The sale of the Jersey Medical Center emerged as a central topic during the meeting. This transaction generated $34 million in city revenue, earmarked to address debt service related to the Bayfront development. The council acknowledged that the current budget planned for $41 million in property sales, raising questions about the city’s financial stability if such revenues were unavailable in future years. There was widespread recognition that relying on land sales as a budgetary strategy is unsustainable, and the city must explore alternative revenue sources to mitigate potential financial shortfalls.

Another crucial aspect of the budget discussion was the city’s surplus management. The finance director presented an overview of the budget, revealing an anticipated surplus beginning with around $71 million and concluding with a cash surplus close to $28 million for the year. Concerns were raised about whether this surplus was a one-time occurrence and how long it might last. The finance director explained that the surplus is cash-based and must account for liabilities and deferred charges. Future surpluses depend on the city’s financial performance and liabilities, with the current surplus being used to stabilize the tax impact.

The budget presentation also highlighted a significant drop in construction code fees, which decreased by 18% compared to previous years. This decline was attributed to cash receipts from the prior year, and the finance director suggested that further details could be obtained from the construction code office. The council was informed about the termination of payment in lieu of taxes (PILOTs), which reportedly increased the net valuation for conventional taxes by about $19 million. The tax net valuation increased by approximately $1.66 billion from October 2023 to October 2024, impacting the new levy. The maximum allowable amount to be raised for the year is about $409 million, staying under the 2% levy cap.

One council member raised concerns about the rising costs of employee health insurance, questioning what measures could be taken to mitigate these expenses. The finance director explained that the increases are influenced by statewide trends, and the city’s HR department is implementing initiatives to promote healthier lifestyles among employees. Being self-insured, the city is particularly sensitive to the volume of claims and prescription drug costs, which have seen increases. The discussion also touched on collective bargaining as a means to address health insurance costs.

Declining parking meter revenue was another topic of concern, with a reported decrease of approximately $150,000. The decline began in 2022, and there was speculation about whether it was due to lack of enforcement or changes in public behavior regarding payments. Despite the introduction of park mobile intended to improve collections, revenue has continued to decrease. A council member requested data on meter tickets issued to gain further insight into the issue. Moreover, vacant property registrations were reported down by about $350,000, attributed to the timing of cash receipts and accounting practices impacting the budget.

The council also discussed the repurposing of old capital funds amounting to $13 million, which will primarily support infrastructure projects, including street and building improvements. This repurposing aims to address prior projects that were either completed or deemed no longer viable. Public safety issues were raised, particularly about the traffic division, which had been noted as a revenue-generating entity that seemed to have diminished in effectiveness. There was a call to revisit the traffic safety division’s operations to enhance revenue and address public safety, emphasizing the importance of supporting the director responsible for the division.

The city’s grants budget was another area of concern, with a significant reduction in anticipated grant funding, dropping from $6.1 million to $1.5 million. It was clarified that this reduction pertained to the percentage of the budget, not the absolute total. The city’s grants director is working to secure additional funding, although the future of some prior year programs remains uncertain.