Cape May Tables Budget Adoption, Awaits Covid Funds

CAPE MAY – The agenda for Cape May City Council’s April 20 meeting contained a resolution to adopt the 2021 budget, as introduced. 
The governing body, based on advice from Auditor Leon Costello and Chief Financial Officer (CFO) Neil Young, did not vote on the resolution, electing to wait for agency guidance on how municipal relief funds contained in the federal American Rescue Plan can be used, in 2021.
Mayor Zachary Mullock said the city believes it will receive $336,000 in relief funds, which, depending on the permissible areas of use, could make a significant difference in the structure of the 2021 budget. Mullock also pointed out that even without any federal funds, the budget, as introduced, contained no increase in the local tax rate.
CFO Neil Young advised the council not to adopt a budget too soon because an adopted budget may limit some of the potential uses for the funds. “It is better if we get the money in the budget first,” Young said. He pointed out that municipalities across the county are waiting for clarification on the municipal stimulus funds.
“Some municipalities have not even introduced yet,” Young said, pointing specifically to Middle Township, which has, so far, elected not to introduce a 2021 budget. Middle Township Mayor Timothy Donohue April 19 acknowledged the municipality was “holding off for final clarification” on the use of the federal monies.
Young said Costello agrees with the advice to delay the adoption of the city’s budget. 
“Leon is working with the state on the guidelines and is in a position to give us the best advice,” Young added.
When asked about the state mandate to adopt municipal budgets by April 30, Young said that date was not officially extended, but, he added, “There is really no consequence to missing it.” 
Young said he could see a Local Finance Board notice extending the deadline, but he would not be concerned if he did not receive such notice. 
“The state is well aware of the fact that municipalities are waiting for the guidance on stimulus funds,” he said.
The American Rescue Plan (ARP) Act of 2021 contains the Coronavirus Local Fiscal Recovery Fund, which provides $350 billion for states, municipalities, counties, tribes and territories, including $130 billion for local governments split between municipalities and counties.  
To contact Vince Conti, email vconti@cmcherald.com.