DO SCHOOL DISTRICTS REALLY HAVE TO OBTAIN A PERFORMANCE BOND AND A PAYMENT BOND FROM CONTRACTORS?

November 18, 2014

By Alan M. Mullins

School districts routinely require contractors to provide both performance bonds and payment bonds for school construction projects.   But are both necessary?   Can school districts be liable to subcontractors if they only obtain a performance bond?  The Illinois Supreme Court recently ruled that school districts would not be liable if they only received a performance bond and you may be surprised why.

In Lake County Grading Company, LLC v. Village of Antioch, a village obtained performance bonds from a contractor but did not obtain a separate payment bond.  The contractor went bankrupt and the sub-contractor sued the village for not obtaining a payment bond from the contractor. The village argued that it was not liable because the performance bond would have covered the subcontractor’s claim had it been filed within the required 180 days.  The Illinois Supreme Court agreed with the village.

The Bond Act provides that when contracts are for $50,000 or more, local governmental entities such as school districts must require contractors to furnish “a bond” and “the bond” shall cover the completion of the contract and payment for materials and subcontractors.   The Bond Act further provides that all such bonds shall guarantee: 1) the performance of the contract, and 2) that all people or entities that have contracts with the contractor or subcontractors will be paid, whether or not provisions to that effect are included in the bonds. Last, anybody who has a claim under a bond must file it within 180 days of the date the last item of work was completed or last item of material was finished.

 

It has been the general belief that contractors must provide two bonds, a performance bond and a payment bond. That view no longer prevails.  The Illinois Supreme Court ruled that the language described above requires only one bond from contractors and that bond will cover the completion of the contract and payment of material men and subcontractors even if it does not specifically say so.   In the case before the Supreme Court, the subcontractor did not have a claim against the village because filing a claim against the bond was its only remedy.  However, it could not file a claim against the bond because the 180 days for doing so had expired.

 

There are two practical effects to the decision.  Other than a bid bond, school districts can be safe in requiring only a performance bond when contracting for a construction project.  With this legal development, it may be appropriate for public bodies to reconsider the bond requirements typically included in their bid solicitations since it could mean lower construction costs.  We are prepared to assist you with your next RFP and contract drafting.  Furthermore, material men and subcontractors have to realize that if a contractor provides only one bond and that bond does not contain specific payment provisions they still have to file claims on that bond within 180 days.

FAQ – Firearm Concealed Carry Act

 November 5, 2014

By: Adam Dauksas

 Last Fall, Scariano, Himes and Petrarca, Chtd., alerted its clients as to the requirements of the Firearm Concealed Carry Act, which generally permits Illinois citizens to now carry concealed firearms in public.  As the law has begun to take effect, however, there have been some common questions that the Firm has received:

  •  Can a person drive onto a school’s parking lot with a concealed firearm and store it in their vehicle?

Yes. While the law makes it illegal for a licensed individual to carry a concealed firearm on or into the property of a public school, there is a limited exception regarding parking lots. A person may drive onto the parking lot of a public school with a concealed firearm in their vehicle and store it in a “case” out of plain view, inside of the locked vehicle. The law defines a “case” as a glove compartment or console that completely encloses the firearm, the trunk of the car, or a firearm carrying box, shipping box, or other container. In addition, the law provides that a person may carry a concealed firearm “in the immediate area” surrounding their vehicle within a school’s parking lot but only for the limited purpose of storing or retrieving it from the vehicle’s trunk; provided, however, the concealed firearm must be unloaded prior to exiting the vehicle.

  • Where do the signs that a school is required to post need to be located?

Signs stating that the carrying of firearms is prohibited must be clearly and conspicuously posted at the public entrances to school buildings, administrative offices, athletic fields, and parking lots (notwithstanding the exception noted above). The signs, a printout of which can be found here, must also be at least 4 inches by 6 inches in size.

  • Has the Illinois State Police Department issued any additional guidance about the “clear and present danger” reporting requirement?

Yes. The State Police have promulgated an administrative rule that addresses this issue, as well as made available a form and instructions for how school administrators are to report their determinations of students who constitute a “clear and present danger.” This form must be sent directly to the State Police within 24 hours of the determination being made. In addition, the administrative rule provides that reporting must be made consistent with the Family Educational Rights and Privacy Act (“FERPA”).

If your school district has any additional questions concerning the Firearm Concealed Carry Act or needs assistance in drafting its policy regarding “clear and present danger” reporting, contact Scariano, Himes and Petrarca, Chtd.

