Chapter 5123:1-1 Distribution of Funds for Facility Development

5123:1-1-01 Distribution of state construction assistance funds for community adult facilities and early childhood and family centers.

(A) Community capital assistance program planning

(1) The community capital assistance program provides funds for county boards of developmental disabilities (hereinafter referred to as "county boards") and nonprofit corporations for the purchase, renovation, and construction of facilities. The Ohio department of developmental disabilities (hereinafter referred to as "department") shall set priorities for the use of community capital assistance based upon the needs of the county boards.

(2) The county boards or nonprofit corporations supported by the county board shall submit letters of intent to the department in August of each odd numbered year regarding construction or purchase/renovation needed in the next six years. Letters of intent shall detail the following:

(a) A description of the proposed project that includes information regarding the type of construction or purchase/renovation;

(b) The estimated construction or purchase/renovation costs;

(c) The impact on the local service delivery system; and

(d) A statement indicating the availability of local matching funds.

(B) Application

(1) The department shall develop priorities and program guidelines based upon the needs of the counties and notify agencies that meet the priorities to submit an application for funds.

(2) The department shall review and rank applications based upon following:

(a) Submission of a complete and accurate application;

(b) Projects that are programmatically acceptable;

(c) Impact on the local service delivery system; and

(d) Availability of local matching funds.

(C) Definitions

As used throughout this rule, the following definitions shall apply:

(1) "Applicant" means any of the following who submit an application to the department for state construction assistance funds:

(a) A board of county commissioners;

(b) A county board of developmental disabilities; or

(c) A nonprofit corporation specifically chartered to provide a developmental disability service when such service fulfills a public purpose as provided by section 154.20 of the Revised Code and that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code.

(2) "Construction" means the construction of new buildings or renovation of existing buildings provided by section 154.01 of the Revised Code, except that renovation shall not include work that consists primarily of maintenance repairs and replacement due to normal use, wear and tear, or deterioration.

(3) "Controlling board" means the board established by section 127.11 of the Revised Code.

(4) "Director" means the director of the Ohio department of developmental disabilities or his or her designee.

(5) "Project" means capital facilities as defined in section 154.01 of the Revised Code.

(6) "Renovation" means work done to a building to restore it to an acceptable condition and to make it functional for the purpose(s) set forth in an application, including architectural and structural changes and the modernization of mechanical and electrical systems. Renovation does not include work that consists primarily of maintenance repairs and replacement due to normal use, wear and tear, or deterioration.

(D) Awarding of funds

(1) County boards and nonprofit corporations shall be awarded funding based upon rank order established by the department once the appropriation is available. The director shall inform the applicant in writing of approval or disapproval of a project. If a project is approved, the letter shall indicate the amount of state funding approved, subject to favorable fund release action by the controlling board.

(2) The applicant shall enter into an agreement with the department that assures the completion of the project in accordance with standards set forth by the department and other applicable federal, state, and local statutes. The agreement shall also assure operation of the facility in accordance with the agreement. The applicant agrees to use and maintain the project for the length of the agreement for the purposes stated in the application unless otherwise agreed to in writing by the department. If the project is not used for said purpose, the applicant shall pay to the department on a pro rata basis any state funds reimbursed to the applicant, or shall permit the department to operate or transfer the operation of the project, including the assignment of any contracts or other interests, to another approved organization for the balance of the agreement. The terms of the agreement shall expire as of the earlier of:

(a) Fifteen years from the date of the agreement; or

(b) The date when all capital bonds, any of the proceeds of which were expended for project costs, are no longer outstanding.

(3) The department shall participate at a percentage level of the total project cost based upon a funding formula developed by the department.

(4) The department, as a part of a construction or purchase and renovation project and contingent upon the availability of department funds, may consider and include in the development of the participation schedule the value of property purchased by an applicant and may use such value as part or all of the applicant's share of approved project costs under the following provisions:

(a) The director shall have final discretion to:

(i) Approve the use of the value of property and/or buildings thereon which are owned by an applicant as part or all of the local participation share in a project;

(ii) Determine the part or percentage of a building and/or property which may be used as local participation share; and

(iii) Determine that the property and/or buildings thereon are suitable for the intended purpose both programmatically and economically.

