VENTNOR – The city plans to cancel unexpended balances in older bonds to help reduce the cost of this year’s capital improvements. The cost of this year’s capital improvement plan will not affect the tax rate, Chief Financial Officer Albert Stanley said.
The city will cancel $1.27 million in balances remaining in older bonds approved for the Fishing Pier, bulkheads, public safety equipment, and various other capital projects, but a majority of it, $1,056,897, will come from a 2017 bond ordinance that appropriated funds to rebuild Firehouse No. 2 on Wellington Avenue.
Reappropriating $1,273,838 of unspent funds will reduce funding needed for this year’s capital projects to $4,764,618.
Additionally, Stanley said the city already has $600,000 in capital improvement funds to cover the required 5% down payment, or $226,886 needed for new projects.
The city has issued a total of $24.5 million in bonding, $5.8 million of which is scheduled to be drawn down this year. However, the $1.27 million reappropration will reduce the amount of new bond financing to $4.7 million this year. That amount does not include any grants that may be received.
Stanley said he cleared the plan with the city’s auditor, who indicated the city would normally have a $92,000 increase in debt service payments for every $1 million in new bonding.
“We would have to bond $8 million to see a tax increase, but we are only looking to fund $4 million in projects this year,” Stanley said.
Most of the reappropriations are coming from bonds approved before the current administration took office. Bonds with balances go back as far as 2009.
Fire Chief Michael Cahill said the department has requested $1.39 million in funding over the next three years, with the biggest expenditure being $450,000 to replace an aging fire engine.
He also requested funding to install a second restroom at Firehouse No. 1 to accommodate male and female firefighters. He will also request $125,000 in 2021 to rebuild two fire engines.
“That will give us many more years of service for those vehicles,” he said.
A spreadsheet showing departmental requests show $1.68 million for the Police Department, with $1 million of it for new holding cells or perhaps a new building, with funding split over 2020 and 2021.
Reappropriations would also reduce this year’s Utility Department capital needs by more than $500,000.
Stanley said the city has school debt expiring this year and that the city should consider a utility rate increase. The last increase was in 2015.
In other capital business, Stanley reported that despite a month-long delay in opening the Fishing Pier due to the bathroom rebuilding project, revenue is $1,000 ahead of last year’s amount. Beach tag sales have also exceeded this year’s budgeted amount.
Stanley also reported that the city is considering hiring a fleet management company used by Atlantic and Cape May counties that would track inventory and automatically replenish all vehicles as needed, except for fire apparatus.
“We usually shut them down when the wheels fall off,” Commissioner Lance Landgraf said jokingly.
Using the fleet management company would save the city about $267,000 over the life of the contract and save on the cost of unexpected maintenance.
Mayor Beth Holtzman, who is a finance official for Atlantic County government, praised the proposal.
“I deal with them at the county and it works very well,” she said.
Stanley said he would ask a company representative to attend a commission meeting in September or October to further explain the program.
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