N.J. Admin. Code § 5:31-2.4

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

Section 5:31-2.4 - Preparation and content of fire district annual budget; budget introduction and adoption for fire districts

(a) Every fire district 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 program section, and supplemental schedule and necessary certifications relating thereto. The Board of Commissioners shall introduce its annual budget by resolution, passed by not less than a majority of the full membership.

(b) The budget shall set forth all anticipated revenues and other financing sources of the district, including the following, where applicable:

1. Fund balance utilized;

2. Miscellaneous anticipated revenues, which shall not be such amounts as may reasonably be expected to be realized in cash during the budget year from known and regular sources, or from sources reasonably capable of anticipating, including amounts expected to be received from municipalities appropriating money for district purposes, but not including revenues from taxes to be levied to support the district budget;

3. Amount to be raised by taxation to support the district budget, which shall be the amount to be certified to the assessor of the municipality to be assessed against the taxable property in the district. Such amount shall be equal to the amount of the total appropriations set forth in the budget minus the total amount of surplus (fund balance) and miscellaneous revenues set forth in the budget;

4. Sale of assets;

5. Interest on investments and deposits;

6. Operating grant revenues;

7. Revenues offset with appropriations;

8. Other revenue; and

9. Any other specialized revenues that the Director may determine necessary based on circumstances affecting an individual fire district, so that revenues of the fire district are properly disclosed to the public.

(c) The budget shall set forth all of the appropriations of the district, including the following, where applicable:

1. For operating appropriations, the following shall be included, with personnel costs broken out, where applicable:

i. Administration;

ii. Operation and maintenance of each office or agency of the district;

iii. Reimbursement to employees of a fire district and any volunteer firemen having membership in a volunteer fire company within the fire district for expenses and losses actually incurred in the performance of their duties;

iv. Each paid position of a fire district, along with the compensation to be paid therefor;

v. Appropriations offset with revenue;

vi. Appropriations for duly incorporated first aid/rescue squad;

vii. Emergency appropriations and deferred charges; and

viii. Amounts necessary to fund any deficit, or anticipated deficit, from the preceding budget year;

2. Capital appropriations, which shall include the following:

i. Amounts necessary in the current budget year to fund or meet obligations incurred for capital purposes, including principal and interest on bonds, notes, capital leases, and intergovernmental loans, itemized according to purpose. For fire trucks, the term "capital lease" shall encompass not only lease-purchase agreements but also operational leases;

ii. For capital appropriations not paid for through borrowing:

(1) The date of the special meeting conducted pursuant to N.J.S.A. 40A:14-84;

(2) An affidavit of compliance with N.J.S.A. 40A:14-84adhering to the content and format set forth at N.J.A.C. 5:31-2Appendix C; and

(3) A certification of special meeting results adhering to the content and format set forth at N.J.A.C. 5:31-2Appendix D;

iii. For debt service, which shall include bond issuances, lease-purchase agreements, and the creation of any other debt or liability for permitted purposes, as applicable:

(1) The date of voter approval and percentages;

(2) The date of Local Finance Board approval; and

(3) A certification of special elections results adhering to the content and format set forth at N.J.A.C. 5:31-2Appendix E;

iv. Amounts reserved for future capital outlays;

v. Appropriations offset with grants;

vi. Appropriations offset with restricted fund balance; and

vii. Appropriations offset with unrestricted fund balance;

3. Length of service award programs, once approved by referendum pursuant to P.L. 1997, c. 388; and

4. Total appropriations shall be the sum of (c)1 through 3 above.

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

(e) Where the intended purpose of restricted fund balance is no longer essential, the board of fire commissioners may authorize a referendum seeking voter approval to release the restricted fund balance to be appropriated for other unrestricted purposes that provide and maintain essential services.

1. If the fund balance was restricted by a ballot question voted upon pursuant to N.J.S.A. 40A:14-85, the fund balance shall only be unrestricted by a referendum to be held on the third Saturday in February.

2. If the fund balance was restricted by voter approval at a special meeting held by a fire district that holds its annual election for board of fire commissioners on the third Saturday in February, the fund balance shall only be unrestricted with voter approval during a special meeting held pursuant to N.J.S.A. 40A:14-84.

