Cape May’s Proposed Budget Seeks Slight Hike from Payers

CAPE MAY – Cape May City Council called a special meeting Jan. 16 to allow City Manager Bruce MacLeod to present his 2015 budget. The city is currently operating under a temporary budget authority passed by council as part of its annual reorganization. This year’s revised budget calendar requires that municipalities adopt formal budgets by April 24. The city plans to be ahead of that process and has scheduled the formal introduction of the budget for its Feb. 24 council meeting with public comment and a final vote by March 24.
There was no little amount of pride as MacLeod presented the proposed budget. It was a time to reflect on the financial health of the municipality. The city’s AA bond rating is the highest a municipality of its size could achieve.
A 98.7 percent tax collection rate, $3.8 million in budget surplus from previous years and $2.8 billion in ratables, all reinforce the image of financial health.
MacLeod’s presentation was just two weeks after Mayor Edward Mahaney gave his State of the City address to council and the people. Both presentations give the sense of an assertive approach to the city’s development married to a conservative approach to fiscal management.
The budget that MacLeod presented had four major components and totaled $27,143,850. The current fund budget, which represents the funds used for administration of the city, is 63 percent of the total, coming in at just over $17 million.
The city has three utilities that apportion costs based on use rather than generally spreading those costs across the general tax levy.
The Water Utility, for fresh water and sewer, had a proposed budget of $6.7 million and represented 25 percent of the total. The Beach and Tourism Utilities were $2.3 and $1.1 million respectively and comprise the remaining 12 percent of the budget. Each of the utilities is self-liquidating and maintains balanced budgets for 2015 in MacLeod’s proposal.
Across all budgets, $9 million is allocated to salaries and wages, about one third of the total $27 million. A significant component of the wages and salaries item is for public safety costs for both police and fire departments. MacLeod pointed to a decrease of seven full-time positions since 2008, all achieved through attrition.
The proposed budget would require a modest tax increase if adopted. The increase would represent about $13 a year per $100,000 of assessed value. The precise tax rate increase proposed is from 32.9 cents per $100 of value to 34.2 cents. MacLeod noted that the budget is under both the state-mandated 2 percent cap on tax levy and the 3.5 percent cap on spending increases. Even with the increase, local-purpose taxes represent 55 percent of the revenue estimated in the budget.
Two areas of potential ongoing litigation were accommodated in the budget:
• $75,000 was allocated to allow the city to go to court in an attempt to force a change in the school funding formula for Lower Cape May Regional school district. The issue was the subject of two voter referendums in the fall, and council has not yet decided how the city should proceed.
• $350,000 was preserved for legal action related to the construction of the Convention Center below flood level.
Council will consider and potentially change MacLeod’s budget with the goal of hitting the city’s own imposed deadline of March 24.
Those wishing to see the video of the budget presentation and council meeting can do so by going to the following link: http://goo.gl/8Y5J1f.
To contact Vince Conti, email vconti@cmcherald.com.