Law Offices of

58 Main Street - Third Floor

Hackensack, New Jersey 07601
Tel: (201) 489-0078 • Fax: (201) 489-0520
440 60th Street-Suite 106
West New York, New Jersey 07093
Tel: (201) 861-6164 • Fax: (201) 861-3388
GREGG F. PASTER www.ortizandpaster.com
Admitted NJ & PA
Reply to: Hackensack
WILFREDO J. ORTIZ, II
Admitted NJ & NY

CHRISTOPHER CAMPOS
Admitted NJ

MONICA Y. CHO
Admitted NJ &. NY

June 6, 2006

Mr. Robert Zeitlinger

237 Lexington Avenue
Dumont, New Jersey 07628

RE: REQUEST FOR PROFESSIONAL SERVICE PROPOSALS

Dear Mr. Zeitlinger:

Following our telephone conversation of May 25, 2006, I reviewed your

suggestion that the request for proposals pursuant to the 'Fair and Open" process was
inadequate. As you will recall, I indicated that it would take some time to complete a
thorough review. Having been given the impression that you understood the time
frame, I was surprised to learn that you had already written and submitted a letter to the
editor of the Bergen Record suggesting that the Dumont governing body performed
something improper. Nevertheless, I hope the facts found within this letter will correct
your understanding of the situation.

My office began following and researching the developing regulations on

government contracting that arose out of Governor James McGreevey's Executive
Order #134 in mid 2004. As the subsequent legislation moved forward in the fall of
2005, I suggested to the members of the governing body that although it was not legally
required, the borough should consider employing the 'Fair and Open' process prior to
the legislature's mandate. This recommendation was made anticipating potential errors
that are associated with the implementation of new policies and procedures.

On December 9, 2005, my office completed a draft legal notice and proposed

criteria for the new procedure. That draft was transmitted to outgoing Borough
Administrator Frank DeRosa for review, approval, and publication early the next week.
The notice was returnable for the 27th of December, which should have been adequate
to allow at least 10 calendar days to respond to the notice. For reasons that apparently
are attributable to transitional changes, the notice was not published on time. On
December 22, I retransmitted the proposed notice with instruction to the deputy clerk,
who published the notice soon thereafter. In the rush to publish the notice, the return
date was not revised. Recognizing this error, the decision was made administratively to
accept proposals up until December 30, the last business day prior to the conclusion of
the borough's official business calendar. No proposals were rejected, no matter when
they were received.

The governing body's intent and attempt with regards to implementing the 'Fair
and Open' process prior to the legal mandate was grounded in sound planning principal,
and I can assure you and the entire Dumont citizenry that the process has been
improved with additional personnel, better communication, and qualified professionals in
key positions. It is also important to note, that the governing body and I have continued
working in our efforts to ensure that the Borough of Dumont is at the forefront of pubic
contracting issues.

In summary, while the borough was not required to advertise for proposals for its
professional contracts this year, it was attempted regardless in a good faith effort to
comply with the pending regulations. All in all, the program was a vast improvement
from previous years, though shortfalls were identified and cured. I must stress that no
proposals were rejected as untimely, and thus, the publication date did not prejudice
any proposing vendor. Your inference that the notice was deliberately drafted and
published to exclude qualified vendors or professionals from submitting proposals is
simply speculation that is uncorroborated by any facts. I hope this information will satisfy
your questions and correct your understanding.

Should you wish to confer over this matter further, please feel free to advise in
writing, and I will gladly attempt to respond to your queries.

Very truly
ORTIZ, P"

BY: GREGG F. PASTER-BOROUGH ATTORNEY

GFP:fm
cc: Mayor and Council
Borough Clerk
Borough Administrator
June 13, 2006

Gregg Paster
Dumont Borough Attorney
c/o Dumont Borough Hall
50 Washington St.
Dumont, NJ 07628

Mr. Paster,

I’m in receipt of your letter regarding my request concerning professional services

proposals. There are several points I would like to have clarified, if possible. If you wish
to confer over these questions via phone or in person, please feel free to call me.

It’s my understanding that the Legislature’s mandate regarding the Fair and Open process
does not require municipalities to use the Fair and Open process, as you imply in
Paragraph 2 and Paragraph 5 of your letter. The Legislature’s mandate simply sets out
the rules for using the Fair and Open process if a municipality chooses to do so in
2006. Please advise me if my understanding is wrong in this regard.

It’s also my understanding that because the professional services contracts in question
were awarded in 2006, the use of the Fair and Open process was required if professional
services firms doing business with the Borough and Dumont’s governing body wanted to
avoid restrictions that are part of the new pay-to-play rules. These rules limit the size of
campaign contributions if the contracts were not awarded in the Fair and Open
process. Again, please advise me if my understanding is wrong in this regard.

It’s also my understanding that once a set of contracts are advertised under “Fair &
Open,” the rules and procedures for this public contracting method must be adhered to.