3. If the fund balance was restricted by voter approval at a special meeting held by a fire district that holds its annual election for the board of fire commissioners in conjunction with the November general election, the fund balance shall only be unrestricted by a two-thirds vote of the full membership of the board of fire commissioners during a special meeting held pursuant to N.J.S.A. 40A:14-84.

(f) If a levy cap referendum is to be held pursuant to N.J.S.A. 40A:4-45.45, or a referendum to release restricted fund balance, an enabling resolution must be adopted by the majority of the full membership of the board of fire commissioners.

(g) Any resolution authorizing a levy cap referendum shall adhere to the content and format set forth in N.J.A.C. 5:31-2Appendix A. Any resolution authorizing a referendum on the release of restricted fund balance shall adhere to the content and format set forth at N.J.A.C. 5:31-2 Appendix B.

(h) If either a levy cap or restricted fund balance referendum is planned at the time of introduction of the budget, the resolution shall be adopted prior to the budget introduction, with a certified copy of the resolution being filed with the Director alongside the introduced budget. If the budget is amended prior to adoption, and the amendment either requires a levy cap or restricted fund balance referendum to take place or would change the question or questions to be brought before the voters, the resolution shall be adopted or amended, as appropriate, and filed with the Director.

(i) The district shall transmit two certified copies of its budget to the Director at least 60 days prior to the third Saturday in February, together with all relevant information as prescribed in this chapter, or as otherwise required by the Director. Upon implementation of the Financial Automation Submission Tracking (FAST) system, or such other automated system as may be implemented by the Director, the district shall electronically submit the certified budget to the Director at least 60 days prior to the third Saturday in February, together with all relevant information and documentation as prescribed in this chapter, or as otherwise required by the Director. The Director shall have the discretion to require the submission of one or more certified paper copies of the budget, together with all relevant information and documentation as prescribed in this section or as otherwise may be required by the Director, parallel to electronic submission.

(j) The following information and documentation shall accompany the budget:

1. A computation of the estimated fund balance or deficit from the preceding fiscal year, along with a reconciliation of fund balance for the current year;

2. A schedule of debt service (principal and interest) for the budget year and next succeeding five years;

3. The levy cap calculation pursuant to N.J.S.A. 40A:4-45.45;

4. If a levy cap referendum is to be held pursuant to N.J.S.A. 40A:4-45.45 and 40A:4-45.46 and /or a referendum is to be held on the release of restricted fund balance:

i. A listing of the specific amounts and budget line items for which funds approved at referendum would be utilized;

ii. A certified copy of the enabling resolution or resolutions adopted by the board of fire commissioners authorizing a referendum; and

iii. The proposed referendum question or questions;

5. Compensation paid by the fire district to commissioners and officers. The schedule shall, at a minimum, provide individual detail on compensation and hours worked per week;

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

i. The 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;

7. The accumulated liability for compensated absences that 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;

8. A listing of all shared service agreements to which the fire district is a party;

9. Any contract for the sale of assets; and

10. Such other information as the Director may require in order to approve fire district 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:5-48 relevant to fire districts.

(k) Every fire district budget shall contain a completed questionnaire with answers for the following questions:

1. Whether the fire district 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 positions, the amount receivable, and a description of the amount due to the authority;

2. Whether the fire district was party to a business transaction with a current or former commissioner, officer, or employee. The fire district shall also disclose whether it was a party to any business transactions with an entity in which any such individuals, or a family member thereof, was 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;

3. A detailed list of any of the following expenses paid by the fire district for fire district commissioners, 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;

4. An explanation regarding any payments to employees or commissioners for discretionary bonuses, severance, or termination;

5. A list of the fire district's vehicles, including make, model, and year, indicating to whom the vehicles are assigned and their positions;

6. If the fire district contracts with another entity to provide fire protection or emergency medical services within the district, whether there is a written agreement detailing the services the entity shall provide along with the amount to be paid by the fire district and, if there is no written agreement, the reason for not having a written agreement in place, the services provided, and the basis for the amount paid by the district;

