Division of Local Government Services Streamlines Procedure for Local Unit Investment in Municipal Notes
On September 29, 2015, the Division of Local Government Services of the New Jersey Department of Community Affairs issued Local Finance Notice 2015-18, which provides new procedural guidance to local units (including municipalities and counties (each a “Local Unit”)) seeking approval to purchase notes issued by other municipalities, counties and fire districts with a maturity date of 397 days or less (a “Municipal Note”). In particular, Local Finance Notice 2015-18 directs that, prior to a Local Unit’s investment (i.e., the purchase) in a Municipal Note, each Local Unit must file certain delineated materials to the Division of Local Government Services (“DLGS”) for approval to amend its Cash Management Plan to include investments in a Municipal Note. Upon approval of the amendment to its Cash Management Plan, a Local Unit may thereafter bid for purchase and invest in any Municipal Notes until the expiration of the amended Cash Management Plan. By streamlining the approval process, the newly implemented policy will allow Local Units to bid on multiple Municipal Notes during the full term of its amended and DLGS approved Cash Management Plan without having to seek individual approval from the Division of Investment prior to each proposal to purchase or invest (as was previously the case).
The above is provided as a summary of the pertinent provisions of Local Finance Notice 2015-8. We would, therefore, encourage you to review the complete text of Local Finance Notice 2015-18 for further detail.
Please feel free to contact any member of Parker McCay’s Public Finance group with any questions related to Local Finance Notice 2015-18 and its procedural application.