Building and Fire Officials Slam Third Party Inspection Bill (HB128)
Over a dozen opponents – mostly members of local building departments and fire safety organizations – expressed their opposition to HB 128 which would permit a general contractor or owner of specified buildings to enter into a contract with a third-party private inspector or a certified building department for building inspection.
The ability for contractors to use the bill to pick and choose their inspectors, thereby circumventing municipal inspection requirements, was a major concern of the witnesses. Josh Brown, director of communications for the Ohio Municipal League, emphasized the role of local building inspectors.
“Proponents have argued that building departments should compete with each other, effectively creating a free market in law enforcement,” he said. “However, nobody seriously believes that law enforcement officers should compete with each other to enforce the law. Citizens are not consumers of law enforcement.”
There was general consensus among the opponents that the Ohio Board of Building Standards ought to remain the sole authority for inspections in the state, and that permission for contractors to request independent inspections would lead to chaos.
“This rule change would undermine the OBBS existence,” wrote Neal Dorenkott, member of the North Central Ohio Building Officials Association. “This would send the inspection process back in time; it could be an example of the ‘fox guarding the hen house.'”
Several witnesses suggested that some of the issues raised in the bill ought to be dealt with at the level of the OBBS.
Bryan Parker, president of the Miami Valley Building Council, has been on both sides of the appeals process – as a contractor and an inspector. He said the OBBS listens and is fair, and the board is quite capable of handling complaints from contractors. The issues of timeliness
Jonathan Westendorf, fire chief for the city of Franklin, provided opponent testimony on behalf of the Ohio Fire Chiefs’ Association. He said that there is often a great deal of collaboration between fire safety inspectors and building officials, given that fire officials take up authority once the inspector’s office provides a certificate of occupancy to a successfully inspected building. He argued against the bill on the grounds that building officials and inspectors act as a law enforcement officers with responsibility beyond that of just an inspector. He also shared concerns that a provision in which contractors would pay inspection fees to third-party inspectors would essentially make the construction industry self-regulating.
He expressed concerns that the bill contains no provisions ensuring continued collaboration between the fire safety community and third party inspectors, as well as about the 24-hour deadline provision and possible degradation of safety standards.
Legislative Action Alert: Ohio House Puts QBS In Jeopardy: Contact your Senator Today!
Qualification Based Selection (QBS) of architects is in jeopardy from an amendment that the House of Representatives added to the state’s Budget Bill, Sub. HB 49. Please contact your state Senator today asking that the Senate remove this amendment.
Background:
In 2012-2013, comprehensive construction reform provided the most significant change to Ohio’s public construction law in more than 130 years. One positive result of this collaboration between industry and government was the centralization of construction authority into OFCC, creating consistency and transparency in Ohio’s public construction projects.
This House amendment to the state’s Budget Bill, Sub. HB 49, takes a step backward by allowing for the establishment of a second construction authority in the Ohio Department of Administrative Services (DAS), causing confusion, inconsistency and the potential of significant legal entanglements.
Details:
The language would allow DAS to award its own design and construction contracts as “supplies” or “services” contracts under R.C. Chapter 125, thereby circumventing R.C. Chapter 153 construction law. Using this language, DAS could authorize a private third-party administrator to bid and award construction contracts, without the transparency and fair processes required under ORC 153. Further, DAS could use its cooperative purchasing authority to extend this same contract to all political subdivisions. The state’s construction authority, OFCC, could not challenge these contracts since “a contract awarded by DAS takes precedence over the commission’s authority” according to the bill.
AIA Ohio Believes:
This language is not in the best interests of public construction in Ohio because:
· It bypasses the competitive processes and protections of standard construction under ORC Chapter 153, including advertising, bonding, subcontractor protections, etc.;
· It creates a path for all political subdivisions to avoid competitive bidding for construction;
· It makes the award of construction contracts less transparent;
· It breeds confusion and a sense of unfairness within the design and construction industry in Ohio;
· It provides no legal recourse to challenge the appropriateness of a construction contract awarded by a non-construction agency (DAS).
The Ask:
AIA Ohio has uploaded the parts of Sub. HB 49 that include this language here. Please ask your state Senator to remove the language that is shown Please ask your state Senator to remove the language that is shown highlighted in red boxes.
