NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST OPEN PUBLIC MEETING. MINUTES March 13, 2014

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2 New Jersey Environmental Infrastructure Financing New Jersey s Water Quality Future Warren H. Victor, Chairman Herbert Barrack, Vice Chairman Roger Ellis, Secretary Robert A. Briant, Jr., Treasurer Andrew P. Sidamon-Eristoff, State Treasurer Bob Martin, DEP Commissioner Richard E. Constable, III, DCA Commissioner David E. Zimmer, CFA, Executive Director March 13, 2014 NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE TRUST OPEN PUBLIC MEETING 1. CALL TO ORDER: MINUTES March 13, 2014 A meeting of the New Jersey Environmental Infrastructure Trust was convened on Thursday, March 13, 2014 in the conference room of 3131 Princeton Pike, Building 4, Suite 216, Lawrenceville, New Jersey. Chairman Victor called the meeting to order at 10:00 a.m. 2. OPEN PUBLIC MEETING ACT STATEMENT: Executive Director Zimmer read the Open Public Meeting Act Statement into the record. 3. ROLL CALL: Ms. Josephine Manzo conducted roll call to which Mr. Victor, Mr. Barrack, Mr. Briant, Mr. Ellis, Mr. Requa, Ms. Campbell, and Mr. Chebra all responded affirmatively. DIRECTORS Warren Victor, Chairman (*) Herbert Barrack, Vice Chairman (*) Roger Ellis, Secretary Robert A. Briant, Jr., Treasurer Eugene Chebra (for DEP Commissioner Martin) Christine Campbell (for State Treasurer Sidamon Eristoff) James Requa (*) (for DCA Commissioner Constable) OTHERS David E. Zimmer, Executive Director Frank Scangarella, Assistant Director Lauren Seidman Kaltman, Chief Financial Officer John Hansbury, Chief Budget Officer Kerstin Sundstrom, Governor s Authorities Unit Clifford T. Rones, Deputy Attorney General Richard Nolan, McCarter & English LLP Geoffrey Stewart, Public Financial Management (*) Participated via teleconference A roll call will be conducted for all action items Princeton Pike, Building 4, Suite 216, Lawrenceville, NJ Website: Phone: Fax:

3 4. APPROVAL OF THE MINUTES: Chairman Victor opened discussion of the minutes of the Thursday, February 20, 2014 Trust Board meeting. Chairman Victor asked if there were any comments or questions, hearing none Chairman Victor requested a motion for approval. Mr. Briant moved for the approval of the minutes. Mr. Ellis seconded the motion. The motion was carried 7 to 0 with 0 abstentions. 5. ANNOUNCEMENTS: Chairman Victor raised questions as to certain credit stresses currently in the municipal bond market. Mr. Stewart of Public Financial Management (PFM) responded that he would coordinate a briefing package for the Board to be presented at the next meeting. Executive Director Zimmer noted that the list of the substantive events which had occurred since the last Trust Board meeting, as well as the correspondence that was issued during the same time period, would be available on the Trust s webpage in a format that allows for copying under the General Information tab at: information/miscellaeous/board meeting agenda Executive Director Zimmer and Trust senior staff participated in a number of client project meetings or conference calls relative to the Financing Program including: o Sterne Agee to discuss short term funding options o State Energy Resiliency Bank o Trust s Bond Counsel and Financial Advisor to discuss Detroit s bankruptcy plan and its potential impact on the Trust s bond holders The next Board meeting is scheduled for Thursday, April 10, 2014 at 10:00 am at the Trust s offices. There were no comments or questions. 6. PUBLIC COMMENTS: Chairman Victor invited comments from the public. Hearing none, the meeting continued. Page 2

4 7. UNFINISHED BUSINESS: Mr. Chebra of the NJDEP s Municipal Finance and Construction Element, reported on Agenda Items 7A and 7B. A. Mr. Chebra reported that there are 203 active projects totaling $1,181,123,074 and 906 closed projects with loans outstanding totaling $4,404,626,026 for a grand total of 1,109 projects at $5,585,749,100. Mr. Chebra reported that after closing SFY2015 projects, the active project number will increase by an additional 98 projects totaling $270MM for an estimated grand total of 1,207 projects at $1.5B. B. Mr. Chebra also discussed the SFY2014 Combined Financing Loan Programs: SFY2014 Clean Water Financing Program: Traditional and Supplemental Program: Supplemental Program: Track II Projects: Barnegat Bay Projects: 43 Projects Totaling 5 Projects Totaling 3 Projects Totaling 3 Projects Totaling $164,741,249 $25,477,107 $4,187,440 $3,170,129 Total Clean Water Projects 54 Projects Totaling $197,575,925 SFY2014 Drinking Water Financing Program: Traditional and Supplemental Program: Supplemental Program: Legacy: Track II Projects 38 Projects Totaling 2 Projects Totaling 1 Projects Totaling 3 Projects Totaling $66,398,704 $225,545 $2,678,000 $675,250 Total Drinking Water Projects 44 Projects Totaling $69,977,499 SFY2014 Grand Totals: Clean & Drinking Water Program Totals: 98 Projects $267,553,424 There were no comments or questions. C. Executive Director Zimmer reported on the status of the Trust s outstanding Requests For Proposals (RFPs): RFP for Financial Advisory Services Pursuant to Resolution No at the February 2014 Trust Board meeting, on March 19, 2014, the Trust will issue an RFP for Financial Advisory Services and expects to present a recommendation for contract award to the Board at the June meeting. Page 3

