N.J. Admin. Code § 5:31-2.1

Current through Register Vol. 56, No. 11, June 3, 2024

Section 5:31-2.1 - Annual budget preparation and content for authorities other than fire districts

(a) Every authority shall prepare an annual budget for each fiscal year in which an expenditure of money is expected. Each budget shall include an operations section, capital budget and capital program section, and supplemental schedule and necessary certifications relating thereto.

(b) The budget shall comply with the terms of any security agreement and be prepared in compliance with these regulations.

(c) The total budget appropriations shall not exceed total anticipated revenues reasonably expected to be realized.

(d) Every budget shall be prefaced by a narrative explanation of its contents, entitled "Budget Message & Analysis," which shall consist of the following:

1. A brief statement on the proposed year's budget compared to the current year's adopted budget for each operation, including reasons and supporting documentation for any increase or decrease in the budgeted line item by greater than 10 percent;

2. A brief statement on the impact the proposed budget will have on anticipated revenues, especially service charges, and on the general purpose financial statements and any component unit financial statements as described by N.J.A.C. 5:31-7.8, including an explanation for any increase or decrease greater than 10 percent from the current year's adopted budget;

3. A description of how the state of the local and regional economy may impact the proposed budget, including the capital budget and capital program;

4. The reasons for utilization of unrestricted net position funds;

5. Identification of any sources of funds transferred to the county or municipality under a shared service or as a budget subsidy, with an explanation of the reason for the transfer;

6. Excluding housing authorities, if the authority's rate structure has changed since the prior budget year submission, the authority's existing rate schedule along with a schedule of the proposed rate, fee, or charge structure for the upcoming fiscal year, with an explanation of any proposed changes in said structure and the resolution from the authority's governing body approving the change in the rate, fee, or charge structure; and

7. The reasons for an accumulated deficit, existing or anticipated, subject to the provisions of N.J.S.A. 40A:5-12, along with a deficit reduction plan and an explanation of how the funding plan would eliminate the deficit.

(e) Signatures required on all budget documents, budget amendments, and information supporting the budget shall be hand-written signatures or, for electronically generated documents, electronic signatures.

(f) Annual budgets, capital budgets and capital programs shall be prepared on standard forms provided by the Division as prepared by the Director.

(g) All introduced budgets, adopted budgets and budget amendments shall contain the recorded vote of the governing body.

(h) For every budget, operating appropriations shall be itemized as to salaries and wages, fringe benefits and other expenses and further classified as to administration and cost of providing service and include total principal payments on debt service in lieu of depreciation.

(i) For every budget, except for housing authorities, non-operating appropriations shall be itemized to include the following:

1. Total interest payments on debt;

2. Operations and maintenance reserve;

3. Renewal and replacement reserve;

4. Municipal/county appropriation; and

5. Other reserves.

(j) For every housing authority budget, non-operating appropriations shall be itemized to include the following:

1. Net interest debt payments for other than Federally guaranteed debt;

2. Operations and maintenance reserve;

3. Renewal and replacement reserve; and

4. Other reserves.

(k) For every authority, revenues generated by the imposition of service charges or fees upon users of one type of operation shall be accounted for, kept, and utilized separately from the revenues generated by the imposition of service charges or fees imposed upon the users of other operations administered by the authority. Accordingly, each authority shall complete a separate authority budget column for each type of operation being provided, pursuant to the provisions of N.J.S.A. 40:14B-1et seq., 40A:5A-1 et seq., and 52:27BB-1 et seq. Once it is determined that an operation should be accounted for in this way, a separate enterprise fund shall be established for each operation provided by the authority, consistent with accounting and financial reporting systems requirements specified in N.J.A.C. 5:31-7.1.

(l) Every authority budget shall contain schedules, in a format prescribed by the Director, for the following items:

1. A cost analysis of employee health benefits comparing the prior and current years, including, but not limited to, the:

i. Number of covered members;

ii. Total annual cost;

iii. Annual cost, broken down by active employees, retirees, and governing body members; and

iv. Cost sharing by benefit recipients;

2. Compensation paid by the authority to the authority's governing body members, key employees, highest compensated employees, and independent contractors. Individual detail shall be provided on, at a minimum, compensation and hours worked per week;

3. Accumulated liability for compensated absences, which shall, at a minimum, provide gross days of accumulated absences at the beginning of the current year, dollar value of compensated absence liability, and the legal basis for the benefit;

4. A listing of all shared service agreements to which the authority is a party; and

5. Such other information as the Director may require in order to approve authority budgets pursuant to N.J.S.A. 40A:5A-11 or otherwise comply with the user-friendly budget provisions of N.J.S.A. 40A:5-48relevant to authorities.