Bill Heard to Make Prevailing Wage Optional (HB163)
The Ohio House Economic Development, Commerce and Labor Committee took testimony May 9 on HB 163 which would allow political subdivisions, special districts, and state institutions of higher education to elect to apply the Prevailing Wage Law to public improvement projects.
Reps. Roegner and Reidel said in sponsor testimony the bill, a companion to Sen. Huffman’s SB72, would allow local governments to decide whether to use prevailing wage on public improvement projects.
Roegner said the state-required prevailing wage is “inflated” by including costs such as base union wage, and union fringe benefits like health care, pensions and training. She also said that the requirement to have the Ohio Department of Commerce determine wages to be paid on a project is a bureaucratic hindrance. The result, she said, is that local projects are more expensive than they should be.
Roegner noted 20 states currently do not have prevailing wage requirements, and cited Ohio’s experience with removing prevailing wage requirements from school construction projects, saying it saved hundreds of millions of dollars in five years.
Reidel said his 27 years of experience in the construction industry showed him there’s no justification for the assertions that prevailing wages provides higher quality work and safer conditions on projects. “I will attest that the quality of workmanship and safety on construction projects today are of the same caliber whether that project pays prevailing wage or doesn’t,” he said.
Rep. Lepore-Hagan asked the motivation for the bill, and whether it would be better to restore Local Government Fund money rather than “attack wages.”
Roegner said the committee will hear from future witnesses about the ability for the bill to save local governments money. She disagreed with the characterization that the bill attacks wages.
Rep. Sheehy asked if the sponsors could quantify estimated savings from the bill, as well as estimated wage reductions.
Roegner again cited Ohio’s experience with school construction, and said a California study had showed substantial increases in costs when public housing projects there were subject to prevailing wage. As to wages, Reidel said in his experience, a steelworker on a prevailing wage project might make $50 or more per hour, versus $25 to $30 on anon-prevailing wage project.
Rep. West asked if the bill would hurt local governments’ funding, as people are paid less on construction projects and thus pay less in income taxes. Roegner said savings to local governments from avoiding prevailing wage requirements could enable them to finance additional projects, thus increasing employment and tax revenue.
West also cited a Midwest Economic Policy Institute study that showed the loss of prevailing wage could cost some workers their health and pension benefits and reduce wages for some to the point they qualify for public assistance. Roegner said she would look at the study he cited, adding that research she’s seen shows compelling benefits related to removing prevailing wage requirements.
Rep. Kelly asked if prevailing wage projects are more or less likely to attract in-state versus out-of-state contractors. Reidel said bidding by Indiana companies in Ohio and vice versa is common in the border counties he represents, but said the paperwork involved in prevailing wage projects is often what compels contractors to forego bidding on a project. Kelly also asked if the paperwork is in fact the problem, or the wage levels. Reidel said there’s no question the paperwork stifles participation, while saying the bill simply seeks to give local governments a choice on the question of wages.
Rep. Arndt asked about how the bill would affect bonding requirements for public projects, citing a situation in his area where an out-of-state contractor couldn’t complete a project, and the community had to go through the bonding agent to try to find another contractor who would complete the work at the same price. He said he wants to make sure taxpayers are not at risk.
Roegner said she would look into it, but posited that the 20 states without prevailing wage laws must have come up with answers to such situations.
Sponsor Explains Need for Third Party Building Inspections (HB128)
The bill that would authorize third party building inspections, HB 128 received a sponsor’s hearing April 25 in the House Economic Development, Commerce and Labor Committee.
Rep. Kristina Roegner (R-Hudson) gave sponsor testimony on the legislation that she said would give a common sense solution to expanding the base of inspection to avoid costly delays. She said no matter how efficient and organized a construction company may be, if the inspections are delayed, it holds up progress on the project.
Under current law, the Board of Building Standards formulates and adopts rules governing the erection, construction, repair, alteration and maintenance of buildings, she said. The rules are incorporated into residential and non-residential codes. The board then certifies local building departments and the personnel of these departments as well as individuals, corporations and firms to approve plans and perform inspections. The building inspections currently must be performed by the local building department, she said, but if there are backlogs or personality conflicts, the lack of choice can cause unnecessary and expensive delays.
