NEW ISSUE SERIAL BONDS Rating: Standard & Poor’s: “AA-”

See “RATING” herein

In the opinion of McManimon, Scotland & Baumann, LLC, Bond Counsel to the Borough (as defined herein), pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code") interest on the Bonds (as defined herein) is not included in gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the alternative minimum tax imposed on individuals and corporations. It is also the opinion of Bond Counsel, that interest on the Bonds held by corporate taxpayers is included in "adjusted current earnings" in calculating alternative minimum taxable income for purposes of the federal alternative minimum tax imposed on corporations. In addition, in the opinion of Bond Counsel, interest on and any gain from the sale of the Bonds is not includable as gross income under the New Jersey Gross Income Tax Act. Bond Counsel’s opinions described herein are given in reliance on representations, certifications of fact, and statements of reasonable expectation made by the Borough in its Tax Certificate (as defined herein), assume continuing compliance by the Borough with certain covenants set forth in its Tax Certificate, and are based on existing statutes, regulations, administrative pronouncements and judicial decisions. See "TAX MATTERS" herein.

BOROUGH OF WEST WILDWOOD, In the County of Cape May, New Jersey

$1,765,000 GENERAL IMPROVEMENT BONDS, SERIES 2014 (Book-Entry Issue)/(Non-Callable)/(Bank Qualified)

Dated Date: Date of Delivery Due: February 1, as shown on the inside front cover page hereof

The $1,765,000 General Improvement Bonds, Series 2014 (the "Bonds"), of the Borough of West Wildwood, in the County of Cape May, New Jersey (the “Borough”), will be issued in the form of one certificate for the aggregate principal amount of the Bonds maturing in each year and when issued will be registered in the name of CEDE & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as "Securities Depository". See “THE BONDS - Book-Entry Only System” herein.

Interest on the Bonds will be payable semiannually on the first day of February and August in each year until maturity, commencing August 1, 2014. The principal of and the interest on the Bonds will be paid to DTC by the Borough as paying agent. Interest on the Bonds will be credited to the Participants (as defined herein) of DTC as listed on the records of DTC as of each next preceding January 15 and July 15 (the “Record Dates” for the payment of interest on the Bonds).

The Bonds are not subject to redemption prior to their stated maturities.

The Bonds are valid and legally binding obligations of the Borough and, unless paid from other sources, are payable from ad valorem taxes levied upon all the taxable real property within the Borough for the payment of the Bonds and the interest thereon without limitation as to rate or amount.

This cover page contains information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement, including the Appendices, to obtain information essential to the making of an informed investment decision.

The Bonds will be offered when, as and if issued and delivered to the Underwriter (as defined herein), subject to prior sale, to withdrawal or modification of the offer without notice and to approval of legality by the law firm of McManimon, Scotland & Baumann, LLC, Roseland, New Jersey and certain other conditions described herein. Delivery is anticipated to be at the offices of the Borough’s bond counsel, McManimon, Scotland & Baumann, LLC, Roseland, New Jersey or at such other place as agreed to with the Underwriter on or about February 6, 2014.

UBS FINANCIAL SERVICES

Dated: January 23, 2014

BOROUGH OF WEST WILDWOOD, In the County of Cape May, New Jersey

$1,765,000 GENERAL IMPROVEMENT BONDS, SERIES 2014

(Book-Entry Issue) (Non-Callable)

(Bank Qualified)

MATURITIES, INTEREST RATES, YIELDS AND CUSIP NUMBERS

Year

Principal Amount

Interest Rate

Yield

CUSIP Number*

2015 $100,000 2.00% 0.25% 956874 CP4

2016 150,000 2.00 0.35 956874 CQ2

2017 175,000 2.00 0.50 956874 CR0

2018 175,000 2.50 0.75 956874CS8

2019 180,000 2.50 1.00 956874 CT6

2020 185,000 3.00 1.40 956874 CU3

2021 200,000 3.00 1.75 956874 CV1

2022 200,000 3.00 2.05 956874 CW9

2023 200,000 3.00 2.25 956874 CX7

2024 200,000 3.00 2.40 956874 CY5

* "CUSIP" is a registered trademark of the American Bankers Association. CUSIP numbers are provided by Standard & Poor’s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP Numbers listed above are being provided solely for the convenience of Bondholders only at the time of issuance of the Bonds and the Borough does not make any representations with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specified maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

BOROUGH OF WEST WILDWOOD IN THE COUNTYOF CAPE MAY

NEW JERSEY

MAYOR

Christopher J. Fox

COMMISSIONER MEMBERS

Scott Goden Cornelius Maxwell Christopher J. Fox

CHIEF FINANCIAL OFFICER

Neil Young

ACTING BOROUGH CLERK

Donna L. Frederick

BOROUGH ATTORNEY

Andrew J. Cafiero Wildwood, New Jersey

INDEPENDENT ACCOUNTANT

Bowman & Company, LLP Voorhees, New Jersey

BOND COUNSEL

McManimon, Scotland & Baumann, LLC Roseland, New Jersey

FINANCIAL ADVISOR

Phoenix Advisors, LLC Bordentown, New Jersey

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No broker, dealer, salesperson or other person has been authorized by the Borough to

give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the foregoing. The information contained herein has been provided by the Borough and other sources deemed reliable; however, no representation or warranty is made as to its accuracy or completeness and such information is not to be construed as a representation or warranty by the Underwriter or, as to information from sources other than itself, by the Borough. The information and the expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder under any circumstances shall create any implication that there has been no change in any of the information herein since the date hereof or since the date as of which such information is given, if earlier.

References in this Official Statement to laws, rules, regulations, resolutions, agreements, reports and documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein, and copies of which may be inspected at the offices of the Borough during normal business hours.

For purposes of compliance with Rule 15c2-12 of the Securities and Exchange

Commission, this document, as the same may be supplemented or amended by the Borough from time to time (collectively, the "Official Statement"), may be treated as a "Final Official Statement" with respect to the Bonds described herein that is deemed final as of the date hereof (or of any such supplement or amendment) by the Borough.

The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Borough since the date hereof or any earlier date as of which any information contained herein is given. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be used, in whole or in part, for any other purpose.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT PRIOR NOTICE.

The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which it is unlawful for any person to make such an offer, solicitation or sale. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations other than as contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the Borough or the Underwriter.

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THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT,

INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT.

None of McManimon, Scotland & Baumann, LLC or the Underwriter has participated in

the preparation of the financial or statistical information contained in this Official Statement nor have they verified the accuracy or completeness thereof, and, accordingly, they express no opinion with respect thereto.

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TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 THE BONDS ................................................................................................................................. 1

General Description .................................................................................................................. 1 Redemption ............................................................................................................................... 2 Book-Entry Only System ........................................................................................................... 2 Discontinuation of Book-Entry Only System ............................................................................. 4

SECURITY AND SOURCE OF PAYMENT .................................................................................. 4 AUTHORIZATION AND PURPOSE OF THE BONDS.................................................................. 4 MUNICIPAL FINANCE - FINANCIAL REGULATION OF COUNTIES AND MUNICIPALITIES .... 5

Local Bond Law (N.J.S.A. 40A:2-1 et seq.) ............................................................................... 5 The Local Budget Law (N.J.S.A. 40A:4-1 et seq.) .................................................................... 6 Tax Assessment and Collection Procedure .............................................................................. 8 Tax Appeals .............................................................................................................................. 9 The Local Fiscal Affairs Law (N.J.S.A. 40A:5-1 et seq.) ........................................................... 9 Impact of Super Storm Sandy on the Borough ......................................................................... 9

TAX MATTERS ............................................................................................................................. 9 General ..................................................................................................................................... 9 Certain Federal Tax Consequences Relating to the Bonds .................................................... 10 Bank Qualification ................................................................................................................... 10 New Jersey Gross Income ...................................................................................................... 11 Future Events .......................................................................................................................... 11

LITIGATION ................................................................................................................................ 11 SECONDARY MARKET DISCLOSURE ..................................................................................... 11 MUNICIPAL BANKRUPTCY ....................................................................................................... 13 APPROVAL OF LEGAL PROCEEDINGS .................................................................................. 14 UNDERWRITING ........................................................................................................................ 14 RATING ...................................................................................................................................... 14 FINANCIAL ADVISOR ................................................................................................................ 14 PREPARATION OF OFFICIAL STATEMENT ............................................................................ 14 ADDITIONAL INFORMATION .................................................................................................... 15 MISCELLANEOUS ..................................................................................................................... 15 CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE BOROUGH OF WEST WILDWOOD ................................................... Appendix A AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31, 2012 ................................................................................................ Appendix B FORM OF APPROVING LEGAL OPINION OF BOND COUNSEL................................ Appendix C

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OFFICIAL STATEMENT Relating to

BOROUGH OF WEST WILDWOOD,

In the County of Cape May, New Jersey

$1,765,000 GENERAL IMPROVEMENT BONDS, SERIES 2014 (Book-Entry Issue)

(Non-Callable) (Bank Qualified)

INTRODUCTION

This Official Statement, which includes the cover page, the inside front cover page and the appendices attached hereto, has been prepared by the Borough of West Wildwood (the “Borough”), in the County of Cape May (the "County"), New Jersey (the "State"), in connection with the sale and the issuance of $1,765,000 General Improvement Bonds, Series 2014 (the “Bonds”). This Official Statement has been executed by and on behalf of the Borough by its Chief Financial Officer and may be distributed in connection with the sale of the Bonds described herein.

This Official Statement is "deemed final," as of its date, within the meaning of Rule 15c2-12 of the Securities and Exchange Commission.

THE BONDS General Description The Bonds shall be dated their date of issuance and will mature on February 1, in the years and in the principal amounts as set forth on the inside front cover page hereof. The Bonds shall bear interest from their date, payable semiannually on each February 1 and August 1 (each, an "Interest Payment Date"), commencing August 1, 2014, in each year until maturity, at the interest rates shown on the inside front cover page hereof. Interest on the Bonds shall be computed on a 30-day month/360-day year basis. The Bonds are issuable as fully registered book-entry bonds in the form of one certificate for each maturity of Bonds and in the principal amount of such maturity. The Bonds may be purchased in book-entry only form in the amount of any integral multiple of $1,000 with a minimum purchase of $5,000 required (or a necessary odd denomination) through book-entries made on the books and records of The Depository Trust Company, New York, New York ("DTC") and its participants. So long as DTC or its nominee, CEDE & Co. (or any successor or assign), is the registered owner for the Bonds, payments of the principal of and interest on the Bonds will be made by the Borough directly to CEDE & Co. (or any successor or assign), as nominee for DTC. Interest on the Bonds will be credited to the participants of DTC as listed on the records of DTC as of each next preceding January 15 and July 15 (the "Record Dates" for the payment of interest on the Bonds). See "Book-Entry Only System" herein.

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Redemption

The Bonds of this issue are not subject to redemption prior to their stated maturities.

Book-Entry Only System The description which follows of the procedures and recordkeeping with respect to beneficial ownership interest in the Bonds, payment of principal and interest and other payments on the Bonds to Direct and Indirect Participants (each as defined below) or Beneficial Owners (defined below), confirmation and transfer of beneficial ownership interests in the Bonds and other related transactions by and between DTC, Direct Participants and Beneficial Owners, is based on certain information furnished by DTC to the Borough.

DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of CEDE & CO. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each year of maturity of the Bonds, in the aggregate principal amount of each maturity, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial

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Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, CEDE & CO., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of CEDE & CO. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor CEDE & CO. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Borough as soon as possible after the Record Date. The Omnibus Proxy assigns CEDE & CO.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Bonds will be made to CEDE & CO., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Borough or the paying agent, if any, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the paying agent, if any, or the Borough, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to CEDE & CO. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Borough or the paying agent, if any, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Borough or the paying agent, if any. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered.

The Borough may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC.

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The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Borough believes to be reliable, but the Borough takes no responsibility for the accuracy thereof.

THE BOROUGH WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO SUCH DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENTS TO OR PROVIDING OF NOTICE FOR THE DTC PARTICIPANTS, OR THE INDIRECT PARTICIPANTS, OR BENEFICIAL OWNERS.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE BONDS (OTHER THAN UNDER THE CAPTION "TAX MATTERS") SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. Discontinuation of Book-Entry Only System If the Borough, in its sole discretion, determines that DTC is not capable of discharging its duties, or if DTC discontinues providing its services with respect to the Bonds at any time, the Borough will attempt to locate another qualified Securities Depository. If the Borough fails to find such a Securities Depository, or if the Borough determines, in its sole discretion, that it is in the best interest of the Borough or that the interest of the Beneficial Owners might be adversely affected if the book-entry only system of transfer is continued (the Borough undertakes no obligation to make an investigation to determine the occurrence of any events that would permit it to make such determination) the Borough shall notify DTC of the termination of the book-entry only system.

SECURITY AND SOURCE OF PAYMENT

The Bonds are valid and legally binding general obligations of the Borough, and the

Borough has pledged its full faith and credit for the payment of the principal of and the interest on the Bonds. The Borough is required by law to levy ad valorem taxes upon all the real property taxable within the Borough for the payment of the principal of and the interest on the Bonds without limitation as to rate or amount.

AUTHORIZATION AND PURPOSE OF THE BONDS

The Bonds have been authorized and are being issued pursuant to the laws of the State,

including the Local Bond Law (constituting Chapter 2 of Title 40A of the New Jersey Statutes, as amended) (the “Local Bond Law”), the bond ordinances adopted by the Borough Commissioners referred to in the chart below and by a resolution adopted by the Borough Commissioners on December 4, 2013.

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Principal

Amount of Bonds

Number of Ordinance

Description of Improvement and Date of Adoption of

Ordinance $234,000 #450 Providing for various capital improvements, finally

adopted May 24, 2005. $295,000 #475 Various capital improvements, finally adopted February

1, 2008. $149,000 #482 Improvements to Bay Avenue and other streets, finally

adopted April 2, 2008. $1,087,000 #497 Various improvements to the 26th Street Bulkhead,

finally adopted October 2, 2009.

Proceeds from the sale and issuance of the Bonds will be used by the Borough to (i)

currently refund $1,116,248 of the Borough's $1,116,248 Bond Anticipation Note, dated and issued on October 9, 2013 and maturing February 7, 2014, (ii) provide $648,752 in new money to finance the projects set forth in the bond ordinances described above, and (iii) pay the costs in connection with the authorization, sale and issuance of the Bonds.

