CAPE MAY CITY — The city’s tax rate for local purposes would stay the same under a 2024 budget presented by City Manager Paul Dietrich to the City Council on Wednesday, March 19. If that holds when the budget is formally adopted, it will be the city’s fifth consecutive year with no local tax rate increase.
Dietrich said the timetable for the 2024 budget includes having a formal introduction on April 2, with a public hearing and vote on adoption scheduled for May 7.
He reminded taxpayers that this is only the municipal budget process and that more goes into the total property tax bill, including school and county taxes.
Under the city’s council-manager form of government, the city manager is required to submit his budget to the governing body as what is essentially a first draft. The council may make changes to that budget before it is formally introduced.
The manager’s budget puts general fund appropriations at $26.8 million. The city also makes use of three self-financing utilities. The budget allocates $7.6 million to the Water and Sewer Utility, $4.2 million to the Beach Utility and $1.3 million to the Tourism Utility. The total proposed 2024 city budget is $39.9 million, which Dietrich said represents a 9% increase in appropriations over 2023.
The budget will make use of $5.9 million in general fund surplus revenue. Dietrich said that the surplus balance is at $14 million, and that the budget calls for using $1.1 million in surplus funds for capital projects. Calling the city’s surplus adequate to cover any unexpected emergency, he said using funds for capital investments lowers the amount the city would need to issue bonds or notes for.
The city’s local purpose tax rate will remain at $0.361 per hundred dollars of assessed value. The manager noted that ratables in the city were up by almost $30 million, but that the city will not get the full advantage of that increase in this budget year.
His presentation touched briefly on capital projects, including construction of a new police station, ongoing work on the city’s sea wall, continued planning for a new desalination plant and remaining work on the AME Church.
The presentation noted the recent award of $6.8 million from the state for repairs and upgrades to the Promenade. It also mentioned annual road and utilities work.
Dietrich listed $200,000 in the capital projects budget for the updating of the city’s tax maps. He did this because he expects to hear from the county tax board soon about the need for a citywide revaluation. The frenzied rise in property values during and immediately following the pandemic has led to an imbalance between the assessed value of city property and its true value.
As part of his review of planned capital spending, the manager said that the city’s debt ratio has declined by 42% since 2018.
The next step in the budget process is for city administration to meet individually with each member of the council to review detailed budget books and respond to questions. The council then has the ability to alter Dietrich’s budget proposal if it elects to do so prior to the planned introduction on April 2. The introduced budget would then be made available to the public prior to the public hearing in May.
