in the planning stages or have received development approval. Median house prices have moved from far below tax value, to well above with middle-income properties being under contract within 48 hours. The city’s demolition program has slowed because blighted houses are viable targets for renovation. Vacant infill lots created from the earlier demolition program are now being used to construct new houses. After years of stagnant economic growth, the city is experiencing new development and healthy redevelopment. In 2018, there was $21.4 million in commercial and residential development. In 2019 there was $56.7 million. In 2020 investment dropped to $24.7 million as a result of temporary halts due to COVID-19 closing impacts. The 2021, construction values rebounded to $48.8 million and leveled off in 2022 with $33.8 million. Unemployment for the area is in step with state and national trends. The current unemployment rate for the county is 3.5, compared to 4.0 for the region, 3.3 percent in North Carolina and 3.8 percent nationally. (US Bureau of Labor Statistics) The current growth is expected to continue as a result of ongoing initiatives such as: industrial development; investing in redevelopment of the Depot District; tourism; progressive leadership; marketing ample infrastructure and an ideal location for logistics; business development assistance and recruitment efforts by the city and its partners; a future passenger rail service; former manufacturing building space appropriate for redevelopment; and a flexible workforce with translatable skills in furniture, assembly, and textiles. Confidence in growth is demonstrated by the number of applications submitted for new commercial and residential development. This continued growth will be necessary to overcome poverty rates that have slightly improved but remain comparatively high in Lexington.”
As with many cities, the largest expenditure in the city’s budget in the last fiscal year, 55 percent, is on public safety, but that has been consistent for decades. It was noted that there was only a slight increase in revenues from property taxes; there was a larger increase from sales tax, due to the economic growth.
To read the report in full detail, please visit the city’s website at www.lexingtonnc.gov.