MUNICIPAL FINANCE - FINANCIAL REGULATION OF COUNTIES AND MUNICIPALITIES

Local Bond Law (N.J.S.A. 40A:2-1 et seq.) The Local Bond Law governs the issuance of bonds and notes to finance certain general municipal and utility capital expenditures. Among its provisions are requirements that bonds must mature within the statutory period of usefulness of the projects bonded and that bonds be retired in serial installments. A 5% cash down payment is generally required toward the financing of expenditures for municipal purposes. All bonds and notes issued by the Borough are general full faith and credit obligations. The authorized bonded indebtedness of the Borough for municipal purposes is limited by statute, subject to the exceptions noted below, to an amount equal to 3½% of its average equalized valuation basis. The average for the last three years of the equalized value of all taxable real property and improvements and certain Class II railroad property within the boundaries of Borough, as annually determined by the State Director of Taxation is shown in Appendix A. Certain categories of debt are permitted by statute to be deducted for purposes of computing the statutory debt limit, including school bonds that do not exceed the school bond borrowing margin and certain debt that may be deemed self-liquidating. As shown in Appendix A, the Borough has not exceeded its statutory debt limit. The Borough may exceed its debt limit with the approval of the Local Finance Board, a State regulatory agency, and as permitted by other statutory exceptions. If all or any part of a proposed debt authorization would exceed its debt limit, the Borough may apply to the Local Finance Board for an extension of credit. If the Local Finance Board determines that a proposed debt authorization would not materially impair the credit of the Borough or

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substantially reduce the ability of the Borough to meet its obligations or to provide essential public improvements and services, or if it makes certain other statutory determinations, approval is granted. In addition, debt in excess of the statutory limit may be issued by the Borough to fund certain notes, to provide for self-liquidating purposes, and, in each fiscal year, to provide for purposes in an amount not exceeding 2/3 of the amount budgeted in such fiscal year for the retirement of outstanding obligations (exclusive of utility and assessment obligations). The Borough may sell short-term "bond anticipation notes" to temporarily finance a capital improvement or project in anticipation of the issuance of bonds if the bond ordinance or a subsequent resolution so provides. Bond anticipation notes for capital improvements may be issued in an aggregate amount not exceeding the amount specified in the ordinance creating such capital expenditure, as it may be amended and supplemented. A local unit’s bond anticipation notes may be issued for periods not greater than one year. Generally, bond anticipation notes may not be outstanding for longer than ten years. An additional period may be available following the tenth anniversary date equal to the period from the notes’ maturity to the end of the tenth fiscal year in which the notes mature plus 4 months (May 1) in the next following fiscal year from the date of original issuance. Beginning in the third year, the amount of notes that may be issued is decreased by the minimum amount required for the first year’s principal payment for a bond issue. The Local Budget Law (N.J.S.A. 40A:4-1 et seq.) The foundation of the New Jersey local finance system is the annual cash basis budget. Every local unit must adopt a budget in the form required by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the "Division"). Certain items of revenue and appropriation are regulated by law and the proposed budget must be certified by the Director of the Division ("Director") prior to final adoption. The Local Budget Law requires each local unit to appropriate sufficient funds for payment of current debt service, and the Director is required to review the adequacy of such appropriations. The local unit is authorized to issue Emergency Notes and Special Emergency Notes pursuant to the Local Budget Law. Tax Anticipation Notes are limited in amount by law and must be paid off in full within 120 days of the close of the fiscal year. The Director has no authority over individual operating appropriations, unless a specific amount is required by law, but the review functions focusing on anticipated revenues serve to protect the solvency of all local units. The cash basis budgets of local units must be in balance, i.e., the total of anticipated revenues must equal the total of appropriations (N.J.S.A. 40A:4-22). If in any year a local unit's expenditures exceed its realized revenues for that year, then such excess must be raised in the succeeding year's budget. The Local Budget Law (N.J.S.A. 40A:4-26) provides that no miscellaneous revenues from any source may be included as an anticipated revenue in the budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year, unless the Director determines that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the fiscal year and certifies that determination to the local unit.

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No budget or budget amendment may be adopted unless the Director shall have previously certified his approval of such anticipated revenues except that categorical grants-in-aid contracts may be included for their face amount with an offsetting appropriation. The fiscal years for such grants rarely coincide with the municipality's calendar year. However, grant revenue is generally not realized until received in cash. The same general principle that revenue cannot be anticipated in a budget in excess of that realized in the preceding year applies to property taxes. The maximum amount of delinquent taxes that may be anticipated is limited by a statutory formula, which allows the unit to anticipate collection at the same rate realized for the collection of delinquent taxes in the previous year. Also the local unit is required to make an appropriation for a "reserve for uncollected taxes" in accordance with a statutory formula to provide for a tax collection in an amount that does not exceed the percentage of taxes levied and payable in the preceding fiscal year that was received in cash by December 31 of that year. The budget also must provide for any cash deficits of the prior year. Emergency appropriations (those made after the adoption of the budget and the determination of the tax rate) may be authorized by the governing body of a local unit. However, with minor exceptions, such appropriations must be included in full in the following year's budget. The exceptions are certain enumerated quasi-capital projects ("special emergencies") such as ice, snow and flood damage to streets, roads and bridges, which may be amortized over three years, and tax map preparation, re-evaluation programs, revision and codification of ordinances, master plan preparation drainage map preparation for flood control purposes, which may be amortized over five years. Of course, emergency appropriations for capital projects may be financed through the adoption of a bond ordinance and amortized over the useful life of the project. Budget transfers provide a degree of flexibility and afford a control mechanism. Transfers between appropriation accounts may be made only during the last two months of the year. Appropriation reserves may also be transferred during the first three (3) months of the year, to the previous year’s budget. Both types of transfers require a 2/3 vote of the full membership of the governing body; however, transfers cannot be made from either the down payment account or the capital improvement fund. Transfers may be made between sub-account line items within the same account at any time during the year, subject to internal review and approval. In a "CAP" budget, no transfers may be made from excluded from "CAP" appropriations to within "CAPS" appropriations nor can transfers be made between excluded from "CAP" appropriations. A provision of law known as the New Jersey "Cap Law" (N.J.S.A. 40A:4-45.1 et seq.) imposes limitations on increases in municipal appropriations subject to various exceptions. The payment of debt service is an exception from this limitation. The Cap formula is somewhat complex, but basically, it permits a municipality to increase its overall appropriations by the lesser of 2.5% or the "Index Rate" if the index rate is greater than 2.5%. The "Index Rate" is the rate of annual percentage increase, rounded to the nearest one-half percent, in the Implicit Price Deflator for State and Local Government purchases of goods and services computed by the U.S. Department of Commerce. Exceptions to the limitations imposed by the Cap Law also exist for other things including capital expenditures; extraordinary expenses approved by the Local Finance Board for implementation of an interlocal services agreement; expenditures

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mandated as a result of certain emergencies; and certain expenditures for services mandated by law. Counties are also prohibited from increasing their tax levies by more than the lesser of 2.5% or the Index Rate subject to certain exceptions. Municipalities by ordinance approved by a majority of the full membership of the governing body may increase appropriations up to 3.5% over the prior year’s appropriation and counties by resolution approved by a majority of the full membership of the governing body may increase the tax levy up to 3.5% over the prior years’ tax levy in years when the Index Rate is 2.5% or less.

Additionally, legislation constituting P.L. 2010, c. 44, approved July 13, 2010 and applicable to the next local budget year following enactment, limits tax levy increases for those local units to 2% with exceptions only for capital expenditures including debt service, increases in pension contributions and accrued liability for pension contributions in excess of 2%, certain healthcare increases, extraordinary costs directly related to a declared emergency and amounts approved by a simple majority of voters voting at a special election. Neither the tax levy limitation nor the "Cap Law" limits the obligation of the Borough to levy ad valorem taxes upon all taxable real property within the Borough to pay debt service on its bonds or notes. In accordance with the Local Budget Law, each local unit must adopt and may from time to time amend rules and regulations for capital budgets, which rules and regulations must require a statement of capital undertakings underway or projected for a period not greater than over the next ensuing six years as a general improvement program. The capital budget, when adopted, does not constitute the approval or appropriation of funds, but sets forth a plan of the possible capital expenditures which the local unit may contemplate over the three years. Expenditures for capital purposes may be made either by ordinances adopted by the governing body setting forth the items and the method of financing or from the annual operating budget if the terms were detailed. Tax Assessment and Collection Procedure Property valuations (assessments) are determined on true values as arrived at by a cost approach, market data approach and capitalization of net income where appropriate. Current assessments are the results of new assessments on a like basis with established comparable properties for newly assessed or purchased properties. This method assures equitable treatment to like property owners. But it often results in a divergence of the assessment ratio to true value. Because of the changes in property resale values, annual adjustments could not keep pace with the changing values. A re-evaluation of all property in the Borough was last completed in 2008. Upon the filing of certified adopted budgets by the Borough’s Local School District and the County, the tax rate is struck by the County Board of Taxation based on the certified amounts in each of the taxing districts for collection to fund the budgets. The statutory provision for the assessment of property, levying of taxes and the collection thereof are set forth in N.J.S.A. 54:4-1 et seq. Special taxing districts are permitted in New Jersey for various special services rendered to the properties located within the special districts. Tax bills are mailed annually in June by the Borough. The taxes are due August 1 and November 1 respectively, and are adjusted to reflect the current calendar year’s total tax liability. The preliminary taxes due February 1 and May 1 of the succeeding year are based upon one-half of the current year’s total tax.

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Tax installments not paid on or before the due date are subject to interest penalties of 8% per annum on the first $1,500.00 of the delinquency and 18% per annum on any amount in excess of $1,500.00. These interest rates and penalties are the highest permitted under New Jersey Statutes. Delinquent taxes open for one year or more are annually included in a tax sale in accordance with New Jersey Statues. Tax Appeals The New Jersey Statutes provide a taxpayer with remedial procedures for appealing an assessment deemed excessive. Prior to February 1 in each year, the Borough must mail to each property owner a notice of the current assessment and taxes on the property. The taxpayer has a right to petition the County Tax Board on or before April 1 for review. The County Board of Taxation has the authority after a hearing to decrease or reject the appeal petition. These adjustments are usually concluded within the current tax year and reductions are shown as canceled or remitted taxes for that year. If the taxpayer feels his petition was unsatisfactorily reviewed by the County Board of Taxation, appeal may be made to the Tax Court of New Jersey for further hearing. Some State Tax Court appeals may take several years prior to settlement and any losses in tax collections from prior years are charged directly to operations. The Local Fiscal Affairs Law (N.J.S.A. 40A:5-1 et seq.) This law regulates the non-budgetary financial activities of local governments. The chief financial officer of every local unit must file annually, with the Director, a verified statement of the financial condition of the local unit and all constituent boards, agencies or commissions. An independent examination of each local unit’s accounts must be performed annually by a licensed registered municipal accountant. The audit, conforming to the Division of Local Government Services’ "Requirements of Audit", includes recommendations for improvement of the local unit’s financial procedures and must be filed with the report, together with all recommendations made, and must be published in a local newspaper within 30 days of its submission. The entire annual audit report for the year ended December 31, 2011 for the Borough is on file with the Clerk and is available for review during business hours. Impact of Super Storm Sandy on the Borough On October 29, 2012, the entire region was impacted by Super Storm Sandy (the “Storm”), particularly coastal communities from Maryland to New York. The Storm has been coined a “Super Storm” due to the fact that it progressed up the east coast as a hurricane, and then joined another front in the mid-atlantic region, taking on more sub-tropical or nor’easter type characteristics before making landfall. Although the Storm was an unprecedented storm for the region, particularly in New Jersey, its effects on the Borough were moderate compared to other areas affected by the Storm.

TAX MATTERS

General Section 103(a) of the Internal Revenue Code of 1986, as amended (the “Code") provides that interest on the Bonds is not included in gross income for federal income tax purposes if

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various requirements set forth in the Code are met. The Borough has covenanted in its Arbitrate and Tax Certificate (the "Tax Certificate"), delivered in connection with the issuance of the Bonds, to comply with these continuing requirements and has made certain representations, certifications of fact, and statements of reasonable expectation in connection with the issuance of the Bonds to assure this exclusion. Pursuant to Section 103(a) of the Code, failure to comply with these requirements could cause interest on the Bonds to be includable in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds.

In the opinion of Bond Counsel, pursuant to Section 103(a) of Code, interest on the

Bonds is not included in gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the alternative minimum tax imposed on individuals and corporations. Bond Counsel is also of the opinion that interest on the Bonds held by corporate taxpayers is included in “adjusted current earnings” in calculating alternative minimum taxable income for purposes of the federal alternative minimum tax imposed on corporations. Bond Counsel’s opinions described herein are given in reliance on the representations, certifications of fact, and statements of reasonable expectation made by the Borough in its Tax Certificate, assume continuing compliance by the Borough with certain covenants set forth in its Tax Certificate, and are based on existing statutes, regulations, administrative pronouncements and judicial decisions. Certain Federal Tax Consequences Relating to the Bonds

Although, pursuant to Section 103(a) of the Code, interest on the Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The nature and extent of these other tax consequences will depend upon the recipient’s particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences. Purchasers of the Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions and certain recipients of Social Security benefits, are advised to consult their own tax advisors as to the tax consequences of purchasing or holding the Bonds. Bank Qualification The Bonds will be designated as qualified under Section 265 of the Code by the Borough for an exemption from the denial of deduction for interest paid by financial institutions to purchase or to carry tax-exempt obligations. The Code denies the interest deduction for certain indebtedness incurred by banks, thrift institutions and other financial institutions to purchase or to carry tax-exempt obligations. The denial to such institutions of one hundred percent (100%) of the deduction for interest paid on funds allocable to tax-exempt obligations applies to those tax-exempt obligations acquired by such institutions after August 7, 1986. For certain issues, which are eligible to be designated and which are designated by the issuer as qualified under Section 265 of the Code, eighty percent (80%) of such interest may be deducted as a business expense by such institutions.

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New Jersey Gross Income In the opinion of Bond Counsel, the interest on the Bonds and any gain realized on the sale of the Bonds is not includable as gross income under the New Jersey Gross Income Tax Act. Future Events Tax legislation, administrative action taken by tax authorities, and court decisions, whether at the Federal or state level, may adversely affect the exclusion from gross income of interest on the Bonds for federal income tax purposes, or the exclusion of interest on and any gain realized on the sale of the Bonds under the existing New Jersey Gross Income Tax Act, and any such legislation, administrative action or court decisions could adversely affect the market price or marketability of the Bonds. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT THEIR OWN ADVISORS IN ORDER TO UNDERSTAND THE IMPLICATIONS OF THE CODE.

ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT THEIR OWN ADVISORS REGARDING ANY CHANGES IN THE STATUTES, PROPOSED FEDERAL OR NEW JERSEY STATE TAX LEGISLATION, ANY CHANGES IN THE STATUS OF PENDING OR PROPOSED LEGISLATION, ADMINISTRATIVE ACTION TAKEN BY TAX AUTHORITIES, COURT DECISIONS OR PROPOSALS FOR CHANGE ON THE TAX AND MARKET IMPLICATIONS OF OWNERSHIP OF THE BONDS.

LITIGATION

To the knowledge of the Borough Attorney, Andrew J. Cafiero, Esq., Wildwood, New Jersey, there is no litigation of any nature now pending or threatened, restraining or enjoining the issuance or the delivery of the Bonds, or the levy or the collection of any taxes to pay the principal of or the interest on the Bonds, or in any manner questioning the authority or the proceedings for the issuance of the Bonds or for the levy or the collection of taxes, or contesting the corporate existence or the boundaries of the Borough or the title of any of the present officers. Moreover, to the knowledge of the Borough Attorney, no litigation is presently pending or threatened that, in the opinion of the Borough Attorney, would have a material adverse impact on the financial condition of the Borough if adversely decided.

