What is required for any long-term borrowing by a municipality?

For any long-term borrowing by a municipality in New Jersey, it is essential to obtain approval from the Local Finance Board and execute a bond ordinance. This process ensures that the borrowing is conducted in compliance with state laws and is subject to oversight, which protects the financial integrity of the municipality.

The bond ordinance serves as the formal legal document that outlines the terms and conditions of the borrowing, including the purpose of the funds and repayment plan. The approval from the Local Finance Board further validates that the municipality's financial plans are sound and that the long-term obligations will not adversely affect its financial stability.

Long-term borrowing usually entails significant financial commitments and impacts whether funds are allocated for ongoing services, capital improvements, or other essential expenditures. Therefore, adhering to these legal requirements helps maintain responsible fiscal management and transparency in municipal operations.