(b) The property value to be used in the participation schedule for projects involving property owned by the applicant for less than one year shall be based on the purchase price or the appraised value, whichever is less. For projects involving property owned by the applicant for one year or more, the value to be used shall be based on the appraised value. The appraised value shall be determined by an appraisal made by an accredited appraiser. The appraisal shall be based on the fair market value of the property as determined by the appraisal. The appraisal fee shall be considered as an element or project cost eligible for state participation. Two appraisals are required if the value exceeds one hundred thousand dollars, and the appraisals must be descriptive narratives.

(5) The applicant shall verify that sufficient funds will be available to meet its share of project cost from project initiation through project completion.

(6) The applicant has one year from the date of controlling board approval to begin the construction/renovation project. The director has the discretion to withdraw funds at anytime if the project is not proceeding in a timely manner.

(E) Standards of construction, design criteria, site criteria, and reimbursement

(1) The department shall pay the applicant for approved costs for an amount up to but not exceeding the maximum state share of project cost stated in the approved application. No additional funds will be approved over the maximum state share of project cost once the funds are released from the controlling board.

(2) The applicant shall hold the department harmless for any liability resulting from liens issued against the project by any contractors, subcontractors, material suppliers, or laborers.

(3) The applicant shall obtain the services of registered architects or engineers to perform any design work required for the project. The applicant agrees that if design fees for the project equal or exceed twenty-five thousand dollars, any architectural or engineering services shall meet the requirements of sections 153.65 to 153.70 of the Revised Code. The applicant shall provide and maintain competent and adequate architectural or engineering supervision and observation at the construction site. On the basis of on-site observations as an architect, the architect shall keep the applicant informed of the progress and quality of the work, and shall endeavor to guard the applicant against defects and deficiencies in the work.

(4) No funds for the project shall be used by the applicant for renovation, rehabilitation, or construction unless the mechanics, laborers, or workers are paid the prevailing wage rates as described in section 4115.04 of the Revised Code.

(5) The applicant shall agree to solicit or cause to be solicited through a public solicitation or an invitation for bids, bids in accordance with federal, state, and local laws.

(6) The applicant shall agree to complete a life cycle cost analysis when required by Chapter 123:4-1 of the Administrative Code.

(7) The applicant shall agree to provide and maintain insurance or self-insurance against general liability for accidents or injuries that may occur on the premises of the project. The applicant shall also ensure that the facility design and construction conforms to all applicable building codes, standards, zoning, and licensing requirements.

(8) The agreement between the department and the applicant shall include the following terms:

(a) That all contractors agree to comply with all applicable federal, state, and local laws in the conduct of the work hereunder. The contractors shall accept full responsibility for payment of all unemployment compensation, insurance premiums, income tax deductions, social security deductions, and any and all other taxes or payroll deductions required for all employees engaged by contractors in the performance of the work authorized by this agreement.

(b) That the project is located upon, or will be located upon, real estate which the applicant owns in fee simple or in which it has a leasehold interest; the terms of lease are subject to the department's approval. The applicant further covenants that the premises are, and shall remain for the term of the agreement, free and clear of all liens, encumbrances, restrictions, and conditions, which prevent or interfere with the use of the project facilities, except such as may be imposed by zoning ordinances and regulations.

(c) That requirements for approval of title on capital projects as approved by the office of the attorney general shall include a current title insurance policy (no more than sixty days old) or current attorney opinion of title, a map outlining the project site, and a deed.

(d) That if leased property is being used, the following is required:

(i) The term of the lease shall be at least fifteen years.

(ii) The department shall have an opportunity to absolutely cure any default to avoid the reversion of the property to the lessor, and the department may at its option assume operation of the facility or may transfer or assign the leasehold interest and the operation of the program in the facility, upon approval of the lessor, which approval shall not be unreasonably withheld, to a nonprofit corporation or other agency to provide substantially similar services in the facility for the remainder of the lease term.

(iii) The lease shall state the exact location of the space being leased, if only a portion of the property is being leased.

(iv) Documentation shall be submitted establishing who owns the underlying land or building . If the applicant is subleasing part of a building , a copy of the prime lease with a certification that the copy is a true copy as well as the document that gives the lessor permission to sublet the property must be provided.

(v) Proof shall be submitted to the department that all leasehold interests are recorded in the county recorder's office.

(e) That a certified copy of a resolution with a secretary's certificate that the persons who signed the lease or sublease were authorized to do so must be provided.

(f) That the lease provision is consistent with the series II lease agreements and attachment A of the agreement and clearly stated that the property is to be leased for a minimum of fifteen years.