SECONDARY MARKET DISCLOSURE

The Borough, pursuant to the Resolution, has covenanted for the benefit of the Bondholders and the beneficial owners of the Bonds to provide certain secondary market disclosure information pursuant to the Securities and Exchange Commission Rule 15c2-12 (the "Rule"). Specifically, for so long as the Bonds remain outstanding (unless the Bonds have been wholly defeased), the Borough will:

(a) On or prior to 270 days from the end of each fiscal year, beginning with the fiscal year ending December 31 of the year in which the Bonds are issued, to the Municipal Securities Rulemaking Board through the Electronic Municipal Market Access Data Port (the "MSRB"), annual financial information with respect to the Borough consisting of the audited financial statements (or unaudited financial statements if audited financial statements are not then available, which audited financial statements will be delivered when and if available) of the

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Borough and certain financial information and operating data consisting of (i) the Borough and overlapping indebtedness including a schedule of outstanding debt issued by the Borough, (ii) the Borough’s most current adopted budget, (iii) property valuation information, and (iv) tax rate, levy and collection data. The audited financial information will be prepared in accordance with modified cash accounting as mandated by State of New Jersey statutory principles in effect from time to time or with generally accepted accounting principles as modified by governmental accounting standards as may be required by New Jersey law and shall be filed electronically and accompanied by identifying information with the MSRB; (b) in a timely manner not in excess of ten business days after the occurrence of the event, to the MSRB, notice of any of the following events with respect to the Bonds (herein "Material Events"):

(1) Principal and interest payment delinquencies; (2) Non-payment related defaults, if material;

(3) Unscheduled draws on debt service reserves reflecting financial difficulties;

(4) Unscheduled draws on credit enhancements reflecting financial difficulties;

(5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of

proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

(7) Modifications to rights of security holders, if material; (8) Bond calls, if material, and tender offers;

(9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the

securities, if material; (11) Rating changes;

(12) Bankruptcy, insolvency, receivership or similar event of the obligated person;

(13) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

For the purposes of the event identified in subparagraph (12) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation

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by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.

(c) in a timely manner to the MSRB, notice of failure of the Borough to provide

required annual financial information on or before the date specified in the Resolution. In the event that the Borough fails to comply with the above-described undertaking and

covenants, the Borough shall not be liable for any monetary damages, remedy of the beneficial owners of the Bonds being specifically limited in the undertaking to specific performance of the covenants.

The undertaking may be amended by the Borough from time to time, without the consent

of the Bondholders or the beneficial owners of the Bonds, in order to make modifications required in connection with a change in legal requirements or change in law, which in the opinion of nationally recognized bond counsel complies with the Rule.

There can be no assurance that there will be a secondary market for the sale or

purchase of the Bonds. Such factors as prevailing market conditions, financial condition or market position of firms who may make the secondary market and the financial condition of the Borough may affect the future liquidity of the Bonds.

This is the first time the Borough will be obligated to provide secondary market

disclosure pursuant to the Rule.

MUNICIPAL BANKRUPTCY The undertakings of the Borough should be considered with reference to Chapter IX of the Bankruptcy Act, 11 U.S.C. Section 901, et seq., as amended by Public Law 94-260, approved April 8, 1976, and as further amended on November 6, 1978 by the Bankruptcy Reform Act of 1978, effective October 1, 1979, as further amended by Public Law 100-597, effective November 3, 1988, and as further amended and other bankruptcy laws affecting creditor’s rights and municipalities in general. The amendments of P.L. 94-260 replace former Chapter IX and permit the State or any political subdivision, public agency, or instrumentality that is insolvent or unable to meet its debts to file a petition in a court of bankruptcy for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of petitioner’s creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner; grants priority to debt owed for services or material actually provided within three months of the filing of the petition; directs a petitioner to file a plan for the adjustment of its debts; and provides that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount or more than one-half in number of the listed creditors. The 1976 Amendments were incorporated into the Bankruptcy Reform Act of 1978 with only minor changes. Reference should also be made to N.J.S.A. 52:27-40 et seq., which provides that a municipality has the power to file a petition in bankruptcy provided the approval of the Municipal Finance Commission has been obtained. The powers of the Municipal Finance Commission have been vested in the Local Finance Board. The Bankruptcy Act specifically provides that Chapter IX does not limit or impair the power of a state to control, by legislation or otherwise, the procedures that a municipality must follow in order to take advantage of the provisions of the Bankruptcy Act.

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APPROVAL OF LEGAL PROCEEDINGS

All legal matters incident to the authorization, the issuance, the sale, and the delivery of the Bonds are subject to the approval of McManimon, Scotland & Baumann, LLC, Roseland, New Jersey, Bond Counsel to the Borough, whose approving legal opinion will be delivered with the Bonds substantially in the form set forth as Appendix “C”. Certain legal matters will be passed on for the Borough by the Borough Attorney.

UNDERWRITING

The Bonds have been purchased from the Borough at a public sale by UBS Financial Services, New York, New York, (the “Underwriter”) at a price of $1,855,315.20 (consisting of the par amount of the Bonds plus a bid premium of $90,315.20). The Underwriter has purchased the Bonds in accordance with the Notice of Sale. The Bonds are being offered for sale at the yields set forth on the inside front cover of this Official Statement.

RATING

Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services, LLC business (the "Rating Agency"), has assigned a rating of “AA-” to the Bonds.

The rating reflects only the views of the Rating Agency and an explanation of the significance of such rating may only be obtained from the Rating Agency. There can be no assurance that the rating will be maintained for any given period of time or that they may not be raised, lowered or withdrawn entirely if, in the Rating Agency’s judgment, circumstances so warrant. Any downward change in, or withdrawal of such rating, may have an adverse effect on the marketability or market price of the Bonds.

FINANCIAL ADVISOR

Phoenix Advisors, LLC, Bordentown, New Jersey served as financial advisor to the Borough (the “Financial Advisor”) with respect to the issuance of the Bonds. This Official Statement has been prepared with the assistance of the Financial Advisor. Certain information set forth herein has been obtained from the Borough and other sources, which are deemed reliable, but no warranty, guaranty or other representation as to the accuracy or completeness is made as to such information contained herein will be realized. The Financial Advisor is a financial advisory firm, and is not engaged in the business of underwriting, marketing or trading municipal securities or any other negotiable instrument.

PREPARATION OF OFFICIAL STATEMENT

The Borough hereby states that the descriptions and statements herein, including

financial statements, are true and correct in all material respects and it will confirm to the purchasers of the Bonds, by certificates signed by the Chief Financial Officer of the Borough, that to his knowledge such descriptions and statements, as of the date of this Official Statement, are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements herein, in light of the circumstances under which they were made, not misleading.

Ford-Scott & Associates, L.L.C. takes responsibility for the audited financial statements to the extent specified in their Independent Auditor’s Report.

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All other information has been obtained from sources which Borough considers to be

reliable and they make no warranty, guaranty or other representation with respect to the accuracy and completeness of such information.

McManimon, Scotland & Baumann, LLC, has not participated in the preparation of the financial or statistical information contained in this official statement, nor have they verified the accuracy, completeness or fairness thereof and, accordingly, expresses no opinion with respect thereto.

ADDITIONAL INFORMATION

Inquiries regarding this Official Statement, including information additional to that contained herein, may be directed to Neil Young, the Borough’s Chief Financial Officer, at 701 W. Glenwood Avenue, West Wildwood, New Jersey 08260, telephone (609) 522-4845 or by email nyoung@westwildwood.org or Phoenix Advisors, LLC, telephone (609) 291-0130 or by email ainverso@muniadvisors.com.

MISCELLANEOUS

This Official Statement is not to be construed as a contract or agreement between the Borough and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinion contained herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Borough since the date hereof. The information contained in the Official Statement is not guaranteed as to accuracy or completeness.

BOROUGH OF WEST WILDWOOD

By: /s/ Neil Young Neil Young, Chief Financial Officer Dated: January 23, 2014

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APPENDIX A

CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE BOROUGH OF WEST WILDWOOD

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INFORMATION REGARDING THE BOROUGH1

The following material presents certain economic and demographic information of the Borough of West Wildwood (the “Borough”), in the County of Cape May (the “County”), in the State of New Jersey (the “State”). General Information

The Borough is located in the southeastern portion of the County. It is approximately ten

miles north of the City of Cape May, which provides ferry service to Lewes Delaware, and 40 miles south of Atlantic City, the largest gambling resort on the east coast. The Borough divides the Richardson Sound and Grassy Sound. Its bordering municipalities include, the City of Wildwood, the City of North Wildwood, the Township of Middle, and the Township of Lower.

Within 20 miles of the Borough are State Parks, Fish and Wildlife Management Areas,

the Wildwood Boardwalk, and the Airport of Cape May County. The Borough is best characterized as a summer resort area for residents within and

outside of the State. Form of Government

The Borough is an instrumentality of the State, established to function as a municipality,

and is governed under the Walsh Act by a three-member commission. The commission is elected at-large in non-partisan elections to serve four-year terms of office on a concurrent basis. At a reorganization conducted after each election, the commission selects one of its members to serve as mayor and gives each commissioner an assigned department to oversee and operate.1

Planning and Development

The Borough has established development regulations governing the size of lots for

various types of construction. The land requirements are based on the type and nature of the building. The Borough building codes conform to standards of the Uniform Construction Code of New Jersey. These codes and other municipal codes are codified as a basis for improved administration and regulation.

The Borough adopted the Municipal Land Use Law on October 15. 1976. The Municipal

Land Use Law gave the Borough Zoning Board of Adjustment and Planning Board authority to regulate most land use other than family residential use. In this way, the Borough is able to guide the approximate use or development of land to promote the public health, safety, morals and general welfare.

On January 6, 1997, the New Jersey Department of Community Affairs published

N.J.A.C. 5:21-1 et seq- the Residential Site Improvement Standards (RSIS). The RSIS became effective on June 3, 1997. These standards are to be used for reviewing any residential proposals 1 Source: The Borough, unless otherwise indicated

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for construction, alterations, additions, repairs, demolition, maintenance, and use of residential sites or residential portions of mixed-use developments. All applications for Subdivisions, Site Plan approval, and Use Variances are subject to the standards contained in the RSIS.2 Urban Enterprise Zone

The four municipalities of the Wildwoods (the Borough, the City of Wildwood, the City

of North Wildwood, and the Borough of Wildwood Crest) have been a designated Urban Enterprise Zone since 2002. The New Jersey Urban Enterprise Zone Program was created to stimulate economic growth and job creation. Businesses that participate in the program may include incentives such as sales tax exemptions, corporate tax benefits, and unemployment insurance rebates. Participating retail establishments charge half of the current sales tax for purchases which sales tax collected is deposited in a Zone Assistance Fund to which the Borough may apply for funding for projects.

Police and Fire Protection

The safety and security of the residents of the Borough are protected by seven (7)

officers.3 Police dispatch is provided by a joint services agreement with the City of Wildwood.2 Fire protection is provided by a volunteer fire department consisting of twenty-six (26)

active volunteers. Fire equipment is maintained by the Borough. Present fire apparatus includes two (2) engines, one (1) mini-attack pumper, one (1) utility vehicle, and one (1) 14 foot inflatable boat to provide first initial emergency service to the Borough.4

Public Works

The Public Works Department has three (3) full-time employees and one (1) part time

employee as of August 21, 2013. It has the responsibility of maintaining public buildings and grounds, beach and street cleaning, road maintenance, snow removal, and maintenance of water and sewer lines. Trash and recycling service is provided by Earthtech Inc., a private company.

Utilities

The Borough maintains a self-liquidating Sewer Utility. The Borough previously

operated a Water Utility which was sold to the City of Wildwood in 2010. The City of Wildwood now provides water service to the Borough.

Library

The Borough participates in the County Library System. The closest library location is

the Wildwood Crest Branch.

2 Source: Master Plan of the Borough dated August 2008 3 Source: Borough Website 4 Source: Borough Volunteer Fire Department Website

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Transportation

The Borough transportation modes include streets, sidewalks and waterways. The street system is primarily a grid system, with streets angled along the waterways.

All developed streets have sidewalks, creating an uninterrupted pedestrian system. The

Borough is bike-friendly by nature due to its small size and lack of fast moving traffic. Access to and from the island is via the Glenwood Avenue bridge from the City of

Wildwood. The Route 147 Bridge into the City of North Wildwood and Route 47 Bridge into the City of Wildwood provide access on to the main island of the Wildwoods.2 Recreation

The Borough is a fishing, crabbing, and boating mecca for its permanent and seasonal

residents. It offers easy access to both the Sound and Ocean waterways. There are several existing recreational facilities that serve the residents and visitors of the

Borough totaling just over half an acre of land. With the exception of the park across the street from Borough Hall, which is owned by the County, and a few public access right-of-ways, all recreational facilities are owned by the Borough.1

Education

The Borough is a non-operating school district. There are no high schools, private

schools or colleges/universities located with the municipality. The school age children in the Borough that attend public school attend in the North Wildwood City School District (the “School District”) as part of a sending/receiving agreement. The School District has one (1) elementary school, Margaret Mace Elementary, which educates students in grades Pre-Kindergarten through 8. The School District also has one (1) middle school, Wildwood Middle School, which serves grades 6 through 8; and there is one high school in the School District, Wildwood High School, serving grades 9 through 12. St. Ann’s School (pre-school through 8th grade) in the City of Wildwood and Wildwood Catholic High School in the City of North Wildwood are private schools in the area.

Retirement Systems

All full-time permanent or qualified Borough employees who began employment after

1944 must enroll in one of two retirement systems depending upon their employment status. These systems were established by acts of the State Legislature. Benefits, contributions, means of funding and the manner of administration are set by State law. The Division of Pensions, within the New Jersey Department of Treasury (the “Division”), is the administrator of the funds with the benefit and contribution levels set by the State. The Borough is enrolled in the Public Employees' Retirement System (“PERS”) and the Police and Firemen's Retirement System (“PFRS”).

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Pension Information

Employees, who are eligible to participate in a pension plan, are enrolled in PERS or PFRS, administered by the Division. The Division annually charges municipalities and other participating governmental units for their respective contributions to the plans based upon actuarial calculations. The employees contribute a portion of the cost. The Borough’s share of pension costs in 2013, which is based upon the anticipated annual billings received from the State, amounted to $17,559 for PERS and $18,534 for PFRS.5 Employment and Unemployment Comparisons For the following years, the New Jersey Department of Labor reported the following annual average employment information for the Borough, the County, and the State:

Total Labor Employed Total UnemploymentForce Labor Force Unemployed Rate

Borough2012 298 239 60 20.0%2011 292 237 55 19.0%2010 297 243 55 18.4%2009 293 243 49 16.9%2008 282 246 35 12.5%

County2012 58,190 50,397 7,793 13.4%2011 57,239 50,015 7,224 12.6%2010 58,396 51,254 7,142 12.2%2009 57,851 51,417 6,434 11.1%2008 56,639 52,058 4,581 8.1%

State2012 4,595,500 4,159,300 436,200 9.5%2011 4,556,200 4,131,800 424,400 9.3%2010 4,502,400 4,076,700 425,700 9.5%2009 4,536,700 4,118,400 418,300 9.2%2008 4,496,700 4,251,200 245,500 5.5%

Source: New Jersey Department of Labor, Office of Research and Planning, Division of Labor Market and Demographic Research, Bureau of Labor Force Statistics, Local Area Unemployment Statistics

5 Source: State Department of Treasury Website

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Income (as of 2010)

Borough County StateMedian Household Income $40,536 $55,315 $71,180Median Family Income 61,154 71,861 86,779Per Capita Income 29,095 33,796 35,768

Source: US Bureau of the Census 2010

Population The following tables summarize population increases and the decreases for the Borough, the County, and the State.