The bill would specify that inspections, performed by the building department having jurisdiction, must be performed within 24 hours of a request. The general contractor or owner of a building may request an independent inspection, and the Board of Building Standards shall provide a list, which it will maintain, of board-certified, third party, private inspectors and certified building departments from which the contractor may choose. The contractor/owner would still be responsible for inspection fees to the third party, and the local building department may still charge the general contractor/owner any standard fee customary for approval including administrative and filing fees. The third party inspector would be required to send a copy of the inspection results within 24 hours post-inspection to the local building department.
The bill also specifies that local building departments may contract with the division of industrial compliance to exercise enforcement authority, accept and approve plans/specifications and perform inspections for non-residential buildings. It provides for an expedited arbitration process in which a general contractor/owner may appeal inspection results.
During the hearing Rep. Lepore-Hagan asked if the bill would constitute a cut to local governments. Roegner said the bill does not address any funding. She noted that if a contractor or owner uses a third-party inspector, that local government can still charge application and other fees. Lepore-Hagan also said she is concerned that the bill would privatize government services. Roegner said the bill provides choice, and competition can only drive up quality. She also said the contractors could choose a building department from a neighboring jurisdiction.
Lepore-Hagan asked if a situation would be created where a friend of the contractor would do the inspection and be lenient. Roegner said the list of third party inspectors would be certified by the state and any wrong-doing could cause them to lose certification. She also said contractors could also have a situation like that under current law with a friend in the local building department. “I really do not believe that will be an issue,” she said.
Rep. West asked if local governments could farm out inspections under current law. Roegner said they can but a contractor could not do it independently. West also asked if Roegner had talked to local governments about the bill. The sponsor replied that she had talked to the Ohio Municipal League, who has some concerns, but has been at the table.
Rep. Arndt said the 24-hour deadline seems to be a tight period to complete the work. Roegner said she is drafting an amendment to address those issues so there won’t be a time squeeze. She said they want to be reasonable but also put into place best practices.
She told Rep. Kelly that she didn’t have any statistics on how often inspections are delayed or the cost of those delays, but she said it will be interesting to see what proponents have to say about the bill.
She told Rep. Stein that the bill is silent on penalties for violating the 24-hour rule.
She told Rep. Sheehy that she was approached about the issue by several construction companies and contractors. She said they are concerned about retaliation if they complain about lags in building inspections to the Board of Building Standards.
Interior Designers Oppose Sales Tax Extension
Two interior designers testified against the proposed extension of the sales tax to interior designers during an April 5 hearing before the House Finance Committee studying the state’s Budget Bill, HB 49.
Tamra Fuscaldo, an interior designer representing the International Interior Design Association (IIDA) Ohio Kentucky Chapter, said she opposed the expansion of sales tax on interior design services. “Simply stated, IIDA and its members are opposed to the expansion of sales tax on interior design because taxing commercial interior design services adds costs to public and private building construction costs, and would clearly hinder companies seeking to expand or bring their business to the state of Ohio,” she said.
“Professional services should not be taxed as they are not a commodity,” Fuscaldo continued. “The interior design process follows a systematic and coordinated methodology, including research, analysis and integration of knowledge into the creative process, whereby the needs and resources of the client are satisfied to produce an interior space that fulfills the project goals. We are not a luxury or a discretionary service and should not be taxed as such.”
Tracy Phelps, an interior designer from Mentor’s Laura Gills Interior Design, said she opposed the expansion of sales tax on interior design services.
“As a young, striving designer, I chose this profession and to stay in Ohio because there was great potential for this industry. I, like many of the current students studying for their degree in interior design at many of our institutions across Ohio, fear that a tax on our services would stifle opportunities for our future in our state,” she said. “Our profession is already competitive in nature and must have a balance between good design, best price, and best value. I feel that if this provision were to stay in HB49, Ohio’s interior designers would be placed at an extreme disadvantage and opportunities in Ohio for graduates of interior design would be drastically reduced.”
Hearing on Structural Design Rule Set for April 14
The Department of Commerce will hold an April 14 hearing on a proposed Rule 4101:1-16-01 regarding Structural Design.
Building Code Bill Gets Hearing (SB 43)
Pro and con testimony regarding SB43 was heard March 28 by the Senate Local Government Committee. SB43 would enable limited home rule townships to adopt building codes regardless of any similar codes adopted by the county in which the township resides.
