New Jersey Division of Local Government Services Local Finance Notice 2026-04
LFN 2026-04: Storm Response, Emergency Spending, and Procurement — What Local Units Can (and Cannot) Do After a Declared Emergency
Following the January 2026 winter storm and the Governor’s emergency declaration under Executive Order 8, the Division of Local Government Services issued Local Finance Notice 2026-04 to guide municipalities, counties, authorities, school districts, and fire districts through the complex financial and procurement rules that apply during emergency response and recovery.
This Notice is essential reading for any local unit incurring storm-related costs.
Emergency Appropriations: Cap Exceptions Are Available — But Not Automatic
One of the most consequential changes is the formal codification of long-standing budget extensions:
- Budget introduction deadline: March 31
- Budget adoption deadline: April 30
Budgets introduced or adopted at the next regularly scheduled governing body meeting after these dates will no longer be considered late, eliminating years of uncertainty around annual extensions.
Budget Mechanics Matter
For budgets not yet adopted, emergency storm costs must be shown on Sheet 20 — Operations Excluded from CAPS, using the exact statutory captions prescribed in the Notice. CFO certification is required, and all amendments must be submitted through FAST, not email or regular mail.
For already-adopted budgets, emergency appropriation resolutions require:
- A two-thirds vote of the governing body
- CFO certification
- Filing with DLGS
- Director approval if exceeding the 3% limitation
Spreading the Cost: Refunding and Special Emergencies
When storm costs are substantial, municipalities and counties may apply to the Local Finance Board to refund emergency appropriations over multiple years. Historically, this relief has been granted when taxpayer impacts would otherwise be significant.
Municipalities may also use Special Emergency Ordinances to fund storm-related road and infrastructure repairs over a three-year period, subject to prior Local Finance Board approval.
Emergency Procurement: Flexibility with Guardrails
Emergency contracts may be awarded without public bidding when immediate action is required to protect public health and safety. These contracts are:
- Exempt from Pay-to-Play
- Temporarily exempt from Business Registration Certificate requirements (payment prohibited until BRC is provided)
- Still subject to prevailing wage, PWCR, and debarment rules
Contracting units must also ensure vendors are not listed on State or federal debarment databases.
Fire Districts: Separate Rules Still Apply
Fire districts may adopt emergency appropriations post-budget adoption, subject to:
- A 3% annual cap
- Two-thirds approval by both the fire district and municipal governing body
- Deferred charge treatment in the following year’s budget
Estimated Tax Bills: Director Approval Now Available
Beginning in 2026, calendar-year municipalities may seek Director approval to mail estimated tax bills after June 30 if good cause is demonstrated. Similar relief is available for State Fiscal Year municipalities for first and third installments.
Key Takeaways for Local Units
LFN 2026-04 provides critical flexibility for storm response — but only when procedures, certifications, and documentation are handled correctly. Emergency spending shortcuts are allowed, not excuses for weak compliance. Local units that follow the Notice closely can respond quickly while protecting themselves from audit findings and statutory violations.
Local Finance Notice 2026-04
Please follow the link below to read more about these items and guidance on how your local unit can implement them: https://www.nj.gov/dca/dlgs/lfns/2026/2026-04.pdf
Contact Wielkotz & Company, LLC Today
For further information on Local Finance Notice 2026-04 and its implementation feel free to reach out to Steven Wielkotz at (973)-835-7900 ext. 201 or sdw@w-cpa.com.
