Capital Construction Projects Funded by Donations or Grants - Reference Guide #C.7
School districts frequently fund - or partially fund - capital construction projects with donations or grants. Donations may take the form of cash contributions or donated services and/or materials. Grants may be for various purposes, such as asbestos abatement or energy conservation. In any event, the source of monies used to fund capital construction projects does not alter the normal requirements which must be met by a district to obtain a Building Permit and approval of the Commissioner for the work to proceed.
Donations are often made to districts for such projects as playground installations,
greenhouses, athletic field lighting, scoreboards, press boxes and concession
stands. In the rush to get such donated facilities in place and operational,
many boards of education lose sight of the fact that these are capital construction
projects and that the work, as well as the donated supplies, materials or equipment must conform to all applicable provisions of the New York State Uniform Fire Prevention and Building Code and that the work requires a Building Permit. The district increases its liability if these types of projects are done without first obtaining the Building Permit and approval of the Commissioner.
If there is a question about whether or not the work will require a Building Permit, the district should consult with the Office of Facilities Planning before any action is taken to initiate the project.
If the work to be done requires a Building Permit -- that is, if the work must comply with provisions of the New York State Uniform Fire Prevention and Building Code -- then the district must obtain a Building Permit through the Office of Facilities Planning. Approval of the Commissioner will be given at the same time a Building Permit is issued. Furthermore, if the work is to be publicly bid, then the district cannot advertise for bids until the Commissioner has approved the project (pursuant to Chapter 315 of the Laws of 1990, effective June 30, 1990).
The main difference between projects funded by grants or donations and projects funded by taxpayer dollars involve the method of authorization for the project.
For capital construction projects funded by the taxpayers of a district, a vote of the people is required in school districts to authorize the expenditure of funds on that specific work, unless the Board of Education declares the funds to be a contingent expense and this can only be done under certain conditions (i.e., basically, for health or safety reasons or to insure the integrity of the building -- refer to Section 2023 of the Education Law and Formal Opinion of Counsel #213). The vote may be by special referendum or at the annual meeting, but in either instance, the voters should be informed as to specifically what type of work will be done, what buildings will be involved, and the cost of the project.
For projects funded by a grant or donations, the Board of Education would have to pass a resolution accepting the grant or donations on behalf of the district, to be used for that particular project (Education Law, Section 1709, subdivision 12 and 12a and Education Law, Section 1718, subdivision 2). Building Aid for an eligible project may be available, but is computed only on cash donations -- not on the value of donated services or supplies, or on State or Federal grants -- which are expended as part of the eligible capital construction project. An eligible project is one which meets the normal requirements for Building Aid -- i.e., the work involves a building that has a State-rated capacity or is a bus garage, the contract costs total $10,000 or more, the funds for the project were properly authorized, the project was approved by the Commissioner and a Building Permit issued before contracts were signed. For projects funded by a combination of taxpayer dollars and grants or donations, the same conditions apply except that there would be two dates of authorization -- one for taxpayer dollars and one for the grant or donation.