Hopes Are High for Legislative Action on Restaurant Liquor License Bill



town-crier_facebookOur State’s liquor licensing laws date back to the ratification of the Twenty-first Amendment in the 1930’s. The world is a different place. And those laws have tended to stifle competition and to hamstring local economic development options.

New Jersey municipalities looking to revitalize downtowns and Main Streets, could use some new tools. Thus, the League of Municipalities supports A-2452, which would create new liquor licenses for restaurants meeting certain criteria. It is the sponsor’s intent to foster and encourage economic development and growth in this State by creating a new less-costly restaurant license that permits the licensee to sell alcoholic beverages and to provide financial compensation to certain plenary retail consumption licensees who already have established businesses and paid market value for their licenses.

This bill creates a restricted restaurant license (R1) which permits the holder to sell any alcoholic beverages for consumption on the premises of certain restaurants.  In addition, the bill creates a restricted beer and wine license (R2) which permits the holder to sell only beer and wine by the bottle or can.  There is no doubt that these licenses would represent an important economic development or redevelopment tool for many municipalities, and give an economic boost to neighborhood restaurants and to other businesses located in proximity to those establishments.

Under current state law, dating back to the repeal of Prohibition, a municipality may not issue a new license unless and until the combined total number of licenses in the municipality is less than one for each 3,000 people. Assemblyman (and former Mayor) John Burzichelli, the prime sponsor of the bill, has noted, “As a result of this restriction, there’s an insufficient number – or complete lack – of available licenses in many municipalities, inflating the value of existing licenses and forcing prospective restaurateurs to buy a license at an exorbitant price or simply operate without a license. This has created an unfair situation for many restaurant owners.”

Allowing restaurants to get a newly created license makes sense, as long as it’s coupled with relief for existing license owners, so this bill proposes tax credits to the holders of existing licenses to compensate them for any devaluation of their licenses.

The bill establishes a fee schedule for the initial issuance and annual renewal fee for the restricted restaurant license and restricted beer and wine license based on the square footage of the restaurant. The first $2,500 of the initial and renewal fee for the restricted restaurant license and the first $1,250 of the fees for the restricted beer and wine license, would be paid to the municipality where the restaurant is located. If the restaurant is located within the boundaries of two or more municipalities, the fee is to be divided equally among those municipalities. The remainder of the fees would go to the Director Division of Taxation to be used solely for the purposes of offsetting the costs associated with issuing tax credits provided under the bill.  After the Division of Taxation is reimbursed for costs associated with issuing tax credits, the full fee is to be paid to the municipality.

The bill imposes certain penalties on the holders of the restricted restaurant license or restricted beer and wine license who violate the law.  Any fine money collected is to be paid to the Director of the Division of Taxation to be used solely for the purposes of offsetting the costs associated with issuing tax credits provided under the bill.  After the Division of Taxation is reimbursed for up to 75 percent of the projected estimated cost associated with issuing tax credits, the full fee is to be paid to the municipality.

The League’s Liquor License Task Force carefully studied this proposal and recognized the benefits such licenses could provide to many municipalities throughout the State.  We also identified some problems in the bill.

Assemblyman Burzichelli, has indicated his willingness to accept many of our recommendations.   In particular, the Assemblyman agreed to our suggestion to allow an “opt-in” provision for all municipalities.  We sincerely appreciate his eagerness to involve us in discussions on the bill and to consider our concerns.

We have no doubt that a significant number of municipalities, if given the opportunity, would take affirmative action to make such licenses available to local restaurateurs. The bill is referenced to the Assembly Regulatory Oversight Committee, which held a “for discussion purposes” only hearing on February 27.  We hope to see the bill advance soon.

We suggest contacting your Assembly representatives and ask for their support of A-2452.

Contact: Jon Moran, Senior Legislative Analyst, jmoran@njslom.org ,609-695-3481, x121.





NJ Supreme Court Hears Arguments in Public Employee Immunity Case


correct size blogEarlier this week the NJ Supreme Court heard oral arguments in the case of Hazel Hamrick Lee v. The City of Paterson, a case in which the League is joined as Amicus.  At issue, in this case, is the interpretation of whether qualified immunity should be afforded to public employees versus absolute immunity in cases when the public employee is enforcing the law.

Both the trial court and the Appellate Division determined that when enforcing a law a public employee is only afforded qualified immunity, not absolute immunity.  The matter is now before the Supreme Court to decide.  Should the Court reverse the lower courts and determine that a public employee is entitled to absolute immunity when enforcing the law, then the city will not be liable for damages.  However, should the Court uphold the lower courts’ decisions of allowing only qualified immunity, then the case will be remanded to the lower court for a determination to be made as to whether or not the city employee acted in good faith when enforcing the law.  This is because, under qualified immunity, a city employee is granted immunity only if it can be shown that the employee acted in good faith.

