Highlights: This School Issue focuses on current events and issues that have a significant impact on schools. Owners, contractors, design professionals, and their representatives need to know about these key events and issues and how they impact school construction projects.
1. Repeal of Jarod’s Law
All provisions of Jarod’s Law, which was codified in Ohio Revised Code Sections 3701.93 through .936, were repealed as a result of Am. Sub. H.B. No. 1, which will be effective October 16, 2009. Jarod’s Law was passed in 2005 in response to the death of an elementary school child who was fatally injured after being struck by a falling school cafeteria table that had been recalled years before.
Jarod’s Law created many new requirements that affected schools and local health departments. The law established the School Health and Safety Network, which required more strict inspection procedures for schools. As a result, many new inspection requirements were implemented and the frequency of inspections was increased. The inspection requirements amounted to unfunded mandates and placed new stresses on schools, as well as the local health departments that were required to conduct the inspections.
With the repeal of Jarod’s Law, the inspection requirements included in Ohio Revised Code Sections 3707.26(A) have been modified and Section 3707.26(B) was repealed. The annual inspection requirement for schools in Section 3707.26(A) is changed to semi-annual inspections. The authority of a board of education to close school and prohibit public gatherings for “any other imminent public health threat as determined by the board” was also eliminated. Under Ohio Revised Code Section 3707.26(A), boards of education retain the right to close school and prohibit public gatherings during “an epidemic or threatened epidemic, or when a dangerous communicable disease is unusually prevalent.”
Through Am. Sub. H.B. No. 1, in addition to the changes to Section 3707.26 described above, the legislature added a new code section, Ohio Revised Code Section 3313.86, which requires each school to review its policies and procedures to ensure safety from known hazards in the building or on school grounds that “in the judgment of the board or governing authority pose an immediate risk to health and safety.”
As a result, the requirements for schools and health departments revert back to the standards that were in existence prior to the passage of Jarod’s Law. The change results in a decreased burden on schools and heath departments. It has been reported, however, that officials at the Ohio School Boards Association believe that the impact of Jarod’s Law will remain because schools are more aware of the safety issues that affect them today.
2. Using Qualified School Construction Bonds
In June 2009, Bricker & Eckler’s Public Finance Group wrote about one of several new financing options for Ohio schools that became available as a result of the American Recovery and Reinvestment Act of 2009. This new option is the Qualified School Construction Bond (QSCB). The article discusses the amount of funding allocated to the State of Ohio, how Ohio will distribute the funding to schools, the types of projects that qualify, market and political considerations, and important dates of which school districts should be aware.
Schools who finance all or a portion of a construction project using the QSCB program must pay federal prevailing wages as required by the Davis-Bacon Act. The Davis-Bacon Act also requires certain contract provisions be included in the construction contract for the work; these provisions define the payment process and documentation, among other things. The article is available at: http://www.bricker.com/publications/articles/1471.pdf.
3. Paying State Prevailing Wage Rates on OSFC Projects
Ohio schools were exempted from paying state prevailing wage rates on school construction projects in 1997, at the same time the Ohio School Facilities Commission was created. Until July 26, 2007, school districts participating in a co-funded Ohio School Facilities Commission project were not permitted by Commission policy to require contractors to pay prevailing wage rates. In July 2007, the Commission changed its policy, and school districts pursuing a cofunded Commission project may now choose whether or not to require contractors to pay Ohio prevailing wage rates when they are awarded a contract for a school construction project. When a board of education decides to require payment of prevailing wage rates, it does so as a contractual requirement; the Ohio Department of Commerce does not have jurisdiction over school construction projects and will not participate in enforcement of payment issues.
4. Advertisement Options Expanded
The 2008 state budget bill included a change to Ohio Revised Code Section 3313.46, the school district bidding statute, that provides another option for publishing the advertisement to solicit bids for the work. Before September 12, 2008, a board had to publish an advertisement for projects that exceeded $25,000 in cost “once each week for a period of not less than two consecutive weeks in a newspaper of general circulation in the district before the date specified by the board to receive bids.” Ohio Revised Code Section 3313.46(A)(2).
The Code now permits the board to “cause the notice to be inserted in trade papers or other publications designated by it or to be distributed by electronic means, including posting the notice on the board’s internet web site.” If the notice is posted on the web site, the second notice is not required to be published in the newspaper. The notice that is published, however, must include the following information, in addition to the other information required to be included in the legal notice:
(1) A statement that the notice is posted on the board’s web site;
(2) The board’s web site address; and
(3) Instructions on how to access the notice on the web site.
5. Notice of Commencement
Remember that a Notice of Commencement must be prepared for a construction project of any size. A Notice of Commencement is different from a Notice to Proceed with the work. Ohio Revised Code Section 1311.252 defines the requirements for the Notice of Commencement, which provides basic information about the project needed by subcontractors, material suppliers, and laborers on the project when they need to assert a claim against contract funds under the Ohio Mechanic’s Lien law because they are not paid by the principal contractor. The principal contractor is the contractor awarded a contract by the board of education.
For public school projects, the Notice of Commencement does not have to be filed with the county recorder, served on the principal contractors, or posted on the job site (these are all requirements on a private construction project). However, a copy of the notice must be given to anyone who requests it. Preparing the Notice of Commencement is not difficult, and it provides protection to the board by ensuring that the appropriate person at the district is served with a copy of any claims against funds. It is important that someone familiar with the Mechanic’s Lien Law receive all notices, so the required notice of any affidavit of claim received by the district is sent to the principal contractor within the 5-day period required by statute.
If you are unsure about the form, have questions about the requirements associated with the Notice of Commencement, or receive a notice of claim or affidavit of lien related to the project, consult your construction counsel.
6. Notices to Surety and Surety Agent
Any time a bid guaranty and contract bond is required as part of the bid submission for a construction project, the surety and surety agent for the contractor awarded the contract as the lowest responsible bidder for the work must be notified that the contract has been awarded. This converts the bid guaranty and contract bond to a contract bond for the project. This notice is required by Ohio Revised Code Section 9.32. Remember to talk with your design professional or construction manager after contracts have been awarded to be sure that this important notice is sent. If there is any question about the notice, consult your construction counsel.
This past year there have been several significant changes that affect school construction projects. Now, more than ever, it is important to have good contract documents, including the design drawings and specifications, for any project, and to have a clear understanding of the bidding, contract, and construction processes.
One change that was included in drafts of Am. Sub. H.B. No. 1 was an increase in the threshold for projects subject to competitive bidding from $25,000 to $50,000. This provision did not survive the final budget, so for now, competitive bidding for projects within the scope of Ohio Revised Code Section 3313.46 is still required when the cost exceeds $25,000. Be sure to check the board’s purchasing policy for any other bidding requirements when preparing to solicit bids or contract for a construction project or any other district procurement.