5 RFP for Investment Advisory Services In addition, Agenda Item 8B contained a request for the Board s authorization to distribute an RFP for Financial Advisory Services. D. Executive Director Zimmer next reported on the status of the Interim Financing Program (IFP): The Trust did not receive any new applications from the previous month. The Trust has 22 IFP loan applications totaling $32,427,081. The Trust has closed on 17 IFP loans applications totaling $24,163,849. The Trust has made IFP loan disbursements to 14 projects to date totaling $10,353,677. The IFP report was provided to the Board of Directors of the Trust in satisfaction of the requirements of Section 6 of the authorizing Resolution No adopted on December 13, There were no comments or questions. 8. NEW BUSINESS: A. Executive Director Zimmer requested that the Trust s Chief Budget Officer, John Hansbury, introduce the Resolution No accepting the February 2014 and amended January 2014 Treasurer s Reports. 7 Mr. Hansbury presented the Report announcing that in February, the Trust received revenues from fees of $5, and paid bills totaling $159, and that the Trust had received and is reviewing bills for payment totaling $1,506, Mr. Hansbury asked if there were any comments or questions regarding the report as presented. Hearing none, Chairman Victor requested a motion for approval. The resolution was moved for adoption by Ms. Campbell and seconded by Mr. Briant. The motion was carried 7 to 0 with 0 abstentions. The breakdown of pending bills was presented to the Board in written form is as follows: Princeton Pike Office Park, LLC $9, (Rent March 2014) Current lease dates 12/1/ /30/2018 Annual Rent $64, New Estimated annual nets $44, divided by 12 months equals $9, per Page 4

6 month. PFM Asset Management, LLC $12, (Investment Advisor January 2014) Pursuant to Trust Resolution number 12 43, Current contract runs from 7/30/2012 to 7/30/2014. Fee based on aggregate assets under management. Invoice# J&J Staffing Resources $13, (Part Time salaries February 2014, inv#'s:322471, , , ) Treasurer, State of New Jersey $1,328, (Salary & Fringe Reimbursement, and Indirect Costs) Bank of America Business Card $3, (Credit Card Payment #5667) McCarter & Englishm LLP $137, (Bond Counsel Services: SFY2014, Post Close Matters, Small System (NANO), SAIL Financing Program) TOTAL $1,506, B. Executive Director Zimmer requested Assistant Director Scangarella to introduce Resolution No authorizing the issuance and distribution of an RFP for Investment Advisory Services pursuant to Policy and Procedure No (Procurement Policy), and in accordance with the Rules and Regulations of the State Investment Council. The contracted services are for two fiscal years beginning August 1, 2014 through June 30, 2016, with an option to extend one year to June 30, 2017 upon Board approval. The Procurement Committee will review, evaluate, and rank all proposals pursuant to the criteria as stipulated in the RFP. Mr. Scangarella asked if there were any comments or questions. Hearing none, Chairman Victor requested a motion for approval. The resolution was moved for adoption by Mr. Requa and seconded by Mr. Barrack. The motion was carried 7 to 0 with 0 abstentions. C. Executive Director Zimmer introduced Resolution No This resolution certifies projects for the SFY2014 NJEIFP pool program. A list of those projects, included in the attachment of the resolution, all received certification from the DEP and have satisfied the NJEIT s creditworthiness standards for inclusion in the Financing Program. Mr. Zimmer noted that the list of project certifications for the Direct Loan Program will be presented to the Board under a separate resolution at the April meeting. Page 5