7. Whether the fire district has a Length of Awards Service Program (LOSAP) plan and, if so:

i. The year in which the LOSAP was implemented;

ii. The total number of volunteers presently eligible to participate;

iii. The total number of vested volunteers;

iv. Whether the annual contribution for each vested member is fixed or based on an automatic increase;

v. The total amount budgeted for LOSAP for the current year; and

vi. Whether the fire district has required the plan contractor to submit its annual financial statement to the Director of the Division of Local Government Services pursuant to N.J.A.C. 5:30-14.49;

8. Such other information as the Director may require in order to approve fire district 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:5-48 relevant to fire districts.

(l) The budget and all relevant information shall be reviewed by the Director. If the Director finds that all requirements of law and the rules of the Local Finance Board have been met, the Director shall, within 45 days of his or her receipt of the budget, approve it; otherwise the Director shall, within that time, refuse to approve it. No district budget shall be adopted by the commissioners until the Director shall have approved the same, provided, however, that if the Director has not notified the commissioners of his or her approval or refusal to approve the budget and the conditions on which approval will be granted at the end of the 45-day period, the budget will be deemed to have been approved. Budget adoption shall be by a resolution passed by a majority of the full membership of the commission.

1. Two certified copies of the budget, as adopted, shall be transmitted to the Director within three days after adoption. Upon implementation of the FAST system, or such other automated system as may be implemented by the Director, the district shall electronically submit the certified adopted budget to the Director within three days after adoption. The Director shall have the discretion to require the submission of one or more certified paper copies of the adopted budget, together with all relevant information and documentation as prescribed in this section or as otherwise may be required by the Director, parallel to electronic submission.

2. One certified copy of the budget, as adopted, shall be transmitted by the fire district to the municipality within three days after adoption.

(m) In the event that the adopted budget is rejected at an annual election of the district held on the third Saturday in February, the governing body of the municipality shall, within 30 days after the annual election, prepare and adopt, by resolution passed by a majority vote of the full membership of the governing body of the local unit, the budget for the fiscal year of the district. The budget adopted by the governing body of the local unit shall be in the same line item and detail as that rejected at the annual election of the district held on the third Saturday in February.

1. Within three days after its adoption, the municipality shall transmit two certified copies of the budget, as adopted by the municipality, to the Director and one certified copy of the budget, as adopted by the municipality, to the commissioners of the district. Upon implementation of the FAST system, or such other automated system as may be implemented by the Director, the certified budget as adopted by the local unit shall be electronically submitted to the Director within three days after adoption. The Director shall have the discretion to require the submission of one or more certified paper copies of the adopted budget, together with all relevant information and documentation as prescribed in this section or as otherwise may be required by the Director, parallel to electronic submission.

2. No district budget adopted by a municipality shall become effective prior to approval by the Director.

(n) When the annual budget is approved at an annual election of the district held on the third Saturday in February or, for fire districts holding their annual election at the November general election, finally adopted by the board of fire commissioners of a fire district, or finally adopted by the local unit, as the case may be, it provides legal authorization for general fund spending. Adopted budgetary accounts shall be formally integrated in the general fund ledger.

(o) For fire districts whose annual elections coincide with the November general election and whose tax levies do not exceed the permissible property tax levy increase as determined pursuant to section 10 of P.L. 2007, c. 62 (N.J.S.A. 40A:4-45.45), the Director shall certify to the tax assessor of the municipality or municipalities in which the fire district is located the amount to be raised by taxation to support the year's fire district budget upon receipt of the budget adopted by the board of fire commissioners.