At this time there is no set date for when the Court will issue its ruling.  However, it is anticipated that a ruling will be issued before the beginning of December.  The League will keep our members updated on this matter.

Contact: Frank Marshall, Esq., League Staff Attorney, fmarshall@njslom.org, 609-695-3481 x137.



Interest Arbitration Cap to Expire At End of Year


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correct size blogIf the Legislature and Governor fail to take action, the 2% cap on Interest Arbitration will expire on December 31, 2017, the same day that the final report and recommendations of the Police and Fire Public Interest Arbitration Impact Task Force are due.  The permanent 2% property tax levy cap, however, will remain in effect. Setting the stage for local officials to be forced to either raise property taxes by a referendum or cut other municipal services to fund an arbitration award for a police or fire contract.

Now is the time to take action to make sure this critical management tool, which has successfully curtailed property tax increases, is preserved.

In 2010, Governor Christie signed into law bipartisan reforms to the Arbitration process that took effect January 1, 2011.  The reforms:

  • capped arbitration awards on economic factors to no more than 2%,
  • provided for random selection of arbitrators,
  • expedited the determination of awards,
  • required the arbitrator to provide a written report detailing the weight accorded to each of the required considerations, and
  • expedited the appeal process.

As a result of this reform arbitration filings dramatically decreased from over 100 per year to 26 in 2013.  The 2010 law included an April 1, 2014 sunset on a key element of the reforms, the capping of arbitration awards.

In 2014, Governor Christie again signed into law a unanimous bipartisan extension of the cap to December 31, 2017.  The 2014 law also:

  • changed the calculation of the 2% cap from the aggregate amount to compounding at the end of each agreement year,
  • increased the time for the arbitrator to render a decision in the case from 45 days to 90 days,
  • required the arbitrator to conduct an initial meeting as a mediation session to effect a voluntary resolution of the impasse,
  • extended the time for an aggrieved party to file a notice of appeal of the arbitrator’s decision from 7 days to 14 days,
  • increased the time frame for PERC to render its decision in an appeal of an arbitration award from 30 days to 60 days,
  • increased the maximum pay for arbitrators from $7,500 to $10,000, and
  • extended the reporting requirements of the Police and Fire Public Interest Arbitration Impact Task Force to December 31, 2017.

As a result of this reform, arbitration filings continued to dramatically decrease from 89 fillings in 2014 to 9 in 2016.

The most recent Police and Fire Public Interest Arbitration Impact Task Force report notes that preliminary data “shows that the economic impact of the 2% cap recognized in the 2014 Final Report has continued.”  In fact, the Interest Arbitration Salary Increase Analysis found:


Year No. Voluntary Settlements Average Increase Base Salary –  Voluntary Settlements No. Arbitration Awards Average Increase Base Salary –  Arbitration Awards
2015 9 1.73% 6 1.71%
2014 16 1.61% 12 1.69%
2013 8 1.96% 27 1.89%
2012 29 1.82% 36 1.98%


These reforms marked a dramatic change to the arbitration process and assisted municipalities to control the never-ending rise in public safety personnel costs.   The interest arbitration cap took a playing field that was weighted heavily to the benefit of the unions and leveled it so that collective bargaining was once again a “give and take” between the parties.  There are many examples where municipalities’ negotiated contracts with significant savings because the unions recognized that if they went to arbitration they would only receive a 2% increase.  Steps were lengthened, sick leave incentives were reduced or eliminated, and vacation time was reduced, providing savings to taxpayers.

We all depend on the service of our police, firefighters and first responders, and greatly respect and admire their service.  But we also respect and admire the service of all public employees, and a failure to extend the cap on interest arbitration would force local budget makers to make deep cuts in services.

The arbitration cap is about budgeting within our means, keeping a control on local taxes, and providing a level playing field at the bargaining table.  Awards which exceed 2%, while there is 2% levy cap in place on municipalities, could immediately threaten the funding for all other municipal services. And, in the not-too-distant future, such awards could force local budget makers to reduce public safety staffing levels, as fewer local employees steadily take home higher percentages of local funds.

Now is not the time to lift the limit on arbitration awards.  If the cap on interest arbitration expires, while the 2% property tax levy cap remains in effect, municipalities will be forced to reduce or eliminate municipal services in order to fund interest arbitration awards.

As long as there is a 2% cap on the tax levy there must be a 2% cap on the interest arbitration awards.

