An Act concerning the budgets of joint meetings and supplementing P.L.2007, c.63.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The budget of every joint meeting entered into pursuant to the provisions of sections 14 through 24 of P.L.2007, c.63 (C.40A:65-14 through C.40A:65-24) shall be subject to the following provisions:

a. The percentage of growth in the fee-funded appropriations in the annual budget of a joint meeting which does not provide sewer or wastewater services shall not exceed two percent per year; and the required apportionment of the costs and expenses of operation of the joint meeting among the contracting local units, as required in section 16 of P.L.2007, c.63 (C.40A:65-16), shall not exceed the apportionment of those costs and expenses in the previous budget year to each contracting local unit by more than two percent.

b. After the budget of a joint meeting has been approved by the management committee of the joint meeting, the budget shall be forwarded to the Director of the Division of Local Government Services for review and approval.

The director shall review the budget to ensure that the budget conforms with the required limitations on appropriations and on the apportionment of the costs and expenses of the joint meeting among the contracting local units set forth in subsection a. of this section, and that the budgeted expenditures for the joint meeting are reasonable in cost and necessary for the performance of the joint meeting.

If the director determines that the budget meets the requirements of subsection a. of this section, and that the budgeted expenditures are reasonable in cost and necessary for the performance of the joint meeting, the director shall approve the budget, and shall then immediately forward the budget to the Governor for the Governor's review thereof pursuant to subsection c. of this section. If the director does not approve the budget, the director shall return the budget to the management committee of the joint meeting with written information concerning the reasons for the disapproval of the budget.

c. The budget of a joint meeting shall not be deemed to be approved until 15 days after the budget has been delivered to the Governor pursuant to subsection b. of this section, unless during this 15-day period the Governor has approved the budget in writing. If, within that 15-day period, the Governor returns the budget to the management committee of the joint meeting with the Governor's veto of the budget, the budget shall have no effect and shall not be apportioned among the governing bodies of the contracting units that comprise the joint meeting. If, after the 15-day review period, the Governor has not notified the joint meeting of a veto of the budget of the joint meeting, the budget shall be deemed approved by the Governor.

d. The director shall adopt rules and regulations as may be necessary to effectuate the provisions of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

2. This act shall take effect immediately.

STATEMENT

This bill would impose State oversight over the budgets of joint meetings. N.J.S.A.40A:65-14 authorizes the governing bodies of two or more local units to enter into a joint contract, for a period not to exceed 40 years, to provide for the formation of a joint meeting for the joint operation of any public services, public improvements, works, facilities, or undertakings which the local units are empowered to operate. However, the budgets of these joint meetings are not reviewed by the New Jersey Department of Community Affairs, or the Division of Local Government Services within that department. The budget of a joint meeting is instead prepared and approved by the management committee of the joint meeting, on which the member local units are represented, and the individual local units pay the costs of the budget based on the allocation formula. This allocation of costs is especially upsetting to many local units, which may be faced with large allocations to be funded through their own budgets, which are subject to a levy cap and a cap on appropriations, which together severely limit increases in spending.

In order to control the growth of joint meeting budgets and spending, the bill would require that the percentage of growth in the fee-funded appropriations in the annual budget of a joint meeting which does not provide sewer or wastewater services cannot exceed two percent per year; and the required apportionment of the costs and expenses of operation of the joint meeting among the contracting local units cannot exceed the apportionment of those costs and expenses in the previous budget year to each contracting local unit by more than two percent.

This bill also would impose oversight by the Director of the Division of Local Government Services and the Governor over the budgets of joint meetings. Under the bill, after the budget of a joint meeting has been approved by the management committee of the joint meeting, the budget would be forwarded to the Director of the Division of Local Government Services for review and approval. The director would review the budget to ensure that it conforms with the required limitations on appropriations and on the apportionment of the costs and expenses of the joint meeting among the contracting local units, and that the budgeted expenditures for the joint meeting are reasonable in cost and necessary for the performance of the joint meeting. If the director determines that the budget meets those requirements, and that the budgeted expenditures are reasonable in cost and necessary for the performance of the joint meeting, the director would approve the budget, and would then immediately forward the budget to the Governor for the Governor's review and approval. (If the director does not approve the budget, he would return the budget to the management committee of the joint meeting with written information concerning the reasons for the disapproval of the budget.)

Under the bill, the budget of a joint meeting would not be deemed to be approved until 15 days after the budget has been delivered to the Governor, unless during this 15-day period the Governor approves the budget in writing. If, within that 15-day period, the Governor returns the budget to the management committee of the joint meeting with the Governor's veto of the budget, the budget would have no effect and would not be apportioned among the governing bodies of the contracting units that comprise the joint meeting. If, after the 15-day review period, the Governor has not notified the joint meeting of a veto of the budget of the joint meeting, the budget would be deemed approved by the Governor.