In Paragraph 3, you reference “transitional changes.” Can you clarify what you mean by
transitional changes? It’s my understanding that Frank DeRosa was still the full-time
borough administrator through December, and it’s my understanding that he is still under
contract to help work through transitional issues since John Perkins joined the
administration in the first half of 2006. My understanding is that the “transition”
happened in early 2006, after the contracts were awarded, not before then.
Page 2

With regard to the steps the governing body took once the error was recognized in the
publishing of the legal notice: Did the governing body consider re-publishing the legal
notice with a longer extension that would have allowed for public notification? N.J. Stat.
§ 40A:11-23 (2006) [§ 40A:11-23. Advertisements for bids; bids; general requirements]
(see the attached document) indicates that is you make a change in the bidding (i.e.
extending the deadline), it needs to be re-advertised or other public notice is required.

In lieu of any public notification about the extension of the deadline, you can provide any
evidence proving that the governing body made the decision to extend the deadline? Can
you show any evidence that the non-publicized extension resulted in additional proposals
being submitted? From my research, I see that the only the town’s current auditor filed a
day late – and it was the only bid received from any auditing firm. I also noted that your
firm provided a letter in lieu of qualifications on Dec. 19, well before the legal notice was
published.

The strategy of simply not enforcing the Dec. 27 deadline did not have its intended effect
of securing more bids/qualifications from professional services firms. In fact, only one
bid each was received for contracts such as “engineering,” “borough attorney,” “borough
auditor,” “risk management firm,” and “bond counsel.” Although it may be true that no
proposals were rejected as untimely, it’s also safe to say, as evidenced by the lack of bids,
that the publication date did, in fact, prejudice the number of proposals received for each
contract. Only those people who were "in the loop" would know that the Borough was
accepting proposals beyond the December 27, 2005 deadline. It takes time and money to
prepare a suitable proposal, and many potential applicants would not go to the effort to
prepare one if they thought that their proposal would be summarily rejected as
untimely. As such, I would have assumed that very few firms would have responded to
the Notice, except for those who already knew about the pending legal notice or those
which already expected a job.

The bottom line is that even with the Dec. 30 deadline, the governing body gave only
four business days – not the required 10 days – for qualifications to be submitted. When
the governing body decided to revise the Request For Qualifications by extending the
deadline, the attached statute indicates that a revision needs to be published seven days
before the awarding of contracts. For these reasons, the statute calls for the borough to
re-advertise and re-award these contracts.
Page 3

I can also debate the point that Dumont is in the forefront of public contracting
issues. I’d argue that 60 other municipalities in New Jersey are in the forefront for their
vision in enacting tougher pay-to-play restrictions. If Dumont wants to truly be in the
forefront, I recommend that the governing body enact the recently proposed pay-to-play
reform ordinance.

I look forward to your feedback and clarifications on these issues.

Regards,

Bob Zeitlinger

237 Lexington Ave.

Dumont, NJ 07628
201-244-1213

CC: Mayor & Council

Borough Clerk
Borough Administrator
 Law Offices of

58 Main Street - Third Floor

Hackensack, New Jersey 07601
Tel: (201) 489-0078 • Fax: (201) 489-0520
440 60th Street - Suite 1 06
West New York, New Jersey 07093
Tel: (201 ) 861 -61 64 • Fax: (201 ) 861 -3388
GREGG F. PASTER www.ortizandpaster.com
Admitted NJ & PA Repiy to: Hackensack
WILFREDO J. ORTIZ. II
Admitted NJ & NY

CHRISTOPHER CAMPOS
Admitted NJ

MONICA Y. CHO
Admitted NJ & NY
CARA H. KWON
Admitted NJ

October 3, 2006

Mr. Robert Zeitlinger

237 Lexington Avenue
Dumont, New Jersey 07628

RE: REQUEST FOR PROFESSIONAL SERVICE PROPOSALS

Dear Mr. Zeitlinger:

Since reviewing your last letter regarding the above referenced issue, I have
attended two seminars on the topic, one held by the Institute of Continuing Legal
Education, and one held by the New Jersey League of Municipalities. In addition, I
have had informal conversations with representatives of the state Division of Local
Government Services, namely, Joseph Valenti, Chief of Local Management Services
and Judy Tripodi, Assistant Director of the Division.

