What is the minimum down payment required for a bond ordinance?

The minimum down payment required for a bond ordinance in New Jersey is 5%. This percentage is established by the Local Bond Law, which governs how municipalities can finance projects through the issuance of bonds. The 5% down payment is intended to show a commitment to the project and ensure that the municipality has a stake in the financing, preventing excessive borrowing without any upfront investment.

This requirement helps to maintain fiscal responsibility by ensuring that municipalities do not overextend themselves financially. It serves to protect both the municipality and its taxpayers by ensuring that at least a portion of the funding comes from the municipality’s own resources. By requiring this down payment, the Local Bond Law promotes prudent financial practices among local governments.