N.J. Admin. Code § 6A:26-4.4
Current through Register Vol. 56, No. 11, June 3, 2024
Section 6A:26-4.4 - Options where there are insufficient funds to complete a capital project(a) A district board of education shall have the following options for referendum-authorized projects upon opening initial bids for the project, or at any other time when it is determined that there are not sufficient funds to complete the referendum-authorized project(s). The district board of education shall: 1. Reject all bids pursuant to 18A:18A-36 and re-advertise based on the same specifications, or on modified specifications that do not materially impact the nature and scope of the project and that have been approved by the Division pursuant to N.J.A.C. 6A:26-5;2. If contracts were previously awarded, seek approval pursuant to 6A:26-4.9 for a change order for modifications to effect economies they would not materially impact the nature or scope of the project as approved by the Division and board of school estimate or voters, as applicable;3. Seek approval of the board of school estimate or voters, as applicable, for additional funds to complete the project. i. The sale of additional bonds, transfer of general-fund surplus, additional tax levy, capital reserve, and/or unexpended bond proceeds of a capital project authorization may be utilized upon voter or board-of-school-estimate approval according to procedures in 6A:26-4.6(b);ii. Approval for the sale of additional bonds shall be by resolution or referendum in accordance with 18A:24-1 et seq.;iii. Approval for the transfer of general-fund surplus, additional tax levy, and/or capital reserve to supplement an approved referendum may be through special appropriation in a Type I school district, separate question at a special election in a Type II school district without a board of school estimate, or through the appropriate line-items and supporting documentation in the base budget at the annual election as follows: (1) Requests at the annual election through the appropriate line-items and supporting documentation in the base budget shall have a statement of purpose, as prescribed by the Commissioner, to be included in the advertised budget. Requests shall also be specifically discussed at the public hearing as documented in the district board of education minutes.(2) Approved line-item appropriations in the annual budget certified for taxes for the requests in (a)3iii(1) above shall not become part of the pre-budget-year net budget for purposes of calculating the spending-growth limitation of the subsequent year pursuant to 18A:7F-1 et seq. Unused spending authority calculated pursuant to 6A:23A-10.3 that is created by such approvals shall not be considered unused spending authority available to a district board of education in the next two subsequent budget years;4. Redefine/scale down the scope of the project and seek approval of the board of school estimate or voters, as applicable, to use the original proceeds for the redefined scope and/or new purpose. All such projects shall be resubmitted and the Division shall redetermine final eligible costs prior to seeking board-of-school-estimate or voter approval; or5. Apply to the Commissioner for a transfer of general-fund surplus to the capital-projects fund to supplement the proceeds from a bond authorization or pre-EFCFA lease-purchase agreement greater than five years if determined and approved by the Commissioner that a transfer is in the best interests of both students and taxpayers of the school district after consideration of alternative corrective actions. i. The school district application shall include a narrative on the need for the transfer and analysis of alternative corrective actions, including steps outlined in (a)1 through 4 above, a copy of the referendum question and detailed cost analysis of the capital project to support the need for the transfer request. The project cost analysis shall include, at a minimum, a comparison of the itemized budget as approved by the Division, including the determination of final eligible costs for a school facilities project; the itemized budget as approved by the voters, including pre-referendum and post-referendum costs; the itemized budget for the project upon bid award; and any change orders approved pursuant to these regulations or change orders pending approval.ii. The Commissioner's approval shall be based upon: (1) A recommendation from the executive county superintendent that no further alternative corrective actions can be made after his or her review of the school district's application in consultation with the Division;(2) The Division's recommendation that the capital project is within the facilities efficiency standards and necessary for educational adequacy after the Division's review of the school district's application. If the Division determines the project scope is beyond the facilities efficiency standards and the excess costs are greater than the transfer request, the Division shall take into consideration in its recommendation whether the excess costs are outside the control of the school district;(3) School district certification that the transfer request is not due to contractor malfeasance subject to legal recourse. If the transfer request is due to architect, engineer or contractor malfeasance, then the school district shall certify its intent to pursue all legal options. If the transfer request is approved by the Commissioner, any subsequent awards on the legal action shall be recorded as revenue in the general fund; and(4) Other considerations as appropriate.iii. If the need for the transfer is due solely to inaccurate and/or insufficient project cost estimates, a district board of education may not request Commissioner approval for a transfer of general fund surplus without first seeking corrective action through board of school estimate or voter approval, as applicable, of additional funds and/or revised scope pursuant to (a)3 and/or 4 above.iv. The Commissioner shall not approve a transfer request if the district board of education did not include an adequate level of contingency at the time of contract award in accordance with 6A:26-4.8(c).v. If a capital project contains excess costs or is an other capital project, no transfer of general-fund surplus shall be approved by the Commissioner prior to a district board of education submission of the capital project for bids on at least two separate occasions.(b) A district board of education shall have the following options for a school facilities project when the school district elects to receive a grant pursuant to N.J.S.A. 18A:76-15 and elects to fund the entire local share through a means other than school bonds if there are insufficient funds to complete the project upon opening initial project bids or any time thereafter. The district board of education shall: 1. Seek approval of the board of school estimate or voters, as applicable, for additional funds to complete the project. Sources that may be considered are: ii. The transfer of general-fund surplus;iv. Capital reserve; and/orv. The unexpended proceeds of a capital-project authorization according to 6A:26-4.6(b); or2. Transfer by district board of education resolution general-fund surplus in an amount not to exceed 20 percent of the school facilities project award price in response to change orders allowed pursuant to 6A:26-4.9; or3. Transfer from capital reserve pursuant to 6A:23A-14.1.N.J. Admin. Code § 6A:26-4.4
Amended by R.2004 d.214, effective 6/7/2004.
See: 36 N.J.R. 243(a), 36 N.J.R. 2733(b).
Rewrote (a).
Amended by R.2007 d.81, effective 3/19/2007.
See: 38 N.J.R. 4533(a), 39 N.J.R. 899(a).
Inserted "school" preceding "district" throughout; in (a)3iii(1), inserted "of education"; in (a)5ii(1) and (a)5ii(2), inserted "school" preceding "district's"; in (a)5ii(3), substituted "School district" for "District"; and in the introductory paragraph of (b), inserted "district" preceding "board".
Amended by R.2013 d.145, effective 12/16/2013.
See: 45 N.J.R. 1026(a), 45 N.J.R. 2557(a).
Rewrote the section.