Cap Bank Established for Emergencies

In advance of the planned March 5 township budget presentation, the council approved the introduction Thursday of an ordinance to establish a cap bank for future needs.

This ordinance is approved annually.

According to township administrator James Naples, the ordinance authorizes the township to exceed its cap by 1 percent, but that has nothing to do with the tax levy cap.

"This is different from the property tax levy cap, which is at 2 percent," he said. "This [ordinance] is for appropriations."

Several years ago, Naples said, the township went to referendum to increase the cap, and it passed. Now, he said, the ordinance allows the township to move 1 percent beyond that cap only for appropriations, not for property taxes.

"It just sets up a cap bank in the event we need to use it in future years," he said.

Naples said the township is required to establish this ordinance before it introduces the budget.

This ordinance allows the township to increase its budget by 3.5 percent, rather than the state-mandated 2.5 percent. In this case, the township has chosen a 1 percent increase above the final appropriations allowed by the state, for a total of $301,749.19.

And at this point, Naples said, the township's cap bank has $2,420,000 from previous years.

"If there was a severe drop in revenue and an absolute emergency, we could exceed the cap," he said. "We would have to come within the 2 percent property tax levy cap, but this allows us to have maneuvering room if it is needed."

Public hearing on the ordinance will be held March 5, along with an expected budget presentation.