(m) Every authority budget shall provide the following information:

1. The number of employees and total compensation information listed on the authority's W-3 Form;

2. The number of regular voting and alternate members of the governing body;

3. Whether the authority has any amounts receivable from current or former commissioners, officers, key employees, or highest compensated employees and, if so, a list of said individuals, their position, the amount receivable, and a description of the amount due to the authority;

4. Whether the authority was party to a business transaction with a current or former commissioner, officer, key employee, or highest compensated employee, or a family member of any of the commissioners, officers, key employees, or highest compensated employees. The authority shall also disclose whether it was a party to any business transactions with an entity in which a current or former commissioner, officer, key employee, or highest compensated employee, or a family member of any of the commissioners, officers, key employees, or highest compensated employees were an officer, direct owner, or indirect owner. If the answer is "yes," a description of the transactions shall be provided along with the name of the individual(s), the name of the entity and its relationship to the individual(s) (if applicable), the amount paid, and whether the transaction was subject to a competitive procurement process;

5. Whether the authority, during the most recent fiscal year, directly or indirectly, was responsible for paying premiums on a personal benefit contract, such as a life insurance, annuity, or endowment contract. If so, a description of the arrangement, the premiums paid, and the beneficiary of the contract shall be provided;

6. An explanation of the authority's process for determining compensation for all persons listed on the schedule detailing public entity compensation for authority governing body members, key employees, highest compensated employees, and independent contractors, including whether the process includes:

i. A study or survey of compensation data for comparable positions in similarly sized entities;

ii. Prior review by an independent compensation consultant;

iii. Review and approval by the governing body or a committee thereof;

iv. A written contract; and

v. Annual or periodic performance evaluation;

7. A detailed list of meals and catering invoices for the current fiscal year, with an explanation for each expenditure listed;

8. A detailed list of any of the following expenses paid by the authority for authority governing body members, key employees, highest compensated employees, and independent contractors, including:

i. Travel;

ii. Tax indemnification and "gross-up" payments;

iii. Discretionary spending;

iv. Housing and vehicle allowances;

v. Payments for business use of personal residence;

vi. Health or social club dues, including initiation fees; and

vii. Personal services including, but not limited to, maids, chefs, and chauffeurs;

9. Whether the authority has, and follows, a written policy regarding payment and reimbursement of expenses incurred by employees and/or governing body members during the course of authority business and an explanation of the policy, including whether the policy requires substantiation of expenses through receipts or invoices prior to reimbursement;

10. An explanation regarding any payments to employees or governing body members for discretionary bonuses, severance, or termination;

11. All notices received from any State or Federal agency concerning maintenance and repairs for facilities, systems, and other infrastructure that the authority has not yet remediated, along with an explanation as to each;

12. All notices of fines, penalties, or assessments issued by any State or Federal agency, along with the amount and a description of the underlying event(s); and

13. Such other information as the Director may require in order to approve authority budgets pursuant to N.J.S.A. 40A:5A-11, and in the case of regional sewerage authorities, N.J.S.A. 40:14A-4.2, or otherwise comply with the user-friendly budget provisions of N.J.S.A. 40A:5-48relevant to authorities.

(n) Regional authorities shall state whether all individuals classified as local government officers pursuant to the Local Government Ethics Law, N.J.S.A. 40A:9-22.1et seq., have filed financial disclosure statements, as required pursuant to N.J.S.A. 40A:9-22.6.

(o) A housing authority shall disclose whether the authority has been deemed "troubled" by the United States Department of Housing and Urban Development, and, if so, a description of the authority's plan to address the identified conditions.

(p) A budget submission shall contain a certification of compliance, by the authority, with the provisions of N.J.S.A. 40A:5A-17.1, pertaining to the maintenance of an Internet website or webpage.

N.J. Admin. Code § 5:31-2.1

Amended by R.1985 d.511, effective 10/21/1985.
See: 17 New Jersey Register 1823(a), 17 New Jersey Register 2537(a).
(d) through (h) added.

Amended by 53 N.J.R. 50(a), effective 1/4/2021