In response to the severe storms and flooding on July 14, Governor Murphy signed Executive Order 392 declaring a state of emergency. The Division of Local Government Services (DLGS) has issued Local Finance Notice (LFN) 2025-10 regarding the budget and procurement guidance for storm response and recovery.
N.J.S.A. 40A:4-46 et seq. establishes the process by which municipal and county officials can make emergency appropriations and expenditures for weather-related disasters. Emergency expenses are defined as those related to storm response, recovery, and restoration of services not anticipated in the current year’s budget. N.J.S.A. 40A:4-55 allows for municipalities to adopt ordinances to cover extraordinary expenses not anticipated at time of budget adoption for repair and reconstruction of streets, roads, bridges, or other public property damaged by flood or hurricane.
For municipalities that have adopted their budgets, an Emergency Appropriation Resolution must be with the approval by a two-thirds (2/3) vote of the full membership of the governing body and a certification of the Chief Financial Officer. A copy of the Resolution must be filed with the DLGS Director via email at DLGS@dca.nj.gov. If the Resolution exceeds the 3% expenditure limit, approval of the DLGS Director is required. For emergency appropriations exceeding the cost of providing services under non-emergency conditions, the deferred charge to be raised in the following year’s budget would be an eligible levy cap exception and municipal appropriations cap exception.
For municipalities that have not adopted their budgets, the provisions in N.J.S.A. 40A:4-20 allow for temporary emergency appropriations directly related to storm response efforts. The normal requirements regarding emergencies must be followed.
Expenditures from a state of emergency are an exception to the appropriations (N.J.S.A. 40A:4-53(bb)) and levy caps (N.J.S.A. 40A:4-45.45(b)). Levy cap exceptions are only available for "extraordinary costs" incurred for the emergent preparation, response, recovery, and restoration of public services due to events not anticipated in the current budget year and subject to the terms of a declaration of a state of emergency. Only a portion of non-emergency services will be exempt from the cap. Municipal budgets must include upon introduction or amend to include before adoption, detailed appropriations on sheet 20 under “Operations Excluded from ‘CAPS’” with the heading: “Declared State of Emergency Costs for July 2025 Storm Response & Recovery: N.J.S.A. 40A:4-45.45(b) and 40A:4-45.3(bb).” CFOs must certify that the appropriations are permitted exclusions.
Regardless of budget process, municipalities can facilitate a 3-year funding cycle for extraordinary expenses for infrastructure repairs by adopting a special emergency ordinance. Municipalities and counties seeking to spread the emergency-related costs over a period of years must first seek Local Finance Board approval.
Procedures concerning emergency appropriations relating to Fire Districts pursuant to N.J.S.A. 40A:14-78.11 through 40A:14-78.15 are outlined in LFN 2025-10.
Municipalities and counties with Storm Recovery Reserves may adopt a resolution to use the funds for related storm recovery costs after current budget appropriations meant for storm recovery have been expended. Any reimbursement of those expenditures must go back to the reserve. A Dedication by Rider Resolution is required to create a storm recovery reserve or convert a snow removal reserve for the purpose of using the funds for storm related expenditures. Resolutions should be submitted to DLGS through the FAST system.
Emergency Procurement because of an emergency that impacts the public health, safety or welfare requiring the immediate delivery of goods or services may be awarded without public bidding regardless of the bid threshold under the Local Public Contracts Law and Public School Contracts Law and are exempt from Pay-to Play for public exigency. An Emergency Procurement Report is no longer needed if contracting units awarding contracts fall under the “public exigency” exception. Additionally, a Business Registration Certificate (BRC) is not required to enter into a contract for emergency purposes if the vendor or contractor agrees to provide it within 2 weeks of the contract’s execution. Payment cannot be processed until the BRC is provided.
Contractors awarded public works contracts under emergency procedures must be notified of applicable Public Works Contractor Registration (PWCR) and prevailing wage requirements at the time of award.
The Division of Purchase and Property’s NJ Start website lists all State cooperative purchasing contracts available to local governments. DLGS will also provide consultation on storm-related recovery contractors that are registered members of a cooperative purchasing system. DLGS recommends that contracting units follow procedures regarding contracts that required the Russia-Belarus and Iran certifications as outlined in LFN 2023-11 and LFN 2024-04.
For further information, please consult LFN 2025-10 or contact DLGS.
Contact: Erin Knoedler, Legislative Analyst, eknoedler@njlm.org, 609-695-3481, x116.