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Division of Local Government Services Modernization and Local Mandate Relief Act of 2015
By Jeffrey D. Winitsky on August 12, 2013

On August 10, 2015, Governor Chris Christie signed in to law P.L.2015, c.95, designated as the “Division of Local Government Services Modernization and Local Mandate Relief Act of 2015” (referred to herein as the “Act”), which, among other things, streamlines certain responsibilities of the Division of Local Government Services (“DLGS”), eliminates or revises certain State mandates imposed upon on local governments and implements certain administrative efficiencies and cost saving measures.

On August 10, 2015, Governor Chris Christie signed in to law P.L.2015, c.95, designated as the “Division of Local Government Services Modernization and Local Mandate Relief Act of 2015” (referred to herein as the “Act”), which, among other things, streamlines certain responsibilities of the Division of Local Government Services (“DLGS”), eliminates or revises certain State mandates imposed upon on local governments and implements certain administrative efficiencies and cost saving measures.

Among its various benefits, the Act (i) provides more expedited and cost effective means for the issuance of debt by a local governmental unit, (ii) expands the scope of permissible special emergency appropriations, (iii) increases allowable municipal contributions to fire districts, (iv) transfers responsibility for the review and approval of New Jersey Environmental Infrastructure Trust (“NJEIT”) loans from the Local Finance Board (“LFB”) to the Director of DLGS, including the elimination of the requirement that local units receive LFB approval for non-conforming maturity schedules for such loans where maturity schedules have been approved by NJEIT, (vi) eliminates the requirement for a down payment for those bond ordinances authorizing environmental infrastructure projects funded by the NJEIT or the State through the Department of Environmental Protection, (vii) eliminates the need for LFB approval for the issuance of “municipal qualified bonds” unless otherwise required by law, (viii) eliminates the requirement that local authorities receive LFB review and approval prior to undertaking bonded debt refundings where certain saving thresholds can be evidenced, (ix) expands the scope of services for which competitive contracting is permissible and (x) eliminates the requirement that property tax bills include the amount of State aid for the municipality.

Although the Act is largely beneficial in its application, there are several changes set forth therein that are worthy of note, including, but not limited to, (i) the authority for the Director of DLGS to establish an electronic filing system for financial disclosure statements, (ii) requiring that LFB may only authorize fees that are greater than 0.125% of the par value of the bonds being issued in a particular financing where a two-thirds majority vote of LFB is obtained, (iii) specifically clarifying that serving as a temporary chief financial officer does not count as time served as a chief financial officer for purposes of acquiring tenure, and (iv) requiring municipalities to approve loan guarantees for redevelopers by ordinance introduced and adopted in the same manner as bond ordinances under the Local Bond Law (N.J.S.A. 40A:2-1 et seq.).

Please note that the above-described changes are a brief summary of the Act’s impact on governmental units and are not inclusive of the many changes specifically provided for in the Act. Accordingly, we recommend that you review the Act in its entirety for a more complete understanding of its implications.

The Parker McCay attorneys listed below can be reached at any time to discuss the changes set forth in the Act in more detail and answer any questions you may have in connection with its application and impact.

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