Testimony against SB43 was given by Brad Cole, managing director of research for the County Commissioners Association of Ohio (CCAO). Testimony in support of the bill was given by Vincent Squillace, executive vice president of the Ohio Home Builders Association (OHBA). Written proponent testimony was submitted by Andrew Glenn, a trustee for Springfield Township in Lucas County.
Cole said, “CCAO is concerned about the duplication of services … Encouraging townships to establish parallel building departments that compete against existing county building departments for the limited business of performing inspections and issuing building permits would appear to be contrary to the overall objective of achieving greater efficiency in local government services… Another potential issue is the consistency of services …”
Chairman Uecker pointed out that Hamilton County has a robust building department despite multiple municipalities with their own departments. Sen. Terhar said Hamilton County also contains charter townships. Cole admitted he had not reached out to all counties, and agreed to meet with Uecker to discuss CCAO’s concerns further.
Squillace said OHBA wants the bill to make clear that charter townships must have exactly the same standards and rules as the county building department. Uecker requested that he submit a written copy of his testimony.
Glen wrote, “We have a very business friendly approach in our township … The building department in Lucas County treats people exactly opposite from how they are treated in our office… Several cities and villages in Lucas County have exercised their option to get away from the Lucas County Building Department by either creating their own department, or contracting with another department for permitting and inspections within their jurisdictions. It makes perfect sense to give townships that same option… another benefit of SB43 would actually be to improve the level of customer service within the county building departments through competition.”
Township Building Code Bill Gets Hearing (SB43)
Pro and con testimony regarding SB43 was heard March 28 by the Senate Local Government Committee. SB43 would enable limited home rule townships to adopt building codes regardless of any similar codes adopted by the county in which the township resides.
Testimony against SB43 was given by Brad Cole, managing director of research for the County Commissioners Association of Ohio (CCAO). Testimony in support of the bill was given by Vincent Squillace, executive vice president of the Ohio Home Builders Association (OHBA). Written proponent testimony was submitted by Andrew Glenn, a trustee for Springfield Township in Lucas County.
Cole said, “CCAO is concerned about the duplication of services … Encouraging townships to establish parallel building departments that compete against existing county building departments for the limited business of performing inspections and issuing building permits would appear to be contrary to the overall objective of achieving greater efficiency in local government services… Another potential issue is the consistency of services …”
Chairman Uecker pointed out that Hamilton County has a robust building department despite multiple municipalities with their own departments. Sen. Terhar said Hamilton County also contains charter townships. Cole admitted he had not reached out to all counties, and agreed to meet with Uecker to discuss CCAO’s concerns further.
Squillace said OHBA wants the bill to make clear that charter townships must have exactly the same standards and rules as the county building department. Uecker requested that he submit a written copy of his testimony.
Glen wrote, “We have a very business friendly approach in our township … The building department in Lucas County treats people exactly opposite from how they are treated in our office… Several cities and villages in Lucas County have exercised their option to get away from the Lucas County Building Department by either creating their own department, or contracting with another department for permitting and inspections within their jurisdictions. It makes perfect sense to give townships that same option… another benefit of SB43 would actually be to improve the level of customer service within the county building departments through competition.”
Bill Granting Townships Building Code Rights Heard (SB 43)
The bill that would enable limited home rule townships to adopt building codes regardless of any similar codes adopted by the county in which the township resides had a proponent hearing March 21 before the Senate Local Government, Public Safety and Veterans Affairs Committee.
Testimony in support of SB43 was given by Bryan Rhoads, administrator for Blendon Township in Franklin County; and Heidi Fought, director of governmental affairs for the Ohio Township Association (OTA), on behalf of OTA and the Coalition of Large Ohio Urban Townships (CLOUT).
Rhoads said, “Our residents have to go to Franklin County to obtain building permits and inspections in order to undertake any improvements to their homes. We feel we can provide quick and efficient building services to our residents and can streamline the construction process.”
Fought said, “Clearly, Ohio law acknowledges that limited home rule townships do have the expertise and resources to effectively operate a building department to establish, revise and enforce building standard codes, for they are allowed to do so as long as the county has not adopted such. The typical limited home rule township is a large and sophisticated operation, managing police, fire and other critical operations… any such code adopted by a limited home rule township may not conflict with state-adopted codes …”
There were no questions following the testimonies.