(g) That if a nonprofit corporation supported by the local county board submits an application to request community capital assistance funds, the nonprofit corporation shall submit with the application, in addition to all other documents required by this rule, a copy of its articles of incorporation, code of regulations (bylaws or constitution), and a current list of all trustees, officers, and members.

(i) The articles of incorporation must contain the following provisions in addition to those otherwise required by law:

(a) A specific statement of purpose that the corporation will provide a developmental disability service;

(b) A provision that upon dissolution of the corporation, if such dissolution occurs within the length of the participation agreement, the department or its successor shall be a party to any judicial proceeding or dissolution agreement and that the department or its successor may be distributee under such order or agreement to the extent of its participation and to the extent provided by law or the agreement which originally set forth disbursal of funds to the corporation; and

(c) A nondiscrimination provision stating that services will neither be rendered nor denied on the basis of race, color, religion, national origin, disability, age, or unless programmatically justifiable, sex .

(ii) The code of regulations or bylaws, as applicable, shall contain the following provisions in addition to those specifically provided by law:

(a) A provision limiting the number and length of term of office for trustees and officers and prohibiting an employee or officer of the corporation from being a trustee;

(b) A provision stating that the board of trustees shall include representatives of the geographic community to be served;

(c) A provision that no persons related by blood or marriage (to a degree of first cousin) shall constitute a majority of the board of trustees; and

(d) A conflict of interest provision to require disclosure of any conflict of interest, including requiring the abstention of a trustee in a vote on a matter affecting persons employed or to be employed by the corporation and related to the trustee by blood or marriage, and procedures for the resolution of conflicts.

(9) The department may participate in the cost or value of real property to be used for developmental disability facilities. Such property may include land only or land with existing buildings thereon which is to be purchased.

(a) All real property proposed as a project site shall be evaluated by the department as applicable to cost adaptability for renovation, programmatic suitability, economic suitability, and ability or potential to meet applicable building and fire codes, licensure, and department or other governmental requirements. The department shall evaluate and approve or disapprove all proposed project sites. Approval or disapproval of all project sites shall also be based on consideration, without limitation thereto, of the following criteria:

(i) Location, including sociological and demographic considerations of area and access to site;

(ii) Program needs;

(iii) Cost of property, including comparison of similar property in the area;

(iv) Size, including needs for future expansion;

(v) Zoning, transportation, and utilities, including gas, electric, water, and sewerage;

(vi) Configuration, topography, and the economical feasibility of development of property and suitability for construction; and

(vii) Environmental assessment that includes, but is not limited to, asbestos, polyvinyl chlorides, and chemical contaminants that may be present on the site.

(b) Property value determination

(i) The value of real property proposed for a project shall be based on a descriptive narrative appraisal made by a qualified appraiser. The appraised value shall be based on the fair market value of the property as determined by the appraisal and approved by the department.

(ii) Department participation in real property shall be based on the purchase price or approved appraised value, whichever is the lesser.

(c) Existing buildings

(i) In addition to all other provisions of this rule, for projects involving the purchase or purchase and renovation of existing buildings, the department shall determine the maximum approved renovation/acquisition cost excluding land. This maximum approved renovation/acquisition cost plus land cost shall be the basis upon which maximum state participation is calculated.

(ii) To reflect the fact that older buildings generally are less suitable than newer buildings, the maximum approved project cost shall in all cases be less than one hundred per cent of the cost of new construction. This percentage shall be eighty-five per cent less one per cent for each year of age of the existing building. For buildings which have had additions, the age shall be the weighted average age of the various portions of the building. For existing buildings fifteen years old or older, the maximum percentage shall be seventy per cent.

(10) Payment schedule

(a) "Approved project costs" means total costs of capital facilities as defined in section 154.01 of the Revised Code, and includes, without limitation thereto, site acquisition, design and project administration fees paid to an outside consultant, construction costs, costs of permits and inspections, bid advertising, construction document printing costs, and equipping the proposed facility to accommodate the approved program. The applicant must obtain written approval from the department on costs other than those items listed in this paragraph.

