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July 24, 2012

Re:       New Content on DLGS Web Site

Dear Mayor:

The Division of Local Government Service’s has posted the following new content on their website:

1.  CY 2012 Statements of State Aid
CY 2012 Statements of State Aid for calendar year municipalities have been posted on the Division of Local Government Service's website:  As a reminder, N.J.S.A. 54:4-64 provides that the 3rd installment of current year property taxes shall not be subject to interest until the later of August 1, the 10 day grace period authorized by resolution or the 25 calendar days after the tax bill for the 3rd quarter was mailed.   For more detailed information please review LFN 2012-13.

2.  Electric and Natural Gas Supply Procurement Guidance:   
As energy markets evolve, a range of vendors are offering local officials assistance in reducing energy costs. Regrettably, some vendors are not aware of laws regulating energy procurement by local government.  The Local Public Contracts Law (“LPCL”), Public School Contracts Law (“PSCL”) and the Electric Discount and Energy Competition Act of 1999 (“EDECA”) direct the energy procurement process for local units and school districts. Located at N.J.S.A. 48:3-49 et seq., EDECA and its accompanying Board of Public Utility (“BPU”) regulations (N.J.A.C. 14:4-6.1 et seq.) establish procedures that contracting units must follow in shopping for electric and natural gas supply from third party suppliers. Please note that public bidding requirements under the LPCL and PSCL apply to contracts with third-party electric and natural gas suppliers, unless the supply is being purchased from the public utility under BPU-regulated tariffs. Separate procedures also exist for contracting units that participate, or serve as lead agency in, a cooperative pricing system; a topic discussed further in our article “Energy Procurement and Cooperative Pricing Systems”.  For more detail information please review LFN 2012-12.

3.  State Comptroller Report on Independent Contractors Earning Pension Credits
On July 17, 2012 State Comptroller Matthew Boxer released an investigative report finding that an overwhelming majority of 58 local governments reviewed failed to comply with a 2007 state law requiring all public entities to determine whether their professional service providers (e.g. lawyers, engineers, auditors, etc.) were bona fide employees as opposed to independent contractors for state pension purposes. A copy of the complete report is available at:  Local units should review the report, together with LFN 2007-28 and the guidance issued by Division of Pension and Benefits, and promptly take necessary steps to comply with the statutory requirements.   Local units can expect in the future that the Division of Local Government Services will include as part of the municipal audit compliance process that auditors examine and test for compliance with the statutory requirements. In addition, the municipal Best Practices questionnaire for this year will require municipal CFOs to certify that the municipality has complied with the existing law that requires vendors to be removed from the pension system.  Failure to comply could jeopardize local aid payments.

Conferences / Training:

1. Historic Preservation Grant Workshop:  The New Jersey Historic Trust is now accepting applications ( for Historic Site Management Grants.  The grants are available for eligible recipients such as certified nonprofit organizations and agencies of state, county or municipal government.  Applications are due by September 20, 2012.  Questions can be emailed to:

Recent Reminders:

2.   Employee Pension Contribution Rate Increase: Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, PERS and TPAF employee pension contribution rates will increase from 6.5% to 6.64% of salary with the first paycheck on or after July 1, 2012.

3.  Health Benefit Contribution Rate Increase: Chapter 78, P.L. 2011, established a four year schedule that phases in increases to employees' contributions for health benefits.  This July begins Year 2 of the phase in for employees who are not covered by a contract.  For those employees covered by a contract, the second year phase in will begin on the calendar date of the second year. The minimum contribution by an employee is the greater of 1.5% of their base salary or the percentage of their premium. For additional information please review LFN 2011-34 and LFN 2011-20R.

4.  Board of Fire CommissionersLFN 2012-11 discusses P.L. 2011 c. 153, a recently enacted law which allows a Board of Fire Commissioners to insert an additional item of revenue, accompanied by an offsetting appropriation, into an already adopted fire district budget with the approval of the Director of the Division of Local Government Services.  The law establishes a process for fire districts, similar to that of municipalities and counties, to insert special items of revenue into their budgets after the budget is adopted.

5.  Newly Adopted Refunding Bond Rule:  N.J.A.C. 5:30-2.5 Permits Issuance of Certain Refunding Bonds without Prior Board Approval.  The Local Finance Board adopted N.J.A.C. 5:30-2.5 at its May 9th meeting, a rule that allows municipalities, counties and school districts to issue refunding bonds without prior Board approval so long as their issuance realizes debt service savings on the outstanding obligations and certain criteria are met including filing a post-closing report with the Local Finance Board.  N.J.A.C. 5:30-2.5 is effective as of June 4, 2012, and can be accessed at   If you have additional questions about this rule adoption, please contact the Local Finance Board at 609-292-0479.

6.  The State Tax Court June 2012 Report:  The State Tax Court has updated their website with the new report for June 2012.  You will need to reach out to your town attorney and/or assessor for copies of any stipulations that may have been taken into consideration for these judgments as they will not be listed on the report itself.  Please take note that the report is searchable by municipality.  Prior reports are available online at  For questions, please call 609-292-6858 or email

Very truly yours,


William G. Dressel, Jr.
Executive Director




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