CAPE MAY – The City Council has introduced three bond ordinances totaling $13 million to fund building, road and parks improvements as well as projects by the water and sewer and beach utilities.
The ordinance with the largest amount authorizes $9.8 million for various capital improvements and equipment. It specified $3.8 million for improvements to city buildings and parks, $2.1 million for the acquisition of a fire truck, $2 million for road work and the remainder for equipment and vehicle needs.
The ordinance, if funded, would create debt that is serviced through the city’s taxpayer-supported general fund budget.
Chief Financial Officer Kevin Haine told the audience at the June 5 council meeting when the ordinances were introduced that the strategy for taking on new debt is to do it as old debt “falls off,” thereby keeping the debt service payments in the budget flat.
Haine said the city’s long-term general obligation debt now stands at $29.9 million. He added that the city has up to $50 million in debt capacity without budget impact.
The second bond ordinance was for $1.8 million for the city’s self-financing water and sewer utility. The ordinance states that the funds will be directed for work on the existing water and sewer infrastructure.
The third was for $1.4 million for the city’s self-financing beach utility. The funds are earmarked for three uses: $300,000 for maintenance of buildings and structures along the beach and Promenade, $400,000 for equipment and vehicles, and $700,000 for the utility’s portion of the state grant from the Boardwalk Preservation Fund.
The beach utility budget is largely supported through the sale of beach tags and use of the utility’s surplus funds.
In anticipation of questions from the public, Haine said that the city does use general fund surplus dollars. He said the city only uses a level of surplus funding that it feels confident can be regenerated through unspent funds by the end of the budget year.
He also reminded the public that adoption of a bond ordinance does not necessarily mean the city is taking on new debt; it represents authorization for a potential future bond sale. Bond ordinances can be canceled if the funding is no longer needed.
Several factors can affect a decision about taking on debt authorized by ordinances. These include future grants, the ability of the city to fund capital projects from its own revenues and the ending or soon-anticipated ending of old debt.
All three of the ordinances will have public hearings at the council meeting Tuesday, July 2, at 3 p.m.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
