New Pay-to-Play Ordinances on the Way for Municipalities Receiving Transitional Aid from the State of New Jersey

In November of 2010, the New Jersey Department of Community Affairs (“DCA”) announced that it will provide transitional aid for nine (9) New Jersey municipalities operating on a fiscal year budget. The program is implemented by the DCA’s Division of Local Government Services. According to a press release on the DCA’s website, the State of New Jersey will be providing transitional aid to: Bridgeton City (Cumberland), Camden City (Camden), East Orange City (Essex), Irvington Township (Essex), Lawnside Borough (Camden), Passaic City (Passaic), Paterson City (Passaic), Trenton City (Mercer) and Union City (Hudson). The program , which replaces the Extraordinary Aid, Special Municipal Aid and Capital Cities Aid programs of previous years, places more stringent requirements on aid recipients, which for the first time must sign a Memorandum of Understanding (MOU) agreeing to certain State oversight, reform and reporting requirements in order to receive the aid dollars. Although the MOU will vary from municipality to municipality, at least one requirement will remain the same for all municipalities accepting the transitional aid – the adoption of a stringent local pay-to-play ordinance. The DCA has made it clear that any such ordinance must cover contributions by all vendors and must apply to “fair and open process” contracts. The DCA has instructed municipalities to look to the Jersey City Pay-to-Play Ordinance as a model. Vendors doing business and/or wishing to do business with any of the municipalities listed above should expect changes in local pay-to-play requirements to be adopted in upcoming months. Changes could include: elimination of a “fair and open process” exception, coverage of contributions to county party committees and coverage of contributions by subcontractors and consultants.