AVALON – The Borough Council has introduced a $36.5 million municipal budget for 2025, along with a $9 million ratepayer-supported Water and Sewer Utility budget and a $2.2 million user-fee-supported Beach Utility budget.
The $36.5 million general budget proposes no local purpose tax increase; the tax rate remains at $0.206. The budget does make use of $719,869 in tax levy cap bank funds that were set to expire. It also makes use of $3.9 million from the general fund surplus, which is 55% of the $7.1 million surplus balance as of Dec. 31, 2024.
The general fund budget in Avalon is different from those elsewhere in the county except in Ocean City. Both Avalon and Ocean City maintain their own libraries and are not part of the Cape May County library system. Embedded in the borough’s general operating budget is revenue for the library, with the minimum amount of support set by the state.
In its 2025 budget draft, introduced March 12, Avalon lists the minimum library tax revenue at $5,774,688. That leaves the municipal tax levy for the general budget, minus the library tax, at $20,660,000.
With the borough providing the $5.8 million in library support, the budget shows anticipated revenue from that separate library tax coming back to the municipality at $2,485,549. In other words, Avalon’s general operating budget gets the benefit of unused excess funding for the library to the tune of $2.5 million. The library does not require all of the funding set as a minimum by the state.
The borough, unlike some of the county’s other island resorts, does not have a large number of user-fee sources of revenue. The best example is that the borough does not have paid parking. This means the borough draws most of its $36.5 million general budget revenue from tax-supported sources.
Among those sources are $20.6 million in municipal tax revenue, $5.8 million in the state-set minimum library tax revenue and $3.9 million in surplus fund use. Together these amount to just over $30 million of the $36.5 million in funds that support borough and library operations.
Other revenues include items such as state aid, uniform construction code fees, grants – as much as they are known at this early date in the process – and $1.9 million in local revenues. The local revenues come from fees for permits, licenses, registrations and inspections. Another source of local revenue is interest on borough funds.
The 2025 budget continues Avalon’s avoidance of long-term general obligation debt. The municipality enjoys an AAA bond rating from Standard and Poor’s.
The budget within categories covered by state-imposed caps is $16.7 million, of which $8 million is budgeted for salaries and wages and $2.6 million for retirement and pension payments.
The borough budgets $656,000 for pay-as-you-go capital improvements, $800,000 for beach replenishment and back-passing efforts, and $436,000 for recreation improvements.
The Water and Sewer Utility budget is $9 million, with $7.6 million of that covered by fee revenue, $700,000 from miscellaneous revenues and $744,000 by the use of the utility’s surplus fund. Very little of the budget goes to salaries and wages, $244,000, with $5.7 million in other general operating expenses. The borough’s water and sewer operations are run under contract with Middlesex Water.
Debt service and capital improvements make up the next largest share of the utility budget, totaling a little over $3 million.
The Beach Utility budget of almost $2.2 million runs a deficit of nearly $500,000 that is covered by taxpayer funds through the general fund budget. Avalon elected to maintain the deficit to keep user fees at desired levels. The sale of beach tags supplies $1.5 million in revenue for the utility. The largest share of expense is $1.6 million in salary and wages for summer personnel.
A full copy of the proposed budget is available on the borough’s website here. A public hearing is scheduled for the council meeting on April 9 at 4 p.m. at Borough Hall.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
