Manager’s $27-M Budget Has Tax Hike; Councilman Urges Use More Surplus

CAPE MAY – In January, Cape May City Manager Bruce MacLeod presented his budget for consideration by the City Council. At the Feb. 3 work session, council began discussion of that budget consistent with its aim of having a first vote on the budget later this month. The council’s self-imposed deadline for approving a 2015 budget is March 24, almost a month before the state requires that municipalities take such final action.
In the $27-million budget presented by MacLeod, the local tax rate for property owners would rise by 1.3 cents for each $100 of assessed value. The 2014 municipal tax was 32.9 cents per $100 of assessed value. If the budget is adopted, the new rate would be 33.2 cents per $100 of assessed value or $332 per $100,000 of assessed value.
That budget also projected a $3.8 million surplus of which MacLeod proposed using $2.1 million for expenses in 2015.
Councilman Jerry Inderwies proposed drawing on $2.4 million of the surplus to serve two goals. He proposed that a $70,000 reduction in the budget of the Fire Department be removed so that the salary and wages budget of the department would remain the same as in 2014. He then wanted the other additional surplus funds to be used to reduce the proposed tax increase.
Mayor Edward Mahaney expressed some support for Inderwies in terms of both objectives, but also cautioned against taking too liberally from the surplus.
In an era in which the state imposes a 2-percent cap on tax increases, long-term planning of the tax rate is required. “You can no longer have years of no increase and then come back with a larger increase when you need it,” Mahaney noted.
The use of a surplus is dependent on many variables including debts owed to the city. “It is not all cash in the bank,” Mahaney said. In fact, MacLeod indicated that the projected surplus has been revised downward to $3.6 million since his presentation.
Mahaney raised other issues for council to keep in mind as it considered Inderwies’ proposal.
The city benefits from its high bond rating and that rating is, in part, dependent on the consistent level of surplus the budget produces. In addition, the agreement for providing police service to West Cape May and Cape May Point “expires this year,” he said. “And we need to be prepared for what that may mean if it is not renewed.”
Mahaney also noted that revenue projections that depend on tourism are subject to significant impact if the weather does not cooperate. Factors like the weather can greatly impact the budget, especially since about 48 percent of it is dependent on user fees and income rather than property tax dollars.
MacLeod was asked to develop some numbers and options based on Inderwies’ proposal and a new look at the needs of the police and fire departments. Mahaney asked that the new numbers be ready by Feb. 9 so council could consider them and still stay on its schedule for approving the budget.
Rotary Park
Council heard from the Mayor’s Advisory Committee on the project to redesign and renovate Rotary Park. Mahaney briefly reminded the public of initial work on the project in 2009-2010 by Temple University landscape architecture students. He noted that work on the mall had been completed and that side streets were being rejuvenated.
The time for Rotary Park is at hand and Mahaney said that he would like agreement on a design and budget by the end of the year “so that implementation can begin a year from January.”
Curtis Bashaw, advisory group member, explained that alterations to the initial design included ways to save some of the older, healthy trees which had been marked for removal as part of the project’s initial plan.
Two concepts for the redesign were discussed and Mahaney indicated that he wanted to get things to the point where public hearings could be held to give residents the opportunity to contribute to the design effort.
Bashaw also mentioned the new Fund for Cape May, of which he is a founder, which seeks to raise private donations to enhance the options for the design in ways that include things that might be beyond the city’s budget. The fund is based on Bashaw’s experience in New York City where public/private partnerships between the city and community organizations have greatly extended the ability of the city to renovate its many parks.
At the conclusion of the discussion, Mahaney asked that MacLeod work with the clerk’s office to schedule a public hearing on the project.
To contact Vince Conti, email vconti@cmcherald.com.