New Jersey Administrative Code › Title 17 - TREASURY - GENERAL › Chapter 49 - PUBLIC-PRIVATE PARTNERSHIPS RULES › Subchapter 7 - SCHOOL DISTRICT PROCEDURES AND REQUIREMENTS › Section 17:49-7.5 - Project review

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A school
				district shall provide the Office of Public Finance, the following items for
				review of a public-private partnership project in an application format
				prescribed by the Office of Public Finance:
1.
				A full description of the proposed public-private partnership
				project;
2. A copy of the school
				facilities project approval letter issued by the Commissioner of Education
				pursuant to the requirements of
				N.J.A.C.
				6A:26-3.3;
3. A copy of the proposed public-private
				partnership agreement between the school district and the private entity, as
				well as any supporting documents including the development agreement, any
				relevant contracts and leases between the school district and the private
				entity, and all information obtained by, and findings of, the school district,
				including redacted copies of all documents for purposes of providing any public
				document as required under the Open Public Records Act;
4. A proposed public-private partnership
				agreement between the school district and the private entity, including the
				following minimum criteria:
i. An agreement
				term length clearly defined to include the estimated construction and
				operational period, as needed;
ii.
				A complete description of the public-private partnership project to be
				developed and the functions and responsibilities to be performed by the school
				district and the private entity;
iii. Terms regarding the planning,
				acquisition, financing, development, design, construction, reconstruction,
				rehabilitation, replacement, improvement, maintenance, management, operation,
				repair, leasing, and ownership of the public-private partnership
				project;
iv. A provision allowing
				express permission of the public entity, and State and local officials, to
				inspect project-related assets or property; such provision shall include any
				specific limitations, particular requirements or allowances related to such
				review. Examples of limitations, particular requirements or allowances may
				include, but are not limited to, any notice requirements, time constraints, or
				review restrictions;
v. The roles
				and responsibilities of the parties for the duration of the
				agreement;
vi. Requirements for
				bonds or other forms of security in amounts acceptable to the school
				district;
vii. Standards and rights
				of parties relating to payments by the school district to the private entity if
				payments are part of the project;
viii. Requirements for any payment by the
				private entity of any costs incurred by the school district before execution of
				the public-private partnership agreement, including costs of retaining
				independent experts to review, analyze, and advise the school district with
				respect to the project;
ix.
				Standards for construction and maintenance of the project, which shall be
				consistent with
				N.J.A.C.
				6A:26-6.1et seq., and the facilities
				efficiency standards developed by the Commissioner pursuant to N.J.S.A.
				18A:7G-4, or for charter schools, consistent with those sections of N.J.A.C.
				6A:26-6, pertaining to the health and safety of pupils;
x. Standards for allocation of costs of
				development including allocation of cost overruns; under no circumstance shall
				cost overruns result in the expenditure of funds by a school
				district;
xi. Performance criteria
				and incentives, if any;
xii. Risk
				mitigation plans and responsibilities at all project stages, including at
				project development, construction, operations, and maintenance, for both the
				private entity and the school district;
xiii. The rights and the standards for
				allocation of any revenue generated by the project and the agreement, in
				addition to the school district's retention of full ownership of the land upon
				which a project is located;
xiv. A
				maximum rate of return to the private entity and a provision for the
				distribution of excess earnings to the school district or to the private party
				for debt reduction;
xv. The minimum
				quality standards, technical requirements, and/or performance criteria
				applicable to the public-private partnership project, including key performance
				indicators, reporting requirements, incentives, cure periods, standards of
				performance or metrics, including performance points systems, monitoring rights
				of the school district, and penalties for failure to achieve these
				standards;
xvi. A maintenance plan
				for the full life cycle of the project, which shall include, at a minimum, the
				criteria set forth in
				N.J.A.C.