On the basis of all available information, certain things are clear, other things are
not as clear. One of the things that is clear, is that professional and extraordinary
services contracts, awarded pursuant to NJSA 19:44A-20.5 are not subject to the strict
dictates of the Local Public Bid law, NJSA 40A:11-1, et seq. While that chapter, at
paragraph 5, explains the services that may be contracted without strict competitive
bidding, the Title 19 laws cover the process for awarding those contracts. Furthermore,
the definition of 'Fair and Open' process, found at NJSA 19:44A-20.7, states the
following: ' "fair and open process" means, at a minimum, that the contract shall be:
publicly advertised in newspapers or on the Internet website maintained by the public
entity in sufficient time to give notice in advance of the contract: awarded under a
process that provides for public solicitation of proposals or qualifications and awarded
and disclosed under criteria established in writing by the public entity prior to the
solicitation of proposals or qualifications; and publicly opened and announced when
awarded. The decision of a public entity as to what constitutes a fair and open process
shall be final.'(emphasis added)

You will notice that there is a specific requirement that the advertisement be
published in sufficient time to give notice in advance of the contract. While reasonable
minds can differ as to what is a sufficient time, you will also notice that the final
sentence of the definition provides that the pubic entity is the final judge of what
constitutes the process. I respectfully decline to any further speculate about the
process from last year. However, I can report that a resolution was adopted earlier this
year that codified the process as it is to be employed for the year 2007 contracts, that
will conclusively resolve timing issues.

Finally, it is noteworthy that New Jersey has the highest level of regulation of
public bidding and campaign finance in the nation, according to the New Jersey
Department of Community Affairs. There are six statutes, an Administrative Order,
state supervision of local budgeting and taxation and state licensing of key local officials
in place to provide transparency and integrity to the public contracting and election
process. No member of the Dumont governing body has indicated to me that these
regulations are inadequate in his/her opinion, and I must admit that I do not believe so
either.

Thank you for your continued interest in this issue.

Very trqly yours

ORT

BY: GREGG F. PASTER-BOROUGH ATTORNEY

GFP:fm
cc: Mayor and Council
Borough Clerk
Borough Administrator
 LERCH, VINCI & HIGGINS, LLP
CERTIFIED PUBLIC ACCOUNTANTS
REGISTERED MUNICIPAL ACCOUNTANTS

1 7 - 1 7 ROUTE 208

FAIR LAWN, NJ 07410

TELEPHONE (201) 791-7100

FACSIMILE (201) 791-3035

ELIZABETH A. SHICK, CPA, RMA, PSA
DIETER P. LERCH, CPA, RMA, PSA
ANDREW PARENTE, CPA, RMA, PSA
GARY J. VINCI, CPA, RMA, PSA
JULIUS B. CONSONI, CPA, PSA
GARY W. HIGGINS, CPA, RMA, PSA
ROBERT W. HAAG, CPA, PSA
JEFFREY C. BLISS, CPA, RMA, PSA
DEBORAH KOZAK, CPA, PSA
PAUL J. LERCH, CPA, RMA, PSA

JOSEPH F. KELLY, CPA, RMA, PSA

DONNA L. JAPHET, CPA, PSA

December 28, 2005

Honorable Mayor and Members

Of the Borough Council
Borough of Dumont
50 Washington Avenue
Dumont, NJ 07628

Dear Governing Body:

We are pleased to confirm our understanding of the services we are to provide the Borough of
Dumont (the "Borough") for the year ended December 31, 2006. We will audit the financial statements
of all funds and account groups which collectively comprise the entity's financial statements, of the
Borough of Dumont as of and for the year ended December 31, 2006. Also, the document we submit to
you will include the following additional information that will be subjected to the auditing procedures
applied in our audit of the financial statements:

1. Schedules of expenditures of federal awards and state financial assistance.

2. Other Supplementary Schedules

Audit Objectives

The objective of our audit is the expression of an opinion about whether your financial
statements are fairly presented, in all material respects, in conformity with the comprehensive basis of
accounting as prescribed by the Division of Local Government Services, Department of Community
Affairs, State of New Jersey, and to report on the fairness of the additional information referred to in the
first paragraph when considered in relation to the financial statements taken as a whole.
 -7-
Fees (continued)

Should any additional matters come to our attention which will require us to enlarge the scope of the
engagement, we will discuss the matter as well as the cost estimate with the Governing Body prior to
commencement of the work. Should the Borough request financial advisory services to be rendered outside
the scope of audit services reflected herein, such services would be billed at our standard hourly rates or an
agreed-upon fixed fee. The Borough will be notified of such agreed-upon fixed fee engagements prior to
the commencement of the work.

Our standard billing rates for 2006 are as follows:

Partners $ 125- $ 150 per hour

Managers $ 100 -$ 120 per hour
Senior Accountants/Supervisors $ 80 - $ 95 per hour
Staff Accountants $ 70 - $ 80 per hour
Other Personnel $ 45 per hour

Government Auditing Standards requires that we provide you with a copy of our most recent
external peer review report and any letter of comment, and any subsequent peer review reports and
letters of comment received during the period of the contract. Our September 30, 2003 peer review
report accompanies this letter.

We appreciate the opportunity to be of service to the Borough of Dumont and believe this letter
accurately summarizes the significant terms of our engagement. If you have any questions, please let us
know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed
copy and return it to us.

Very truly yours,

'LERCH, VINCI & ffiGGINS, LLP

Certified Public Accountants
Registered Municipal Accountants

This letter correctly sets forth the understanding of the Borough of Dumont.

By:
^
Title:

Date: