N.J. Admin. Code § 17:49-7.2

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:49-7.2 - Project analysis

(a) In addition to a formal letter of project approval obtained from the Commissioner of Education, a school district, via a determination by the board of education, and where relevant, a municipal governing body, shall determine and document, for submission of an application to the Office of Public Finance, for approval to enter into a public-private partnership, its analyses based upon the following threshold criteria:

1. A narrative of the project, including the role and responsibilities of the parties, and an assessment of the project's viability, including the outcome and objectives to be realized by the project;

2. An assessment of the benefits or risks to be realized by the project;

3. The total risk-adjusted cost of the project, including costs associated with procurement, financing, design, construction, operation, and maintenance (including oversight costs) over the useful life of the asset that will be built or the length (in years) of the potential public-private partnership agreement, both for delivery as a public-private partnership and delivery under a conventional public sector approach, or, for a charter school, the cost of using an existing facility, including rehabilitation of an existing building, in accordance with N.J.S. A. 18A:36B-10, supported by evidence from comparable projects. Except for a charter school, the analysis must include, at a minimum, a comparison of the present value of the future cost of leasing the completed project from the private entity over the lease term to the cost of self-financing the project using available capital reserve fund balances, and/or financing at the anticipated rate of debt issuance and debt service aid. The analysis must also include assumptions about the cost of early termination of the lease in accordance with the provisions at N.J.A.C. 6A:26-10.10;

4. A comparison of the financial and non-financial benefits of the public-private partnership, including the technical, technological, or socioeconomic merit of a project, compared to other options, including a public sector option, or not proceeding with a project;

5. A list of risks, liabilities, and responsibilities to be transferred to the private entity and those to be retained by the school district as well as an analysis of the financial capacity of the private entity and school district, including an analysis of how the project's execution shall impact the financial status of the school district;

6. An analysis that delivery as a public-private partnership will optimize schedule, cost (on a risk-adjusted and useful life basis) and quality outcomes for the project, relative to a public sector option; and

7. Whether the project has a high, medium, or low level of project delivery risk and how the public is protected from these risks.

(b) A school district's governing body, or in the case of a school district that requires municipal approval, both the school district's and municipality's governing body, shall make the following findings to establish that a project is in the best interests of the public, and shall provide supporting documents, including information on the financial strength of the school district, to support the findings made by a school district's governing body that:

1. There is a public need for the project and the project is consistent with the school district's long-range facilities plan pursuant to N.J.S.A. 18A:7G-4, or for a charter school, with the charter school's existing long-term plans, including its charter;

2. There are specific significant benefits to the project;

3. The project, including procurement, land acquisition, development approval, and financial analysis costs, will cost less than the public sector option, or if it costs more, there are demonstrable factors that warrant the additional expense, and that the project is consistent with Core Curriculum Content Standards established pursuant to N.J.S.A. 18A:7F-46;

4. There exists sufficient public sector financial and technical capability as well as market interest for the project to be delivered efficiently as a public-private partnership;

5. There are specific significant benefits to using the public-private partnership instead of other options including No-Build;

6. The private development will result in timely and efficient development and operation; and

7. The risks, liabilities, and responsibilities transferred to the private entity provide sufficient benefits to warrant not using other means of procurement and preserve the health, safety, and welfare of the building's occupants.

N.J. Admin. Code § 17:49-7.2

Adopted by 52 N.J.R. 898(a), effective 4/20/2020