Skip to main navigation
Governor Chris Christie • Lt Governor Kim Guadagno
The Official Web Site For The State of New Jersey
 
Search
Global Navigation NJHome Services A to Z Departments/ Agencies FAQs
Skip to main navigation

State of New Jersey
Executive Order #26

Governor Christine Todd Whitman

This Executive Order supersedes Orders #79 and #92 (Florio).

WHEREAS, the policies and procedures of the State with regard to the issuance of bonds, notes and other obligations (hereinafter "bonds") and the awarding of underwriting, bond counsel, architectural, engineering and other professional contracts were established by Executive Order No. 79 issued on January 12, 1993 and Executive Order No. 92 issued on May 4, 1993; and

WHEREAS, it was recognized that an analysis of the effect of these policies and procedures should be conducted by the Executive Branch after they had been in place for a number of months and that, in connection with such analysis, it was appropriate to solicit the views of the public and of the affected issuers, service providers and professionals; and

WHEREAS, Executive Order No. 6 issued on January 27, 1994 created an Advisory Panel on Government Contracting Procedures (hereinafter "Advisory Panel") and directed that the Advisory Panel make a comprehensive review of the existing procedures for: the issuance of bonds; the selection of underwriters in connection with the issuance of bonds; the retention of attorneys or law firms in connection with the issuance of bonds; and the retention of any engineering, architectural or other professional firms; and

WHEREAS, the Advisory Panel was directed to report its findings and detailed recommendations as to whether the existing procedures should remain in place or be altered in order to better accomplish the goals of achieving the best economic results with the highest quality of service and integrity in the award of State contracts at the lowest cost; and

WHEREAS, the Advisory Panel has issued its report, dated July 29, 1994, which sets forth its recommendations with respect to the policies and procedures that were implemented in accordance with Executive Orders No. 79 and No. 92; and

WHEREAS, the Advisory Panel has recommended modifications to the present procedures that will ensure that the citizens of the State are informed of specific criteria applied in the selection of the method of bond sale and the selection of professionals; and

WHEREAS, implementation of the Advisory Panel's recommendations will help to ensure that the methods used by the State, its agencies and authorities for issuing bonds and awarding contracts for professional services will secure public confidence and result in the receipt of the highest quality service at the lowest prices;

NOW, THEREFORE, I, CHRISTINE TODD WHITMAN, Governor of the State of New Jersey, by virtue of the authority vested in me by the Constitution and by the Statutes of this State, do hereby ORDER and DIRECT:

METHOD OF BOND SALE

1. The policy of the State generally requiring that all bonds of the State and its agencies and authorities (hereinafter "issuers" or "contracting entities") to be sold on a competitive basis is hereby continued. In certain circumstances, however, where it is determined that a negotiated sale would better serve the requirements of a particular financing, negotiated sales may be conducted, if otherwise permitted by law. The circumstances under which a negotiated bond sale shall be permitted shall include the following:

a. Sale of complex or poor credits;

b. Sale of a complex financing structure, including those transactions that involve the simultaneous sale of more than one series with each series structured differently;

c. Volatile market conditions;

d. Large issue size;

e. Programs or financial techniques that are new to investors; and

f. Variable rate transactions.

2. Where issuers engage in similar types of transactions on a somewhat regular basis, such issuers may make determinations with respect to the method of sale, consistent with section 1 of this Order, which will be utilized for two or more transactions, provided that the transactions are part of a larger bonding program of similarly secured financings. In this instance, issuers shall render public determinations with respect to these financing programs at least annually.

3. Any decision of an issuer regarding the method of sale for a bond issue shall be made by resolution which shall be available to the public. If the issuer is the Treasurer of New Jersey (the "Treasurer"), the Treasurer shall render a written determination which shall be available to the public. When an issuer determines that the sale of bonds should be negotiated with an underwriter based on the standards enumerated in section 1 of this Order, justification in support of such a decision should not be stated in general terms, but should be specific to the particular bond sale. Such findings shall be filed with the Treasurer within five (5) days of the decision.