(b) Once the project has been bid and the contractors have been awarded their contracts, the applicant shall notify the department of the contract amount and also certify that the construction contractor(s) selected was the lowest best bid. An initial award installment that equals fifteen per cent of the total project costs shall be forwarded to the applicant at that point. Additional installments shall be made to the applicant in accordance with project completion levels as follows:

Percentage of construction completion Amount of payment Total paid
.0% 15% 15%
12.5 % 10% 25%
25.0 % 10% 35%
37.5 % 10% 45%
50.0 % 10% 55%
62.5 % 10% 65%
75.0 % 10% 75%
87.5 % 10% 85%
100.0 % 10% 95%
After receipt of close-out documents 5%  
  ---- ----
  100% 100%

(c) The schedule in paragraph (E)(10)(b) of this rule may be adjusted if written justification is provided by the applicant.

(d) The applicant shall keep records of all receipts and expenditures for a project in a separate account which shall be available for inspection or audit by the department. The applicant shall submit paid receipts to the department when requesting the next installment. The department, after appropriate audit or required documentation is received and a determination is made of the percentage level of project completion, shall promptly take necessary action to forward the next installment.

(e) The department reserves the right to withhold an installment for any project.

(11) The final submission of receipts for payment shall include a letter from the contractor(s) certifying that the work has been completed in accordance with the approved application, the drawings and specifications, and contract documents; that prevailing wages have been paid during the project; and that affidavits of release of liens from all prime contractors on the project have been obtained. The applicant shall certify that it or its agent has inspected the work and that it complies with the approved application, the drawings and specifications, and all other contract documents.

(12) All contracts awarded by the applicant for the project shall contain provisions by which:

(a) The contractor agrees that in the hiring of employees for the performance of work under the contract or any subcontract, no contractor, subcontractor, or any person acting on his or her behalf shall by reason of race, creed, sex, disability or military status as defined in section 4112.01 of the Revised Code, or color, discriminate against any citizen of the state of Ohio in the employment of labor or workers who are qualified and available to perform the work to which the employment relates.

(b) The contractor agrees that no contractor, subcontractor, nor any person acting on his or her behalf shall in any manner discriminate against or intimidate any employee hired for the performance of work under the contract on account of race, creed, sex, disability or military status as defined in section 4112.01 of the Revised Code, or color.

(13) The applicant shall ensure that the contractor(s) provide for an affirmative action program for the employment and effective utilization of disadvantaged persons whose disadvantage may arise from cultural, racial, or ethnic background, or other similar cause, including but not limited to, race, religion, sex, disability or military status as defined in section 4112.01 of the Revised Code, national origin, or ancestry.

(14) In awarding contracts for the project, the applicant shall ensure that equal consideration is given to contractors, subcontractors, or joint venturers who qualify as a minority business enterprise as defined in section 122.71 of the Revised Code.

(15) The applicant shall keep all financial records in a manner consistent with generally accepted accounting procedures. Documentation to support each action shall be filed in a manner allowing it to be readily located. Such documentation shall be maintained by the applicant until bond debt is retired.

(16) The department reserves the right to audit.

Effective: 02/14/2011
R.C. 119.032 review dates: 11/30/2010 and 02/14/2016
Promulgated Under: 119.03
Statutory Authority: 5123.04 , 5123.351 , 5123.36
Rule Amplifies: 5123.04 , 5123.351 , 5123.36
Prior Effective Dates: 01/01/1977, 08/11/1980, 09/30/1983, 10/31/1985, 09/13/1987, 05/06/1993, 06/25/1993 (Emer.), 09/02/1993, 08/03/1995

5123:1-1-02 Developmental center capital projects. [Rescinded].

Rescinded eff 6-30-06

5123:1-1-03 Distribution of community assistance funds for the acquisition of housing.

(A) Purpose This rule sets forth a process to allow the department to make available community assistance funds to assist county boards of developmental disabilities (county boards) to acquire housing for individuals receiving supported living including supported living funded by a home and community-based services waiver administered by the department.

(B) Definitions

(1) "Appraisal" means a written report completed by a certified or licensed appraiser which includes a floor plan sketch of the housing; front, back, and street scene photographs of the housing; three interior photographs of the housing; a street map that shows the location of the housing and the comparable sales; front photographs of the comparable sales; a statement of assumptions and limiting conditions; and the appraiser's certification. The appraisal shall be completed on the appropriate "Fannie Mae" form:

(a) Form 1004, "Uniform Residential Appraisal Report" (March 2005) for single-family homes;

(b) Form 1004C, "Manufactured Home Appraisal Report" (March 2005) for manufactured homes;

(c) Form 1025, "Small Residential Income Property Appraisal Report" (March 2005) for duplexes and quadplexes; or

(d) Form 1073, "Individual Condominium Unit Appraisal Report" (March 2005) for condominiums.