If you have not done so already, we urge you to pass a resolution (word or pdf) urging the State Legislature and Governor to extend the 2% cap on Police and Fire Arbitration Contract Awards for an additional five years, at which time the Legislature will have hard data to examine and then make a final decision as to whether this law should be made permanent.

And local leaders should continue education their state officials, candidates for office and the general public on why this management tool must be extended.

Please take action!



U.S. District Court Strikes Down Federal Overtime Rules


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town-crier_facebookRecently, the U.S. District Court for the Eastern District of Texas issued a ruling that impacts New Jersey municipalities and businesses.  In State of Nevada, Et Al. v. United States Department of Labor a group of states and national business groups challenged the Department of Labor’s recently adopted regulations regarding overtime payment for certain salaried employees.  More specifically, at issue was whether or not the Department of Labor (“DOL”) was granted the authority under the Fair Labor Standards Act (“FLSA”) to create a rule which uses the amount of salary as a determining factor for when overtime payments must be made to employees.

Prior to being found unlawful, the 2016 regulations provided that employees could not qualify for the exemption to overtime payment requirements found in the FLSA, regardless of their duties, if they earned a salary less than $47,476.  The regulations also provided for an annual increase in the salary threshold used in determining overtime payment exceptions.  Regulations in effect before 2016 determined exemptions to overtime payments based on a duties test and used a very low salary threshold merely as a means to filter out extreme circumstances where the overtime exemption would not apply.

The court found that the DOL did not have the authority to create a test for overtime payment eligibility that was based primarily on a salary threshold which effectively abandoned a duties test.  The court was sure to clarify that while the DOL could use a salary level test when determining overtime pay exemptions, the salary set by the new regulations was far too high, thereby impermissibly supplanting an analysis of an employee’s job duties.

This ruling is beneficial to employers, including municipal employers, as the increase in the salary threshold for overtime payments would have likely meant an increase in municipal payroll obligations.  Or in the alternative, taxpayers could have seen a reduction in government services as municipalities would have likely prohibited salaried employees from working longer hours that would have required overtime payments.

Due likely to a mixture of legal concerns over the 2016 regulations and differing political ideologies, the DOL, under the new administration, is attempting to revisit the issue of overtime payments and other regulations under the FLSA.  In revisiting these issues the DOL in late July posted a request for information and public comment regarding the current overtime exemptions.

You should review this ruling with your municipal attorney for more information on how the ruling will impact your municipality.

Contact: Frank Marshall, Esq.League Staff Attorney, FMarshall@njslom.org, 609-695-3481 x137.


OPRA and OPMA Bills Amended


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correct size blogAt their June 29 meeting, the Senate Budget and Appropriations Committee amended and released without recommendation, S-1045, which amends the Open Public Meetings Act, and S-1046, which amends the Open Public Records Act. The bills now await consideration by the full Senate, although we do not expect a vote until after the November election. The Assembly companion legislation is referenced to the Assembly Judiciary Committee and has not advanced.

Unfortunately, the League and others were unable to testify in opposition to the bills at the June 29 hearing. While we did present detailed written comments on the bills,  no verbal testimony was taken from anyone other than the bill’s sponsor. During her remarks, Senator Weinberg noted that she had sent a letter to all the Mayors in the State and only heard back from one Mayor expressing concerns with the proposed legislation. If you have not already done so, we strongly suggest that you contact Senator Weinberg expressing your concerns with the proposed legislation.

The amendments to the Open Public Records Act (OPRA) bill include provisions, which:

