New Jersey Administrative Code › Title 17 - TREASURY - GENERAL › Chapter 49 - PUBLIC-PRIVATE PARTNERSHIPS RULES › Subchapter 6 - LOCAL GOVERNMENT UNIT PROCEDURES AND REQUIREMENTS › Section 17:49-6.5 - Project review

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A local
				government unit 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 proposed public-private
				partnership agreement between the local government unit and the private entity,
				including any supporting documents such as the development agreement, any
				relevant contracts and leases, and all information obtained by, and findings
				of, the local government unit, as well as a redacted copy of all materials for
				purposes of providing any public document as required under the Open Public
				Records Act;
3. A proposed
				public-private partnership agreement between the local government unit 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 local government unit 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 local government
				unit;
vii. Standards and rights of
				parties relating to payments by the local government unit 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 local government unit before
				execution of the public-private partnership agreement, including costs of
				retaining independent experts to review, analyze, and advise the local
				government unit with respect to the project;
ix. Standards for construction and
				maintenance of the project;
x.
				Standards for allocation of costs of development, including allocation of
				liability for cost overruns;
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
				local government unit;
xiii. The
				rights that the local government unit and the private entity may have, if any,
				to revenue generated as a result of the agreement, and any standards for
				allocation of such revenue between the parties;
xiv. A maximum rate of return to the private
				entity and a provision for the distribution of excess earnings to the local
				government unit 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 local government
				unit, and penalties for failure to achieve these standards;
xvi. A maintenance plan for the full life
				cycle of the public-private partnership project;
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 local government unit and the
				financial impact of that termination;
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 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 local government and
				private entity's property interest including the acquisition of any property,
				of which the local government unit 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 local government unit,
				including costs of retaining independent experts to review, analyze, and advise
				the local government unit with respect to the proposal; and any stipends
				authorized for work completed, which shall not exceed 0.5 percent of the
				project total; 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.
4. 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 local government unit 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 team, 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 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 are 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 local government unit at which the project is completed,
				including, but not limited to, the Local Public Contracts Law, P.L. 1971, c.
				198 (N.J.S.A. 40A:11-1et seq.);
5. 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; and
ii.
				A long-range maintenance plan and a long-range maintenance bond specifying the
				expenditures that qualify as an appropriate investment in
				maintenance;
6. A
				completed Initial Screening Tool, including any changes to the project made in
				response to the results of the self-assessment;
7. 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;
8. A timetable for completion of the
				construction of the project, including all pre-development and development
				phases;
9. All relevant engineering
				and architectural plans, drawings, and schematics;
10. 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;
11. A performance monitoring plan for the
				agreement. The performance monitoring plan will provide details on how the
				local government unit 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, 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;
12. A
				record of the public hearing held, including any public comments received and
				responses to public comments;
13. A
				resolution by the local government unit's governing body of its intent to enter
				into a public-private partnership agreement pursuant to this section;
14. A list of all experts retained, including
				information on expert qualification and industry experience;
15. An affirmation that any proposed
				procurement contains all necessary elements, based upon minimum contract
				standards outlined in this section; and
16. 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.