Why NJ should allow local governments to bond for electric passenger vehicles.

1. The importance of allowing local governments to bond
for electric passenger vehicles - A4424/S3025
By Alex Torpey
Business Administrator, City of Lambertville, NJ. Former Borough Administrator, Leonia, NJ
and former mayor of South Orange, NJ
Many local governments are looking for ways to reduce their carbon footprint and improve local air quality. And of
course, many are also looking for ways to reduce costs that can help ease the significant tax burden levied on all
of us who live in New Jersey. Fortunately, electric vehicles are one solution that can contribute to meeting both
goals. Unfortunately, state law currently puts up a major roadblock to these goals. But there is an easy path
forward.
The background: While looking to bring a fully-electric plugin electric vehicle to our police department’s fleet
when I was Borough Administrator in Leonia, Bergen County in 2018, I was thwarted by the state’s Local Bond
Law, N.J.S.A 40A:2-22. This state finance law prohibits the financing of passenger vehicles or station wagons
through bonding, although it does not prohibit SUVs or trucks. This distinction struck me as somewhat arbitrary,
and seems to create an unintended negative outcome, both by arguably frontloading capital equipment costs
onto year one taxpayers if vehicles that will have a service life of 5-10 years are bought with current funds, as
well as ultimately incentivizing governments to buy bigger vehicles because they are just easier to finance. On
top of that, because currently in the US there are only fully electric plugin passenger vehicles (No SUVs or trucks
yet), it basically prevents a town from being able to purchase an electric vehicle if they buy vehicles through
capital, which is fairly common, especially in smaller towns.
After discussing with a number of municipal administrators, police departments, and other stakeholders who
have put fully electric vehicles on the road, I felt confident that starting to move our fleet in that direction would
contribute to lowering ongoing maintenance and fuel costs as well as reduce local pollution and energy usage,
especially if the vehicles were used for certain functions such as traffic control or parking enforcement. So over
the summer of 2018, I decided to do some initial surveying of some stakeholders to try to get some clarity on why
this rule is in place, if it can be changed, either administratively or legislatively, and to find any other information
that might be relevant to working through this issue. An example of some stakeholders surveyed included:
- Leonia’s financial team, including the CFO, Auditors, Financial Advisors, and Bond Counsel
- NJ Department of Community Affairs, Division of Local Government Services
- NJ Department of Environmental Protection
- Sustainable Jersey
- Other municipal governments and municipal administrators, both in and out of New Jersey
- A number of other local and state-wide organizations operating in related spaces
Everyone had generally similar things to say, which was that they weren’t sure what benefit the prohibition on
bonding for passenger vehicles has (if any), and agreed that allowing an exception for electric vehicles would be
likely well-received by local governments looking to cut costs and reduce their impact on the environment.
I began conversations with Assemblyman John McKeon (LD27), Chair of the Assembly Financial Institutions and
Banking Committee. The Assemblyman personally, and his staff, were extremely receptive in listening to our
concerns and thinking through our proposed solution, especially considering how important to the NJ DEP
broader EV adoption is, and what a major roadblock this rule actually is. Ultimately, in August, after internal
review, discussions and some revisions with OLS in Trenton, a bill was finalized, then introduced on September
17th (A4424/S3025), assigned to the Assembly Environment and Solid Waste Committee, and will hopefully move
forward with anticipated broad bipartisan support in both houses. The bill is almost beautiful (yes, I am one who
believes the right type of legislation *can* be beautiful) in its simplicity, simply providing an exception to the
current purchasing prohibition in the New Jersey Local Bond Law if the vehicle is powered by an alternative
energy source, rather than fossil fuels. That’s it!

