presented January 16, 2024
Good afternoon, Chairwoman Kern and Commissioners. I join you today to present the 2024 Executive Budget Message. While the state has once again changed its budget introduction and adoption dates which affect our own budget introduction plans, I would like to use this opportunity to provide an overview of the state of the county and how our budget is shaping up.
Atlantic County taxpayers can be assured that county government continues to operate at a high level, maintaining our top tier credit ratings and low debt, tax stability, and a surplus for unanticipated circumstances. Our conservative fiscal management and long-term planning remain hallmarks of Atlantic County government, for which we are justly proud. But no one should assume that because we are proficient at what we do, that it is not difficult work with new challenges each year.
It would be easy for some to be satisfied with our success and recognition as the finest run county in the state. It would be easy for some to be content to rest on their laurels without taking chances or pursuing new goals. But that has never been the mindset of my administration. Our goal is to leave Atlantic County better than we found it for the enjoyment and prosperity of our children and grandchildren. And as we well know, that takes consistent hard work and dedication.
One area where we have made great strides is in the development of an aviation and aeronautics industry to help diversify our regional economy. In 2019, we opened the first building at the National Aerospace Research and Technology Park (NARTP) that is now fully occupied with the likes of NASA, the FAA, General Dynamics, Thunderbolt Solutions, and more. This past October, we held a groundbreaking ceremony for the second building at the park with $8 million in funding committed and another $10 million in potential state funding. The 40,000 square foot building will be constructed and maintained by the Atlantic County Improvement Authority.
The Atlantic County Economic Alliance (ACEA) is working with Industrial Realty Group, LLC, one of the largest industrial real estate developers in the country, to promote the development of 400 acres of land at the Atlantic City International Airport for use as an air cargo hub and aircraft repair and maintenance facility. The ACEA joined Atlantic County and the South Jersey Transportation Authority in a shared services agreement for a transportation infrastructure study to identify what improvements will be needed to support and sustain future airport cargo development. Additionally, the ACEA is planning to develop a local aircraft training academy.
It was also announced at the October groundbreaking that local developer Leo Schoffer of Schoffer Enterprises, intends to build a four-story, 111-room hotel adjacent to the NARTP that will include restaurants, a 24,000 square foot convention center and two more hotels in later phases.
To further supplement these efforts and meet the demand of a growing industry, the Atlantic County Institute of Technology held its own groundbreaking last June for a $53 million, 133,000 square foot Career and Technical Building to house an expanded Academy of Aviation Studies. The academy is fully matriculated with Atlantic Cape Community College’s Aviation Studies program so students can pursue a pilot certification or associate degree.
The Atlantic County Workforce Development Board continues to expand job training programs to meet demands of this and other growing industries such as healthcare, manufacturing and technology. It also offers programs to benefit area employers that may be struggling with labor shortages or looking to add to their workforce. The Workforce Development Board remains focused on providing resources to build careers and businesses throughout Atlantic County. In 2024, it will work with school districts to identify all of the available vocational programs and create a pool of next generation employees to help transition students into career paths with established local businesses.
To help county government attract applicants, fill vacancies and strengthen our own workforce, we will hold and participate in job fairs and consider new strategies to target potential employees. Last year we began to increase the starting salaries of many positions to remain competitive with other employers. At the same time, we recognized the need to promote efforts to retain existing employees. We were able to negotiate contracts beyond the 2% allowable for local governments to raise their budgets. From what we’ve been told, this increase in salaries has had a positive impact. As we move forward, we may also consider hybrid work schedules where feasible.
These adjustments equate to a 3.78% growth in salaries or $3.2 million total based on negotiations with eight of the 23 bargaining units. Other expenses have increased 16.5% for an overall $6.3 million increase.
Much to our disappointment, an attempt to help lower the cost of health benefits for our employees and ultimately reduce costs for taxpayers was rejected by the state after eight months of discussion and initial approval. The plan we proposed was developed by an insurance broker that had already implemented a similar plan in Hunterdon County. Three hundred ninety-six employees agreed to move into the plan that would have saved nearly $750,000 the first year and up to $4.4 million in five years, and even more if additional employees were to make the switch during that 5-year period. We only learned of the state’s disapproval in late November and were then forced to return the employees to their original plans. We will continue to work with the broker to find a plan that may be acceptable to the state and provide a more affordable health care option for our employees.