  • Change the requirements on petitions for a protection order to limit the number of and scope of requests, as follows:
    • Requires a filed verified petition to the Superior Court instead of an appearance before Superior Court.
    • Must allege that the requestor has sought records, under OPRA, for the sole purpose to harass a public agency.
  • Add language that permits the governing body to enter into an agreement with a volunteer fire company or volunteer fire department so the municipal clerk can serve as the records custodian for the volunteer fire company/department.
  • Amend the alarm system exemption in OPRA to only private alarm systems and surveillance cameras.
  • Add “an intern and volunteer employee” to the definition of Public Employee.
  • Remove the language that exempted from OPRA the disclosure of personal identifying information of persons under the age of 18.
  • Remove the address of record provision of the bill which would have permitted an individual to provide an address other than their home address for disclosure purposes.
  • Add the award of any contract to “advisory, consultative or deliberative material” definition. As a result, material that is used and relied upon during the consultative process prior to the completion of a competitive application, the award of any contract, or adoption of an ordinance, rule, regulation…..would be considered “advisory, consultative, or deliberative” and exempt from OPRA.
  • Add e-mail addresses provided to the public agency as contact information on any official government form as an exemption to OPRA
  • Add EZ pass records (or substantially similar) to the definition of public record thereby making it subject to OPRA. However, law enforcement usage of EZ pass would be exempt.
  • Change requirements for redaction of records, as follows:
    • Permits the records custodian to provide a certified statement instead of an affidavit.
    • Requires the custodian to redact information by deleting or obscuring only that information; while not altering, in any manner, the space in the government record formerly occupied by such redacted information.
  • Amend the provision that allows the records custodian to direct the requestor to the public agency’s website where the records can be found and deem the request to be fulfilled. The language amended requires the requestor, within 7 business days, to “respond to the records custodian with specificity” that they prefer to purchase copies rather than “advising the requestor”.
  • Add the requirement that the public agency which maintains a government record in a format or medium that can be inspected without charge to the requestor to:
    • Inform the requestor of the place and time that the record will be available for inspection in such format or medium;
    • Permit the requestor to purchase copies of such records, at the requestor’s option; and
    • Allow the requestor 7 business days to respond to the custodian, specifying that they prefer to purchase the copies, otherwise the request may be deemed fulfilled.
  • When the request is a commercial request:
    • The public agency may charge, in addition to the actual cost of duplicating the record, a special administrative charge;
    • A special administrative charge shall be reasonable and related to ongoing operational expense and shall be for expenditures eligible for inclusion;
    • GRC is to establish the criteria and parameter for expenditures eligible for inclusion; and
    • The commercial requestor must certify to the fact that the request is for commercial use.
      • The public agency may require a requester to state whether the requested records are for a commercial purpose
      • However, the public agency shall not require the requestor to provide the exact purpose of the commercial request
    • Provide that a Municipal records custodian:
      • May direct any officer or employee of that municipality having custody of the record to act on the records custodian behalf and make the record available for inspection, examination, copying, or purchase of copies.
      • However, such direction does not relieve the records custodian of any responsibility under OPRA.
    • Amend the composition of the Government Records Council, as follows:
      • 1 person who has experience with the news media (instead of 2).
      • 1 person who is a member of the Municipal Clerks Association (instead of a person who has experience with powers, functions or duties of a municipal clerk).
      • 1 person who is a member of the New Jersey Press Association.
      • The person with experience in State government must have experience as public records custodian.

The amendments to the Open Public Meetings Act (OPMA) bill include the following:

  • An amended definition of Agenda, which would:
  • Remove the language “for which notice was given 48 hours prior to the meeting”. Instead, the bill states “no public body shall act upon a matter that is not listed on the agenda.”   Please note, the bill still permits the adding on an agenda item after the agenda becomes available, if a majority votes that the item is “of such urgency and importance that a delay for the purpose of providing adequate notice would likely result in substantial harm to the public interest” and the minutes must include the reason why it was added, not on the original agenda, and  why delaying action would result in substantial harm to the public.
  • Remove the requirement to simultaneously make available any government record that is an attachment, appendix, or other documents on the public body’s website.
  • Add a requirement that the agenda must include a statement that an attachment, appendix or other documents that are a government record is available for inspection, copying or purchase of copies. If such a request is received at least 24 hours prior to the meeting, the records custodian must send an electronic copy of the government record.  If such a request is received within 24 hours of a meeting, the documents must be made available to the requestor at the meeting of the public body.
  • The timeframe, in which minutes must be made available to the public, would be changed from 60 days after the meeting to “15 days after the next meeting of the public body occurring after the meeting for which the minutes were prepared.” The bill still includes the language with the exception of closed session matters.
  • Removal of the requirement to include copies of any electronic communications that may take place during a public meeting. Instead, the electronic communication must be filed with the municipal clerk for a period of time determined by the State Records Committee to “permit their use in litigation, to enforce the provisions of the Open Public Meetings Act, or for public access”.
  • Changes to the requirements for posting minutes on the municipal website. Municipalities will still be required to post their minutes, except closed session. However, a statement that the closed session minutes are available upon request if those minutes have been deemed a government record pursuant to OPRA.
  • An added requirement that reports of the subcommittees be open to the public in the same manner as minutes.

As a result of the amendments, the League has the following new concerns with the legislation:

  1. Protection Order: The bill changes the requirements of a records custodian or public agency seeking a protective order limiting the number of and scope of the request.  The new language requires that the public agency/custodian allege that the requestor has sought records for the sole purpose to harass a public agency.  This threshold makes this provision a ‘toothless tiger’ and will never be met.
  2. Expand the definition of public employee:  The bill would expand the definition of public employee to include interns and volunteers. This provision is too broad, unnecessary, and otherwise ambiguous.  Currently, any work product of an intern is subject to OPRA under the definition of a government record.  However, we question who will fall under the definition of volunteer.  For example, is it the member of the volunteer first aid squad that is a non-profit or the Little League football coach to be considered a public employee?
  3. Exemption of alarm systems and surveillance cameras: The bill would limit the disclosure of information, including location, of alarm systems and surveillance cameras to private systems only.  As a result, publicly owned alarm system and surveillance camera information, including location, would be subject to disclosure under OPRA.  The League is concerned regarding security and privacy issues that may arise as a result of public disclosure of the location of the publicly owned alarm systems and surveillance cameras. 
  4. Release of Minutes: The bill would require that minutes be made available as soon as possible, but no later than 15 days after the next meeting of the public body occurring after the meeting for which the minutes were prepared.   The League appreciates the intent of this provision, however, this mandated requirement will be challenging in smaller municipalities and in municipalities with limited resources. 
  5. Municipal Clerks as Volunteer Fire Company Records Custodian: The bill would permit a municipality to enter into an agreement with its volunteer fire company/department where the municipal clerk would serve as the records custodian for the volunteer fire company/department.  Significant implementation and practical issues could arise from this well-intended provision.  By their very definition, most volunteer fire companies/departments are independent of the municipality.  They have their own headquarters, leadership, and policies and procedures.  How will the records custodian be able to ascertain if a record exists or access the records?

The League continues to be concerned with the following outstanding issues:

  1. Subcommittees:  The definition of subcommittees has been changed to “any subordinate committee of a public body, except the Legislature, regardless of label, that is formally created by that body, comprised of two or more members, but less than a quorum, of the public body, and recognized by the public body as a subcommittee thereof.”  Subcommittees would be required to prepare at least quarterly reports of their meetings that must include; the number of meetings held since the last report, the names of members of the subcommittee, and a concise statement of the matters discussed.  Every subcommittee must file at least one report with the public body.  A subcommittee report is available for public access in the same manner as minutes of a meeting of the public body.  If the subcommittee has given an oral report at a meeting of the public body, then they are not required to submit the written report for that quarter. The public body must determine if a subcommittee meeting is open to the public.  If the meeting is open to the public, adequate notice must be provided. The purpose of subcommittees is to make recommendations to the governing body for the governing body to take action. Subcommittees are designed to digest and vet information informally. Subcommittees do not expend public funds nor make binding decisions. That power remains with the governing body. Therefore, they should not be subject to the provisions of the Open Public Meetings Act.   Please note that Senator Weinberg strongly believes the language in the bill permits the governing body to make a subcommittee open to the public but does not mandate the requirement.  We respectfully disagree.
  2. Prevailing Attorney Fees: The OPRA bill continues to mandate prevailing attorney fees for violation of OPRA, and the OPMA bill is changing prevailing attorney fees from permissive to mandatory. The Courts and the Government Records Council need the flexibility to award reasonable attorney’s fees based on the given circumstances of a particular case. The inherent ambiguities of OPRA often times require clarity which can only be achieved through the GRC. The cost for clarifying these ambiguities is more often than not bore entirely by municipalities and property taxpayers.
  3. Expands the definition of Government Records:  The bill expands the definition of government record to include a record that is “required by law to be made, maintained or kept on file.”  Currently, if an OPRA request is received for a document that does not exist, the OPRA request is denied and there is no violation of OPRA.  By expanding the definition, a Records Custodian will be in violation of OPRA if the record was required to be made (e.g. an old municipal budget) but they are unable to locate the archived record.  The bill does provide protections to limit the record custodian liability, but the Records Custodian will still be in violation of OPRA.
  4. Exemption of the Legislature:  Both bills continue to exempt the Legislature from many requirements of the Open Public Meetings Act and all of the requirements of the Open Public Records Act.  In the interest of transparency and openness, the various exceptions in the Open Public Meetings Act and Open Public Records Act that applies to the Legislature should be removed. The rules that the legislation makes applicable to other governmental bodies should apply equally to all governmental levels and officials.

The League remains concerned with the legislation’s impact on daily operations, staff time and resources, with the subcommittee language, with the continued exemption of the Legislature, and with a municipality’s increased exposure to liability and frivolous lawsuits.

We ask you to carefully consider the impact that these bills would have on municipal operations and budgets. Based on those considerations, please contact your State Legislators, urging them to oppose S-1045 and S-1046.

Contact: Lori Buckelew, Senior Legislative Analyst, lbuckelew@njslom.org, 609-695-3481 x112.



