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Flashcards in Local Bond Law Deck (20)
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1

The Local Bond Law, specifically NJSA 40A:2-4, authorizes a local unit to pay any and all bonds and notes issued by it. The limit is:

Unlimited

2

In the case of a municipality, the Local Bond Law NJSA 40A:2-6 sets the debt limit at an amount not to exceed what percentage of the average of the preceding three years equalized assessed valuation:

3.5%

3

A local unit, in anticipation of the issuance of bonds, may borrow money and issue notes if the bond ordinance or subsequent resolution so provides. Such notes shall be designated as a "bond anticipation note" and all such notes shall mature and be paid not later than the first day of the fifth month following the close of which fiscal year?

10th

4

Bond anticipation notes issued in compliance with the requirements of NJSA 40A:2-8.1 require no principal payments until the notes obtain their maximum number of renewals permitted by law.

False.

5

This statement must be filed in the Office of the Clerk by the financial officer prior to the passage on first reading of any bond ordinance or ordinance amending a bond ordinance except if the ordinance does not increase the total amount of the obligations authorized. Said statement is known as:

Supplemental Debt Statement

6

The Local Bond Law, NJSA 40A:2-10 requires a down payment to be appropriated for the purpose authorized in the respective bond ordinance. Said down payment shall not be less than 5% of the amount of the obligations authorized. The down payment must be made available prior to final adoption of the bond ordinance and the source of the down payment may be from moneys previously contributed for such purposes as included in the bond ordinance.

True

7

According to the Local Bond Law NJSA 40A:2-12, a bond ordinance shall contain in substance which of the following:

1. An authorization for the issuance of obligations
2. An authorization for the assumption by the local unit of the obligations of an authority to be dissolved
3. A determination of the period of usefulness

8

The maximum number of annual installments in which obligations for special assessments may be paid cannot exceed how many years?

20 years

9

Which of the following statements would be true according to NJSA 40A:2-17?

A bond ordinance may be introduced by title and approved by a majority vote of the full membership of the governing body.

10

The Local Bond Law, specifically 40A:2-20 permits the inclusion of expenses associated with the purpose of a capital project. Some of those expenses are architect's fees, accounting, engineering and inspection costs. In addition it is permitted to include the interest on obligations until the end of the fiscal year in the year of issue.

True. Section 20 costs

11

When a governing body has concluded that the limitations as to maturities as stipulated by NJSA 40A:2-26 will adversely affect the financial position of the local unit, the limitation causing the adverse condition, is that no annual installment for debt service shall exceed by more than what percentage the smallest prior installment?

100%

12

The following are permitted exceptions for permitting bonds to be sold at a private sale?

1. If all or part of an authorized issue is $1,000,000 or less
2. If sold to the local School District
3. If no bids were received at the public offering and the private sale is within 30 days after the advertised date for public bidding

13

The requirement per NJSA 40A:2-31 regarding the contents for the notice of sale of bonds are the terms and conditions of such public sale only.

False

14

Bidders for the sale of bonds shall be required to deposit a certified or cashier's or treasurer's check for what amount?

Equal to not less than 2% of the bonds

15

The Local Bond Law prohibits the issuance of certain agreements from being authorized as it relates to the issuance or sale of obligations. One such prohibited agreement addresses the restriction on the deposit of any moneys received from such sale.

True

16

The local unit official charged with the legal responsibility of filing the Annual Debt Statement is whom?

The CFO

17

A capital budget would best be described as:

A plan for capital projects

18

Any municipal public utility shall be deemed to be a____________ purpose if the cash receipts from fees, rents or other charges in a fiscal year are sufficient to meet operating and maintenance costs and interest and debt redemption charges payable or accruing in such year without recourse to general taxation.

self-liquidating

19

If a local unit shall require moneys for the purpose of assuring against adopting a budget which sets forth a deficit, the director may recommend that the Local Finance Board authorize the local unit to issue debt. This debt shall be considered as an anticipated revenue applicable to the expenditures for which appropriations are made in a transition year budget. This debt instrument would be known as:

Fiscal Year Adjustment Bonds

20

The Local Bond Law NJSA 40A:2-52 authorizes refunding bonds and requires:

Refunding ordinance, no supplemental debt statement and no down payment