(2) "Construction" means the act or process of assembling or building a one-story single-family home, a one-story duplex, or a one-story quadplex from raw materials upon a permanent base or foundation specifically designed for the one-story single-family home, one-story duplex, or one-story quadplex. Construction includes contracting with a builder to construct a residence or the purchase of a manufactured home from a manufacturer.

(3) "Department" means the Ohio department of developmental disabilities.

(4) "Duplex" means a separate or detached residence with two dwelling units designed and arranged for use by two families separated by a horizontal or vertical wall, each of which is heated independently of the other and has its own separate, private means of ingress and egress.

(5) "Dwelling unit" means a single, self-contained unit providing independent living facilities for one or more individuals and which contains eating, living, sanitary, sleeping, and cooking facilities, all for the exclusive use by the occupants.

(6) "Home and community-based services" has the same meaning as in section 5123.01 of the Revised Code.

(7) "Housing" means a single-family home, a duplex, or a quadplex.

(8) "Housing construction project" means a department-approved construction project that enables a county board to authorize a nonprofit corporation or local housing authority to contract for the construction of a fully accessible, one-story single-family home, duplex, or quadplex.

(9) "Individuals" mean persons with developmental disabilities.

(10) "Manufactured home" has the same meaning as in division (C) of section 4781.01 of the Revised Code.

(11) "Mobile home" has the same meaning as in division (G) of section 4781.01 of the Revised Code.

(12) "Mortgage" means a consensual interest in real property, including fixtures, that secures payment or performance of an obligation between the county board and the nonprofit corporation or a local housing authority memorialized in a mortgage deed and recorded in the county in which the subject real property is located.

(13) "Newly constructed housing" means housing that is for sale and for which an occupancy permit has been issued.

(14) "Nonprofit corporation" means a nonprofit corporation incorporated pursuant to Chapter 1702. of the Revised Code, granted 501(c)(3) status by the internal revenue service, and specifically chartered to develop, acquire, and manage permanent, affordable housing for individuals.

(15) "Permanent foundation" has the same meaning as in division (C)(5) of section 3781.06 of the Revised Code.

(16) "Permanently sited manufactured home" means a manufactured home that meets all of the following criteria:

(a) The structure is affixed to a permanent foundation and is connected to appropriate facilities;

(b) The structure, excluding any addition, has a width of at least twenty-two feet at one point, a length of at least twenty-two feet at one point, and a total living area, excluding garages, porches, or attachments, of at least nine hundred square feet;

(c) The structure has a minimum 3:12 residential roof pitch, conventional residential siding, and a six-inch minimum eave overhang, including appropriate guttering;

(d) The structure was manufactured after January 1, 1995; and

(e) The structure is not located in a manufactured home park as defined by section 4781.01 of the Revised Code.

(17) "Promissory note" means a written instrument that a county board enters into with a nonprofit corporation or local housing authority that evidences a promise to pay a monetary obligation, establishes a schedule for forgiveness of a monetary obligation through installments or otherwise, or a combination thereof, and which may be used to support a mortgage on real property.

(18) "Quadplex" means a separate or detached residence with four one-bedroom dwelling units designed and arranged for use by four individuals separated by a horizontal or vertical wall, each of which is heated independently of the others and has its own separate, private means of ingress and egress.

(19) "Single-family home" means a residential building consisting of one dwelling unit designed and arranged for use by one family. The term shall include a manufactured home and a condominium under Chapter 5311. of the Revised Code.

(20) "Supported living" has the same meaning as in section 5126.01 of the Revised Code.

(C) Use of community assistance funds

(1) The funds shall be used to acquire housing for individuals receiving supported living in accordance with sections 5126.40 to 5126.47 of the Revised Code or individuals receiving supported living funded by a home and community-based services waiver administered by the department.

(2) The housing shall be used as residences for individuals for at least one hundred eighty months.

(3) The funds shall be used to acquire a single-family home, a duplex, a quadplex, a permanently sited manufactured home, a condominium, or newly constructed housing.

(4) The funds may be used for housing construction projects.

(5) The funds shall not be used to purchase:

(a) Furniture and household items other than those fixed items customarily included in a purchase agreement or a construction contract;

(b) Mobile homes; or

(c) Housing when the purchase price exceeds, by more than ten percent, the appraised value of the housing.