2. If passed, this would provide an extremely effective new tool for local governments to start to move their vehicle
fleet to lower environmental impact and less costly electric vehicles, which seems relatively clear is the future of
automotive technology. Additionally, I believe that the purchasing power possessed by a group of organized New
Jersey local governments that now can spend “new” money on electric vehicles could be leveraged to infuse the
EV market with new capital and drive its development towards getting more, better, and cheaper electric vehicles
manufactured and on the road. Having the government play the role of infusing new, directed capital in economic
markets can be a great way to make a change, versus trying to legislate it, for example. This could also help
create new job opportunities, maybe even in New Jersey, as manufacturing related to electric vehicles expands,
and as the vehicles themselves continue to improve and become more widely adopted. My hope is that this new
capital could help convince U.S. auto manufacturers to take more seriously the opportunity for electric vehicles
specially built for government uses, such as police patrol vehicles, code/building/administrative vehicles, jitney
buses, utility, solid waste and dump trucks, ambulances, fire apparatus, and more.
This legislation is a big win both for both local finances and the environment, and your support is critical to help
communicate the importance of the issue to our legislators and the public.
If you are interested in voicing your support to allow local governments to bond for electric vehicles,
please find the sample resolution or letter provided below.
Signing onto this doesn’t create any commitments, but rather it communicates your or your municipality or
organization’s interest in seeing this change. If possible, I also ask that you include how much you anticipate
spending on vehicles (excluding fire apparatus, waste disposal trucks, and other heavy-duty uses) such that I
can begin to organize and compile what our approximate purchasing power looks like to eventually send to U.S.
auto manufacturers to see if we can get one to, for example, build a fully electric plug-in police patrol vehicle, etc.
I am available to speak about this in further detail with you, and I will be continuing to coordinate with the
appropriate stakeholders as we move towards a vote and eventual local implementation of this bill.
Very truly yours,
Contact me by email: alex@alextorpey.com or administrator@lambertvillenj.org
Funded in large-part by a grant from Sustainable Jersey, we put
a fully electric Chevy Bolt on the road in Leonia for our police
department.

3. To Whom It May Concern:
In conjunction with municipal administrators, environmental managers, policymakers and related
groups, we are writing to communicate our support and enthusiasm for A4424/S3025 and
are asking for your support for this important technical change to local finance rules.
Allowing local governments to purchase alternative fuel vehicles, including sedans and station
wagons, through the same financing mechanism currently available for gasoline powered SUVs
and light trucks, will have positive taxpayer relief, economic, and environmental benefits,
including:
● Taxpayer savings realized related to the ongoing maintenance costs of municipalvehicle
fleets by moving to lower fuel and maintenance cost vehicles;
● The reduction of carbon and particulate emissions from fossil fueled vehicles, whichwill
have significant local and global impacts on the environment and health outcomes;and
● Purchasing power given to local governments in New Jersey to bond for fully electric
passenger vehicles, as well as more broadly for alternative fuel vehicles, which may help
infuse valuable capital into this market, accelerating the development of cleaner and
better vehicles, especially those aimed for local government functions (such as police
patrol vehicles), and potentially create more jobs related to the growth of the renewable
energy powered vehicle economy, ideally in New Jersey.
Given these clear and important benefits, and no apparent downsides, we ask that you
support A4424/S3025, which changes one technical rule in state finance laws to allow
vehicles powered by a renewable energy source (such as electric) to be bonded, along
with SUVs, light trucks, and the other currently permitted vehicle types.
We appreciate the important stakeholder surveying and research done by Prime Sponsor
Assemblyman McKeon’s office in conjunction with administration officials from the Borough of
Leonia, who have spent time to ensure that this rule change would both affect the change we
are interested in seeing, as well as not incur any costs or create any downsides that might not
be readily obvious. The Leonia Borough Administrator, who conducted much of the stakeholder
surveys, has made himself available and can be reached at atorpey@leonianj.gov, and has
expressed enthusiasm for speaking with anyone who has questions about this.
Changing this technical rule, which currently prohibits the bonding of passenger vehicles, will
allow municipal governments, and more broadly, the state of New Jersey to reach these
important and shared goals of reducing taxpayer expenses and improving our environmental
impact, but we need your support for A4424/S3025 to make it happen.
Thank you!