Mayor Proposes a City Tourism Utility for Cape May

CAPE MAY — Mayor Edward J. Mahaney Jr. is proposing the city create a city tourism utility.
He said a new city tourism utility would be responsible for the functions of managing and operating all recreation programs, special events, a public information office, the new multi-purpose Convention Hall, and the marketing and promotion of tourism for the city. The tourism utility would function similar to the existing Water and Sewer Utility and the Beach Utility.
A new tourism utility would not be an autonomous authority, but rather a separate division of city government and function under the direction of City Council and the City Manager.
From a financial standpoint, the city will have the legal and functional capability to designate all cost centers and the subsequent expenses for the marketing, promotion, and operations of recreation and tourism-related programs, activities and initiatives to a centralized and isolated utility, said Mahaney. These cost centers and related expenses would be balanced by the various types and amounts of revenue related to these particular recreation and tourism programs, activities and initiatives, he said.
Individuals, groups, and organizations that utilize and benefit from these recreation and tourism activities and events would be the users paying the costs for the programs and initiatives. The cost burden would not fall on the non-participating taxpayers through the city’s annual current fund budget and related capital improvement budget.
Mahaney recommended that debt service for the new Convention Hall should remain assigned to the city’s current fund debt service and not be assigned to a new tourism utility because of the magnitude of the debt service for the construction. He said it is unlikely that the tourism utility would be able to remain solvent in at least its formative years.
Rather than have the current fund transfer the requisite funds necessary to maintain the tourism utility’s solvency annually, it would be advisable to have the tourism utility transfer surplus funds annually to the city’s current fund to pay a portion of the debt service for Convention Hall and any other related capital improvements, said Mahaney.
He suggested that City Council and its professional staff pursue a detailed implementation plan for a tourism utility concurrently with the formulation of the budget for the 2010 fiscal year.
This would ensure that a viable Tourism Utility would be operational for the 2011 fiscal year when the new Convention Hall facility opens, said Mahaney.