Council Moves Closer to Approving Budget; Tax Rate Would Rise to 34.2 Cents/$100

CAPE MAY – With one notable exception, City Manager Bruce MacLeod’s budget moved closer to approval by City Council Feb. 17. A resolution approving the introduction of the budget was passed setting the stage for a public hearing March 24 when the budget could receive final approval.
MacLeod presented his budget at a Jan. 16 special meeting of council. The schedule discussed at that point projected possible final approval of the budget March 24. If that meeting results in any significant changes to the budget, approval would have to be delayed at least two weeks while another hearing on those changes is held.
The budget, as proposed by MacLeod, totaled across all entities about $27 million. In that budget, city property owners would see their tax rate rise by 1.3 cents per $100 of assessed value. Thus it would increase to 34.2 cents per $100 of assessed value, over the present 32.9 cents per $100 of assessed value.
The budget, as presented, also contains a $3.8 million surplus, some of which was to be used for 2015 expenses. The surplus funds not used in the budget are part of the overall financial resources of the city. Maintaining a healthy surplus helps keep the city’s bond rating at the AA level and reduces interest rates the city must pay to finance various public projects.
The city’s approach to its budget process is essentially a conservative one that relies on maintaining an adequate surplus level to assure its bond rating and passing modest tax increases to prevent being pressed against the state 2 percent cap on tax rate increases in any given year.
Councilman Jerry Inderwies raised some concerns about MacLeod’s budget when it was presented last month. Inderwies wanted to see two changes. Noting a $70,000 reduction in the salary and wage category of the budget for the Fire Department, he wanted those funds restored, keeping that portion of the department’s budget the same as in 2014.
Inderwies also wanted to use more of the surplus for 2015 operations in order to reduce the tax increase to the property owners. At the close of that meeting in January, MacLeod was asked by Mayor Edward Mahaney to look comprehensively at the needs of public safety departments and return to council with an analysis of needs and budget impacts.
The vote on introduction of the budget Feb. 17 did not consider any new needs or adjustments of funding for public safety. What did happen was an increase in application of surplus funds to a level that reduced the proposed increase in the property tax rate to an even one cent per $100.
The introduction is a necessary step that formally begins the budget process. While it sets up the public hearings March 24, it does not bind council in any way with respect to the budget as a whole or any items in it. Changes can be made at the March meeting.
The March 24 meeting puts the process within a month of the point where the state requires approval of a budget. While the city has flexibility with respect to the budget at the March meeting, that flexibility diminishes after that point given the need for public hearings on any significant changes to the proposed budget.
As Inderwies explained his inability to support the introduction of the budget following the 4-1 council vote, he pointed to a continuing need for more fiscal support for public safety departments. He also indicated that he was pleased that council reduced the tax increase but would have liked to see further use of surplus funds to reduce the rate further.
Mahaney restated his support for a more comprehensive look at needs in the areas of police and fire departments. He also added the Beach Patrol. This presumably sets the stage for discussion at the hearing in March.
During the public comment period there was discussion of the use of volunteer firefighters. The number of volunteer members of the department has seen a significant reduction over the last several years. MacLeod estimated that current totals are about 20 members down from around 40, several years ago. He also said that probably less than 12 of the current volunteer force are actually of an age where they can participate in firefighting. Discussion on ways the city might encourage greater participation kept returning to the list of obstacles that led to the decline.
Cost of Living
The cost of living within the approved area for volunteers is a factor. A volunteer member must live south of Cape May Canal. The cost of residing there has increased and younger people have moved out. “They just aren’t there anymore,” Inderwies said. The intensive nature of fire training, the increased time commitment which modern firefighting requires, and the sluggish economy that forces more families to concentrate on ways to “keep the roof over their head” were all factors Mahaney cited. As a result, the combined forces press the city back on its paid personnel.
Other Business
Council approved a bond ordinance appropriating $500,000 for a feasibility study in connection with the seawall project. As Mahaney explained, the “4,800 linear feet” of seawall “from Madison to Wilmington (avenues) and around the corner to New Jersey” represents the “Achilles heel” with respect to the city’s preparedness for a major storm.
This bond ordinance demonstrates the city’s “ability to pay” its fair share of a partnership with the state Department of Environmental Protection, Army Corps of Engineers, and Cape May County. It is a “wonderful opportunity” for the city, Mahaney said, indicating that significant portions of the funds needed will be coming from partners in the project.
He also indicated that stabilizing the roadbed between Delaware Avenue and Pittsburgh where beach erosion has undermined the road will be part of the effort as well. This addresses “two of our most vulnerable spots,” he noted.
City Clerk Louise Cummiskey noted that the March regular meeting of the council would be on the 24th instead of its usual day.
To contact Vince Conti, email vconti@cmcherald.com.