(6) The funds shall be repaid if any provision of this rule is violated. The repayment shall be calculated by multiplying the amount of funds provided under this rule by the ratio of one hundred eighty minus the number of months the housing is used for residences for individuals (as determined by the department) to the total term of one hundred eighty months, that is:

funds provided x [(180 - number of months used for residences)/180] = repayment

(D) Application procedure

(1) Prior to purchasing housing or initiating a housing construction project, the county board shall submit a letter of intent and an application to the department in a form and manner prescribed by the department.

(2) The department shall notify the county board whether the application is approved or disapproved.

(3) Based on available funding, the department shall distribute community assistance funds to a county board utilizing a formula developed by the department. The department may participate at a percentage level of the cost of the housing.

(E) County board assurances

(1) The county board shall enter into a contract with either a nonprofit corporation or a local housing authority. The contract and mortgage shall include the following terms:

(a) The use and ownership of the housing if the contract is terminated;

(b) The use and ownership of the housing if the nonprofit corporation or local housing authority is dissolved;

(c) The use and ownership of the housing if the nonprofit corporation or local housing authority files for bankruptcy;

(d) A provision that upon dissolution of the nonprofit corporation or local housing authority, the county board or the department shall be a party to any judicial proceeding or dissolution agreement and that the county board or the department may be a distributee under such order or agreement based upon the amount of funds provided to the nonprofit corporation or local housing authority under this rule and to the extent provided by law; and

(e) A requirement that any proceeds from the sale of the housing shall be used to acquire replacement housing.

(2) The county board shall maintain a mortgage interest in the housing that at least equals the amount of community assistance funds used to purchase the housing. The term of the mortgage shall be for one hundred eighty months.

(3) Only individuals receiving supported living in accordance with sections 5126.40 to 5126.47 of the Revised Code or receiving supported living funded by a home and community-based services waiver administered by the department shall live in the housing. A person who does not have a developmental disability may live in the housing if the department concludes:

(a) The individuals living in the housing consent; and

(b) The housing remains primarily for the use of individuals.

(4) The individuals who will be living in the housing shall take part in its selection. The individuals shall be given appropriate residential options and allowed to make reasonable and responsible choices among them.

(5) Only one single-family home, duplex, or quadplex shall be located on a lot or parcel of land. Funds shall not be used to purchase housing on adjoining lots or parcels if the department determines it would create the appearance of congregating individuals.

(6) Housing shall be kept in good order and condition by:

(a) Making all necessary or appropriate repairs and replacements;

(b) Complying with all laws, rules, insurance policies, and regulations;

(c) Obtaining and maintaining any governmental licenses and permits required for the use, maintenance, repair, and operation of the housing;

(d) Paying all costs, claims, damages, fees, and charges arising out of the possession, use, operation, or maintenance of the housing; and

(e) Remaining free of all liens, encumbrances, restrictions, and conditions which prevent or interfere with its use as residences for individuals.

(7) Before receiving the funds, the county board shall enter into a contract with the department.

(8) Within sixty calendar days of acquiring the housing, the county board shall provide the department with copies of the final closing statement, the promissory note, the recorded deed (with restrictions noted as necessary), and the recorded mortgage.

(F) Distribution of community assistance funds

(1) For purchased housing, the department shall issue a check for all or a portion of the funds awarded to a county board after receiving all of the documents listed below and after determining that all requirements of this rule have been met. The department may present the check at the closing.

(a) A completed application;

(b) An appraisal that is not more than six months old;

(c) A signed purchase contract showing the intent to purchase and the purchase price;

(d) A copy of the title insurance policy;

(e) The documents required in paragraphs (E)(1) and (E)(7) of this rule;

(f) If the housing is a condominium, a copy of the condominium description, deed restrictions, and homeowner association rules and by-laws; and

(g) Any other documents specified by the department.

(2) For a housing construction project, the department shall issue a check for all or a portion of the funds awarded to a county board after receiving all of the documents listed below and after determining that all requirements of this rule have been met:

(a) The documents required in paragraphs (E)(1) and (E)(7) of this rule;

(b) A copy of the mortgage;

(c) A copy of the title insurance policy;

(d) A copy of the occupancy permit which has been issued for the housing construction project;

(e) An appraisal that is not more than six months old; and

(f) Any other documents specified by the department.

