West Windsor reviews 2025 budget: fund balance rises, interest income climbs, council to consider cap-bank ordinance

West Windsor Township officials on Feb. 21 reviewed revenue results from 2024 and outlined key elements of the proposed 2025 municipal budget, including a stronger-than-expected fund balance, sharply higher interest income, a pending agreement with Princeton University and a recommended ordinance to expand the township's cap bank.

"Our interest income has gone from around 800,000 to 2,600,000.0 since 2023," John Water, township chief financial officer, told the council as he led a review of revenues and supplemental information. Water said the increase followed a competitive request-for-proposal process with local banks and larger carrying balances tied to growth in other levies.

The council was presented with the township's year-end fund-balance figures. "At the beginning of 2024, the township had a fund balance of $18,200,000," Water said, and after results of operations for 2024 the balance rose to about $23,400,000. Of that total, Water said roughly $13.4 million is assigned and the township expects to carry roughly $10 million as unassigned balance into 2025.

Why it matters: a larger fund balance and higher interest income give the township more flexibility entering the 2025 budget process but also require conservative anticipation of recurring revenues so one-time gains are not used to mask future shortfalls.

Key revenue drivers and negotiations

Water summarized major categories affecting the budget: building-related fees remain elevated following a busy construction cycle (uniform construction code fees historically range between $2 million and $3 million, Water said), municipal court receipts rose from a few hundred thousand dollars to over $500,000, and cable franchise fees continue to decline as residents cut traditional television packages.

Water said negotiations are ongoing with Princeton University on a revenue agreement that had expired. "That agreement had expired, and we are in the process of negotiating a new deal," he said. Water advised the council that any finalized agreement would be put into a designated reserve and anticipated for the following year's budget.

Sewer connection fees, Water said, are volatile and reflect one-time hookup payments from large developments. He cautioned that hookup revenue can swing substantially year to year and recommended treating those receipts conservatively because inspection and maintenance obligations continue after collections.

Cap bank ordinance and statutory caps

Water recommended the council consider reauthorizing a cap-bank ordinance that would allow an additional optional 1% increase (which Water quantified as $382,000) on top of the automatic statutory increase tied to assessor-certified new construction (he said that automatic addition this year is $1,039,000). If adopted and applied as budget amendments by the council, Water said the combined changes would allow the township to carry roughly $762,000 into future years as part of the cap bank.

Water explained the distinction between two different statutory controls the council must track: an appropriation cap (which limits expenditures) and a levy cap that generally limits the tax rate increase to 2% with specified exceptions. He said both caps must be managed together when preparing and adopting the budget.

Budget timing, local review and financing

Water told the council the administration plans to introduce the budget on April 7, with a required public hearing to follow on May 19 to satisfy the 28-day notice requirement. He also said West Windsor completed a local exam last year without required amendments and that the township will present a resolution confirming the local exam status before budget introduction this year.

The township retains a strong credit profile: Water said Standard & Poor's reaffirmed the township's triple-A rating in November 2023. He said the township will likely seek short-term (one-year) temporary financing notes in advance of permanent issuance based on market conditions and the advice of financial advisers.

Capital items and other budget requests

Water read an email from the volunteer fire chiefs requesting an increase in the annual personal protective equipment (PPE) capital line from $50,000 to $100,000 to allow the purchase of up to about 20 sets per year; he said the additional operating impact is roughly 5 percent of the capital increase and can be absorbed within existing balances.

Council members and staff discussed a proposed pickup truck for the buildings and grounds department and the related decision whether to keep a small stipend for employees who currently receive a monthly vehicle allowance. Water noted the vehicle procurement timing would likely mean delivery in the next fiscal year.

Councilmembers also asked administration to follow up on a township signage project that began about two years ago. Water said staff (Dan and others) would locate the prior work and report back.

Public comment and next steps

A resident, John Church of 11 Princeton Place, thanked staff for the budget work and offered to circulate a written summary to council and administration. Water said he will provide reconciliation sheets in state format and deliver any updates, including if grants or other revenues change the book's figures.

No formal votes were taken during the workshop. Water asked for council's guidance on the cap-bank ordinance and said he will provide counsel with a detailed memo and draft ordinance ahead of introduction.

Ending

The council scheduled the formal budget introduction and the statutory public hearing dates; staff will return with the ordinance language, counsel memo and any additional backup needed for the April 7 introduction and May 19 hearing.