New Jersey Administrative Code › Title 6A - EDUCATION › Chapter 26 - EDUCATIONAL FACILITIES › Subchapter 10 - LEASE PURCHASE AND LEASE AGREEMENTS › Section 6A:26-10.3 - Approval of lease-purchase agreements for improvements or additions to school facilities

Current through Register Vol. 56, No. 14, July 15, 2024
(a) School
				districts shall submit to the Division for approval pursuant to this section
				all lease-purchase agreements to fund the local share or a portion of the total
				costs of a school facilities project for improvements or additions to a school
				facility that has no excess costs. No lease-purchase agreement that will fund
				excess costs of a school facilities project for improvements or additions to a
				school facility or the local funding of an other capital project shall be
				submitted to the Division for approval. If the Division does not approve a
				lease-purchase agreement, the school district shall frame a separate question
				to authorize the lease-purchase agreement and obtain voter or board of school
				estimate approval to enter into the agreement. No lease-purchase agreement for
				a capital project shall be executed by a school district unless it has received
				written approval of the Division, voters, or board of school estimate, as
				appropriate.
(b) School districts
				shall file with the Division a copy of all lease-purchase agreements approved
				by voters or the board of school estimate.
(c) A school district shall not enter into a
				lease-purchase agreement until the Division has notified the school district of
				the final eligible costs of a school facilities project or the consistency of
				an other capital project with the school district's approved LRFP and other
				applicable standards, as set forth in
				6A:26-3.1 1.
(d) The Division shall approve a lease
				purchase-agreement for local share or total costs of a school facilities
				project receiving State debt service aid payments that does not include excess
				costs only upon a demonstration by the school district that the payments for a
				lease-purchase agreement and any operating expenses related to the agreement
				can be included within the school district's net budget spending growth
				limitations and will not result in the need for approval by voters or the board
				of school estimate, as appropriate, of additional spending proposals to
				maintain existing instructional programs or extracurricular
				activities.
(e) All requests for
				approval of lease-purchase agreements for capital projects that are required to
				be filed with, and approved by, the Division shall include the following:
1. A copy of the Department's approval letter
				for the school facilities project and calculation of final eligible
				costs;
2. The lease agreement in
				accordance with
				6A:26-10.4;
3. If applicable, an intercept agreement
				among the school district, the lessor and the State, executed by the school
				district and the lessor, providing that the State shall have the right to
				withhold the portion of State support owed to the school district necessary to
				make timely payments under the lease-purchase agreement and the agent agreement
				if the school district should fail to make timely payment of amounts owed under
				the lease-purchase and agent agreements, and apply the withheld State support
				to pay the school district's obligation, subject to available State
				appropriation;
4. The ground lease
				in accordance with
				6A:26-10.5, except for the
				lease-purchase of equipment only;
5. Evidence of clear title to the proposed
				building site(s) and any land stated in the ground lease except for the
				lease-purchase of equipment only;
6. A resolution of the district board of
				education approving the application and authorizing submission to the Division
				of an application on a form prescribed by the Commissioner;
7. A copy of the newspaper advertisement for
				the public hearing;
8. A copy of
				the newspaper advertisement for request for proposals;
9. A copy of detailed board minutes for the
				public hearing resolution and vote on the approval of the lease-purchase
				concept, approval of the projected maximum funding level, assurance that annual
				lease payments can be included within the school district's base budget
				spending growth limitation, and authorization for the chief school
				administrator or board secretary to advertise for proposals for the selection
				of underwriter/lessor; and
10. Any
				additional information that a school district deems relevant for the Division's
				review of the lease purchase agreement.