But the state needs to do better. On January 8, 2024, state legislators overwhelming passed a bill to increase salaries for themselves and their staffs by 67%. The governor has until today to sign it into law. If he does, New Jersey will now have the highest paid part-time legislators in the country. The sponsors of the legislation said it was needed to keep talented officials in the public sector and remain competitive with the private sector so the quality of government does not suffer. Local governments are facing the same dilemma and our employees are on the front lines providing essential programs and services, yet we must adhere to a 2% cap and try to find a balance that satisfies both our employees, who want competitive salaries and benefits, and our taxpayers, who want to contain costs and lower taxes.
In 2023, local government employees who participate in the State Health Benefits Plan were hit with an unexpected and unprecedented 24% increase in premium costs while state union members saw only a 3% increase. In 2024, these same employees will be faced with an additional 7% increase. Such exorbitant increases make this balancing act all the more difficult.
When we did find a way to reduce costs for both employees and taxpayers with our proposed health benefit plan, it was rejected at the eleventh hour. Perhaps the state should work as hard as we are to find a cost-effective health benefit alternate so county government can more easily retain talented employees, remain competitive, and not allow the quality of programs and services to suffer. Afterall, our state legislators have just demonstrated with their votes how important they think this is to the quality of government.
The Meadowview Nursing and Rehabilitation Center has been especially hard hit by the lingering impacts of COVID. Most businesses have found ways to adapt so COVID is more of an inconvenience than a catastrophic occurrence. But in the case of Meadowview and other long-term care facilities, when there are two or more staff or residents with COVID, it is considered an outbreak and the facility is forced to close to admissions. This produces a constant stop and start that hampers our ability to attract new residents. A further complication is the staffing shortages that have required us to contract for mandated nursing positions, resulting in a budget increase of approximately $615,000 for Meadowview.
The opioid epidemic has caused irreparable damage across our nation. The number of people who died from a drug overdose in 2021 was over six times the number in 1999. Companies involved in the manufacturing, distribution and sale of opioids are now being court-ordered to pay for the damages they have inflicted.
New Jersey has thus far been awarded $641 million in settlement funds from opioid makers and distributors that is being shared among 262 state subdivisions. Atlantic County received nearly $600,000 in 2023 and established a committee of community partners to identify the best use of these funds. With a focus on saving lives and providing treatment, initial funding was made available to aid individuals who seek assistance through an emergency room setting. Referrals and transportation to addiction specialists and medication services are offered to help stabilize these individuals and bridge them to recovery. In 2024, county staff will be assigned to monitor this “bridge” program and work with a consultant to develop a plan for future programming with additional opioid settlement funding. This may include a psychiatric intervention program for youth made available with the assistance of participating school districts.
Over the past year, Atlantic County has seen an increase in the detention of individuals related to crimes. In August 2023, the Atlantic County Prosecutor’s Office was recognized as having a 48.9% detention rate, more than twice the 18.1% statewide average. The office was also successful in obtaining 19 guilty verdicts in 19 homicide cases.
We applaud efforts to enforce the law and remove criminals from our streets and neighborhoods, but we also recognize their impact in increasing costs associated with the Prosecutor’s Office, Youth Detention and our Justice Facility. An additional $3 million will be required in the 2024 budget to house youth in detention facilities. The Office of Youth Services is exploring community-based programs to help high-risk youth avoid detention. We will also explore opportunities for a regional jail as part of a state-funded study. There is pending legislation to create an authority to administer jail services for any county that becomes part of the Regional Rehabilitation and Re-Entry Center. If the study finds fiscal efficiency and administrative effectiveness with a regional jail concept, we will discuss how to move forward.
Atlantic County will also award a contract for a feasibility study of centralized fire, emergency services, and a 911 call center as a shared services agreement. This past year the county worked with Egg Harbor Township and its Board of Education to obtain $400,000 in shared services grant funding for the installation of lighting at the high school athletic field. Another $400,000 grant helped Atlantic City purchase a pothole repair vehicle that will be available for use by multiple municipalities.