Percent Percent Percent

Year Population Change Population Change Population Change2010 603 34.60% 97,265 -4.95% 8,791,894 4.49%2000 448 -1.10 102,326 7.61 8,414,350 8.851990 453 25.83 95,089 15.59 7,730,188 4.961980 360 53.19 82,266 38.14 7,365,001 2.751970 235 13.53 59,554 22.65 7,168,164 18.15

Borough County State

Source: United States Department of Commerce, Bureau of the Census

Largest Taxpayers The ten largest taxpayers in the Borough and their assessed valuations are listed below:

2012 Assessed % of Total Taxpayers Valuation Assessed Bridgeport Family Marina, LLC $1,856,400 0.73%Mosley, Lynn 1,735,500 0.68%C-Lyn, LLC 1,562,600 0.61%Gifford 1,146,100 0.45%Vin, LLC 1,141,400 0.45%Hagstotz, William J and Renee F 1,027,400 0.40%Frederick 937,900 0.37%Bateman 914,500 0.36%Borkowski 913,600 0.36%Stagliano 908,400 0.36%

Total $12,143,800 4.76%

Source: School District Comprehensive Annual Financial Report & Municipal Tax Assessor

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Comparison of Tax Levies and Collections

Current Year Current YearYear Tax Levy Collection Percentage of Collection2012 $3,390,971 $3,238,147 95.49%2011 3,363,555 3,185,516 94.71%2010 3,211,297 2,983,422 92.90%2009 3,205,227 2,971,901 92.72%2008 3,207,173 3,002,910 93.63%

Source: Annual Audit Reports of the Borough

Delinquent Taxes and Tax Title Liens

Amount of Tax Amount of Total % ofYear Title Liens Delinquent Tax Delinquent Tax Levy2012 $211,577 $152,827 $364,405 10.75%2011 138,916 133,509 272,426 8.10%2010 32,150 214,409 246,560 7.68%2009 27,887 164,696 192,583 6.01%2008 18,345 188,772 207,117 6.46%

Source: Annual Audit Reports of the Borough

Property Acquired by Tax Lien Liquidation

Year Amount2012 $02011 02010 02009 02008 0

Source: Annual Audit Reports of the Borough

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Tax Rates per $100 of Net Valuations Taxable and Allocations The table below lists the tax rates for the past five (5) years.

Local Total

Year Municipal School County Taxes2013 $0.566 $0.480 $0.232 $1.2782012 0.551 0.546 0.230 1.328

2011 0.535 0.546 0.230 1.3112010 0.527 0.480 0.210 1.2172009 0.527 0.405 0.237 1.169

Source: Abstract of Ratables and State of New Jersey – Property Taxes

Valuation of Property

Aggregate Assessed Ratio of Aggregate True

Valuation of Assessed to Value of EqualizedYear Real Property True Value Real Property Valuation2013 $252,869,700 105.03% $240,759,497 $240,855,7872012 255,026,300 105.90 240,818,036 240,924,175

2011 255,341,500 100.53 253,995,325 254,100,3932010 263,171,600 96.04 274,022,907 274,152,2822009 273,434,500 99.02 276,140,679 276,248,223

Source: Abstract of Ratables and State of New Jersey – Table of Equalized Valuations

Classification of Ratables The table below lists the comparative assessed valuation for each classification of real property within the Borough for the past five (5) years. Year Vacant Land Residential Farm Commercial Industrial Apartments Total

2013 $23,772,500 $219,528,500 $0 $9,036,000 $0 $532,700 $252,869,700

2012 25,120,200 220,860,600 0 9,036,000 0 532,700 255,549,500

2011 24,542,100 221,230,700 0 9,036,000 0 532,700 255,341,500

2010 26,392,000 227,101,900 0 9,145,000 0 532,700 263,171,600

2009 29,491,600 233,252,300 0 10,157,900 0 532,700 273,434,500

Source: Abstract of Ratables and State of New Jersey – Property Value Classification

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Borough Indebtedness as of December 31, 2012

General Purpose DebtSerial Bonds $0Bond Anticipation Notes 1,116,248Bonds and Notes Authorized but Not Issued 1,638,726Other Bonds, Notes and Loans 0

Total: $2,754,974

Local School District DebtSerial Bonds $0Temporary Notes Issued 0Bonds and Notes Authorized but Not Issued 0

Total: $0

Serial Bonds $1,173,517Bond Anticipation Notes 0Bonds and Notes Authorized but Not Issued 76,000Other Bonds, Notes and Loans 0

Total: $1,249,517

TOTAL GROSS DEBT $4,004,491

Less: Statutory DeductionsGeneral Purpose Debt $337Local School District Debt 0Self-Liquidating Debt 1,249,517

Total: $1,249,854

TOTAL NET DEBT $2,754,637

Self-Liquidating Debt

Source: 2012 Annual Debt Statement of the Borough

Overlapping Debt (as of December 31, 2012)

Related Entity Borough BoroughName of Related Entity Debt Outstanding Percentage Share

Local School District $0 100.00% $0

County 140,732,491 0.50% 703,662

Net Indirect Debt $703,662Net Direct Debt 2,754,637Total Net Direct and Indirect Debt $3,458,300

1

1 Borough percentage of County debt is based on the Borough’s share of total equalized valuation in the County

A-9

Debt Limit

Average Equalized Valuation Basis (2010, 2011, 2012) $256,392,283Permitted Debt Limitation (3 1/2%) 8,973,730Less: Net Debt 2,754,637Remaining Borrowing Power $6,219,093Percentage of Net Debt to Average Equalized Valuation 1.07%

Gross Debt Per Capita based on 2010 population of 603 $6,641Net Debt Per Capita based on 2010 population of 603 $4,568

Source: 2012 Annual Debt Statement of the Borough

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APPENDIX B

AUDITED FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31, 2012

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

Independent Auditor’s Report The Honorable Mayor and Members of the Borough Board of Commissioners Borough of West Wildwood, New Jersey Report on the Financial Statements We have audited the accompanying balance sheets - regulatory basis of the various funds and account group of the Borough of West Wildwood, as of December 31, 2012, the related statement of operations and changes in fund balance - regulatory basis for the years then ended, and the related statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the various funds for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Borough’s basic financial statements as listed in the table of contents. The financial statements for the year ended December 31, 2011 were audited by other auditors whose report dated June 28, 2012 expressed an adverse opinion under accounting principles generally accepted in the United States of America and an unqualified opinion under the regulatory basis of accounting. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the basis of accounting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the “Division”), and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United

B-1

States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Basis for Adverse Opinion on U.S Generally Accepted Accounting Principles. As described in Note 1 of the financial statements, the financial statements are prepared by the Borough of West Wildwood on the basis of the financial reporting provisions prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of New Jersey. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. Adverse Opinion on U.S. Generally Accepted Accounting Principles In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of each fund of the Borough of West Wildwood Borough as of December 31, 2012 and 2011, or changes in financial position for the years then ended.

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Qualified Opinion on Regulatory Basis of Accounting

In our opinion, except for the effects of the matter described in the “Basis for Qualified Opinion on Regulatory Basis of Accounting” paragraph, the financial statements referred to above present fairly, in all material respects, the regulatory basis balances sheets and account group as of December 31, 2012 and 2011, the regulatory basis statements of operations for the years then ended and the regulatory basis statements of revenues and expenditures for the year ended December 31, 2012 in accordance with the basis of financial reporting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1.

Other Matters

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Borough of West Wildwood’s basic financial statements. The supplementary information listed in the table of contents and schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and the schedule of expenditures of state financial assistance as required by NJ OMB 04-04 and the letter of comments and recommendations section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The supplemental information listed in the table of contents and the schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, the schedule of and the schedule of expenditures of state financial assistance as required by NJ OMB 04-04 are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information listed in the table of contents, schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the schedule of expenditures of state financial assistance as required by NJ OMB 04-04 are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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The letter of comments and recommendations section has not been subject to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated April 5, 2013 on our consideration of the Borough of West Wildwood’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Borough of West Wildwood Borough’s internal control over financial reporting and compliance.

Ford, Scott & Associates, L.L.C FORD, SCOTT & ASSOCIATES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS

Kenneth Moore Kenneth Moore Certified Public Accountant Registered Municipal Accountant No. 231

April 5, 2013

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ASheet 1

Ref. 2012 2011

ASSETSRegular Fund:

Cash - Treasurer A-4 933,972.25$ 1,084,614.26$ - Change and Petty Cash Funds 200.00 200.00 Due from State of New Jersey - Senior Citizens' and Veterans' Deductions 1,625.00 91.85

935,797.25 1,084,906.11

Receivables and Other Assets with Full Reserves:Delinquent Property Taxes Receivable A-6 152,827.25 133,509.47 Tax Title Liens Receivable 211,577.42 138,916.10 Revenue Accounts Receivable - 711.22 Amount due from Dog License Fund B 185.35 417.94 Amount due from General Capital Fund C 17.94 - Amount due from Trust Other B 45,863.91 - Amount due from Utility Capital D 65,000.00 65,000.00

475,471.87 338,554.73

Deferred Charges:Emergency Appropriations (40A:4-47) - 254,750.00 Overexpenditure of Appropriation A-3 - 97,485.52 Overexpenditure of Appropriation Reserves A-3 1,075.65 1,614.83

1,075.65 353,850.35

Total Assets - Current Fund 1,412,344.77 1,777,311.19

Federal and State Grant Funds:Due from Current Fund A 165,785.78 179,217.12 Federal and State Grants Receivable A-10 706,903.68 557,688.89 Total Assets - Grant Fund 872,689.46 736,906.01

Total Assets A 2,285,034.23$ 2,514,217.20$

CURRENT FUND

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

See Accompanying Notes to Financial Statements

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ASheet 3

Ref. 2012 2011LIABILITIES, RESERVES AND FUND BALANCE

Regular Fund:Liabilities: Appropriation Reserves A-3 106,708.10$ 248,731.24$ Reserve for Encumbrances A-3 61,844.35 171,325.59 Accounts Payable 7,763.12 7,763.12 Prepaid Taxes 45,328.48 51,397.29 Tax Overpayments 28,735.01 36,172.69 Due to Trust - Escrow 20,000.00 Due to Wildwood Water Department 297.67 - Amounts due to: State of New Jersey Marriage Licenses - 50.00 County - Added and Omitted Taxes 45.24 767.38 Local School Tax Payable 60,411.00 - Federal and State Grant Fund A 165,785.78 179,217.12

Total Liabilities 496,918.75 695,424.43 Reserves for Receivables and Other Assets A 475,471.87 338,554.73 Fund Balance A-1 439,954.15 743,332.03

1,412,344.77 1,777,311.19

Federal and State Grant Fund:Encumbrances Payable 500.00 500.00 Res. for Federal and State Grants - Appropriated A-11 842,851.95 702,063.05 Res. for Federal and State Grants - Unappropriated A-12 29,337.51 34,342.96 Total Liabilities - Grant Fund 872,689.46 736,906.01

A 2,285,034.23$ 2,514,217.20$

AS OF DECEMBER 31,

CURRENT FUND

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

See Accompanying Notes to Financial Statements

B-6

A-1Sheet 1

Ref. 2012 2011Revenue and Other Income RealizedFund Balance Utilized 377,350.55$ 156,572.00$ Miscellaneous Revenue Anticipated A-2 377,422.53 530,121.78 Receipts from Delinquent Taxes A-2 118,398.78 162,032.10 Receipts from Current Taxes A-2 3,175,730.31 3,185,516.39 Non Budget Revenue A-2 86,187.99 319,259.59 Other Credits to Income:

Unexpended Balance of Appropriation Reserves A-8 94,684.90 72,020.31 Intefunds Returned 417.94 1,118.51 Total Income 4,230,193.00 4,426,640.68

ExpendituresBudget and Emergency Appropriations:

Appropriations within "CAP" Operations: Salaries and Wages A-3 570,605.00 666,935.50 Other Expenses A-3 743,260.00 1,121,189.64 Deferred Charges and Statutory A-3 401,374.95 320,872.81 Appropriations excluded from "CAP" Operations: Other Expenses A-3 220,294.21 60,721.17 Capital Improvements excluded from "CAP" A-3 127,500.00 - Deferred Charges excluded from "CAP" A-3 50,276.00 112,005.59 Municipal Debt Service excluded from "CAP" A-3 35,695.88 36,084.36 County Taxes 587,425.91 586,871.03 County Added and Omitted Taxes 45.24 767.38 Local District School Tax A-9 1,394,011.00 1,395,050.50 Refund Prior Revenue 25,714.20 1,864.83 Interfunds Created 17.94 417.94 Total Expenditures 4,156,220.33 4,302,780.75

Excess (Deficit) in Revenue 73,972.67$ 123,859.93$

Adjustments to Income before Fund Balance:Expenditures included above which are by Statute deferred Charges to Budget of Succeeding Year A-3 - 353,850.35 Statutory Excess to Fund Balance 73,972.67 477,710.28

Fund Balance January 1 743,332.03 422,193.75 817,304.70 899,904.03

Decreased by:Utilization as Anticipated Revenue A-2 377,350.55 156,572.00

Balance December 31 A 439,954.15$ 743,332.03$

CURRENT FUND

COMPARATIVE STATEMENT OF OPERATIONS

REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31,

See Accompanying Notes to Financial Statements

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A-2Sheet 1

CURRENT FUND

STATEMENT OF REVENUES - REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2012

ANTICIPATEDSPECIAL N.J.S. EXCESS OR

Ref. BUDGET 40A:4-87 REALIZED (DEFICIT)

Fund Balance Anticipated 377,350.55$ 377,350.55$

Miscellaneous Revenues:Section A: Local Revenues

Licenses: Alcoholic Beverages A-7 840.00 1,020.00 180.00 Other A-7 27,767.00 21,928.00 (5,839.00) Interest and Costs on Taxes A-7 29,380.00 26,450.32 (2,929.68) Total Section A 57,987.00 - 49,398.32 (8,588.68)

Section B: State Aid without OffsettingAppropriations

Energy Receipts Tax A-7 40,531.00 40,531.00 Total Section B 40,531.00 - 40,531.00 -

Section F: Special Items of General RevenueAnticipated with Prior Written Consent of Directorof Local Government Services-Public andPrivate Revenues Offset with Appropriations

NJ Transportation Trust Fund Authority Act A-10 127,500.00 127,500.00 Recycling Tonnage Grant A-10 1,119.03 922.71 2,041.74 CMCMUA Public Area Recycling Grant A-10 2,821.25 2,821.25 Alcohol Education and Rehabilitation Program A-10 53.93 53.93 Body Armor A-10 1,011.24 850.26 1,861.50 Urban Enterprise Zone Administration A-10 16,365.14 16,365.14 Urban Enterprise Zone Project: 2012 A-10 132,849.65 132,849.65 Clean Communities Program A-10 4,000.00 4,000.00 Total Section F 9,005.45 278,487.76 287,493.21 -

Total Miscellaneous Revenue A-2 107,523.45 278,487.76 377,422.53 (8,588.68)

Receipts from Delinquent Taxes A-1:A-2 168,000.00 118,398.78 (49,601.22)

See Accompanying Notes to Financial Statements

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A-2Sheet 2

CURRENT FUND

STATEMENT OF REVENUES - REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2012

ANTICIPATEDSPECIAL N.J.S. EXCESS OR

Ref. BUDGET 40A:4-87 REALIZED (DEFICIT)

Amount to be Raised by Taxes for Support of Municipal Budget Local Tax for Municipal Purpose A-6:A-2 1,405,547.00$ 1,382,150.76$ (23,396.24)$

Total Amount to be Raised by Taxes for Support of Municipal Budget 1,405,547.00 1,382,150.76 (23,396.24)

Budget Totals 2,058,421.00 278,487.76 2,255,322.62 (81,586.14)

Non-Budget Totals A-2 86,187.99 86,187.99 2,058,421.00$ 278,487.76$ 2,341,510.61$ 4,601.85$

Ref. A-3 A-3

See Accompanying Notes to Financial Statements

B-9

A-2Sheet 3

ANALYSIS OF REALIZED REVENUES Ref.

Allocation of Current Tax Collections:Revenue from Collections A-1 3,175,730.31$

Allocated to: School and County Taxes 1,981,482.15

Balance for Support of Municipal Budget Appropriations 1,194,248.16

Add:Appropriation "Reserve for Uncollected Taxes" A-3 187,902.60

Amount for Support of Municipal Budget Appropriations A-2 1,382,150.76$

Receipts from Delinquent Taxes:Delinquent Tax Collections A-1 118,398.78$

CURRENT FUND

STATEMENT OF REVENUES - REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2012

See Accompanying Notes to Financial Statements

B-10

A-2Sheet 4

Ref.

ANALYSIS OF NON BUDGET REVENUE

Miscellaneous Revenue not Anticipated:Treasurer: Street Openings 2,970.00$ Bulk Trash 83.00 Sale of Municipal Assets 31,394.00 Municipal Court 9,326.47 Interest on Investments 1,975.33 Police Reports 5.00 Reimbursements 3,025.02 Planning and Zoning 250.00 Marriage Licenses 66.00 CMCMUA Recycling Rebate 5,844.27 Sale of Guns 1,500.00 FEMA 5,365.69 Dumpster Permits 150.00 Fees and Permits 1,540.00 Copies and Maps 213.75 Cable Franchise Fees 6,001.81 Other Miscellaneous 16,477.65

Total Miscellaneous Revenue not Anticipated A-1 86,187.99$

FOR THE YEAR ENDED DECEMBER 31, 2012

CURRENT FUND

STATEMENT OF REVENUES - REGULATORY BASIS

See Accompanying Notes to Financial Statements

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CURRENT FUND A-3STATEMENT OF EXPENDITURES - REGULATORY BASIS Sheet 1 of 5

FOR THE YEAR ENDED DECEMBER 31, 2012

APPROPRIATIONS EXPENDED UNEXPENDEDBUDGET AFTER PAID OR BALANCE OVER-

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELED EXPENDEDGENERAL GOVERNMENT:

General AdministrationSalaries and Wages 24,220.41$ 25,620.41$ 25,588.82$ 31.59$ Other Expenses: 43,275.00 32,275.00 31,331.29 943.71

Mayor and CommissionersSalaries and Wages 20,600.00 21,300.00 21,294.93 5.07

Municipal ClerkSalaries and Wages 60,500.00 48,500.00 47,868.47 631.53 Other Expenses: 8,700.00 9,600.00 9,003.97 42.00 554.03

Finance Department Salaries and Wages 37,000.00 43,000.00 42,560.36 439.64 Other Expenses 6,500.00 6,500.00 4,199.82 2,300.18

Audit Services 35,000.00 35,000.00 35,000.00 -

Data ProcessingOther Expenses 12,500.00 12,500.00 9,155.60 3,344.40

Collection of TaxesSalaries and Wages 26,000.00 14,800.00 14,483.00 317.00 Other Expenses 1,500.00 2,000.00 1,613.50 270.00 116.50

Assessment of TaxesSalaries and Wages 12,000.00 12,000.00 12,000.00 -

Legal Services and CostsSalaries and Wages 35,000.00 35,000.00 34,494.97 505.00 0.03 Other Expenses 139,000.00 169,735.00 137,619.52 32,115.48

EngineeringOther Expenses 2,500.00 2,500.00 2,500.00 -

Land Use BoardSalaries and Wages 15,000.00 7,500.00 7,400.08 99.92 Other Expenses: - -

See Accompanying Notes to Financial Statements

B-12

CURRENT FUND A-3STATEMENT OF EXPENDITURES - REGULATORY BASIS Sheet 2 of 5

FOR THE YEAR ENDED DECEMBER 31, 2012

APPROPRIATIONS EXPENDED UNEXPENDEDBUDGET AFTER PAID OR BALANCE OVER-

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELED EXPENDED

InsuranceLiability Insurance 25,000.00 25,000.00 25,000.00 - Worker's Compensation 45,000.00 45,000.00 41,176.00 3,824.00 Group Employee Insurance 140,000.00 134,000.00 132,033.57 1,966.43 Unemployment Compensation Insurance 40,000.00 19,700.00 9,213.37 10,486.63

PoliceSalaries and Wages 199,879.59 207,344.59 207,344.48 0.11 Other Expenses 11,900.00 11,900.00 11,722.76 177.24

.Emergency Management

Other Expenses 1,000.00 1,000.00 595.43 404.57

Aid to Volunteer Fire Company 300.00 300.00 300.00

FireOther Expenses 2,000.00 2,000.00 1,383.00 250.00 367.00 Fire Hydrant Services 10,500.00 10,500.00 10,500.00

ProsecutorSalaries and Wages 1,500.00 2,000.00 2,000.00 -

Municipal CourtSalaries and Wages 3,100.00 6,200.00 6,200.00 -

Public DefenderOther Expenses 1,000.00 - -

Public WorksSalaries and Wages 109,840.00 147,340.00 145,521.37 1,818.63 Other Expenses 25,400.00 20,400.00 14,099.42 6,300.58

Solid Waste CollectionOther Expenses 51,000.00 51,000.00 42,033.00 8,967.00

Buildings and GroundsOther Expenses 16,250.00 16,250.00 11,266.49 4,983.51

Animal Control ServicesOther Expenses 2,500.00 4,600.00 4,578.20 21.80

See Accompanying Notes to Financial Statements

B-13

CURRENT FUND A-3STATEMENT OF EXPENDITURES - REGULATORY BASIS Sheet 3 of 5

FOR THE YEAR ENDED DECEMBER 31, 2012

APPROPRIATIONS EXPENDED UNEXPENDEDBUDGET AFTER PAID OR BALANCE OVER-

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELED EXPENDEDParks and Recreation

Other Expenses 400.00 800.00 764.57 35.43

Maintenance of ParksOther Expenses 1,000.00 1,000.00 928.00 72.00

Celebration of Public EventsOther Expenses 1,000.00 1,000.00 194.62 805.38

Accumulated Sick Time - -

Electricity 21,000.00 21,000.00 20,793.02 206.98 Street Lighting 23,000.00 15,900.00 15,466.87 433.13 Telephone 22,000.00 24,000.00 23,403.17 596.83 Natural Gas 11,000.00 6,300.00 6,261.88 38.12 Gasoline/Diesel 28,000.00 19,500.00 16,218.63 3,281.37 Landfill / Solid Waste Disposal Costs 42,000.00 42,000.00 34,696.74 7,303.26

Total Operations Including Contingent-within "CAPS" 1,314,865.00 1,313,865.00 1,209,008.92 1,067.00 103,789.08 - -

Detail: Salaries and Wages 544,640.00 570,605.00 566,756.48 505.00 3,343.52 - - Other Expenses 770,225.00 743,260.00 642,252.44 562.00 100,445.56 - -

DEFERRED CHARGES AND STATUTORY EXPENDITURES - MUNICIPAL WITHIN "CAPS"

DEFERRED CHARGES:Overexpenditure of Appropriations 204,474.00 204,474.00 204,474.00 Overexpenditure of Appropriation Reserve 97,485.52 97,485.52 97,485.52 Expenditure without an Appropriation 1,614.83 1,614.83 1,614.83 Deficit in Reserve for Animial Control 274.60 274.60 274.60

STATUTORY EXPENDITURES:Contribution to: Police and Fireman's Retirement System 31,686.00 31,686.00 31,686.00 - Public Employees' Retirement System 24,103.00 24,103.00 24,103.00 - Social Security System (O.A.S.I) 40,737.00 41,737.00 41,207.98 529.02

See Accompanying Notes to Financial Statements

B-14

CURRENT FUND A-3STATEMENT OF EXPENDITURES - REGULATORY BASIS Sheet 4 of 5

FOR THE YEAR ENDED DECEMBER 31, 2012

APPROPRIATIONS EXPENDED UNEXPENDEDBUDGET AFTER PAID OR BALANCE OVER-

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELED EXPENDEDTotal Deferred Charges and Statutory

Expenditures - Municipal within "CAPS" 400,374.95 401,374.95 400,845.93 - 529.02 - -

Total General Appropriations for MunicipalPurposes within "Caps" 1,715,239.95 1,715,239.95 1,609,854.85 1,067.00 104,318.10 - -

OPERATIONS EXCLUDED FROM "CPAS"

Interlocal Municipal Service Agreements

Police Dispatcher 35,000.00 35,000.00 34,000.00 1,000.00

Ambulance Fee 14,100.00 14,100.00 14,060.00 40.00

Wildwood - Municipal Court 9,000.00 9,000.00 9,000.00 -

Wildwood - Registar 1,500.00 1,500.00 150.00 1,350.00

Total Interlocal Municipal Service Agreements - Excluded from "CAPS" 59,600.00 59,600.00 57,210.00 - 2,390.00 - -

Public and Private Programs Offset by Revenues

Municipal Alliance Grant 701.00 701.00 701.00 Urban Enterprise Zone - Admin. Budget 16,365.14 16,365.14 Urban Enterprize Zone - Project 132,849.65 132,849.65 NJDEP-Clean Communities Program 4,000.00 4,000.00 4,000.00 Body Armor Grant 1,011.24 1,861.50 1,861.50 Recycling Tonnage Grant 1,119.03 2,041.74 2,041.74 CMCMUA Recycling Rebate Grant 2,821.25 2,821.25 2,821.25 Alcohol Education and Rehabilitation Fund 53.93 53.93 53.93

Total Public and Private Programs Offset by Revenues 9,706.45 160,694.21 160,694.21 - - - -

Total Operations - Excluded from "CAPS" 69,306.45 220,294.21 217,904.21 - 2,390.00 - - Detail:

Salaries & Wages - - - - - - - Other Expenses 69,306.45 220,294.21 217,904.21 - 2,390.00 - -

See Accompanying Notes to Financial Statements

B-15

CURRENT FUND A-3STATEMENT OF EXPENDITURES - REGULATORY BASIS Sheet 5 of 5

FOR THE YEAR ENDED DECEMBER 31, 2012

APPROPRIATIONS EXPENDED UNEXPENDEDBUDGET AFTER PAID OR BALANCE OVER-

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELED EXPENDEDCAPITAL IMPROVEMENTS - EXCLUDED FROM "CAPS"

NJ Department of Transportation 127,500.00 127,500.00 -

Total Capital Improvements Excluded from "CAPS" - 127,500.00 127,500.00 - - - -

MUNICIPAL DEBT SERVICE - EXCLUDED FROM "CAPS"

Payment of Bond Anticipation Notes and Capital Notes 7,752.00 7,752.00 7,752.00 Interest on Notes 27,944.00 27,944.00 27,943.88 0.12

Total Municipal Debt Service-Excluded from "CAPS" 35,696.00 35,696.00 35,695.88 - - 0.12 -

DEFERRED CHARGES - MUNICIPAL - EXCLUDED FROM "CAPS"

Emergency Authorization 50,276.00 50,276.00 50,276.00

Total Deferred Charges - Muncipal - Excluded from "CAPS" 50,276.00 50,276.00 50,276.00 - - - -

Total General Appropriations for Municipal PurposesExcluded from "CAPS" 155,278.45 433,766.21 431,376.09 - 2,390.00 0.12 -

Subtotal General Appropriations 1,870,518.40 2,149,006.16 2,041,230.94 1,067.00 106,708.10 0.12 -

Reserve for Uncollected Taxes 187,902.60 187,902.60 187,902.60 - Total General Appropriations 2,058,421.00$ 2,336,908.76$ 2,229,133.54$ 1,067.00$ 106,708.10$ 0.12$ -$

Budget 2,058,421.00$ NJSA 40A:4-87 278,487.76

2,336,908.76$

Reserve for Uncollected Taxes 187,902.60$ Grants 288,194.21 Deferred Charges 354,124.95 Disbursed 1,398,911.78

2,229,133.54$

See Accompanying Notes to Financial Statements

B-16

EXHIBIT - B

TRUST FUND

B-17

B-18

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TRUST FUND BCOMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

Ref. 2012 2011ASSETS

Animal Control FundCash and Investment B-1 291.75$ 172.14$ Deficit in Animal Control Fund - 274.60

291.75 446.74

Other FundsCash and Investment B-1 168,181.00 136,104.93 Due from Current Fund A 20,000.00 -

188,181.00 136,104.93

188,472.75 136,551.67

LIABILITIES, RESERVES AND FUND BALANCE

Animal Control FundDue to Current Fund A:B-4 185.35 417.94 Due to State B-3 - - Reserve for Dog License Fund Expenditures B-2 106.40 28.80

291.75 446.74

Other FundsDue to Current Fund B-14 45,863.91 - Reserve for Housing Rehabilitation B-10 - 3,842.00 Reserve for Confiscated Funds B-11 2,147.72 2,137.93 Reserve for Accumulated Absences B-12 40,250.00 40,250.00 Reserve for Unemployment Compensation B-5 16,202.98 16,197.47 Reserve for Payroll Deductions Payable B-6 4,548.01 24,630.22 Reserve for Tax Title Lien Redemptions B-7 30,173.51 19,838.40 Reserve for Uniform Fire Safety Code Fees B-8 16,797.79 8,089.92 Reserve for Planning Board Escrows B-9 21,330.23 10,249.01 Reserve for Bricks and Benches B-13 10,866.85 10,869.98

188,181.00 136,104.93

188,472.75$ 136,551.67$

See Accompanying Notes to Financial Statements

B-19

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B-20

EXHIBIT - C

GENERAL CAPITAL FUND

B-21

B-22

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CGENERAL CAPITAL FUND

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

Ref. 2012 2011

ASSETS

Cash C-2 55,714.33$ 277,225.94$ Deferred Charges to Future Taxation - Unfunded C-5 2,754,974.00 2,762,526.00

2,810,688.33 3,039,751.94

LIABILITIES, RESERVES AND FUND BALANCE

Due to Current Fund C-3 17.94 - Reserve for the Payment of Debt 336.53 136.53 Capital Improvement Fund C-7 72,412.00 72,412.00 Bond Anticipation Notes C-8 1,116,248.00 1,124,000.00 Improvement Authorizations -

Unfunded C-6 1,619,153.97 1,841,280.52 Fund Balance C-1 2,519.89 1,922.89

2,810,688.33$ 3,039,751.94$

There were no Bonds and Notes Authorized But Not Issued of $1,638,726.00 atDecember 31, 2012 and 2011. (C-9)

See Accompanying Notes to Financial Statement

B-23

C-1

GENERAL CAPITAL FUND

STATEMENT OF FUND BALANCE

REGULATORY BASIS

Ref.

Balance December 31, 2011 C 1,922.89$

Increase by:Premium on Sale of BANs C-2 597.00

Balance December 31, 2012 C 2,519.89$

See Accompanying Notes to Financial Statements

B-24

EXHIBIT - D

SEWER UTILITY FUND

B-25

B-26

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DSheet 1

SEWER UTILITY FUND

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

Ref. 2012 2011

ASSETS

Operating Fund:Cash D-4 130,722.55$ 103,700.41$ Due from Sewer Utility Capital Fund D

130,722.55 103,700.41

Receivables and Other Assets with Full Reserves: Sewer Consumer Accounts Receivable D-6 42,545.91 23,090.90 Sewer Liens Receivable 1,409.51 1,409.51 Water Liens Receivable 352.34 352.34

44,307.76 24,852.75

Deferred Charges Deficit in Operations - 3,098.52

- 3,098.52

Total of Operating Fund 175,030.31 131,651.68

Capital Fund: Cash D-4:D-5 27,346.04 23,299.24 Due from Sewer Utility Operating Fund - 4,038.52 Fixed Capital Authorized and Uncompleted D-7 100,000.00 100,000.00 Fixed Capital D-6 3,975,813.00 3,975,813.00 Total of Capital Fund 4,103,159.04 4,103,150.76

Total Assets D 4,278,189.35$ 4,234,802.44$

See Accompanying Notes to Financial Statements

B-27

DSheet 1

SEWER UTILITY FUND

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

Ref. 2012 2011

LIABILITIES, RESERVES AND FUND BALANCE

Operating Fund: Liabilities:

Appropriation Reserves D-3 11,677.34$ 47,109.65$ Reserve for Encumbrances D-3 - 2,050.00 Prepaid Sewer Rents 18,260.54 22,541.95 Overpaid Water Rents 208.44 208.44 Overpaid Sewer Rents 4,492.13 4,525.23 Accrued Interest on Bonds

and Notes D-10 20,478.11 21,018.08 Due to Sewer Utility Capital Fund A - 4,038.52

55,116.56 101,491.87

Reserve for Receivables Res. 44,307.76 24,852.75 Fund Balance D-1 75,605.99 5,307.06 Total of Operating Fund 175,030.31 131,651.68

Capital Fund: Serial Bonds D-14 1,173,517.10 1,204,459.34 Due to Sewer Utility Operating Fund D 8.28 - Due to Current Fund A 65,000.00 65,000.00 Capital Improvement Fund 16,000.00 16,000.00 Improvement Authorizations

Funded D-11 15,250.00 15,250.00 Unfunded D-11 7,087.76 7,087.76 Deferred Reserve for Amortization D-13 24,000.00 24,000.00 Reserves for:

Amortization D-12 2,802,295.90 2,771,353.66 Total of Capital Fund 4,103,159.04 4,103,150.76

Total Liabilities, Reserves and Fund Balance D 4,278,189.35$ 4,234,802.44$

See Accompanying Notes to Financial Statements

B-28

D-1

SEWER UTILITY FUND

COMPARATIVE STATEMENT OF OPERATIONS

AND CHANGES IN FUND BALANCE

REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31,

Ref. 2012 2011Revenue and Other Income Realized

Fund Balance Anticipated D-2 -$ 59,560.07$ Rents D-2 433,860.27 358,411.26 Miscellaneous Revenue Anticipated D-2 10,130.00 56,804.28 Other Credits to Income:

Unexpended Balance of Appropriation Reserves D-9 44,962.24 19,643.76 Total Income 488,952.51 494,419.37

ExpendituresOperating D-3 326,983.00 366,076.44 Debt Service D-3 88,572.06 128,482.48 Deferred Charges and Statutory

Expenditures D-3 3,098.52 2,135.46 Total Expenditures 418,653.58 496,694.38

Excess/(Deficit) in Revenues 70,298.93 (2,275.01)

Adjustments to Income before Fund Balance: Expenditures included above which are by

Statute deferred charges to budget of succeeding year - -

Statutory Excess to Fund Balance 70,298.93 (2,275.01)

Fund Balance January 1 D 5,307.06 64,867.13

Decreased by: Utilization as Anticipated Revenue D-1:D-2 - 59,560.07 Fund Balance December 31 D 75,605.99$ 5,307.06$

See Accompanying Notes to Financial Statements

B-29

D-2

SEWER OPERATING FUND

STATEMENT OF REVENUES

REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2007

ANTIC. EXCESS ORRef. BUDGET REALIZED (DEFICIT)

Rents - Sewer D-1 391,981.00$ 433,860.27$ 41,879.27$ Miscellaneous Receipts D-1 28,214.00 10,130.00 (18,084.00)

420,195.00$ 443,990.27$ 23,795.27$

Analysis of Realized Revenue

RentsConsumer Accounts Receivable D-5 433,860.27$

MiscellaneousInterest, Penalties and Other

Miscellaneous D-4 10,130.00$

See Accompanying Notes to Financial Statements

B-30

D-3

SEWER OPERATING FUND

STATEMENT OF EXPENDITURES - REGULATORY BASIS

FOR THE YEAR ENDED DECEMBER 31, 2007

APPROPRIATIONS EXPENDEDBUDGET UNEXPENDEDAFTER PAID OR BALANCE OVER -

BUDGET MODIFICATION CHARGED ENCUMBERED RESERVED CANCELLED EXPENDEDOPERATING

Other Expenses 326,983.00$ 326,983.00$ 315,305.66$ -$ 11,677.34$ 326,983.00 326,983.00 315,305.66 - 11,677.34 - -

DEBT SERVICEPayment of Bond Principal 30,943.00 30,943.00 30,942.24 0.76 Interest on Bonds 58,170.00 58,170.00 57,629.82 540.18

89,113.00 89,113.00 88,572.06 - - 540.94 -

DEFERRED CHARGES AND STATUTORY EXPENDITURES

Deferred Charge Deficit in Operations 3,099.00 3,099.00 3,098.52 0.00 0.48

3,099.00 3,099.00 3,098.52 - 0.00 0.48 -

419,195.00$ 419,195.00$ 406,976.24$ -$ 11,677.34$ 541.42$ -$

Ref. D-2 D-2 D:D-1 D:D-1 D-1 D

Deferred Charge 3,098.52 Accrued Interest 12/31/11 (21,018.08) Accrued Interest 12/31/12 20,478.11

Disbursements 404,417.69

406,976.24$

See Accompanying Notes to Financial Statements

B-31

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B-32

EXHIBIT - E

GENERAL FIXED ASSETS ACCOUNT GROUP

B-33

B-34

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G

GENERAL FIXED ASSETS ACCOUNT GROUP

COMPARATIVE BALANCE SHEET

REGULATORY BASIS

AS OF DECEMBER 31,

2012 2011General Fixed Assets:

Land 243,300.00$ 243,300.00$ Buildings 793,200.00 793,200.00 Vehicles 502,448.00 478,717.00 Office Equipment 57,784.00 57,784.00

Total Fixed Assets 1,596,732.00 1,573,001.00

Investment in General Fixed Assets 1,596,732.00$ 1,573,001.00$

See Accompanying Notes to Financial Statements

B-35

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B-36

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Borough of West Wildwood was incorporated in 1920 and is situated in the southeastern

portion of Cape May County. The Borough is a small island that is connected to the City of

Wildwood by a two lane bridge. The Borough also borders the City of North Wildwood and

Middle Township. The population estimate by the US Department of Census as of July 2006 is

408. The Borough provides to its citizens the following services: public safety, recreation, public

improvements, planning and zoning and general administrative services.

The Borough is governed by an elected, three member commission form of government, with the

Mayor appointed annually by the commission members. The commission is comprised of three

individuals serving concurrent four year terms.

Except as noted below, the financial statements of the Borough of West Wildwood include every

board, body, office or commission supported and maintained wholly or in part by funds

appropriated by the Borough of West Wildwood, as required by N.J.S. 40A:5-5.

Component units are legally separate organizations for which the Borough is financially

accountable. The Borough is financially accountable for an organization if the Borough appoints a

voting majority of the organization’s governing board and (1) the Borough is able to significantly

influence the programs or services performed or provided by the organization; or (2) the Borough is

legally entitled to or can otherwise access the organization’s resources; the Borough is legally

obligated or has otherwise assumed the responsibility to finance the deficits of or provide financial

support to the organization; or the Borough is obligated for the debt of the organization.

Component units may also include organizations that are fiscally dependent on the Borough in that

the Borough approves the budget, the issuance of debt or the levying of taxes. The Borough has no

component units.

B. Description of Funds

The accounting policies of the Borough of West Wildwood conform to the accounting principles

applicable to municipalities which have been prescribed by the Division of Local Government

Services, Department of Community Affairs, State of New Jersey. Such principles and practices are

designed primarily for determining compliance with legal provisions and budgetary restrictions and

as a means of reporting on the stewardship of public officials with the respect to public funds.

Under this method of accounting, the Borough of West Wildwood accounts for its financial

transactions through the following separate funds:

Current Fund -- resources and expenditures for governmental operations of a general nature,

including Federal and State grant funds.

Trust Funds -- receipts, custodianship and disbursement of funds in accordance with the purpose for

which each reserve was created.

B-37

General Capital Fund -- receipt and disbursement of funds for the acquisition of general facilities,

other than those acquired in the Current Fund.

Water / Sewer Operating and Capital Funds -- account for the operations and acquisition of capital

facilities other than those acquired in the Current Fund.

As permitted by accounting principles generally accepted in the United States of America, the

Borough has elected to apply all applicable GASB pronouncements, as well as applicable FASB

Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research

Bulletins of the Committee on Accounting Procedure, issued before November 30, 1989 in its

accounting and reporting practices for its water and sewer utility fund.

General Fixed Assets Account Group -- All fixed assets used in governmental fund type operations

(general fixed assets) are accounted for in the general fixed assets account group, rather than in

governmental funds.

C. Basis of Accounting

The accounting principles and practices prescribed for municipalities by the State of New Jersey

differ in certain respects from accounting principles generally accepted in the United States of

America applicable to local governmental units. The more significant policies in New Jersey follow.

A modified accrual basis of accounting is followed with minor exceptions.

Revenues -- are recorded as received in cash except for certain amounts which are due from other

governmental units. Receipts from Federal and State grants are realized as revenue when anticipated

in the Borough budget. Receivables for property taxes are recorded with offsetting reserves on the

balance sheet of the Borough's Current Fund; accordingly, such amounts are not recorded as

revenue until collected. Other amounts that are due to the Borough which are susceptible to accrual

are also recorded as receivables with offsetting reserves and recorded as revenue when received.

Expenditures -- are recorded on the "budgetary" basis of accounting. Generally expenditures are

recorded when an amount is encumbered for goods or services through the issuance of a purchase

order in conjunction with the Encumbrance Accounting System. Outstanding encumbrances at

December 31, are reported as a cash liability in the financial statements. Appropriation reserves

covering unencumbered appropriation balances are automatically created at December 31st of each

year and recorded as liabilities, except for amounts which may be canceled by the Governing Body.

Appropriation reserves are available, until lapsed at the close of the succeeding year, to meet

specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed

appropriation reserves are recorded as income. Appropriations for principal payments on

outstanding general capital bonds and notes are provided on the cash basis; interest on general

capital indebtedness is on the cash basis; interest on utility capital indebtedness is on the accrual

basis.

Foreclosed Property -- Foreclosed property is recorded in the Current Fund at the assessed valuation

when such property was acquired and is fully reserved.

B-38

Interfunds -- Interfund receivables in the Current Fund are recorded with offsetting reserves which

are created by charges to operations. Income is recognized in the year the receivables are liquidated.

Interfund receivables in the other funds are not offset by reserves.

Inventories of Supplies - The cost of inventories of supplies for all funds are recorded as

expenditures at the time individual items are purchased. The cost of inventories are not included on

the various balance sheets.

General Fixed Assets -- The Borough of West Wildwood has developed a fixed assets accounting

and reporting system in accordance with the requirements of the State of New Jersey, Division of

Local Government Services. This reporting system differs in certain respects from accounting

principles generally accepted in the United States of America.

As required by New Jersey Statutes, foreclosed property is reported in the current operating fund of

the municipality.

Fixed assets used in governmental operations (general fixed assets) are accounted for in the General

Fixed Assets Account Group. Public domain ("infrastructure") general fixed assets consisting of

certain improvements other than buildings, such as roads, bridges, curbs and gutters, streets and

sidewalks and drainage systems are not capitalized.

All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not

available except for land which is valued at estimated market value on the date of acquisition. The

Borough capitalizes fixed assets with an original cost in excess of $5,000.

No depreciation has been provided for in the financial statements.

Expenditures for construction in progress are recorded in the Capital funds until such time as the

construction is completed and put into operation.

Fixed assets acquired through grants in aid or contributed capital have not been accounted for

separately.

Property and equipment purchased by the Water and Sewer Utility Fund are recorded in the capital

account at cost and are adjusted for disposition and abandonment. The amounts shown do not

purport to represent reproduction costs or current value. Contributions in aid of construction are not

capitalized. The balance in the Reserve for Amortization and Deferred Reserve for Amortization

accounts in the utility capital fund represents charges to operations for the costs of acquisitions of

property, equipment and improvements. The utility does not record depreciation on fixed assets.

B-39

The following schedule is a summarization of the changes in general fixed assets for the calendar

year ended December 31, 2012

.

Balance Balance

12/31/2011 Additions Deletions 12/31/2012

Land 243,300.00$ 243,300.00$

Buildings 793,200.00 793,200.00

Vehicles 478,717.00 23,731.00 502,448.00

Equipment 57,784.00 57,784.00

1,573,001.00$ 23,731.00$ -$ 1,596,732.00$

Levy of Taxes -- The County Board of Taxation certifies the tax levy of the municipality each year.

The tax levy is based on the assessed valuation of taxable property within the municipality. Taxes

are payable on the first day of February, May, August, and November. Any taxes that have not

been paid by the 11th day of the 11th month in the fiscal year levied are subject to being included in

the tax sale and the lien enforced by selling the property in accordance with NJSA 54:5 et seq.

The municipality is responsible for remitting 100% of the school and county taxes to the respective

agency. The loss for delinquent or uncollectible accounts is borne by the municipality and not the

school district or county.

Interest on Delinquent Taxes – It is the policy of the Borough of West Wildwood to collect interest

for the nonpayment of taxes or assessments on or before the date when they would become

delinquent. The Tax Collector is authorized to charge eight percent (8%) per annum on the first

$1,500 of taxes becoming delinquent after the due date and eighteen percent (18%) per annum on

any amount of taxes in excess of $1,500 becoming delinquent after the due date. There is a ten day

grace period.

Capitalization of Interest -- It is the policy of the Borough of West Wildwood to treat interest on

projects as a current expense and the interest is included in the current operating budget.

Use of Estimates -- The preparation of financial statements in conformity with accounting principles

generally accepted in the United States of America or the statutory basis of accounting requires

management to make estimates and assumptions that affect certain reports amounts and disclosures.

Accordingly, actual results could differ from those estimates.

B-40

D. Comparative Data

Comparative total data for the prior year has been presented in the accompanying Balance Sheets

and Statement of Operations in order to provide an understanding of changes in the Borough's

financial position. However, comparative (i.e., presentation of prior year totals by fund type) data

have not been presented in the Statement of Revenue-Regulatory Basis and Statement of

Expenditures-Regulatory Basis since their inclusion would make the statements unduly complex

and difficult to read.

