MARGATE – The Board of Commissioners Jan. 8 adopted a temporary budget and held a public information session about the city’s procedures for borrowing money to pay for capital improvements.
The presentation addressed some concerns from the public about two recently approved bonds totaling $16.4 million, half of which will finance a new Public Works building. In past years, the board limited capital spending to about $5 million annually.
The board opened the meeting hearing from auditor Leon Costello of Ford-Scott Associates of Ocean City, who spoke about the process for issuing bonds and notes to keep city infrastructure and equipment up to date and “keep the town looking good.”
Costello, who has 52 years of experience developing capital plans, said the city’s bonding procedures are designed to keep debt service payments leveled out and keep tax rate increases below 1 cent. Rebuilding existing homes into larger ratables also helps to keep the tax rate stable.
Costello said it is important for the city to keep its infrastructure up to date.
“If you let it go down, it’s very expensive when you want to bring it back,” he said, noting that he meets with the Finance Department several times a year to determine capital needs, including those at the city’s public schools.
“We want to keep the taxpayers in mind and not have a spike,” he said. “You are always going to need capital stuff and it’s short sighted if you don’t. What has to be done is, how can we do it with no pain to the taxpayers, and that is what we are trying to accomplish.”
The city has been approving general and utility capital ordinances twice a year as federal, state and county project approvals are received. The ordinances appropriate funds for road reconstruction, improvements to municipal facilities and purchasing equipment for the Police, Fire, Public Works departments and the Beach Patrol. The city is currently undertaking major capital projects, including building a new Public Works facility, improving the Bloom Pavilion and replacing lead service lines. The city is required to have appropriations on the books in order to receive grant funds that pay for a portion of the projects. Many grants require about 10% of any project costs to be borne by the taxpayers.
Although the bonding documents appropriate funds, the money is not borrowed until it is needed. The city then secures bond anticipation notes, which require interest-only payments. The bond anticipation notes are refinanced every few years when the financial markets indicate favorable rates.
Costello said interest rates on permanent financing are averaging about 3% at this time. The city went to permanent financing on outstanding bond anticipation notes last year, which is repaid with principal and interest over a 12-40-year term. He anticipates the next bond sale will be in 2028. Costello explained that long-term financing is designed to come on the books as other bonds mature and are paid off, keeping debt service level.
In the January edition of the city newsletter, Mayor Michael Collins addressed operating expenses, which continue to outpace growth in the ratable base and have resulted in tax rate increases. He said the cost of living has increased 25% since 2000.
“In that same time, Margate’s ratable base has increased only 9.68%. That is a significant number that helps our tax rate but, clearly it is not keeping up with inflation, which is why we have seen tax increases. Annually we use between $5 million and $6 million in surplus to fund our budget. Our surplus is made up of unexpended funds of previous budget years as well as unbudgeted revenues. Historically, we have started the year with $8-$9 million in surplus and the goal is to maintain that so we don’t run into financial trouble in the future,” he said.
The board also approved a three-year contract for Deanna Krupp to serve as municipal court administrator. She will be paid $110,000 plus benefits for 2026 and have 25 vacation days and 15 sick days.
It awarded a $2,699,750 contract to low-bidder Landberg Construction, LLC of Dorothy, for the 2025 road program that will replace utilities and repave a portion of Atlantic Avenue. The project will be funded with $1.5 million from the NJ DOT Alternatives Set Aside Program and $1.19 million from the 2025 State Aid Program.
It also approved a resolution asking Gov. Phil Murphy to declare a State of Emergency for Jersey Shore beaches, which would allow the state to file for federal funding to replenish beaches damaged in storms throughout the state.
The board also held an executive session at the end of the meeting to discuss potential litigation. No action was taken and the board will inform the public about the issue at the appropriate time.
Copyright Fideri News Network 2026
