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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 Sexy真人y,
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
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