The Ohio Attorney General has issued Opinion No. 2012-029 (pdf) providing guidance on county road use maintenance agreements. The Opinion provides that: (1) a county may enter into a road use maintenance agreement (RUMA) with a private company conducting oil and gas operations or wind farm operations where the company will improve and repair roads at no cost to the county; (2) the county is not required to comply with statutory competitive bidding and professional design requirements; (3) the prosecuting attorney can request review of the RUMA prior to execution by the county commissioners; and (4) Ohio’s prevailing wage statutes apply to work done under a RUMA. The Attorney General declined to address the issue of whether a county will face liability for not paying prevailing wage on RUMA-authorized work.
The Attorney General advised that Ohio’s prevailing wage laws apply to RUMAs, even though there would be no cost to a county. In reaching that decision, the Attorney General first looked to the prevailing wage statute to find that the county was a public authority under the statutes. The Attorney General also reviewed the definition of “construction” under the statute and found that it included road repairs and improvements. The Attorney General next reasoned that a private company’s estimated costs for repairing and improving county roads counts toward the statutory dollar threshold for prevailing wage requirements. The Attorney General finally determined that a RUMA project is a public improvement because the construction work would be done pursuant to a contract with a county and for the benefit of the county. Absent the RUMA, there would be no obligation to repair the county roads.
The Attorney General’s Opinion is consistent with the holding in Zurz v. 770 W. Broad AGA, LLC, 192 Ohio App. 3d 521, 2011-Ohio-832 (Franklin County 2011). In Zurz, the Tenth District Court of Appeals reversed a common pleas court decision that the use of private funds to improve an office building before leasing the building to the State did not require prevailing wage. The Zurz Court found that the lease, signed prior to the building improvements, was the animating force for the building improvements and that the project was a public improvement even though only private funds were used for the building renovations.
The Attorney General’s Opinion on RUMAs reinforces the need for labor professionals to consider the applicability of prevailing wage when a company enters into contractual arrangements with state or local officials that involve construction activities. Prevailing wage requirements include working with a prevailing wage coordinator designated by the public authority, maintaining payroll records, seeking a determination on the applicable prevailing rate of wages from the Ohio Department of Commerce before letting contracts, and notifying employees of their job classification and prevailing wage rate. Failure to pay prevailing wage can lead to substantial penalties and possible debarment for intentional violations.