News & Updates

Payment Delays On OPWC Projects Avoided - For Now

7/23/2020

Ohio has narrowly avoided COVID-19 related shutdowns of its local infrastructure construction projectsfor the time being. For background, under the Ohio Constitution and Ohio Revised Code, the State is permitted to use its general revenues to provide grants, loans, and loan assistance to local counties, cities, villages, townships, and water and sanitary districts for improvements to roads, bridges, culverts, water
supply systems, wastewater systems, storm water collection systems, and solid waste disposal facilities.  The State has 175 million slated for local infrastructure financing for both fiscal years 2019-2020 (Round 33 projects) and 2020-2021 (Round 34 projects), which is administered by the Ohio Public Works Commission (“OPWC”).

Although those dollars are part of the State’s budget and earmarked for the qualified projects, the OPWC needs Ohio’s General Assembly and Governor to pass authorizing legislation to disburse the funds. Due to COVID-19, the General Assembly cancelled its May voting meeting and, therefore, was unable to pass the authorizing legislation. As a result, the OPWC notified the participating municipalities that funding for Round 34, Round 33, and older projects was uncertain after July 1, 2020, and would remain that way until General Assembly’s next scheduled voting session in September. Representatives for the municipalities were then forced to inform their contractors, designers, and other project participants that work on these projects would either have to be suspended or proceed unfunded until the required legislation was passed.  This news could not have been well received by the construction professionals expecting and relying on these contract payments during these tough and unprecedented times.

Fortunately, Ohio’s legislators recognized this issue, and on June 19, 2020, Governor DeWine signed Am. Sub. H.B. 481, which allowed the OPWC to continue to fund these infrastructure projects after July 1st without delay. While it appears that project shutdowns were avoided for now, it is important for OPWC construction project participants to continue to monitor this issue, as further authorizing legislation will be
required, and there is currently no activity for funding for Round 35 projects.

Author: Alan Dailide is an attorney in the Frantz Ward Construction Group. He can be reached at 216-515-1645 or adailide@frantzward.com.

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