Township Council Meeting — Packet

Current Debt Profile • The Township’s Statutory Net Debt is approximately $170 million. This includes: • • • • • • $54 million of long-term, fixed rate bonds $11.4 million of bond anticipation notes (“BANs”) coming due in March 2026 $62.7 million of BANs coming due in November 2026 $3.3 million of special emergency notes (“SENs”) coming due in November 2026 $38 million of authorized but not issued debt (includes JMEU authorizations) $700k of NJIB loans (JMEU) • For 2025, debt service and deferred charges (SENs) combined for $13.5 million, or 12.5% of the total budget. • There are large drops in aggregate debt service in 2029 and 2038. • The Township’s current bond rating is “AA” (3rd highest) by S&P Global and was last affirmed in October 2025. A bond rating is similar to a resident’s credit score, as it impacts their cost to borrow. • The CFO and Phoenix review the outstanding debt annually to make sure the debt is managed in the most cost-effective way possible given market conditions, future debt authorizations, budgetary concerns and current capital needs. 7

Outstanding Bonded Debt Service by Series (1) Excludes special assessment bonds, authorized but not issued debt, short-term debt (BANs) and deferred charges (SENs). (2) Long-term bonds may be refinanced from time-to-time based on market conditions and redemption provisions. 8

Future Debt & Capital Discussion • The Township Council and CFO have expressed a desire to begin to transition to an annual pay-go capital plan funded by the budget in lieu of borrowing short and longterm debt. • The Township expects to receive $6.3 million in green acres grants (Rock Spring) and $10.8 million from the sale of land (55 Lakeside). These funds will be used towards the repayment of debt. • The CFO has identified approximately $22.8 million of authorized but not issued bond ordinances that will also need to be funded over the next two (2) years, as the projects are ongoing and will require cash to fund them. • This excludes approximately $15 million of JMEU authorizations that may not need to be funded by the Township. • Based on the Township’s outstanding long-term debt, a bond issuance between 20262028 would be the best time to permanently finance the debt, assuming favorable market conditions. 9

Proposed Debt & Capital Plan • The proposed debt plan targets an annual pay-go capital program of $5.5 million per year ($5 million capital and $500k special emergencies), which is expected to be 100% funded by the budget by 2038 with 2% annual increases to debt service in the interim. • For 2025, we included $6.7 million of new debt authorization (ordinance 2915-25) and $800,000 of special emergencies. • From 2026 to 2036, new annual capital needs of $5.5 million would be funded by a mix of debt authorizations, special emergencies and pay-go capital. • In addition, approximately $22.8 million of authorized but not issued bond ordinances will be funded over the next two (2) years by debt issuance. • The proposed future debt issuances include: • • • • • • • Roll existing notes to 2028 Issue new notes in 2025-2036 to finance "Expected New Debt" Issue $81.4 million bonds between 2026-2028 to finance all outstanding notes Roll new notes to 2037 Issue $14.6 million bonds in 2037 to finance all outstanding notes Roll SENs with mandatory pay downs and annual new money as shown above Full migration to pay-go capital funding beginning 2038 10

Aggregate Debt & Capital Projections PROJECTED AGGREGATE DEBT SERVICE & CAPITAL INCLUDES EXISTING BONDS, LOANS & NOTES AND $5.5M ANNUAL CAPITAL PROGRAM FY Ending 12/31 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 Total: Existing Debt Service 13,450,810 8,169,835 7,736,739 7,668,173 5,457,648 5,413,373 4,605,778 4,569,078 3,906,417 3,896,292 3,803,254 3,738,032 2,879,335 310,520 315,020 319,270 318,273 321,775 324,763 327,475 324,981 326,925 328,225 334,150 334,700 334,950 $79,515,791 New Bonds, Notes & Deferred Charges Total Debt Principal Interest Service 3,517,226 3,589,000 3,455,500 2,960,000 3,060,000 3,718,000 3,939,000 4,159,000 4,370,000 4,583,000 4,781,000 5,450,000 5,230,000 5,335,000 5,455,000 5,585,000 5,720,000 5,855,000 5,905,000 5,955,000 6,005,000 6,060,000 6,120,000 1,180,000 1,245,000 1,300,000 1,300,000 2,018,554 2,649,660 3,122,973 3,694,200 3,698,125 3,703,563 3,678,168 3,648,515 3,585,105 3,469,080 3,332,583 3,176,313 3,109,125 2,869,913 2,627,550 2,381,338 2,130,850 1,875,875 1,616,350 1,354,075 1,089,050 821,275 550,475 276,375 211,475 143,000 71,500 5,535,780 6,238,660 6,578,473 6,654,200 6,758,125 7,421,563 7,617,168 7,807,515 7,955,105 8,052,080 8,113,583 8,626,313 8,339,125 8,204,913 8,082,550 7,966,338 7,850,850 7,730,875 7,521,350 7,309,075 7,094,050 6,881,275 6,670,475 1,456,375 1,456,475 1,443,000 1,371,500 Aggregate Debt Service 13,450,810 13,705,615 13,975,399 14,246,646 12,111,848 12,171,498 12,027,341 12,186,246 11,713,932 11,851,397 11,855,334 11,851,614 11,505,648 8,649,645 8,519,933 8,401,820 8,284,610 8,172,625 8,055,638 7,848,825 7,634,056 7,420,975 7,209,500 7,004,625 1,791,075 1,791,425 1,443,000 1,371,500 $115,831,726 $60,905,062 $176,736,788 $256,252,579 Max Annual Debt Service: Avg Annual Debt

