Oldest Resort Gets Top Bond Rating

CAPE MAY – At the regular meeting of City Council June 17, City Manager Bruce MacLeod announced results of the long prepared-for sale of general obligation bonds. In advance of the actual sale, the city consolidated a number of existing bonds and put itself through a new appraisal of its credit rating with Standard and Poor’s. The result of the credit review was gratifying with the city maintaining its AA rating which is the highest rating that a municipality of its size and overall financial structure can achieve.
In an era when many states and municipalities are seeing a downgrading of their ratings, MacLeod was able to announce “we went as high as we can go.”
The actual bond sale was for $10.7 million in general obligation bonds, the Beach Utility, and the Water Utility. Although such sales formerly involved sealed bids, they now make use of an electronic, online process with a window of 15 minutes for bidding. The action was fast and furious with 47 bids from seven qualified bidders in just the last five minutes. The winner of the bidding war was Bank of America in conjunction with Merrill Lynch as the broker of record.
Factoring in a $425,000 premium, which was offered as part of the winning bid by Bank of America, the net interest rate on the bonds was 2.40 percent, a rate almost 1 percent less than that on bonds the city sold a year ago. MacLeod noted this positive perception of the city’s “overall financial health.”
School Funding
A recent Bergen County case which sought to change the funding formula for River Dell Regional School District was denied by Acting Commissioner of Education David C. Hespe. The similarities to the controversy surrounding Lower Cape May Regional Distinct (LCMR) prompted remarks by Deputy Mayor Jack Wichterman. He noted that the specifics of the decision by the state were rooted in the fact that the actual differential in per student costs between the two municipalities in the Bergen County case was relatively minor. “The commissioner did not find the differential of a few thousand dollars compelling,” Wichterman noted, but “our differential is $90,000.” “We continue to hope we find an individual with common sense,” he said.
Wichterman also noted that the council’s appeal for assistance to Sen. Jeff Van Drew (D-1st) has met with no positive response. “Van Drew said that there is no interest on the part of Lower Township to negotiate the issue,” Wichterman noted. “Of course there isn’t,” he continued. “They don’t even recognize our right to greater board representation.”
Wichterman recounted that the school board for LCMR had been set in the early years of the consolidation. Now, “with Cape May paying 35 percent of the costs, we cannot even get a second on motions because we only have one member. We should have at least three members on that board.”
Wichterman’s remarks seem to indicate that the recent ruling concerning the Bergen County school district has not dampened the council’s willingness to continue the fight with Lower Township over the funding formula and board representation.
Fun Times Ahead
On a lighter note, council approved a resolution authorizing the fireworks for the Fourth of July. The annual event is part of a joint effort among the city, the Better Business Bureau, and Congress Hall. Wichterman said the event pulls 20,000 people to the city.
Mayor Edward Mahaney also announced the first Cape May Seafood Festival, which will be held on June 28 between 11 a.m. and 9 p.m. Two blocks of Beach Avenue will be set aside for the event that will also make use of Convention Hall.
Not just a food event, the festival will also incorporate an education component. Around the event and especially in Convention Hall, exhibitors from the seafood industry will explain how the industry sustains itself in terms of approaches to fishing and seafood farming.
Center stage will be seafood. Mahaney said the festival will concentrate on low cost ways for the public to taste and experience a variety of seafood. The event will feature cooking demonstrations and celebrity chefs. The hope is that the festival will attract between three and six thousand people and serve as a kickoff for the coming Fourth of July festivities. Mahaney sees this as a new “signature event” that will help the city promote the start of the busiest part of the tourist season.
To contact Vince Conti, email vconti@cmcherald.com.