North Wildwood Focuses on Eliminating Debt

NORTH WILDWOOD – North Wildwood wants to eventually be able to declare itself debt-free, by self-funding capital projects instead of borrowing money, Mayor Patrick Rosenello said. However, that plan is going to cost taxpayers a little more in the interim.
Rosenello introduced a $32.8-million budget – up close to $1 million over last year’s – with a near three-cent tax rate increase, to city council March 3.
Proposed Tax Rate
The new local purpose tax rate would be 77.4 cents per $100 of assessed value if the budget is adopted. The rate was 74.5 cents per $100 of assessed value in 2019.
“I think most people look at the long-term benefits of this plan and they agree with it,” the mayor said, in an interview with the Herald.
According to Rosenello, if it weren’t for this long-term vision of being debt-free, the tax rate increase would be “negligible” at less than a half-cent. 
The self-funded capital plan is responsible for two and a half cents of the tax increase, said Todd N. Burkey, North Wildwood’s chief financial officer.
Toward Self-Funding
“We are working toward a self-funded capital plan, so that we don’t have to borrow money for capital improvements. Each year, we are adding dedicated revenue to that capital fund through the tax rate,” Rosenello said. “We are not borrowing any additional money, and as we pay off our existing debt, our interest payments will go down. In a relatively short amount of time, the city will be virtually debt-free.”
Some would rather see the city borrow money for major projects and keep the taxes down now. 
Rosenello pointed to the money that will be saved over years by not paying interest.
“I feel pretty strongly that this is the right financial move for North Wildwood,” said the mayor.
“Nobody likes to pay taxes, period. Nobody likes to pay more taxes than they did last year. Period. That includes me and everyone else on the city council,” Rosenello said, adding that he’s focused on growing what is most people’s biggest asset – their North Wildwood home.
Taking the Long View
“What we are doing is a long-term financial plan that will preserve that asset that those people own, increase the value of that asset, as North Wildwood pays off its debt while simultaneously making infrastructure improvements,” the mayor said. 
“Long-term, this is going to save the city of North Wildwood and our residents millions of dollars a year in interest payments,” he said.
Another reason for the tax increase is the frequency of large, capital projects in recent years. 
Capital Project Impacts
Rosenello said that’s no thanks to the Army Corps of Engineers and the state’s Department of Environmental Protection. 
The Wildwoods haven’t felt the urgency from the state and the federal government to construct a dune that would save the beaches and protect the city’s infrastructure.
“That project not being built when it was supposed to have been built is absolutely costing North Wildwood millions of dollars a year and is absolutely contributing to the tax increase,” said the mayor
As far as a surplus?
“We’re still in good shape, we have a little over $6 million,” Burkey said.
Rosenello expects the city could be debt-free, aside from some small, long-term loans, within the next 10 years.
“I just want to reiterate, tax increase, attributable to just our normal operations would be .42 cents, so less than half a penny, 2.5 cents is going toward our self-funded capital. So that is money we are raising in taxation now, instead of borrowing now and in the future. I think that’s extremely important that we understand those numbers,” Rosenello told council.
To contact Shay Roddy, email sroddy@cmcherald.com.