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11/23/2010

Shift in political landscape portends big changes for Ohio School Facilities Commission

Legislator seeks more flexibility in design standards

Republican John Kasich’s victory in the Nov. 2 gubernatorial election almost certainly portends big changes in the way the Ohio School Facilities Commission funds and oversees the construction of local school projects.

Funding for charter school construction and more paired-down building design requirements are some of the changes Republicans are contemplating as they prepare to regain control of the agency that has provided districts billions of dollars for new schools.

However, the most immediate change to the Ohio School Facilities Commission is likely to be a reversal of the policy of Democratic Governor Ted Strickland’s policy that allows school districts to apply prevailing wage requirements and project labor agreements to construction contracts, non-voting commission member, State Senator Gary Cates (R-West Chester) said recently.

Kasich’s victory means two of the three OSFC voting members will be his cabinet members – Budget Director Tim Keen and Bob Blair, director of the Department of Administrative Services. The third member is the state superintendent, who is appointed by the State Board of Education.

Cates, chairman of the Senate Education Committee, said prevailing wage requirements and PLAs – topics that have been subjects of controversy for the commission since Democrats gained control – would almost certainly be on the chopping block early next year.

Prior to Strickland’s tenure, Republicans prohibited the labor-friendly contract provisions from school construction projects receiving OSFC funding.  The Strickland-led OSFC removed the prohibition on prevailing wage and PLAs, arguing that local school districts should have the ability to determine labor policies that best fit their needs.

While the Strickland administration stresses that the labor policy change was permissive and school districts themselves decide whether to apply the provisions, Cates charged it had been used for political ends. “There’s an awful lot of intimidation that can accompany that too,” he said.

Indeed, in August the Ohio Inspector General Tom Charles issued a scathing report that accused OSFC Executive Director Richard Murray of pressuring local school districts to require project labor agreements and pay prevailing wages on their school construction projects.  Murray generally provided unions “with undue access and accommodations. In ways large and small, Murray repeatedly failed in his responsibility to remain neutral on union matters,” according to the IG report.

Perhaps the final nail in the project labor agreement coffin was hammered last week, when Murray told the commission that a second round of bids for renovation of the state schools for deaf and blind children came in only slightly over budget after the requirement for use of a PLA on the project was scrapped.

“We are in the awardable range,” said Murray, who is expected to be relieved of his duties shortly after Kasich takes office. The contracts could be ready for approval during the commission’s next meeting on December 16.

The agency was forced to rethink the project earlier this fall when the lowest bid was about 46% higher than the construction manager’s original projections. State law requires rejection of bidders that are more than 10% over estimate.

In September the commission decided to rebid the planned overhaul of the deaf and blind schools without the PLA, which requires union labor and specifies wages and benefits, worker training, and arbitration procedures.

Republicans and non-union contractors panned the Strickland Administration’s decision to include a PLA on the deaf and blind schools’ projects, arguing that they unnecessarily increase the cost of construction.

Murray said the bidding results with and without the PLA didn’t present an exact apples-to-apples comparison because the construction manager’s estimate was 10% higher during the second round because of adjustments for inflation and design changes.

Nonetheless, OSFC received far more bidders during the second round – a total of 32, compared to only 13 contractors that were willing to enter into the PLA. The biggest difference was in general trades, where the number of bidders increased from two in July to 12 in October.

“That certainly indicates that competition from the added bidders brought the package in at estimate,” Murray said in an interview after the hearing.

The PLA apparently wasn’t appropriate for the project in part because the agreements are fairly unusual in central Ohio and deterred contractors from bidding, he said.

Nonetheless, PLAs were helpful in some areas, such as the Switzerland Local School District in eastern Ohio, which recently included the requirement out of concern that contractors could hire workers from nearby West Virginia.

In other areas, such as Circleville City School District, building trades helped the school system get a ballot issue passed that was critical to raise the local funding match, Murray said.

While the commission’s policies relating to PLAs and payment of prevailing wages are likely to change under the Republicans, it’s unlikely that this will affect construction contracts the commission has already approved.  It’s unclear how it would affect those still awaiting bids, however.

“The question will be will the new commission honor that PLA entered into at a time when PLAs were legal and it was the policy of this commission? I don’t know that answer,” Murray said. The Euclid City School District adopted the labor agreement, but likely won’t bid the project until after the new administration takes office.

While the elimination of PLAs and prevailing wage requirements are high on Cates’ priority list, he also wants the commission to relax its school design standards and provide funding for charter schools.

Cates said he would allow more flexibility in building design because the current guidelines, such as minimum square footage limits, discourage many school districts from participating in the program. Some parochial schools have built lower-cost facilities that are perfectly functional, yet wouldn’t meet the commission’s stringent requirements, he said.

As the program has crept upwards on the “equity list,” which prioritizes poorer districts, wealthier school systems that need facility upgrades often face difficulty in generating the local matching requirement, he said.

“I would like for the School Facilities Commission to include a more basic option, in terms of participation – maybe allow school buildings that don’t have all the bells and whistles,” he said. “We should be looking at how we reduce cost to both the districts and the state by providing more basic options.”

Another change Cates would like to see is making OSFC funding available to publicly funded, privately operated charter schools – a change that would likely provoke considerable Democratic opposition.

“Charter schools are public schools and certainly if the reason is to provide adequate facilities to school children, I could see doing that because these are not private entities. They are in fact public schools,” he said. “I think we have to remove discriminatory measures against charter schools simply because they’re not the traditional public schools.”

Charter schools often obtain shuttered school district buildings that are in need of costly renovations, he said. “They can go in and make them functional and with some support there, it seems to me that it would be in the best interest to not have to spend money to tear a building down when it can be used.”

Democrats have long criticized the expenditure of public funds on privately operated schools, saying the entities lack accountability to taxpayers and are linked to major GOP donors. The Strickland Administration has tried to restrict funding for charter schools.


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