SELECTION OF FINANCIAL ADVISORS, SENIOR MANAGERS AND CO-MANAGERS

4. Issuers whose bonds are secured by appropriations from the State's General Fund, the full faith and credit of the State or otherwise in whole or in part by State revenues, shall adhere to the following procedures and criteria in connection with the selection of financial advisors, senior managers and co-managers:

a. A request for proposal and criteria for selection shall be developed by the issuer and the Treasurer for each financing. Criteria for such selection shall include, but not be limited to, the following:

1) Quality of response regarding the proposed bond structure, credit, and/or marketing strategy;

2) Sophisticated cash flow capabilities as required by a particular financing;

3) Development of a new idea;

4) Demonstrated ability to distribute New Jersey securities;

5) Quality of relevant service to the State in previous transactions;

6) Experience with similar financings in which the firm and its proposed financing team participated;

7) Proposed fees for the particular bond sale; and

8) Sufficient capital to participate in underwriting the issue.

b. The issuer shall provide particular consideration for firms with a presence in New Jersey and for minority-owned and women-owned firms.

c. The issuer and the Treasurer shall select the financial advisor, senior manager and/or co-manager for the financing.

d. The firm(s) solicited, the firm(s) selected and criteria applied in connection therewith shall be made available to the public.

e. Such procedures may include a process whereby a group, or "pool," of financial advisors, senior managers and/or co-managers may be utilized for two or more transactions, provided that the transactions are part of a larger bonding program of similarly secured financings. Issuers may select from such pools without soliciting separate proposals provided the pools are established via procedures and criteria consistent with this Order.

5. Issuers, other than those referred to in section 4 of this ` Order, shall: (a) formulate procedures consistent with the above criteria for the selection of financial advisors, senior managers and/or co-managers; (b) select such financial advisors, senior managers and/or co-managers based on said procedures and criteria; and (c) make the selection, procedures and criteria available to the public. Such procedures shall provide for an open and competitive process. Information regarding the firm(s) solicited, the firm(s) selected and criteria applied shall also be made available to the public by issuers.

6. Issuers shall undertake the selection process outlined in section 4 of this Order except in those rare instances in which each of the following three criteria have been met:

a. An innovative idea has been brought to the issuer;

b. A request for proposal cannot be constructed without communicating the new idea; and

c. The issue would not benefit from a competitive selection process.

SELECTION OF BOND COUNSEL

7. Appointments of bond counsel shall generally be made on a competitive basis where price is a factor but not the sole factor. The Attorney General of New Jersey (the "Attorney General") shall develop guidelines for the solicitation of such counsel. However, where unusual circumstances may require the appointment of bond counsel with a particular expertise, such as unique prior experience with a transaction, direct appointments shall be permitted.

8. When bond counsel appointments are made pursuant to N.J.S.A. 52:17A-13 or where the Attorney General acts as general counsel to an issuer, the Attorney General shall establish procedures for the appointment of bond counsel on a competitive basis and under criteria that place great weight on the bond counsel's qualifications and suitability for a particular transaction as well as the bond counsel's fee proposal.

a. Such criteria shall include, but not be limited to, the following:

1) Experience of the bond counsel and the proposed team with similar transactions;

2) Familiarity with the State laws relevant to the proposed bond issue;

3) Proficiency with securities, tax and other laws relevant to the financing;

4) Quality of proposed legal strategy with respect to specific questions posed in the request for proposal;

5) Quality of past legal services rendered to the State and its authorities; and

6) Fees.

b. Such procedures and criteria may include a process whereby a group, or "pool," of bond counsel firms may be appointed to serve as counsel to frequent bond issuers for a term not to exceed two years. Issuers may select from such pools without soliciting separate proposals for each bond issue, provided the pools are established via procedures and criteria consistent with this Order. This "pool" process shall, where appropriate, involve the establishment of a fee schedule for such transactions at the outset of the term.

c. Such procedures and criteria may include a process whereby bond counsel may be utilized for two or more transactions, provided that the transactions are part of a larger bonding program of similarly secured financings and further provided such procedures and criteria are consistent with this Order.

