Effective July 1, 2004, the City of Cape May operates under the Council/Manager form of government. According to the 2000 U.S. Census, the council/manager plan is in use by 41 municipalities covering 11.5% of New Jersey's total population.
A municipality operating under a council/manager plan is governed by a municipal council which is elected at large and chaired by the mayor. The Council, in the council/manager plan, exercises the legislative power of the municipality.
Non partisan elections are held in May with the winner of a contest determined by plurality rule meaning that candidates with the greatest number of votes win. Cape May voters directly elect the Mayor. The person elected serves a four year term. The mayor, in the council/manager plan, is a member of the council. The mayor presides over the council and has a vote, but no administrative authority.
There are four members of Council, in addition to the Mayor. Their terms are staggered, where the members of the first council draw lots to determine who serves a four year term. The remaining three will serve a two year term. Subsequently, all councilmen elected serve for four years.
The city manager exercises all the executive power of the municipality. It is the duty of the manager to see that all laws and ordinances, in effect in the municipality, are observed. The council appoints the municipal clerk, the municipal attorney, the tax assessor, the tax collector, the treasurer, and such other boards and commissions as may be provided by the administrative code. The manager appoints all other officers and employees of the municipality, and all other employees if no other method of appointment is provided in the code, or by general law.
The annual budget, of a municipality operating under the Council/Manager plan, is prepared by the Manager, with the assistance of the treasurer. It is presented to the Council, in January, who then modifies it as it see fit, prior to adoption.