7 Mr. Requa requested an explanation of the projects determined as shadowbox rating. The Trust s financial advisor, Mr. Stewart from PFM and Executive Director Zimmer, addressed his question. Chairman Victor asked if there were any comments or questions. Hearing none, Chairman Victor requested a motion for approval. The resolution was moved for adoption by Mr. Chebra and seconded by Mr. Ellis. The motion was carried 7 to 0 with 0 abstentions. 9. EXECUTIVE SESSION: Chairman Victor asked if there was a need for an Executive Session. Executive Director Zimmer responded there was not. Chairman Victor asked Executive Director Zimmer if there was any further action required by the Board. Mr. Zimmer answer there was not. Chairman Victor questioned the cost of arbitrage rebate work and if those costs were the same for a borrower depending on the size of the loan. Mr. Stewart of PFM replied that the tax regulations and monitoring of the bond proceeds were the same regardless of the size of the loan. Chairman Victor then asked for a motion for an adjournment. Mr. Briant moved to adjourn the meeting. The motion was second by Ms. Campbell. The motion was carried 7 to 0 with 0 abstentions. The meeting was adjourned at 10:40 a.m. Page 6

8 RESOLUTION NO RESOLUTION AUTHORIZING APPROVAL OF THE FEBRUARY 2014 AND AMENDED JANUARY 2014 TREASURER REPORTS WHEREAS, the New Jersey Environmental Infrastructure Trust (the "Trust") has reviewed the Treasurer Reports for February 2014 and the amended January 2014, and WHEREAS, the Trust has placed in its files certain correspondence relating to expenses incurred in relation to the Trust. NOW THEREFORE BE IT RESOLVED, that the Trust hereby accepts the Treasurer Reports for February 2014 and the amended January 2014 and requests that the same be entered into the record. Adopted Date: March 13, 2014 Motion Made By: Motion Seconded By: Ms. Campbell Mr. Briant Ayes: 7 Nays: 0 Abstentions: 0

9 RESOLUTION NO RESOLUTION AUTHORIZING ISSUANCE OF A REQUEST FOR PROPOSALS FOR INVESTMENT ADVISOR SERVICES WHEREAS, the New Jersey Environmental Infrastructure Trust (the "Trust") is organized and existing under the New Jersey Environmental Infrastructure Trust Act, constituting Chapter 334 of the Pamphlet Laws of 1985 of the State of New Jersey (codified at N.J.S.A, 58:11B-1 et seq.), as the same may from time to time be amended and supplemented (the Act); and WHEREAS, pursuant to, and in accordance with Section 5(j) of the Act, the Trust is authorized to invest moneys of the Trust not required for immediate use in accordance with the Rules and Regulations of the State Investment Council or as may otherwise be approved by the Director of the Division of Investment in the Department of the Treasury. NOW THEREFORE BE IT RESOLVED THAT, the Executive Director of the Trust is authorized, in consultation with counsel, to prepare and distribute a Request for Proposal (RFP) to such Investment Advisors pursuant to Policy and Procedure No (Procurement Policy). BE IT FURTHER RESOLVED THAT the Executive Director is further authorized to designate a procurement committee pursuant to the Procurement Policy to independently review all proposals received and make a report and recommendation as to the selection of an Investment Advisor to the Executive Director; and BE IT FURTHER RESOLVED THAT the Executive Director shall present the Board with a recommendation for contract award for Investment Advisor Services for a contract period of two (2) fiscal years, starting August 1, 2014 through June 30, 2016; with an option to extend one-year to June 30, 2017 upon approval by the Board; and BE IT FURTHER RESOLVED THAT the Executive Director is authorized to take all other actions consistent with the Procurement Policy to procure the services of an Investment Advisor. Adopted Date: March 13, 2014 Motion Made By: Motion Seconded By: Mr. Requa Mr. Barrack Ayes: 7 Nays: 0 Abstentions: 0