				6A:26-20.3;
xvii. A hand-back plan that includes
				requirements regarding return of the facility in a state of good repair and
				standards for determining such state of repair;
xviii. Any compensation and/or revenue
				structure of the private entity related to the project coming into the private
				entity, including the extent to which, and terms upon which, the private entity
				may charge fees to individuals and entities for the use of the public-private
				partnership project, as well as a full payment schedule (if
				applicable);
xix. Rights and
				remedies, including, but not limited to, compensatory, liquidated, or other
				types of damages, and dispute resolution procedures available or applicable in
				the event of nonperformance or breach of contract, up to and including,
				material default;
xx. Procedures
				for notice and cure of default;
xxi. Insurance requirements for any project
				to be operated by the private entity;
xxii. Grounds for termination of the
				public-private partnership agreement by the school district and the financial
				impact of that termination, which shall include express permission to terminate
				a lease due to lack of availability and appropriation annually of sufficient
				funds as provided for in N.J.S.A. 18A:18A-42(n) or non-renewal or revocation of
				a charter of a charter school. Under no circumstance shall a public-private
				partnership agreement require payment of a termination penalty by a school
				district for lack of availability or appropriation annually of sufficient funds
				or the non-renewal or revocation of a charter by a charter school;
xxiii. Grounds for termination of the
				public-private partnership agreement by the private entity and the financial
				impact of that termination;
xxiv.
				Procedures for amending the public-private partnership agreement;
xxv. Provisions for the termination of the
				public-private partnership agreement by either party and upon expiration of
				term of the agreement and the disposition of the public-private partnership
				facility upon termination;
xxvi.
				Identification of funding sources to be used to fully fund the capital,
				operation, maintenance, and other expenses under the public-private partnership
				agreement;
xxvii. The nature of the
				school district and private entity's property
interest including the acquisition of any property, of which
				  the school district shall retain full ownership of the land upon which the
				  project is located;
xxviii.
				An articulation of the legal relationship and requirements of the parties
				involved, including the rights and responsibilities of the parties as to design
				elements, technologies, techniques, methods, information, or intellectual
				property contained in an agreement;
xxix. Details on distribution of costs
				between the private entity and school district, including costs of retaining
				independent experts to review, analyze, and advise the school district with
				respect to the proposal; and
xxx.
				When applicable, a provision in the agreement establishing that the private
				entity will not take any action or fail to take any action, if any such action
				or failure to take action would adversely affect the exclusion from gross
				income of the interest on any Outstanding Tax-Exempt Bonds under Section 103 of
				the Internal Revenue Code (Code). The provision shall also establish that the
				applicant will not directly or indirectly use or permit the use of any proceeds
				of any Outstanding Tax-Exempt Bonds or take or omit to take any action that
				would cause any Outstanding Tax-Exempt Bond to be an "arbitrage bond" within
				the meaning of Section 148(a) of the Code;
5. A project agreement, including the
				following terms and conditions:
i. Ensure
				each worker employed in the construction, rehabilitation, or building
				maintenance services of facilities by a private entity that has entered into a
				public-private partnership agreement with a school district be paid not less
				than the prevailing wage rate for the worker's craft or trade as determined by
				the Commissioner of Labor and Workforce Development pursuant to P.L. 1963, c.
				150 (N.J.S.A. 34:11-56.25et seq.) and
				P.L.
				2005, c. 379 (N.J.S.A.
				34:11-56.58et seq.);
ii. Guarantee
				that any building construction projects under a public-private partnership
				agreement contain a project labor agreement. The project labor agreement shall
				be subject to N.J.S.A. 52:38-1et seq., and shall be in a manner that, to the
				greatest extent possible, enhances employment opportunities for individuals
				residing in the county of the project's location;
iii. Ensure the general contractor,
				construction manager, design-build contractor, or subcontractor for a
				construction project be registered pursuant to N.J.S.A. 34:11-56.48et seq., and
				be classified by the Division of Property Management and Construction, or shall
				be pre-qualified by the Schools Development Authority, Department of
				Transportation, New Jersey Transit, or the New Jersey Turnpike Authority, as
				appropriate, to perform work on a public-private partnership project;
iv. When practicable, adhere to the
				Leadership in Energy and Environmental Design Green Building Rating System as
				adopted by the United States Green Building Council, the Green Globes Program
				adopted by the Green Building Initiative, or a comparable nationally
				recognized, accepted, and appropriate sustainable development rating system and
				the green building manual prepared by the Commissioner of Community Affairs
				pursuant to
				section
				1 of
				P.L.