E. Recent Accounting Pronouncements

In November 2010, the Governmental Accounting Standards Board (GASB) issued Statement No.

60, “Accounting and Financial Reporting for Service Concession Arrangements” to improve

financial reporting related to service concession arrangements (SCAs) which are a type of public-

private or public-public partnership. This statement will become effective for fiscal periods

beginning after December 15, 2011. This statement is not anticipated to have any effect on the

District’s financial reporting.

In November 2010, the Governmental Accounting Standards Board (GASB) issued Statement No.

61 “The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No.

34”. The purpose of the statement is to amend the criteria for reporting and including component

units with the primary government. This statement, which is effective for fiscal periods beginning

after June 15, 2012, is not anticipated to have any effect on the District’s financial reporting.

In December 2010, the Governmental Accounting Standards Board (GASB) issued Statement No.

62 “Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,

1989 FASB and AICPA Pronouncements”. The statement, which is effective for periods beginning

after December 15, 2011, amends and supersedes several previously issued GASB statements to

incorporate guidance that had been included in AICPA and FASB guidance. The statement will

have a minimum, but undetermined impact on the proprietary fund financial statements of the

District.

In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 63

“Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and net

Position”. The statement, which is effective for periods beginning after December 15, 2011, amends

several previously issued GASB statements to standardize reporting of deferred inflows and

outflows of financial resources. This statement is not anticipated to have any effect on the District’s

financial reporting.

In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 64

“Derivative Instruments: Application of Hedge Accounting Termination Provisions – an

amendment of GASB Statement No. 53”. This statement, which is effective for fiscal periods

beginning after June 15, 2011, is not anticipated to have any effect on the District’s financial

reporting.

B-41

Note 2: BUDGETARY INFORMATION

Under New Jersey State Statutes, the annual budget is required to be a balanced cash basis

document. To accomplish this, the municipality is required to establish a reserve for uncollected

taxes. The 2012 and 2011 statutory budgets included a reserve for uncollected taxes in the amount

of $187,902.60 and $264,847.09. To balance the budget, the municipality is required to show a

budgeted fund balance. The amount of fund balance budgeted to balance the 2012 and 2011

statutory budgets was $377,350.55 and $156,572.00.

The Chief Financial Officer has the discretion of approving intra department budgetary transfers

throughout the year. Inter department transfers are not permitted prior to November 1. After

November 1 these transfers can be made in the form of a resolution and approved by the Borough

Commissioners. The following significant budget transfers were approved in the 2012 calendar

year:

To From

Municipal Clerk

Salaries and Wages 12,000.00$

Collection of Taxes

Salaries and Wages 11,200.00

Legal Services

Other Expesnses 30,735.00

Insurance:

Unemployment Compensation 20,300.00

Public Works

Salaries and Wages 37,500.00

Gasoline/Diesel 9,500.00

NJSA 40A:4-87 permits special items of revenue and appropriations to be inserted into the annual

budget when the item has been made available by any public or private funding source and the item

was not determined at the time of budget adoption. During 2012, the Borough Commissioners

approved total budget insertions in the amount of $278,487.76. The following schedule details the

significant budget insertions:

NJ Transportation Trust Fund Authority Act 127,500.00$

Recycling Tonnage Grant 922.71

Body Armor 850.26

Urban Enterprise Zone Administration 16,365.14

Urban Enterprise Zone Project:

2012 132,849.65

B-42

Note 3: INVESTMENTS

As of December 31, 2012, the municipality had no investments.

Interest Rate Risk. The municipality does not have a formal investment policy that limits

investment maturities as a means of managing its exposure to fair value losses arising from

increasing interest rates. However, New Jersey Statutes 40A:5-15.1(a) limits the length of time for

most investments to 397 days.

Credit Risk. New Jersey Statutes 40A:5-15.1(a) limits municipal investments to those specified in

the Statutes. The type of allowable investments are Bonds of the United States of America or of the

local unit or school districts of which the local unit is a part of: obligations of federal agencies not

exceeding 397 days; government money market mutual funds; the State of New Jersey Cash

Management Plan; local government investment pools; or repurchase of fully collateralized

securities.

Concentration of Credit Risk. The municipality places no limit on the amount the Borough may

invest in any one issuer.

Note 4: CASH AND CASH EQUIVALENTS AND INVESTMENTS

Custodial Credit Risk – Deposits. Custodial credit risk is the risk that in the event of a bank

failure, the government’s deposits may not be returned to it. The Borough believes that due to the

dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank

deposits. As a result, the Borough evaluates each financial institution with which it deposits funds

and assesses the level of risk of each institution; only those institutions with an acceptable estimated

risk level are used as depositories. As of December 31, 2012 and 2011, $0 of the Borough’s bank

balance of $1,342,449.01 and $1,639,311.88 were exposed to custodial credit risk.

Cash and cash equivalents included various checking and money market accounts, U.S. obligations

and certificates of deposit with maturities of three months or less.

B-43

Note 5: LONG TERM DEBT

Long-term debt as of December 31, 2012 consisted of the following:

Amounts

Balance Balance Due Within

12/31/2011 Issued Retired 12/31/2012 One Year

Bonds Payable:

Utility 1,204,459.34$ 30,942.24$ 1,173,517.10$ 32,480.05$

Other Liabilities:

Compensated Absences 57,844.87 14,375.54 17,124.88 55,095.53

Total Long Term Liabilities 1,262,304.21$ 14,375.54$ 48,067.12$ 1,228,612.63$ 32,480.05$

Paid by Water and Sewer Utility Fund:

$562,600 Waste and Water Disposal Systems for Rural Communities General Improvement Bond

dated 9/17/92 payable in semi-annual installments through 9/08/32. Interest is paid semiannually at

a rate of 5.625% per annum. The balance remaining as of December 31, 2012 and 2011 was

$422,900.28 and $434,147.45.

$1,000,000 Waste and Water Disposal Systems for Rural Communities General Improvement Bond

dated 8/12/94 payable in semi-annual installments through 8/12/34. Interest is paid semiannually at

a rate of 4.50% per annum. The balance remaining as of December 31, 2012 and 2011 was

$770,311.89 and $750,616.82.

B-44

Schedule of Annual Debt Service for Principal and Interest for Bonded Debt Issued and

Outstanding

Year Principal Interest

2013 32,480.04$ 57,171.96$

2014 34,095.22 55,556.78

2015 35,791.73 53,860.27

2016 37,573.70 52,078.30

2017 39,445.50 50,206.50

2018-2022 228,783.30 219,476.70

2023-2027 291,990.60 156,269.40

2028-2031 290,858.11 67,749.89

2032-2034 184,640.45 13,291.54

1,175,658.65$ 725,661.34$

Sewer Utility Fund

As of December 31, 2012, the carrying value of the above bonds approximates the fair value of the

bonds.

B-45

Summary of Municipal Debt

Year 2012 Year 2011 Year 2010

Issued:

General:

Bonds and Notes 1,116,248.00$ 1,124,000.00$ 1,894,200.00$

Sewer Utility:

Bonds and Notes 1,173,517.10 1,204,459.34 2,163,260.09

Total Issued 2,289,765.10 2,328,459.34 4,057,460.09

Authorized But Not Issued

General:

Bonds and Notes 1,638,726.00 1,638,726.00 650,000.00

Sewer Utility:

Bonds and Notes 76,000.00 76,000.00 76,000.00

Total Authorized But Not Issued 1,714,726.00 1,714,726.00 726,000.00

Total Issued and Authorized But Not Issued 4,004,491.10 4,043,185.34 4,783,460.09

Deductions:

Reserve for Payment of Bonds 336.53

Self-Liquidating Debt 1,249,517.10 884,593.14 1,920,661.49

Total Dedcutions 1,249,853.63 884,593.14 1,920,661.49

Net Debt 2,754,637.47$ 3,158,592.20$ 2,862,798.60$

Summary of Statutory Debt Condition - Annual Debt Statement

The summarized statement of debt condition which follows is prepared in accordance with the

required method of setting up the Annual Debt Statement and indicates a statutory net debt of

1.075%.

Gross Debt Deductions Net Debt

Self-Liquidating Purpose 1,173,517.10$ 1,173,517.10$ -$

General Debt 2,754,974.00 336.53 2,754,637.47

3,928,491.10$ 1,173,853.63$ 2,754,637.47$

Net Debt $452,200 ÷ Equalized Valuation Basis per N.J.S.A. 40A:2-2 as amended, $256,278,756, =

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1.075%.

Borrowing Power under N.J.S.A. 40A:2-6 as Amended

3 1/2% of Equalized Valuation Basis (Municipal) 8,969,756.46$

Net Debt 2,754,637.47

Remaining Borrowing Power 6,215,118.99$

Calculation of "Self-Liquidating Purposes"

Sewer Utility Per N.J.S.A. 40A:2-45

Cash Receipts from Fees, Fund Balance Anticipated

Interest and Other Investment Income, and Other

Charges for the Year 488,952.51$

Deductions:

Operating and Maintenance Costs 326,983.00$

Debt Service per Sewer Fund 88,572.06

Total Deductions 415,555.06

Excess in Revenues 73,397.45$

Note 6: SHORT TERM FINANCING

On January 1, 2012 the Borough had a bond anticipation note payable to Oppenheimer & Co., Inc.

in the amount of $1,124,000.00. During 2012 the Borough budgeted and paid $7,752.00 for bond

anticipation note payments. The balance at year end is $1,116,248.00. The current interest rate on

this note is 1.50%. This note will mature on October 13, 2013 and will be renewed for another one-

year period.

General Capital Total

Balance 12/31/11 1,124,000.00$ 1,124,000.00$

Decrease 7,752.00 7,752.00

Balance 12/31/11 1,116,248.00$ 1,116,248.00$

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Note 7: FUND BALANCES APPROPRIATED

Fund balances at December 31, 2012 and 2011 which are anticipated to be appropriated and

included as anticipated revenue in their own respective funds for the year ending December 31,

2013 and 2012 were as follows:

2013 2012

Current Fund 350,000.00$ 377,351.55$

Sewer Utility 50,000.00 -

Note 8: DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS

Certain expenditures are required to be deferred to budgets of succeeding years. At December 31,

2012, the following deferred charges are shown on the balance sheets of the various funds:

Balance 2013 Budget

12/31/2012 Appropriation

Current Fund:

Overexpenditure of Appropriation Reserves 1,075.65$ 1,075.65$

Note 9: TAXES COLLECTED IN ADVANCE

Taxes collected in advance are recorded as cash liabilities in the financial statements. Following is a

comparison of the liability for the previous two years:

Balance

12/31/11

Balance

12/31/10

Prepaid Taxes 45,328.48$ 51,397.29$

Cash Liability for Taxes Collected in Advance 45,328.48$ 51,397.29$

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Note 10: PENSION FUNDS

Description of Plans

Substantially all of the Borough’s employees are covered by the Public Employees’ Retirement

System (PERS) and Police and Fireman's Retirement System (PFRS), a cost-sharing multiple-

employer defined benefit pension plan which has been established by state statute and is

administered by the New Jersey Division of Pension and Benefits (Division). According to the

State of New Jersey Administrative Code, all obligations of the System will be assumed by the State

of New Jersey should the System terminate. The Division issues a publicly available financial

report that includes the financial statements and required supplementary information for the Public

Employees Retirement System and Police and Fireman's Retirement System. This report may be

obtained by writing to the Division of Pensions and Benefits, PO Box 295, Trenton, New Jersey,

08625 or the report can be accessed on the internet at

http://www.state.nj.us/treasury/pensions/annrpts_archive.shtml.

Public Employees' Retirement System

The Public Employees' Retirement System was established in January, 1955 under the provisions of

N.J.S.A. 43:15A to provide retirement, death, disability and medical benefits to certain qualified

members. The Public Employees’ Retirement System is a cost-sharing multiple-employer plan.

Membership is mandatory for substantially all full time employees of the State or any county,

municipality, school district or public agency provided the employee is not required to be a member

of another State-administered retirement system or other state or local jurisdiction.

Police and Fireman’s Retirement System

The contribution policy for the PFRS is set by N.J.S.A. 43:16 and requires contributions by active

members and contributing employers. Plan member and employer contributions may be amended

by State of New Jersey legislation. PFRS provides for employee contributions of 8.5% of

employees’ annual compensation, as defined. Employers are required to contribute at an actuarially

determined rate.

Funding Policy

The contribution policy is set by N.J.S.A. 43:15A, Chapter 62, P.L. of 1994, Chapter 115, P.L. of

1997 and N.J.S.A. 18:66, and requires contributions by active members and contributing employers.

Plan member and employer contributions may be amended by State of New Jersey legislation.

PERS provide for employee contributions of 5.5% of employees’ annual compensation, as defined.

Employers are required to contribute at an actuarially determined rate in PERS and PFRS. The

current PERS rate is 6.9% of covered payroll and for PFRS a rate of 8.5% of covered payroll. The

Borough’s contributions to PERS for the years ending December 31, 2012, 2011 and 2010 were

$24,103.00, $25,150.00 and $34,441.00 respectively, equal to the required contributions for each

year. The Borough’s contributions to PFRS for the years ending December 31, 2012, 2011 and 2010

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were $31,686.00, $69,633.00 and $58,291.00 respectively, equal to the required contributions for

each year.

Note 11: POSTRETIREMENT BENEFITS

Chapter 384 of Public Laws 1987 and Chapter 6 of Public Laws 1990 required PERS to fund post

retirement medical benefits for those State employees who retire after reaching age 60. As of June

30, 2007 there were 75,860 employees Statewide eligible for post-retirement medical benefits. The

cost of these benefits is funded through contributions by the State in accordance with Chapter 62,

P.L. 1994. Funding of post-retirement medical premiums changed from a prefunding basis to a

pay-as-you-go basis beginning in fiscal year 1994 with an additional contribution beginning in

fiscal year 1996 which will increase the medical reserve by one half of 1% of payroll.

The State made post-retirement (PRM) contributions of $592.7 million for PERS in fiscal year

2007.

The Borough provides post-retirement health benefits to qualified employees with at least 25 years

of service. This includes medical, dental, vision and prescription plans. At December 31, 2012, the

Borough provided benefits to 0 retirees. The approximate annual cost of providing these benefits

during the year 2012 was $0.

Note 12: ACCRUED SICK AND VACATION BENEFITS

The Borough has permitted employees to accrue unused vacation, personal and sick time, which

may be taken as time off or paid at a later date at an agreed upon rate. The monetary value of these

earned and unused employee benefits has not been accrued by either charges to operations or to

budgets of prior years, although in some cases they might be material, since the realization of this

liability may be affected by conditions which preclude an employee from receiving full payment of

the accrual. At December 31, 2012 and 2011, the Borough estimates this liability to approximate

$55,095.53 and $57,844.87, respectively. Effective January 1, 2003 the State of New Jersey is

allowing municipalities to accrue a compensated absences liability. The Borough has established an

accumulated absence reserve with balances on December 31, 2012 and 2011 of $40,250.00 and

$40,250.00, respectively.

Note 13: ECONOMIC DEPENDENCY

The Borough of West Wildwood is not economically dependent on any one business or industry as

a major source of tax revenue for the Borough.

Note 14: CONTINGENT LIABILITIES

From time to time, the Borough is a defendant in legal proceedings relating to its operations as a

municipality. There are presently no outstanding lawsuits that would result in a contingent liability

to the Borough.