Federal Infrastructure Funding Update


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When Congress returns from recess next week, members face a daunting inventory of program expiration deadlines. The debt limit will have to be raised. The National Flood Insurance Program (NFIP) will need to be renewed by the end of September. The Children’s Health Insurance Program (CHIP) could expire on September 30.  Legislative action will be needed to extend the life of the Federal Aviation Authority (FAA). And the new Federal Fiscal Year will begin on October 1. On top of all that, Congressional action will be needed to address the devastation wrought by Hurricane Harvey.

Facing this long line of hurdles, and according to Press reports, Speaker of the House Paul Ryan believes that a Continuing Resolution (CR) will likely be needed to extend federal spending authority in the coming fiscal year. As you recall, after a series of Continuing Resolutions, the final appropriations bill for the current fiscal year was signed into law this past May 5.

Reliance on a Continuing Resolution would likely freeze current year spending levels for federal programs and agencies, pending final action on FY 2017-2018 appropriations. In 2015, Congress passed and the President signed the five-year Fixing America’s Surface Transportation (FAST) Act. That act authorized annual increases in federal aid to State departments of transportation, subject to annual Congressional appropriations. This year, absent separate treatment of US Department of Transportation appropriations, a CR would likely freeze transportation infrastructure funding at current year levels, at least until completion of the FY ‘18 appropriations process.

Word out of Washington also portends a further delay in the introduction of the Administration’s long-promised $1 trillion infrastructure program. With tax reform now gaining prominence, infrastructure will likely remain on the back burner until 2018.

Meanwhile, the US DOT has reconfigured some existing grant programs and launched the Infrastructure for Rebuilding America (INFRA) discretionary grant program through a Notice of Funding Opportunity (NOFO) in the Federal Register. (Applications must be received by November 2, 2017.)

According to US DOT, “the INFRA program will make approximately $1.5 billion available to projects that are in line with the Administration’s principles to help rebuild America’s crumbling infrastructure  In addition to providing direct federal funding, the INFRA program aims to increase the total investment by state, local, and private partners.” As the Department’s Press Release states:

INFRA advances a pre-existing grant program established in the FAST Act of 2015 and utilizes updated criteria to evaluate projects to align them with national and regional economic vitality goals and to leverage additional non-federal funding. The new program will increase the impact of projects by leveraging capital and allowing innovation in the project delivery and permitting processes, including public-private partnerships.

Additionally, the new program promotes innovative safety solutions that will improve our transportation system. INFRA will also target performance and accountability in project delivery and operations.

The Department will make awards under the INFRA program to both large and small projects.  For a large project, the INFRA grant must be at least $25 million.  For a small project, the grant must be at least $5 million. For each fiscal year of INFRA funds, 10% of available funds are reserved for small projects.

The INFRA grant program preserves the statutory requirement in the FAST Act to award at least 25% of funding for rural projects. The Administration understands that rural needs may well exceed this limit, and the Department will consider rural projects to the greatest extent possible.  For rural communities in need of funding for highway and multimodal freight projects with national or regional economic significance, INFRA is an opportunity to apply directly for financial assistance from the federal government. For these communities, DOT will consider an applicant’s resource constraints when assessing the leverage criterion.

INFRA grants may be used to fund a variety of components of an infrastructure project, however, the Department is specifically focused on projects in which the local sponsor is significantly invested and is positioned to proceed rapidly to construction. Eligible INFRA project costs may include: reconstruction, rehabilitation, acquisition of property (including land related to the project and improvements to the land), environmental mitigation, construction contingencies, equipment acquisition, and operational improvements directly related to system performance.

Applicants may resubmit their previous FASTLANE application, but must explain how the project competitively addresses the improved INFRA Grant criteria.  This NOFO will remain open until 8:00 PM EST, November 2, 2017.

We will do our best to keep you posted on further developments or lack thereof.

Contact:  Jon Moran, Sr. Legislative Analyst, jmoran@njslom.org or 609-695-3481 x121.


Changes When Financing Environmental Infrastructure and Recent EIT Program Revisions


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The Division of Local Government Services recently issued Local Finance Notice 2017-16, “Environmental Infrastructure Trust: the “WISE” Act and Recent Program Changes” jointly with the New Jersey Environmental Infrastructure Trust (EIT) summarizing recent EIT related legislation along with new requirements when financing environmental infrastructure projects.

