About two months ago, the school system discovered it was in violation of a $5 million Qualified School Construction Bond awarded in August 2010 as part of the American Recovery and Reinvestment Act. Because it is a federal bond, contractors must pay employees in accordance with the Davis-Bacon Act, which requires that on-site workers at government construction projects be paid according to a specific wage index reflecting the locally prevailing pay rates.
While some workers on the SHS project are meeting the specified wages, others on the job are not, Chief Financial Officer Lisa Dickerson said Monday. Forms for usage of the bond, which was awarded through the Alabama Public School and College Authority, were not received until after the job was bid out, Dickerson said, thus the wage requirements were not made part of the initial agreement with contractor First Team Construction.
Dennis Heard, funding and accountability contact with the State Department of Education, joined the work session via phone and said the Davis-Bacon and Buy American Acts were included in the initial paperwork sent in 2010.
Dickerson said this is a problem several school systems have encountered, in part because of the sheer volume of paperwork related to the bond, and also because both the schools and state are unfamiliar with the federal construction process.
“This is a statewide bond issue; this is not just a Sylacauga bond issue,” Dickerson said. “So, when we’re discussing this, we’re discussing a piece of a statewide bond issue, and they didn’t give us good guidance. Now, I’m not going to tell you that there’s not some things where the ball was dropped, but I will tell you that we’re learning as we’re going on this. We’ve never used federal (construction) funds before.”
The BOE tabled an item concerning this issue at its Nov. 19 meeting. The item was for approval of a $141,821 change order that would adjust the wages according to Davis-Bacon from now through the end of the project around April 2013.
While the bond money does not have to be used on this particular project, Heard said it must be spent by June 1, 2013, or the state will have to re-structure the entire bond issue, which totals more than $154 million statewide.
Although Heard said there is no penalty for violating Davis-Bacon wages, board member Scott Stewart suggested that the school system adjust payments from the beginning of the project.
“To me, it’s a fairness issue,” Stewart said. “You’ve got workers that have performed the work that could probably really use the money, and that would be my position. We wouldn’t want this looming over our head if someone made an issue of it down the road.”
Robert Brown, project inspector and architect for TCU Consulting, estimated that the adjustment for the entire project would be about $225,000.
Brown said he will get payroll information from the contractor to figure the exact cost. He said he will push to have it ready for board approval before Christmas, but definitely by the board’s Jan. 22, 2013, meeting.
The money will likely come from a $350,000 contingency fund set up for the project, so no additional money will be spent to make up the wage difference, Maintenance Supervisor Johnny Gray said.
Despite the complication, the federal grant does have one major benefit. Of the $5 million received, the school system will only have to pay back 83.28 percent of that or $4,164,000 over the next 17 years.
First Team is about 60 percent done with the two-story, 55,000 square-foot school wing that constitutes Phase I of a three-phase, $20 million project to renovate about 70 percent of the high school in the next six years. The remaining funds for the project were acquired through bonds from the city of Sylacauga.
New gymnasiums recently completed at Indian Valley and Pinecrest elementary schools did not utilize federal funds.
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