9. In cases where the Attorney General is not statutorily required to appoint bond counsel or does not serve as general counsel to an issuer, issuers are hereby directed to establish their own competitive appointment processes based on the criteria enumerated in section 8 of this Order to ensure the selection of the most qualified firms at the lowest possible fees.

10. In establishing policies and procedures for the selection of bond counsel, issuers and the Attorney General shall provide particular consideration for New Jersey law firms and minority-owned and women-owned law firms.

11. The policies and procedures established by issuers with respect to the appointment of bond counsel, as well as procedures established by the Attorney General in accordance with N.J.S.A. 52:17A-13, shall be available to the public.

APPOINTMENT OF ARCHITECTS, ENGINEERS AND ACCOUNTANTS

12. The State and its contracting entities shall continue to utilize, to the fullest extent practicable, competitive practices for the selection of architects, engineers and accountants. Contracting entities shall establish their own procedures for competitive selection of architects, engineers and accountants. Such practices shall be aimed at the fundamental goals of ensuring that each contracting entity of the State will receive the best services at the lowest costs. Information regarding such procedures shall be made available to the public.

13. Any selection of architects, engineers and accountants shall include particular consideration for minority-owned and women-owned firms.

30-DAY REPORTS

14. Within 30 days of the closing of a bond issue, the allocation of bonds and fees received by each member of the underwriting syndicate and a breakout of the costs of issuance paid by the issuer shall be reported to the Treasurer and be publicly available.

ANNUAL DEBT MANAGEMENT PLAN

15. Each issuer shall annually, on or before January 31, render a debt management plan with respect to its bond financing programs to the Treasurer. This plan shall include information on the outstanding debt and debt service costs for the prior and current year and shall also describe the proposed bond issues for the year outlining the size and purpose of each transaction; the expected sale date of the issue; the security and expected ratings for each transaction; the expected method of sale and the method of selecting financial professionals consistent with the terms of this Order.

APPLICATION AND EFFECTIVE DATE

16. This Order shall apply to the State, its agencies and all authorities that are required to submit their minutes, resolutions or actions for gubernatorial approval or veto. Additionally, the State's participation in all other financings shall, to the extent practicable, be conditioned on compliance with the procedures and criteria set forth herein. "State's participation" includes but is not limited to instances in which a financing: 1) is secured directly or indirectly by the moral obligation of the State; or 2) is secured or financed directly or indirectly by State appropriations; or 3) includes as part of an issuer's offering statement State financial information. The determination as to whether it is practicable to apply this Order to such financings shall be made concurrently by the Treasurer and Attorney General.

17. This Order shall take effect on January 1, 1995 (the "effective date") and shall supersede Executive Order No. 79 (Florio) and Executive Order No. 92 (Florio) as of that date; however, any agency and authority required to comply with the terms of this Order may do so prior to the effective date and in lieu of the terms of Executive Orders No. 79 and No. 92, provided such agency or authority has adopted the procedures necessary to comply with all aspects of this Order.

SUBSEQUENT REVIEW

18. The Advisory Panel is hereby directed to reconvene and hold at least one public hearing on or about one year from this Order's effective date for the purpose of obtaining public testimony regarding the implementation of this Order. Thereafter, the Advisory Panel shall recommend modifications, if any, necessary to better achieve the objectives of this Order as expressed above.

GIVEN, under my hand and seal
this day of in the Year of Our Lord,
One Thousand Nine Hundred and
Ninety-Four and of the Independence
of the United States, the Two Hundred
and Eighteenth.

/s/ Christine Todd Whitman
GOVERNOR

Attest:

/s/ Peter Verniero
Chief Counsel to the Governor

Contact Us | Privacy Notice | Legal Statement & Disclaimers | Accessibility Statement
NJHome
Statewide: NJ Home | Services A to Z | Departments/Agencies | FAQs
Copyright © State of New Jersey, 1996-2010
This site is maintained by the New Jersey Office of Information Technology