New Jersey currently has the third highest unemployment rate in the nation and Atlantic County remains one of the poorest counties in the state. As a result, the number of residents who receive economic assistance and benefits continues to climb. There are approximately 35,000 residents receiving food stamps, 52,500 on Medicaid, 1,500 on Temporary Assistance for Needy Families and 1,000 receiving general assistance, in addition to other programs that support welfare. Despite its own staffing shortage, the Department of Family and Community Development remains committed to meeting the growing demand and processing cases in a timely manner.
Our Planning and Engineering staff will continue its work to improve county roads and bridges that will include the reconfiguration of the Brigantine Circle, reconstruction of Lakes Creek bridge in Egg Harbor Township, and the raising of a portion of Shore Road in Absecon, from Ohio Avenue to Illinois Avenue, that continually floods. We will also begin work on the installation of a coffer dam at Lake Lenape in Mays Landing.
Approximately $750,000 for Public Works supplies will be included in the 2024 budget to help maintain county roads and bridges. This is necessary as motor vehicle fines from municipal court cases have diminished providing less funding to the county for this purpose.
To help reduce costs at the Central Municipal Court for the 10 participating towns, the county was able to successfully negotiate a decrease in the cost of security, lowering the expense from $1.2 million in 2023 to $625,000 in 2024. And if passed, new legislation will require all state cases to be heard in the municipality of origin rather than all being heard at the Central Municipal Court. This will drastically reduce caseloads and further reduce costs and increase efficiency.
The Division of Facilities Management will be involved in several projects this year which include the construction of a new 10,000 square foot warehouse. The existing warehouse was provided to the Superintendent of Elections for storage of new voting machines and poll books. Facilities Management will also install a new water flow system at the county jail, complete roof replacements at four facilities, re-pave several parking lots, and replace drainage at the Galloway library branch. A new energy savings program will address air conditioning and heating systems at the Civil Court House and county jail and provide LED lighting replacements.
Companies that want to do business with the county are able to register to access information and bid specifications through the new online purchasing portal. Staff will focus on greater outreach to businesses in 2024 to promote participation and increased response to bids and requests for proposals.
The Division of Information Technologies continues to make upgrades to enhance the county’s network security. Employees also receive cyber security training to help them identify suspicious activity and prevent threats to our system.
Under the direction of our public information officer and the county webmaster, the county has been working to create a new county website using a Content Management System platform that provides enhanced security, ADA compliance, opportunities for increased input from county employees, and greater citizen engagement. The site is expected to launch in the next two to three months.
At this time last year, I mentioned that the lawsuit between the county and the state regarding the casino PILOT funding was at a standstill with no movement toward resolution. Sadly, not much has changed over the past 12 months. Despite the initial rulings in our favor and a willingness on our end to discuss the matter, the state remains steadfast in its determination to stall and appeal, which only serves to deny Atlantic County taxpayers what is rightfully theirs and to also pass along the cost of this prolonged litigation to taxpayers throughout the entire state.
If the appeal is heard this year, and we are successful, we will be due $14.1 million, less any small increase afforded the county from the modified PILOT legislation. Given the uncertainty of this matter, we cannot include these funds in our 2024 budget calculations.
We do, however, plan to use $16.1 million of surplus or approximately 50% of available funding. With what we know now, the county tax levy would be $178,542,755. There are still discussions about the county’s equalized value, but the general-purpose tax rate would be 43 cents, down .008 of a cent. Once the municipal values are submitted to the Board of Taxation, the final rate will be determined. It will be made available within the next few months when we formally introduce the 2024 county budget.
As I mentioned earlier in this message, the preparation of our annual budget is extensive and requires the cooperation and contributions of many people throughout county government. Our fiscal teams do a tremendous job year-round. This year in particular, we have had more new personnel who have stepped up to the challenge under the direction of County Administrator Jerry Del Rosso, Deputy County Administrator Diana Rutala, Treasurer Bonnie Lindaw, Comptroller Todd Reitzel, Administrative Services Department Head Tammi Robbins, and Budget Manager Julie Sharkey.
I am also appreciative of the continued support and input from the Board of Commissioners, and specifically its own budget committee members. They take pride in their work and do their due diligence to help us provide a cost-effective and efficient government without ever sacrificing the quality of our services.
I look forward to working with you once again and know that our shared commitment to serving the best interests of our residents will continue to take us far.
Thank you all, God bless!