In May, Governor Christie signed the “WISE” Act (P.L. 2017, c.71) which made changes to both the EIT program as well as implementing new requirements for municipalities financing environmental infrastructure projects.  Beginning November 7, 2017, any local government unit financing $1 million or greater for any environmental infrastructure project (or project component) without using the EIT Program must first complete an EIT Financial Cost Estimate by using EIT’s WISE Calculator. A pdf of the Cost Estimate must be included with the local unit’s emailed Supplemental Debt Statement. If the local unit is submitting an application with the Local Finance Board for financing their project, then a printed Cost Estimate must be included with their application. The Local Finance Board has reserved the right to request a printed Cost Estimate for applications submitted prior to November 7.

EIT’s Wise Calculator Cost Estimate will compare the cost of financing environmental infrastructure project through an independent bond issuance versus EIT. “Utilizing independent financial data and the borrower’s submitted information, the Calculator immediately generates a Cost Estimate report detailing annual cash flow projections and total estimated debt savings over the life of the loan.”

For questions regarding the WISE Calculator contact the EIT at 609-219-8600.

Recent EIT Program Revisions

The New Jersey Environmental Infrastructure Program (NJEIFP) is a low-interest financing program offered jointly by the Department of Environmental Protection (DEP) and EIT. The following recent changes have been made to the program to enhance flexibility and attractiveness of EIT financing to local governments.

  • Maximum loan terms have been extended to 30 years, but not to exceed the useful life of a project, to reduce annual debt service payments.
  • Applicants can apply for and receive short-term project financing from EIT anytime throughout the year, subject to DEP project certification.
  • Submission and review process is available online through the H2Loans portal.
  • Expedited Review of Equipment Loan applications for such equipment as a street sweeper, sewer flushing, and dump trucks in under 60 days.
  • NJEIFP loan applications will be approved by DLGS Director instead of the Local Finance Board.
  • Elimination of Local Finance Board approval for non-conforming maturity schedules for NJEIFP loan.
  • Automatic statutory waiver of the 5% down payment requirement for bond ordinances that exclusively fund EIT projects.
  • Short-Term Construction Loans, up to 3 full fiscal years, to allow for the completion of a project. Acts like a line of credit wherein a borrower receives funds for eligible project expenses upon approval of submitted invoices and only pays interest on funds drawn.
  • SAIL” Program provides quick access to short-term funding in the aftermath of a declared disaster.

We suggest you review this notice with your Chief Financial Officer and local bond counsel.

Contact: Lori Buckelew, Senior Legislative Analyst, lbuckelew@njslom.org, 609-695-3481 x112.

Accounting for Uniform Construction Code Enforcement Fees



correct size blogOn August 11 the Division of Local Government Services issued Local Finance Notice 2017-15 jointly with the Division of Codes and Standards to remind municipalities of statutory fee limitations and how construction code fees must be accounted and budgeted.  According to the notice, the Division issued it into the response to “instances where municipal construction code enforcement offices are consistently earning revenue well in excess of the offices’ operating costs.”

N.J.S.A. 52:27d-126a requires the municipality, by ordinance, to set enforcing agency fees for plan review, construction permit, certificate of occupancy, demolition permit, moving of building permit, elevator permit, and sign permit, in accordance with standards established by DCA.  However, those fees cannot exceed the annual costs for the operation of the construction office.  By regulation (N.J.A.C. 5:23-4.17(c)), the fees must be calculated to reasonably cover the municipal costs of enforcing the regulations to ensure that construction code revenue is used only for construction code enforcement purposes and by the means to make revenue available year to year.  The regulations further define which costs can be covered.  They include salary and employment benefits; cost of motor vehicle used for enforcement; direct costs in support such as equipment, supplies, furniture, maintenance of equipment, printing, safety equipment; professional expenses; fees for contracted private on-site inspection agencies; documented legal costs in connection with construction code enforcement litigation; annual audit fees; and indirect overhead, and other expenses of the municipality in support of the enforcing agency. Indirect and overhead expenses cannot exceed 12% of all other costs of the construction office unless the indirect and overhead expense of the municipality exceeds 12% of the municipal budget.  Then indirect and overhead construction office cost can be increased in proportion to the municipal budget’s overall indirect and overhead expenses.

If construction code enforcement is provided by a shared service agreement, one uniformed fee schedule must be applied by all parties of the agreement.  The lead agency is responsible for collecting the fees with no additional fee required to be paid by an applicant to any municipality or county.  If construction code enforcement is provided by a private on-site inspection and plan review agency the fees cannot exceed the contracted amount the municipality pays to the third party vendor, except to cover additional overhead and other operational cost incurred by the municipality.

