40A:2-32 Sale of bonds; bidding requirements.
40A:2-32. a. (1) All bidders shall be required to deposit cash delivered by wire or otherwise or a certified or cashier's or treasurer's check, drawn upon a bank or trust company, equal to not less than 2% of the bonds to secure the local unit in part from any loss resulting from the failure of the bidder to comply with the terms of his bid, or as liquidated damages for such failure.
(2) The local finance board may adopt rules to permit local units to accept a financial surety bond in lieu of a certified, cashier's or treasurer's check as required in paragraph (1) of this subsection.
b. All sealed bids for bonds shall be publicly opened and announced, and all bids received electronically shall be received and announced, at the advertised time and place of sale, except upon a postponement and recommencement of the public sale made in accordance with the provisions of subsection b. of N.J.S.40A:2-30 in which case such bids or proposals shall be publicly opened, received and announced, as appropriate, at the postponed and recommenced date. Such bids as comply with the terms of the notice of sale shall be considered, and any bid not complying with the terms of such notice may be rejected. All bids received may be rejected.
c. Bonds of two or more issues may be sold on the basis of combined maturities, or the maturities of each issue offered for sale.
d. Bonds may be offered for sale at a single rate of interest, or bidders may be requested to name a single rate of interest, but no proposal shall be considered which offers to pay less than the principal amount of bonds offered for sale or which names a rate of interest higher than the lowest rate of interest stated in any legally acceptable proposal. As between proposals naming the same lowest rate of interest, the proposal offering to accept the least amount of bonds shall be accepted, the bonds to be accepted shall be those first maturing, and as between such proposals, the proposal offering to pay the greatest premium shall be accepted. The amount of premium bid for the bonds shall in no event exceed $1,000.00 for the principal amount of bonds offered for sale. In order to effect the foregoing, a sufficient number of the last maturing bonds shall be of the denomination of $1,000.00 or less.
e. (1) Bonds may be offered for sale at different rates of interest for the same issue or different rates of interest for different issues, or parts thereof, or bidders may be requested to name any such rates of interest. No proposal shall be considered under which the total loan is made at an interest cost higher than the lowest net interest cost or the true interest cost to the local unit under any legally acceptable proposal. The governing body shall specify in its notice of public sale advertised pursuant to N.J.S.40A:2-30 whether the award shall be based on net interest cost or true interest cost.
(2) The net interest cost shall be computed by adding to the total principal amount of bonds bid for, the total interest cost to maturity in accordance with such bid and by deduction therefrom of the amount of premium, if any, bid or the addition thereto of the amount of discount, if any, bid.
(3) The true interest cost shall be computed in each instance by determining the interest rate, compounded semi-annually, necessary to discount the debt service payments to the date of the bonds and to the price bid, excluding interest accrued to the delivery date.
f. The governing body may establish additional terms or conditions of sale.
g. The governing body may, by resolution, allow or otherwise delegate to a finance officer the authority to permit bidders to aggregate consecutive principal maturities for which such bidder bid the same interest rate into term bonds, provided that mandatory sinking funds for which redemptions in lieu of the principal maturities are provided. For the purposes of this subsection "term bond" means a bond that is due in a certain year but has mandatory retirement provisions for portions of the term bond on specified dates prior to the maturity date of the term bond itself.
amended 2003, c.15, s.8; 2015, c.95, s.34.