625 8,055,638 7,848,825 7,634,056 7,420,975 7,209,500 7,004,625 1,791,075 1,791,425 1,443,000 1,371,500 $115,831,726 $60,905,062 $176,736,788 $256,252,579 Max Annual Debt Service: Avg Annual Debt Service: Outstanding Principal Amount 139,022,466 149,540,083 145,300,174 123,910,799 119,815,525 115,339,251 110,460,977 105,160,702 99,436,351 93,261,000 86,598,000 79,437,000 71,760,000 66,315,000 60,755,000 55,065,000 49,240,000 43,270,000 37,155,000 30,980,000 24,750,000 18,460,000 12,105,000 5,675,000 4,175,000 2,600,000 1,300,000 Annual Pay-Go Capital 2,375,000 2,550,000 2,950,000 3,050,000 3,775,000 3,900,000 4,150,000 4,400,000 5,000,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 $114,650,000 Pay-go Capital + Annual Debt Percentage Service Increase 13,450,810 13,705,615 1.9% 13,975,399 2.0% 14,246,646 1.9% 14,486,848 1.7% 14,721,498 1.6% 14,977,341 1.7% 15,236,246 1.7% 15,488,932 1.7% 15,751,397 1.7% 16,005,334 1.6% 16,251,614 1.5% 16,505,648 1.6% 14,149,645 -14.3% 14,019,933 -0.9% 13,901,820 -0.8% 13,784,610 -0.8% 13,672,625 -0.8% 13,555,638 -0.9% 13,348,825 -1.5% 13,134,056 -1.6% 12,920,975 -1.6% 12,709,500 -1.6% 12,504,625 -1.6% 7,291,075 -41.7% 7,291,425 0.0% 6,943,000 -4.8% 6,871,500 -1.0% $370,902,579 $14,246,646 $8,992,658 (1) Includes all Current Fund debt including: general improvement bonds, NJIB loans, debt service on BANs for 2025 and deferred charges (SENs) for 2025. Excludes special assessment bonds debt service. (2) Rates assumed to increase 0.25% for bonds and notes each year. Includes voluntary principal pay downs on notes that are subject to change. (3) Annual pay-go capital funded as a combination of debt and cash as described herein. 11

Aggregate Debt & Capital Projections (cont.) (1) Includes all Current Fund debt including: general improvement bonds, NJIB loans, debt service on BANs for 2025 and deferred charges (SENs) for 2025. Excludes special assessment bonds debt service. (2) Rates assumed to increase 0.25% for bonds and notes each year. Includes voluntary principal pay downs on notes that are subject to change. (3) Annual pay-go capital funded as a combination of debt and cash as described herein. 12