 

 

Appellate Court Sides with Municipality in Dispute with School District Over Application of Municipal Zoning Rules

September 29, 2014

By Anthony Scariano III

Recently, in Gurba v. Community High School District No. 155, the Illinois Appellate Court held that school districts located within home-rule municipalities are subject to local zoning ordinances. You may even recall the highly-publicized events that gave rise to the litigation.

In response to a failed inspection of the Crystal Lake South High School football bleachers, the school district decided to construct new $1.8 million bleachers. But the school district did so without notifying the City of Crystal Lake or seeking an exception from the city’s zoning code. Neighboring homeowners were disturbed by the new bleachers’ stature and proximity to their homes and eventually sued the school district. The school district maintained that it was not subject to the city’s zoning ordinances. The trial court ruled in favor of the city, and the school district appealed.

The Appellate Court rejected the argument that ISBE’s Health/Life Safety Code shields school districts from municipal zoning burdens. The court noted that the Health/Life Safety Code makes no mention of zoning issues and thus could not preempt the city’s zoning code.

The court recognized that the Illinois Constitution gives the State, not municipalities, broad authority when it comes to regulating education. However, the court stated that provisions of the Illinois Constitution infer that “in the case of a conflict between a home-rule unit and a school district, there is a slight bias toward the home- rule unit.”

Finally, the court held that because the School Code allows school boards to seek zoning variances regardless of whether they are located within a home-rule unit, the law indicates an intent for school districts to comply with municipal zoning regulations.

While the court’s decision only pertains to school districts located within home-rule municipalities, it underscores the importance of consulting with your attorney before construction projects begin. The court’s deference to the School Code’s provision on zoning may mean that schools need to seek local zoning oversight regardless of the municipality’s home-rule status.

THE ILLINOIS FIREARM CONCEALED CARRY ACT PROHIBITS FIREARMS ON SCHOOL GROUNDS AND ADDS REPORTING REQUIREMENT FOR ADMINISTRATORS

December 9, 2013

By Parker Himes

Under the recently enacted Firearm Concealed Carry Act (PA 098-0063), licensed Illinois citizens will be permitted to carry concealed firearms.

While concealed carry is now generally permitted in Illinois, it will still be illegal to carry a concealed firearm on the property, including parking areas, athletic fields, etc., of pre-schools, child care facilities, and public and private elementary and secondary schools.  Property, including parking areas, athletic fields, etc., under the control of a public or private community college, other college, or university will also be off-limits.  Further, concealed carry will be prohibited in any building or portion of a building under the control of a unit of local government.  These locations are a few of the “prohibited areas” listed in the law.

Another important aspect of the law concerns a new reporting requirement for school administrators.  Under the Act, the principal of an elementary or secondary school, or the principal’s designee, and the chief administrative officer of a community college, other college, or university, or designee, must report to the Department of the State Police, within 24 hours, when a student has been deemed a “clear and present danger” to himself or others. The Act defines “clear and present danger” as a student who “demonstrates threatening physical or verbal behavior such as violent, suicidal, or assaultive threats, actions, or other behavior as determined by a physician, clinical psychologist, qualified examiner, school administrator, or law enforcement agent.”

If you have questions about the impact of the Firearm Concealed Carry Act, we urge you to contact an attorney at the Firm so we may help with your specific concerns.

AED Update

February 10, 2010

By John E. Fester and Darcee C. Williams

Effective January 21, 2010, the Physical Fitness Facility Medical Emergency Preparedness Act was amended to clarify that school districts must only provide an AED and trained AED user for physical fitness activities directly supervised by employees of the district.  The Act does not apply when a district assigns security or maintenance personnel to merely be present to do things like unlock doors or maintain order among spectators.  Further, the amendment clarifies that an "outdoor physical fitness facility" does not include a district facility when it is used for an activity or program organized by a private or not-for-profit organization and supervised by an individual other than a district employee.

Therefore, a district is not required to provide either an AED or a trained AED user during third party uses of district physical fitness facilities (indoor or outdoor) if an event or activity is not directly supervised by district personnel.  For example, under the amended Act, a district is not required to provide an AED or a trained AED user during a park district's use of an outdoor physical fitness facility if the event or activity is not directly supervised by a district employee.  However, if you have AEDs in these facilities during district activities, we recommend you leave them there for private party use during non-district activities.

Accordingly, policies and procedures governing third party use of district facilities and any third party use agreements may need to be amended to clarify when the district will provide an AED and trained AED user.  If you would like assistance in revising your policies, procedures or third party use agreements, please do not hesitate to call Scariano, Himes and Petrarca.