				2007, c. 132 (N.J.S.A.
				52:27D-130.6);
v. Ensure that the
				general contractor, construction manager, or design-build contractor post a
				performance bond to ensure the completion of the project and a payment bond
				guaranteeing prompt payment of moneys due in accordance with and conforming to
				the requirements of N.J.S.A. 2A:44-143et seq.;
vi. Where a project is less than $ 50
				million, include a requirement that precludes contractors from engaging in the
				project if the contractor has contributed to the private entity's financing of
				the project in an amount of more than 10 percent of the project's financing
				costs;
vii. Where appropriate,
				include a requirement that work performed under the agreement is subject to the
				provisions of the Construction Industry Independent Contractor Act,
				P.L.
				2007, c. 114 (N.J.S.A.
				34:20-1et seq.); and
viii. In the
				event that a private entity assumes full financial and administrative
				responsibility for a project, a stipulation that the private entity shall not
				be subject to the procurement and contracting requirements of statutes
				applicable to the school district at which the project is completed, including,
				but not limited to, the Public School Contracts Law, N.J.S.A.
				18A:18A-1;
6. In
				addition, a school district shall provide the estimated costs, including
				development and operating costs, as well as financial documentation for the
				project showing the underlying financial models and assumptions that determined
				the estimated costs. The financial documentation shall include:
i. At least three different projected
				estimated costs showing scenarios in which materially different economic
				circumstances are assumed and an explanation for how the estimated costs were
				determined based on the three scenarios, including a net present value analysis
				for each of the scenarios;
ii. A
				long-range maintenance plan and a long-range maintenance bond specifying the
				expenditures that qualify as an appropriate investment in
				maintenance;
7. A
				completed Initial Screening Tool, including any changes to the project made in
				response to the results of the self- assessment;
8. A completed project analysis, including
				any supporting documents, as well as documentation of the qualification of any
				experts retained to perform any aspect of the Project Analysis;
9. A timetable for completion of the
				construction of the project, including all pre-development and development
				phases;
10. All relevant
				engineering and architectural plans, drawings, and schematics;
11. An analysis of all available funding
				options for the project, including an analysis of the financial viability and
				advisability of such project, along with evidence of the public benefit in
				advancing the project as a public-private partnership;
12. A performance monitoring plan for the
				agreement. The performance monitoring plan will provide details on how the
				school district will monitor the performance of the private entity for the full
				term of the agreement. This plan shall identify the required skills and
				resources for monitoring performance, specify schedules for periodic
				monitoring, and specify the requirements for the preparation and issuance of
				reports and/or updates to support performance monitoring, and specify any
				applicable metrics for monitoring performance, including the use of possible
				performance-points systems, and any performance bonuses or reductions based
				upon the early or late completion and delivery of a project;
13. A record of the public hearing held,
				including any public comments received and responses to public comments;
i. In the event that a lease is considered, a
				copy of the minutes of the meeting of the board of education at which the
				public hearing for facility leases in excess of five years was discussed
				accompanied by a copy of the district board of education resolution endorsing a
				facility lease in excess of five years, if a project involves a
				lease;
14. A resolution
				by the school district's governing body of its intent to enter into a
				public-private partnership agreement pursuant to this section;
15. A list of all experts retained, including
				information on expert qualification and industry experience;
16. An affirmation that any proposed
				procurement contains all necessary elements, based upon minimum contract
				standards outlined in this section; and
17. When applicable, an opinion of Bond
				Counsel, defined as an opinion signed by an attorney or firm of attorneys in
				good standing in the field of law related to municipal bonds, that such project
				will not adversely affect the tax-exempt status of any Outstanding
				Bonds.