Debt & Capital Amortization Summary DEBT & CAPITAL AMORTIZATION SUMMARY New BAN New SEN Authorization Authorization Annual Pay-Go Capital Adjustments Principal Amortization Ending Net Debt Net Debt Percentage Debt Service + Deferred Charges Debt Service Carrying Charge (15,468,335) Year Starting Net Debt 2025 170,571,638 6,700,000 800,000 - (8,631,838) 153,971,466 1.96% 13,450,810 12.5% 2026 153,971,466 5,000,000 500,000 - - (9,931,383) 149,540,083 1.87% 13,705,615 12.5% 2027 149,540,083 5,000,000 500,000 - - (9,739,909) 145,300,174 1.78% 13,975,399 12.5% 2028 145,300,174 5,000,000 500,000 (9,755,774) 123,910,799 1.49% 14,246,646 12.5% 2029 123,910,799 2,625,000 500,000 2,375,000 - (7,220,274) 119,815,525 1.41% 12,111,848 10.4% 2030 119,815,525 2,450,000 500,000 2,550,000 - (7,426,274) 115,339,251 1.33% 12,171,498 10.2% 2031 115,339,251 2,050,000 500,000 2,950,000 - (7,428,274) 110,460,977 1.25% 12,027,341 9.9% 2032 110,460,977 1,950,000 500,000 3,050,000 - (7,750,274) 105,160,702 1.16% 12,186,246 9.8% 2033 105,160,702 1,225,000 500,000 3,775,000 - (7,449,351) 99,436,351 1.08% 11,713,932 9.3% 2034 99,436,351 1,100,000 500,000 3,900,000 - (7,775,351) 93,261,000 0.99% 11,851,397 9.2% 2035 93,261,000 850,000 500,000 4,150,000 - (8,013,000) 86,598,000 0.90% 11,855,334 9.0% 2036 86,598,000 600,000 500,000 4,400,000 - (8,261,000) 79,437,000 0.81% 11,851,614 8.8% 2037 79,437,000 - 500,000 5,000,000 - (8,177,000) 71,760,000 0.72% 11,505,648 8.4% 2038 71,760,000 - - 5,500,000 - (5,445,000) 66,315,000 0.65% 8,649,645 6.2% 2039 66,315,000 - - 5,500,000 - (5,560,000) 60,755,000 0.59% 8,519,933 6.0% 2040 60,755,000 - - 5,500,000 - (5,690,000) 55,065,000 0.52% 8,401,820 5.8% 2041 55,065,000 - - 5,500,000 - (5,825,000) 49,240,000 0.46% 8,284,610 5.6% 2042 49,240,000 - - 5,500,000 - (5,970,000) 43,270,000 0.39% 8,172,625 5.4% 2043 43,270,000 - - 5,500,000 - (6,115,000) 37,155,000 0.33% 8,055,638 5.2% 2044 37,155,000 - - 5,500,000 - (6,175,000) 30,980,000 0.27% 7,848,825 5.0% 2045 30,980,000 - - 5,500,000 - (6,230,000) 24,750,000 0.21% 7,634,056 4.8% 2046 24,750,000 - - 5,500,000 - (6,290,000) 18,460,000 0.15% 7,420,975 4.5% 2047

27% 7,848,825 5.0% 2045 30,980,000 - - 5,500,000 - (6,230,000) 24,750,000 0.21% 7,634,056 4.8% 2046 24,750,000 - - 5,500,000 - (6,290,000) 18,460,000 0.15% 7,420,975 4.5% 2047 18,460,000 - - 5,500,000 - (6,355,000) 12,105,000 0.10% 7,209,500 4.3% 2048 12,105,000 - - 5,500,000 - (6,430,000) 5,675,000 0.05% 7,004,625 4.1% 2049 5,675,000 - - 5,500,000 - (1,500,000) 4,175,000 0.03% 1,791,075 1.0% 2050 4,175,000 - - 5,500,000 - (1,575,000) 2,600,000 0.02% 1,791,425 1.0% 2051 2,600,000 - - 5,500,000 - (1,300,000) 1,300,000 0.01% 1,443,000 0.8% 2052 1,300,000 - - 5,500,000 - (1,300,000) 0 0.00% 1,371,500 0.7% - (17,133,600) (1) Adjustments include: (i) the removal of $15.5 million of authorized but not issued debt in 2025 to better reflect the Township’s actual debt profile; and (ii) assume ordinance 2651-21 is reduced by $10.8 million from sale proceeds in 2028 (55 Lakeside) and ordinance 2564-19 is reduced by $6.3 million from green acres grant funds in 2028 (Rock Spring). 13

Financial Debt Metrics • Net debt is limited to 3.5% of the equalized valuation basis per State statute. • As of 2024, net debt was $171 million or 2.2%. • Net debt has increased by 56% over the last five (5) years. • Debt service is typically +/- 10% of the municipal budget for NJ municipalities. • In 2025, the Township’s debt service (including deferred charges/SENs) was 12.5% of budget. • Annual debt service has increased from $8 million in 2020 to $13.5 million in 2025. 14