(p) For fire districts whose annual elections are held on the third Saturday in February, the board of commissioners shall certify to the Director no later than 10 days after the passage of the budget referendum, unless the Director grants an extension:

1. The amount to be raised by taxation, together with the tax rate per 100 dollars of assessed value, pursuant to N.J.S.A. 54:4-35, and the total "Yes" votes and total "No" votes;

2. The amount of any capital project subject to referendum and the total "Yes" votes and total "No" votes;

3. The results of any levy cap referendum held pursuant to N.J.S.A. 40A:4-45.45;

4. The results of any referendum to release restricted fund balance; and

5. The appropriated LOSAP amount subject to referendum and the total "Yes" votes and total "No" votes.

(q) Upon receipt of the certifications required at (p) above, along with the election results and a copy of the ballot, the Director shall certify to the tax assessor of the municipality or municipalities in which the fire district is located the amount to be raised by taxation to support the year's fire district budget. In the event a discrepancy exists between the levy in the adopted budget and the levy approved by the voters on the ballot, the Division will certify the lesser amount.

(r) In the event the adopted budget is rejected by a majority of the legal voters voting in the district at an annual election held on the third Saturday in February, the board of commissioners shall certify to the Director its intent to comply with N.J.S.A. 40A:14-78.5(b) relating to required actions by the governing body of the municipality in which the district is located, including holding a hearing and the setting of a budget for the district. In considering the budget, the governing body shall not reduce any debt service amount or any appropriated LOSAP amount affirmatively approved by the voters of the fire district.

(s) For fire districts whose annual elections coincide with the date of the November general election, in the event a levy cap or restricted fund balance referendum is held on the third Saturday in February of the budget year in which the levy increase would apply, the results of said referendum or referendums shall be submitted to the Director no later than 10 days after the referendum takes place, unless the Director grants an extension. Upon receipt of the referendum results, the Director shall certify to the tax assessor of the municipality or municipalities in which the fire district is located the amount to be raised by taxation to support the year's fire district budget.

(t) Every budget submitted to the Division shall include a budget message, which shall consist of the following brief statements:

1. The proposed year's budget compared to the current year's adopted budget, with a description of the reason for the increase or decrease over 10 percent in any line item along with any supporting documentation;

2. The impact the proposed year's budget will have on the amount to be raised by taxation to support the district and upon unrestricted or restricted fund balances, along with an explanation of the projected impact on the following year's budget if unrestricted fund balance is reduced by more than 10 percent;

3. A statement explaining how the fire district is complying with the property tax levy cap set forth at N.J.S.A. 40A:4-45.45, accompanied by an explanation of any reasons for exceeding the levy cap that identifies the appropriations causing the fire district to exceed the levy cap;

4. Any service transfers to which the fire district is a party. If the district is party to a service transfer, the district shall set forth the levy cap base adjustment attributable to the service transfer;

5. If the fire district plans to adopt a resolution for the release of restricted fund balance, an explanation of the reason and purposes for the appropriation;

6. The impact the proposed year's budget will have on capital appropriations, pursuant to N.J.S.A. 40A:14-78.6.b;

7. Disclosure of any proposed amount provided for any cash deficit of the preceding year, pursuant to N.J.S.A. 40A:14-78.6.a, along with an explanation of why the deficit occurred;

8. Disclosure of any proposed amount to be provided to purchase first aid, ambulance, rescue, or other emergency vehicle equipment, supplies, and materials, pursuant to N.J.S.A. 40A:14-85.1;

9. Disclosure of the total assessed valuation of the district and the property tax rate per $ 100.00 of assessed value; and

10. If the fire district is providing for a first-year funding appropriation to establish a LOSAP, disclosure of that action, the amount, and the fact that a public referendum is required in order to ratify the LOSAP, but if defeated that the board of commissioners will amend its budget to remove the first year's appropriation and reduce the amount to be raised by taxation by a like amount.

(u) The budget submission shall contain a certification of compliance by the fire district with the provisions of N.J.S.A. 40A:14-70.2, pertaining to the maintenance of an internet website or webpage.

(v) The secretary, or other official having been duly designated with those responsibilities, shall attest to the actions taken by the board of commissioners of a fire district with respect to approval, adoption, and amendment of the budget, including the recorded vote of the full membership thereof, by signature on all required certifications and resolutions.

N.J. Admin. Code § 5:31-2.4

Amended by R.1985 d.511, effective 10/21/1985.
See: 17 New Jersey Register 1823(a), 17 New Jersey Register 2537(a).
(f)3 deleted; (g) through (j) substantially amended; (k) added.

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