Paterson Transitional Aid Pay-to-Play Ordinance Goes Into Effect

Earlier this year, a number of New Jersey municipalities were required to begin the process of adopting stringent pay-to-play ordinances because they accepted transitional aid from the State of New Jersey. Over the past two months, several ordinances have gone into effect. Most recently, on March 6, 2011, the City of Paterson’s transitional aid pay-to-play ordinance went into effect. Like most of the transitional aid ordinances, the City of Paterson’s Ordinance covers no-bid contracts with the City. No exception exists for contracts awarded pursuant to a “fair and open process”. The ordinance contains reduced limits during the 12 months prior to a contract award and an absolute ban on contributions (in any amount) during the term of a no-bid contract with the City. In addition to covering contributions to Paterson recipients, the ordinance also covers contributions to Passaic County party committees and PACs/CPCs that regularly engage in the support of Paterson and/or County of Passaic elections. The ordinance covers contributions by the vendor itself and certain individuals associated with the vendor. Contributions by a vendor’s affiliates, subcontractors and consultants may also be covered. Paterson’s new transitional aid ordinance is more stringent than the pay-to-play ordinance which the City enacted last spring. Unlike the North Arlington transitional aid pay-to-play ordinance, the Paterson ordinance does not contain a Sunset provision. As transitional aid pay-to-play ordinances, like the one enacted in the City of Paterson, begin to roll out across the state, vendors that contract with and/or wish to contract with covered municipalities should become familiar with the ordinances to preserve their eligibility for municipal contracts.