New Jersey Administrative Code › Title 6A - EDUCATION › Chapter 26 - EDUCATIONAL FACILITIES › Subchapter 4 - INITIAL ASSESSMENT AND ENROLLMENT › Section 6A:26-4.4 - Options where there are insufficient funds to complete a capital project

Current through Register Vol. 56, No. 14, July 15, 2024
(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; or
5. 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.