10 RESOLUTION NO RESOLUTION CERTIFYING PROJECTS FOR THE STATE FISCAL YEAR 2014 NEW JERSEY ENVIRONMENTAL INFRASTRUCTURE FINANCING PROGRAM WHEREAS, pursuant to Sections 5(m) and 9(a) of the New Jersey Environmental Infrastructure Trust Act (N.J.S.A. 58:11B-1 et seq.) (the "Act"), the New Jersey Environmental Infrastructure Trust (the "Trust") is authorized to make and contract to make loans to local government units or public water facilities (the "Borrowers") to finance a portion of the cost of environmental infrastructure projects which they may lawfully undertake or acquire and for which they are authorized by law to borrow funds; and WHEREAS, the Borrowers having projects listed in P.L. 2013, c.94 and in the Trust's Financial Plan submitted to the Legislature in May of 2013 pursuant to N.J.S.A. 58:11B-21 submitted applications to the Trust for Trust loans under the State Fiscal Year (SFY) 2014 Environmental Infrastructure Financing Program (as described in the Trust's Financial Plan) to finance a portion of the allowable costs of their environmental infrastructure projects; and WHEREAS, the Legislature has authorized in P.L.2013, c.94 the expenditure of Trust funds to finance a portion of the allowable costs of the projects of certain Borrowers designated in Sections 2 and 4 of this legislation (constituting the "SFY2014 Project Priority List"); and WHEREAS, representatives of the Department of Environmental Protection (DEP) and the staff of the Trust have reviewed and evaluated these applications in accordance with the provisions of N.J.A.C. 7: and 4.46, advised the Trust which of these applications may be deemed complete, made recommendations to the Trust which applications may be approved or conditionally approved for Trust Loans, and determined the amounts presently constituting the allowable costs which may be financed with Trust loans; and WHEREAS, the Trust has received DEP certifications that certain projects are in conformity with P.L. 1985, c.329 the Wastewater Treatment Bond Act of 1985; P.L. 1992, c.88, N.J.S.A. 58:12A-1 et seq. the Green Acres, Clean Water, Farmland and Historic Preservation Bond Act of 1992; P.L. 2003, c.162 the Dam, Lake, Stream, Flood Control, Water Resources, and Wastewater Treatment Project Bond Act of 2003; N.J.S.A. 58:12A-2 Et. Seq., and/or P.L. 1981, c.261 the Water Supply Bond Act of 1981 and any rules and regulations adopted pursuant thereto; and with respect to certain other projects, certification conditioned upon such projects satisfying certain contingencies required by the DEP pursuant to its regulations. NOW THEREFORE BE IT RESOLVED, the Trust Board of Directors hereby approves the project applications set forth in Appendix A for Trust loans under the SFY2014 Environmental Infrastructure Financing Program, subject to certification of the corresponding projects by the Chairman or Vice Chairman of the Trust pursuant to the provisions of P.L. 2013, c.94, Section 6 as being in conformity with the provisions of the Act and rules and regulations adopted pursuant thereto. Adopted Date: March 13, 2014 Motion Made By: Motion Seconded By: Mr. Chebra Mr. Ellis Ayes: 7 Nays: 0 Abstentions: 0