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Note 15: RISK MANAGEMENT

The Borough is exposed to various risks of loss related to torts; theft of, damage to, and destruction

of assets; errors and omissions; injuries to employees; and natural disasters. During the 2012

calendar year, the Borough did not incur claims in excess of their coverage and the amount of

coverage did not significantly decrease.

Property and Liability Insurance – The Borough maintains commercial insurance coverage for

property, liability and surety bonds.

The Borough is a member of the Atlantic County Municipal Joint Insurance Fund. The Fund

provides its members with the following coverage:

Workers’ Compensation and Employer’s Liability

Liability other than Motor Vehicles

Property Damage other than Motor Vehicles

Motor Vehicles

Boiler and Machinery

Employee Dishonesty

Contributions to the Fund, including a reserve for contingencies, are payable in two installments

and are based on actuarial assumptions determined by the Fund’s actuary. The Commissioner of

Insurance may order additional assessments to supplement the Fund’s claim, loss retention, or

administrative accounts to assure the payment of the Fund’s obligations.

The Fund publishes its own financial report for the year ended December 31, 2012, which can be

obtained from:

Atlantic County Municipal Joint Insurance Fund

P.O. Box 12

Hammonton, New Jersey 08037

Worker’s Compensation Fund – The Borough currently maintains traditional insurance for its

worker’s compensation coverage.

New Jersey Unemployment Compensation Insurance – The Borough has elected to fund its New

Jersey Unemployment Compensation Insurance under the “Benefit Reimbursement Method”.

Under this plan, the Borough is required to reimburse the New Jersey Unemployment Trust Fund

for benefits paid to its former employees and charged to its account with the State. The Borough is

billed quarterly for amounts due to the State. The following is a summary of Borough

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contributions, employee contributions, reimbursements to the State for benefits and the ending

balance of the Borough’s trust fund for the last three years.

Borough

Contributions

Payroll

Withholdings

Interest

Earned

Amount

Reimbursed

Ending

Balance

2012 -$ -$ 5.51$ -$ 16,202.98$

2011 30,000.00 95.72 23,122.97 16,197.47

2010 33,992.85 26,012.58 9,224.72

Note 16: DEFERRED COMPENSATION ACCOUNT

Employees of the Borough may participate in a deferred compensation plan adopted under the

provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans with Respect to

Service for State and Local Governments).

The deferred compensation plan is available to all employees of the Borough. Under the plan,

employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred

portion until the withdrawal date. The deferred compensation amount is not available for

withdrawal by employees until termination, retirement, death, or unforeseeable emergency.

An unrelated financial institution administers the deferred compensation plan. Under the terms of

an IRC Section 457 deferred compensation plan, all deferred compensation and income attributable

to the investment of the deferred compensation amounts held by the financial institution, until paid

or made available to the employees or beneficiaries, are the property of the employees.

As part of its fiduciary role, the Borough has an obligation of due care in selecting the third party

administrator. In the opinion of the Borough’s legal counsel, the Borough has acted in a prudent

manner and is not liable for losses that may arise from the administration of the plan.

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Note 17: INTERFUND BALANCES

As of December 31, 2012, the following interfunds were included on the balance sheets of the

various funds of the Borough of West Wildwood:

From To

Current Fund

Dog License Fund 185.35$ -$

General Capital Fund 17.94

Sewer Utility Capital Fund 65,000.00

Trust Fund 45,863.91

Trust Escrow 20,000.00

Trust Fund

Current Fund 45,863.91

Current Fund 20,000.00

Dog License Fund

Current Fund 185.35

General Capital Fund

Current Fund 17.94

Sewer Utility Capital Fund

Current Fund 65,000.00

131,067.20$ 131,067.20$

The amounts due to the Current Fund from the Grant fund is due to the fact that there is only one

bank account. It is anticipated that all other interfunds will be liquidated during the 2008 calendar

year.

Note 18: SALE OF WATER OPERATION

In the year 2011, the Borough sold the water operations of its Water Sewer Utility Fund to the City

of Wildwood. Proceeds from the sale were received in the amount of $952,239.57. On December

12, 2011, the Borough paid its associated outstanding loan with the United States Department of

Agriculture Rural Development for $930,631.74 representing principal of $908,764.58 and accrued

interest of $21,867.16.

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Note 19: JOINT URBAN ENTERPRISE ZONE

In 2002, the Borough of West Wildwood was designated as a Joint Urban Enterprise Zone along

with the Borough of North Wildwood, the Borough of Wildwood and the Borough of Wildwood

Crest by the State of New Jersey. This program allows retail merchants, excluding automobile

dealers and restaurants, to charge 3% sales tax to their customers. It also allows the merchant to

purchase their supplies tax-free. The sales tax collected is placed in a special UEZ fund, at the state

level, and the Borough can draw on these funds to do various projects within the zone and also to

fund the administration of the zone. The zone is limited to commercial properties.

Note 20: SUBSEQUENT EVENTS

The Borough has evaluated events through April 5, 2013, the date which the financial statements

were available to be issued and no additional items were noted for disclosure.

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Independent Auditor’s Report

The Honorable Mayor and Members of the Borough Board of Commissioners Borough of West Wildwood, New Jersey We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the regulatory basis financial statements of the various funds and account group as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Borough’s basic financial statements, and have issued our report thereon dated April 5, 2013, which was adverse due to being presented in accordance with the New Jersey regulatory basis of accounting. Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Borough’s control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements but not for the purpose of expressing an opinion on the effectiveness of the Borough’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Borough’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that

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we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Borough’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Ford, Scott & Associates, L.L.C FORD, SCOTT & ASSOCIATES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS

Kenneth Moore Kenneth Moore Certified Public Accountant Registered Municipal Accountant No. 231

April 55, 2013

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Schedule A

Program Unexpended Receipts or Unexpended

Federal Grantor / CFDA Pass-Through Grant Period or Award Balance Revenue Disbursements/ Balance Accumulated

Pass-through Grantor Program Number Entity ID# From To Amount 12/31/11 Recognized Expenditures Adjustments 12/31/12 Expenditures

BOROUGH OF WEST WILDWOOD

SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

YEAR ENDED DECEMBER 31, 2012

Department of JusticeSeatbelt Enforcement $2,000.00 $2,000.00 $2,000.00 $0.00

2,000.00 - - - 2,000.00 -

DARE Grant 315.00 315.00 315.00

315.00 - - - 315.00 -

Total Department of Justice 2,315.00 - - - 2,315.00

Housing and Urban DevelopmentSmall Cities - ADA 303,610.00 303,610.00 303,610.00

Total Housing and Urban Development 303,610.00 - - - 303,610.00

Department of Environmental Protection

Municipal Storm Regulation 5,321.00 5,321.00

Total Department of Environmental Protection 5,321.00 - - - 5,321.00

Total Federal Assistance 311,246.00 - - - 311,246.00

Prior

Prior

Prior

See Accompanying Notes to Schedules of Federal and State Financial Assistance

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Schedule B

Unexpended Receipts or Unexpended

State Grantor / Pass-Through State Account Grant Balance Revenue Disbursements/ Balance Accumulated

Grantor / Program Number From To Award 12/31/11 Recognized Expenditures Adjustments 12/31/12 Expenditures

Department of Transportation:Trust Fund Authority Act of 1984: By Formula 6320-480-601385-61 1/1/2012 12/31/2012 $127,500.00 $0.00 $127,500.00 $127,500.00 $0.00Trust Fund Authority Act of 1984: By Formula 6320-480-601385-61 1/1/2010 12/31/2010 262,505.00 262,505.00 99,402.00 163,103.00 99,402.00

Total Department of Transportation 262,505.00 127,500.00 99,402.00 - 290,603.00

Department of Law and Public Safety:Body Armor Grant 1020-718-066-1020 1/1/2012 12/31/2012 1,861.50 1,861.50 1,861.50 - Body Armor Grant 1020-718-066-1020 1/1/2011 12/31/2011 1,565.17 1,565.17 1,565.17 - Drunk Driving Enforcement 6400-100-078-6408 2,730.00 2,730.00 2,730.00 - Alcohol Education and Rehabilitation 9735-760-098-Y900-001-6020 1/1/2012 12/31/2012 53.93 53.93 53.93 -

Total Department of Law and Public Safety 4,295.17 1,915.43 - - 6,210.60

Department of Environmental ProtectionClean Community Program 4900-765-042-4900 1/1/2012 12/31/2012 4,000.00 4,000.00 4,000.00 - Clean Community Program 4900-765-042-4900 1/1/2011 12/31/2011 4,000.00 4,000.00 4,000.00 - Clean Community Program 4900-765-042-4900 4,142.84 4,143.00 3,831.97 311.03 3,831.97

8,143.00 4,000.00 3,831.97 - 8,311.03

Storm Water Grant 4,531.00 4,531.00 4,531.00

SLE HEOP 2,406.00 2,406.00 2,406.00

Recycling Tonnage Grant 1900-752-042-4900-001-6020 1/1/2012 12/31/2012 2,041.74 2,041.74 323.00 1,718.74 323.00 Recycling Tonnage Grant 1900-752-042-4900-001-6020 777.00 777.00 777.00 - 777.00

777.00 2,041.74 1,100.00 - 1,718.74

Total Department of Environmental Protection 15,857.00 6,041.74 4,931.97 - 16,966.77

New Jersey Commerce & Economic Growth CommissionUEZ Assistance

Fiscal Year 12 Administration 730-020-2830-061 1/1/2012 12/31/2012 16,365.14 16,365.14 13,744.07 2,621.07 13,744.07 Fiscal Year 11 Administration 730-020-2830-061 2,971.59 2,971.59 2,971.59 Familty Festival 730-020-2830-061 6,599.00 6,599.00 6,599.00 Familty Festival Year 3 730-020-2830-061 924.00 924.00 924.00 Police Year 1 730-020-2830-061 31,089.00 31,089.00 31,089.00 26th Street Bulkhead 730-020-2830-061 32,328.00 32,328.00 32,328.00 Railrosd Bridge 730-020-2830-061 12,560.00 12,560.00 9,160.00 3,400.00 9,160.00 Police Year 2 730-020-2830-061 1/1/2012 12/31/2012 132,849.65 132,849.65 17,448.23 115,401.42 17,448.23

Total NJ Department of Commerc & Economic Growth Commission 86,471.59 149,214.79 40,352.30 - 195,334.08

Total State Assistance 369,128.76 284,671.96 144,686.27 - 509,114.45

Local AssistanceCounty of Cape May

Art Regrant 476.00 476.00 Recreation Grant 2,659.00 2,659.00 Fishing Pier and Park 4,509.57 4,509.57 - Defibulator Grant 500.00 500.00 Municipal Alliance Drug and Alcoholism 4250-760-050000-63-262 1/1/2012 12/31/2012 701.00 701.00 689.00 12.00 689.00

Joint Insurance Fund 6,557.12 2,030.00 4,527.12 2,030.00 CMCMUA Recycling Rebate 5,889.61 2,821.25 8,710.86 CMCMUA Public Area Recycing 1,097.00 1,097.00

- -

Total Local Assistance 21,688.30 3,522.25 2,719.00 - 22,491.55

Total State and Local Assistance 390,817.06 288,194.21 147,405.27 - 531,606.00

Total Federal and State and Local Assistance $702,063.06 $288,194.21 $147,405.27 $0.00 $842,852.00

Prior

Prior

Prior

Prior

Grant Period

BOROUGH OF WEST WILDWOOD

SCHEDULE OF STATE AND LOCAL FINANCIAL ASSISTANCE

YEAR ENDED DECEMBER 31, 2012

prior

PriorPriorPriorPrior

PriorPriorPriorPriorPriorPrior

See Accompanying Notes to Schedules of Federal and State Financial Assistance

B-58

BOROUGH OF WEST WILDWOODNOTES TO SCHEDULE OF FEDERAL AND STATE AWARDS

YEAR ENDED DECEMBER 31, 2012

Note 1: General

The accompanying schedule of financial assistance present the activity of all state financial assistance programs of the Borough of West Wildwood. The Borough is defined in Note 1 to the Borough's financial statements.

Note 2: Basis of Accounting

The accompanying schedule of financial assistance is presented using the modified accrual basis of accounting in accordance with the "Requirements of Audit" as promulgated by the State of New Jersey, Department of Community Affairs, Division of Local Government Services. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Borough accounts for its financial transactions through separate funds, which differ from the funds required by accounting principles generally accepted in the United States of America (GAAP).

Note 3: Relationship to General-Purpose Financial Statements

Amounts reported in the accompanying schedules agree with amounts reported in the Borough's financial statements. The financial statements present the Grant Fund on a budgetary basis. The Grant Fund is presented in the accompanying schedules on the grant accounting budgetary basis which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not.

Federal State Total

Grant Fund $ - $ 147,405.31 $ 147,405.31

Total Financial Assistance $ - $ 147,405.31 $ 147,405.31

Note 4: Relationship to State Financial Reports

Amounts reported in the accompanying schedules agree with the amounts reported in the related state financial reports.

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APPENDIX C

FORM OF APPROVING LEGAL OPINION OF BOND COUNSEL

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75 Livingston Avenue, Roseland, NJ 07068 (973) 622-1800

McManimon, Scotland & Baumann, LLC Newark - Roseland - Trenton

_________, 2013 Borough Committee of the Borough of West Wildwood, in the County of Cape May, New Jersey Dear Committee Members: We have acted as bond counsel to the Borough of West Wildwood, in the County of Cape May, New Jersey (the “Borough”) in connection with the issuance by the Borough of $1,765,000 General Improvement Bonds, Series 2014 (the “Bonds”). In order to render the opinions herein, we have examined laws, documents and records of proceedings, or copies thereof, certified or otherwise identified to us, as we have deemed necessary. The Bonds are issued pursuant to the Local Bond Law of the State of New Jersey, a resolution of the Borough adopted December 4, 2013 pursuant to N.J.S.A. 40A:2-26(f), in all respects duly approved, and the various bond ordinances referred to therein, each in all respects duly approved and published as required by law. In our opinion, except insofar as the enforcement thereof may be limited by any applicable bankruptcy, moratorium or similar laws or application by a court of competent jurisdiction of legal or equitable principles relating to the enforcement of creditors' rights, the Bonds are valid and legally binding general obligations of the Borough, and the Borough has the power and is obligated to levy ad valorem taxes upon all the taxable real property within the Borough for the payment of the Bonds and the interest thereon without limitation as to rate or amount. The Borough has covenanted to comply with continuing requirements that must be satisfied subsequent to the issuance of the Bonds in order to preserve tax exemption under the Internal Revenue Code of 1986, as amended (the "Code"). Failure to comply with certain requirements of the Code may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. In the event that the Borough continuously complies with its covenant and in reliance on representations, certifications of fact and statements of reasonable expectations made by the Borough, it is our opinion that interest on the Bonds is not included in gross income for federal income tax purposes and is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations. Interest on the Bonds held by a corporate taxpayer is not included in the relevant income computation for calculation of the federal alternative minimum tax as a result of the inclusion of interest on the Bonds in "adjusted current earnings." We express no opinion regarding other federal tax consequences arising with respect to the Bonds. Further, in our opinion, interest on the Bonds and any gain on the sale thereof are not included in gross income under the New Jersey Gross Income Tax Act. This opinion is issued as of the date hereof. We assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may come to our attention or any changes in law or interpretations thereof that may occur after the date of this opinion or for any reason whatsoever. Very truly yours,

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