Municipalities have two options on how to dedicate any revenues earned from the construction code enforcement fees.  The first is to state the fee revenues in a separate section of the municipal budget together with appropriations for the purposes to which such revenues are applicable; with the total of anticipated revenues equaling the total appropriations.  When using this method, the current year revenue cannot exceed the prior year realized revenue, with certain exceptions.  The second method is to dedicate the Uniformed Construction Code Enforcement fees using a “dedicated by rider.”  This method permits the accumulation of funds at a reasonable level to offset future code enforcement expense.

State regulation also requires that the appropriation and expenditures for the construction code fee revenues be tested annually as part of the municipal audit.   DCA will notify municipalities if they are required to perform further sample testing by March 1 for Calendar Year municipalities and September 1 for State Fiscal Year municipalities.  The outcome of such testing must be a separate opinion in an addendum to the annual Audit.

We suggest you review this notice along with the Local Finance Notice with your Chief Financial Officer, Construction Code Official, and Municipal Auditor.

Contact: Lori Buckelew, Senior Legislative Analyst, lbuckelew@njslom.org, 609-695-3481 x112.


Recent Court Decisions Impacting OPRA



correct size blogTwo recent court decisions have been issued dealing with the Open Public Records Act (“OPRA”).  The first case issued on August 3, 2017, is an Appellate Court decision concerning the ability of the Superior Court to issue civil penalties for the “knowingly and willful” violations of OPRA.  The second, a NJ Supreme Court case issued on August 7, 2017, deals with a question regarding a fire district and a volunteer fire company’s status as a public agency subject to OPRA.

You should review both of these cases with your municipal attorney for information on how these cases may impact you.

OPRA’s Civil Penalties

On August 3, 2017 the Appellate Division published its opinion in North Jersey Media Group Inc., d/b/a The Record v. State of New Jersey Office of the Governor. This case dealt with whether or not the Superior Court has the power to issue civil penalties under certain OPRA provisions or whether the authority to issue these civil penalties rests exclusively with the Government Records Council (“GRC”).

Due to some unclear language within the OPRA statute, the question was raised as to whether or not the Superior Court shared authority with the GRC to issue civil penalties for “knowingly and willful” violations of OPRA.  The State took the position that the statute allows for the civil penalty for an OPRA violation to be handed down only by the GRC, despite the aggrieved requestor having the option to bring a dispute before either the GRC or the Superior Court.  North Jersey Media Group (“NJMG”) countered that this interpretation of the statute was flawed.  In their view, it would make no sense for the civil penalty to be limited only to disputes brought before the GRC when the aggrieve requestor has the choice to bring the dispute in either venue.

The trial court agreed with the State, the Appellate Division, however, did not and ruled that both the Court and the GRC had the authority to hand down OPRA’s civil penalty and that a reading of the statute otherwise would frustrate the purpose of the penalty.

Defining a Public Agency Under OPRA – A Tale of an Instrumentality of an Instrumentality

On August 7, 2017, the NJ Supreme Court issued its opinion in Robert A. Verry v. Franklin Fire District No. 1 (A-77-15)(077495).  This case dealt with whether or not a fire district and a volunteer fire company that is part of that fire district are public agencies and therefore subject to the requirements of OPRA.  In a 5-2 decision, the Court ruled that the Fire District is a public agency and therefore subject to OPRA but that the volunteer fire department, which is part of the Fire District, is not a public agency and therefore not subject to OPRA.

This conclusion was reached after the Court found the fire district to be an instrumentality of a political subdivision and therefore subject to OPRA.  Further, the Court decided that the volunteer fire department, which is part of the Fire District, is only an instrumentality of an instrumentality and therefore not subject to OPRA.  The Court reasoned that the volunteer fire department is not subject to OPRA because only public agencies are subject to OPRA and the law does not define an instrumentality of an instrumentality as a public agency.

The reasoning for the decision is complicated and you may find the breakdown below helpful in following the Court’s reasoning.

Fire District = Instrumentality of Political Subdivision (municipality) = Public Agency = Subject to OPRA

Volunteer Fire Company = Instrumentality of Instrumentality (Fire District) = Not Public Agency = Not Subject to OPRA

While the Court ruled that the volunteer fire department, which is part of the Fire District, itself is not subject to OPRA it did rule that the fire district is, and because the district acts as the supervising agency of the department, the fire district “has certain responsibilities under OPRA to provide public access to records relating to that supervision.”  Therefore, any documents which are necessary for the district’s supervision of the volunteer department should be made available under OPRA via a request to the district, even though those records do not need to be made available through an OPRA request to the department.

For more information in connection to this blog click here.

Contact: Frank Marshall, Esq., League Staff Attorney, fmarshall@njslom.org or 609-695-3481 x137.