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13 SUMMARY TOTAL IFP APPLICATIONS 22 TOTAL AMOUNT REQUESTED $32,427,081 TOTAL CLOSED PROJECTS 17 TOTAL DISBURSED TO DATE $10,353,677 NJEIT 2014 IFP Summary: as of 3/12/14 Agenda Item 7E Borrower Proj # IFP App. Date Amount Requested CLEAN WATER Description Comment IFP Closing Date Amount of IFP Req's Processed Date IFP Req's Summary Atlantic Highlands Highlands RSA S /8/13 $ 2,833,082 Sewerage Force main Replacement CLOSED FUNDED 8/22/13 2,833,082 8/23/13, 10/17/13, 11/18/13, 12/2/13, 1/31/14 Ewing Lawrence SA S /17/13 $ 500,000 WWTP improvements P&D loan CLOSED FUNDED 8/14/13 500,000 12/4/13 Fanwood Borough S /23/13 $ 1,369,674 Glenwood Ave. Area drainage improvements CLOSED FUNDED 7/11/13 609,866 2/19/14 Hanover SA S /18/13 $ 7,510,630 Rehab of primary digester #2 CLOSED FUNDED 6/26/13 Ocean Gate Borough S /15/13 $ 450,000 Sanitary sewer rehab infiltration/inflow correction CLOSED FUNDED 6/6/13 167,376 7/12/13, 8/19/13, 1/9/14 Ocean Twp S /14/13 $ 377,588 Replacement ACP sewer main Hornblower Dr. CLOSED FUNDED 6/21/13 Passaic Valley SC S /12/13 $ 3,983,802 Plantwide boiler upgrd/obtain exempt 6 under NJSA 34:7 1 6 Passaic Valley SC S /13/13 $ 1,119,430 Rehab of Kearny Harrison Newark 42in branch interceptor Warren County MUA (Pequest) S /12/13 $ 3,158,674 Oxford area WWTF upgrade CLOSED FUNDED 1/21/14 583,574 2/19/14 Watchung Borough S /28/13 $ 1,219,343 Contr#2 08, sanitary sewer ext., Johnston Dr. to Bonnie Burn CLOSED FUNDED 12/23/13 329,895 2/11/14 Total CW projects: 10 $22,522,223 # OF CW PROJECTS CLOSED 8 $5,023,793 Berkeley Twp MUA W /6/14 $ 700,000 Install 10,000 LF of new water mains to homes w/private wells Hammonton Town W /1/13 $ 1,103,963 Installation of radium removal treatment at Well#4 CLOSED FUNDED 12/12/13 469,108 2/19/2014, 3/6/14 Independence MUA W /22/13 $ 262,000 Autumn Ln well head rehab & plant improvement CLOSED FUNDED 10/11/13 237,418 10/29/13, 11/26/13, 2/19/14, 2/24/14 Manchester UA W /24/13 $ 1,051,245 Rehab Central Ave storage tank CLOSED FUNDED 9/10/13 797,989 9/12/13,9/30/13,10/17/13,11/14/13,1 2/18/13,1/13/14,2/7/14,3/12/14 Manchester UA W /24/13 $ 240,700 Rehab high service reservoir/security improvements CLOSED FUNDED 9/10/13 70,407 9/12/13,9/30/13,10/17/13,11/14/13,1 2/18/13,1/13/14,2/7/14,3/12/14 Manchester UA W /29/13 $ 436,000 demolition of structures, security, improv's filter plt CLOSED FUNDED 9/10/13 436,000 9/12/13,9/30/13,10/17/13,11/14/13,1 2/18/13,1/13/14,2/7/14,3/12/14 Merchantville Pennsauken WC W /15/13 $ 2,571,000 Park Ave. Tank Painting CLOSED FUNDED 4/19/13 2,254,000 6/6/13,9/3/13,9/20/13,10/22/13,12/2 0/13,1/15/14 Newfield Borough W /25/13 $ 995,086 Installation of radium treatment for well #5 CLOSED FUNDED 2/14/14 989,962 2/14/14 Newfield Borough W /30/13 $ 9,864 Replace meter station at Vineland interconnection CLOSED FUNDED 2/14/14 Ocean Gate Borough W /27/12 $ 75,000 Wind Turbine CLOSED FUNDED 2/8/13 75,000 3/5/13 Old Bridge MUA W /2/13 $ 1,751,000 Higgins Rd & Rt 516 water storage tank connection Old Bridge MUA W /2/13 $ 709,000 Replacement of 2,100 LF of water main with 16 in on Rt 516 Total DW projects: 12 $9,904,858 # OF DW PROJECTS CLOSED 9 $5,329,884 Grand Total Projects: 22 $32,427,081 # OF TOTAL PROJECTS CLOSED 17 $10,353,677 ***LAST DAY FOR TRUST IFP REQ PROCESSING IS 4/17/14*** DRINKING WATER TOTAL $ AMT OF PROJECTS CLOSED $24,163,849 TOTAL PROJ'S GIVEN FUNDS 14

14 NJEIT BOARD MEETING MARCH 13, 2014 SUMMARY OF ANNOUNCEMENTS: Executive Director Zimmer summarized the substantive events and correspondence issued since the last Trust Board meeting. H2 LOans meetings continue between the Trust and DEP technology staffs. Executive Director Zimmer met with DEP Senior Staff to discuss long term Solid Waste economics and financing strategies. Chief Budget Officer Hansbury participated in the State s Local Demonstration Projects round table in Hoboken. Executive Director Zimmer, DEP Deputy Commissioner Michele Siekerka, BPU Senior Policy Advisor Mike Winka, GORR Representative s Eric Daleo and James Jones, and the Governor s Authorities Unit s Assistant Counsel Kerstin Sundstrom met to discuss coordination issues for the Energy Resiliency Bank. Executive Director Zimmer and Trust senior staff participated in a number of client project meetings or conference calls to discuss program qualification requirements for funding. The EIT participated in project funding meetings with: o Sterne Agee; Discuss short term funding options o Trust s Bond Counsel and Financial Advisor s; Discuss Detroit s bankruptcy plan and its potential impact on GO bond holders The next Board meeting is scheduled for Thursday, April 10, 2014 at 10:00 am at the Trust s offices. SUMMARY OF CORRESPONDENCE: During the past month, the Trust received or sent the following noteworthy correspondence. Pursuant to the Trust s Green Initiative, the agenda package does not include copies of the following correspondence. Board members should contact the Trust Secretary if they wish to receive hard copies Certificates were sent to the following Program borrowers: 2012A Aberdeen Twp Project No. W A Flemington Borough Project No. W / A Pennsauken SA Project No. S A Salem City Project No. W (ARRA) 2010A Secaucus MUA Project No. S Orange Twp Ciy Project No. W /002/003/004 1 A copy of the full list of announcements is available on the Trust s webpage in a format that allows for copying under the General Information tab at: information/miscellaneous/board meeting agendas