Christie Administration Announces Transitional Aid Awards for Municipalities on Fiscal Year Budgets
MOU Requires Aid Recipients to Adhere to Strict Oversight, Effective Management and Accountability Practices or Forfeit 25% of Award

TRENTON - New Jersey Department of Community Affairs Commissioner (DCA) Lori Grifa today announced the Transitional Aid awards for 9 municipalities operating on a fiscal year budget. The Transitional Aid to Localities program outlined in the FY2011 budget is part of Governor Christie’s overall reform effort to increase the efficiency, effectiveness and accountability of local governments statewide. 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.

“We are embarking on a new approach, one that imposes accountability measures to ensure that cities and towns engage in responsible spending, budgeting practices and transparency," said Governor Christie. "This aid, which was previously called 'extraordinary and special aid' to municipalities, was neither extraordinary nor special, since it was given out annually and counted on as part of local budgets. Our goal is to hold municipalities accountable for the taxpayer funds they receive and to return them to self-sufficiency. The days of open-ended gifts of discretionary state aid, without oversight and accountability to all of New Jersey's taxpayers, are over."

DCA will allocate 75 percent of a municipality's awarded funds upon signing the MOU. The balance will be payable later in the fiscal year, provided the requirements of the MOU are complied with and implemented. Municipalities on a calendar year budget cycle will be subject to the same measures next year.

"Only those municipalities that demonstrate they are aggressively reducing costs, prioritizing their services and practicing transparency received Transitional Aid," said Commissioner Grifa. "As part of this Administration's commitment to reform and accountability, we will withhold 25 percent of recipients' aid awards until they demonstrate they are complying with the MOU."

Among other requirements, the MOU directs each aid recipient to adopt a local pay to play ordinance that covers political contributions by all vendors, including those selected through a "fair and open process" and to submit a Transition Plan detailing how it will eliminate its reliance on Transitional Aid. The MOU also limits non-essential expenditures, contracting and personnel actions. Aid recipients will be required to meet with Division staff at least four times a year to review their budget and fiscal progress.

A total of $159 million in Transitional Aid was available in FY2011 for municipalities. Transitional Aid was awarded in September to 13 calendar year budget municipalities. A list of the calendar year recipients, their requested amounts, and aid awards can be viewed at on the DCA website.

The program required applicants to reduce their labor costs, modify the services they provide, document efforts to maximize revenues, and eliminate all non-essential spending as a precondition to receiving aid. Applicants also had to prove that despite meaningful cost reductions and services changes, they needed Transitional Aid to avoid a significant increase in their property tax rate.

The Transitional Aid program is implemented through the Division of Local Government Services, which works with local governments throughout the state to ensure their fiscal integrity and to support their efforts to comply with state laws and regulations.

For more information on Transitional Aid, please refer to the Local Finance Notice at on the DCA website.

Transitional Aid Awards for Fiscal Year Budget Municipalities





Bridgeton City



Camden City



East Orange City



Irvington Township



Lawnside Borough



Passaic City



Paterson City



Trenton City



Union City