(G) Acquisition of replacement housing

(1) To sell housing purchased under this rule and obtain replacement housing, the county board shall:

(a) Comply with sections 5123.37 to 5123.375 of the Revised Code;

(b) Provide the department with the appraisal that is not more than six months old, promissory note, mortgage, and recorded deed for the replacement housing; and

(c) Comply with all other requirements of this rule.

(2) The net sale proceeds shall equal the amount of funds owed to the department in accordance with the formula in paragraph (C)(6) of this rule.

(H) Failure to comply with this rule may result in the repayment of the funds awarded under this rule and/or the denial of future requests for funds.

Replaces: 5123:1-1-03

Effective: 04/01/2014
R.C. 119.032 review dates: 04/01/2019
Promulgated Under: 111.15
Statutory Authority: 5123.04 , 5123.351 , 5123.36
Rule Amplifies: 5123.04 , 5123.351 , 5123.36
Prior Effective Dates: 05/24/1991 (Emer.), 08/09/1991, 09/14/2001, 06/21/2004, 07/20/2008, 02/12/2009

5123:1-1-17 Distribution of funds for residential accessibility and renovation projects.

(A) Purpose

This rule establishes parameters for the use of community capital assistance funds for residential accessibility and renovation projects.

(B) Definitions

As used throughout this rule, the following definitions shall apply:

(1) "Applicant" means a county board of developmental disabilities, governmental entity, or nonprofit corporation specifically chartered to provide a developmental disability service when such service fulfills a public purpose as provided by section 154.20 of the Revised Code and that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code.

(2) "Controlling board" means the board established by section 127.11 of the Revised Code.

(3) "Department" means the Ohio department of developmental disabilities.

(4) "Maintenance" means a repair to a structure or component, if that structure has not reached the end of its useful life.

(5) "Project" means capital facilities as defined in section 154.01 of the Revised Code.

(6) "Renovation" means work done to a building to restore it to an acceptable condition and to make it functional for the purpose(s) set forth in an application, including architectural and structural changes and the modernization of mechanical and electrical systems. Renovation does not include work that consists primarily of maintenance repairs and replacement due to normal use, wear and tear, or deterioration.

(C) Eligibility

To be eligible for state funding, an applicant shall:

(1) Have a stable programmatic and financial history ; and

(2) Provide services, or be a nonprofit corporation which acquires residential properties for individuals requiring services, through the following:

(a) Supported living program;

(b) Medicaid-funded home and community-based services waiver ;

(c) Family consortium program ;

(d) Community-based intermediate care facility for the mentally retarded licensed by the department; or

(e) Other types of residential programs serving persons eligible for services by the department as may be approved by the department.

(D) Awarding of funds

(1) The department shall develop priorities and program guidelines.

(2) The department shall use data from the letters of intent to determine the allocation for each project.

(3) No funds shall be distributed until the appropriation is released by the controlling board.

(4) The facility to be made accessible or renovated shall house no more than eight individuals.

(5) An addition to an existing structure is allowed only as part of an authorized accessibility modification.

(6) The department shall review requests based upon the following:

(a) Submission of complete and accurate information within the time-frame allowed in accordance with paragraph (E) of this rule.

(b) Architectural and economical feasibility of the accessibility modification or renovation, as determined by the department.

(i) The cost of the project shall not exceed thirty-five per cent of the appraised value of the home. Waivers of this provision, up to seventy-five per cent, shall be reviewed by the department on a case-by-case basis.

(ii) A site visit by the department may be required prior to the approval of any project that exceeds fifty per cent of the value of the home.

(7) If approved, the letter shall indicate the maximum amount of state funding approved, subject to fund release action by the controlling board. The department will reimburse the applicant for approved costs for an amount up to but not exceeding the maximum total project cost stated in the initial approval letter.

(8) Costs that are suitable for reimbursement shall be limited to the following:

(a) Design and project administration fees paid to an outside consultant;

(b) Construction costs;

(c) Costs of permits and inspections ;

(d) Construction document printing costs; and

(e) Interest, subject to prior approval of the department at the time of application .

(9) Funds may not be used for the following:

(a) Maintenance projects;

(b) Movable equipment (e.g., furniture);

(c) Painting, wallpapering, and re-siding, unless in conjunction with an approved accessibility or renovation project; and

(d) Any project involving asbestos abatement or underground storage tank removal.

(E) Application process

(1) The applicant shall submit a letter of intent data form to the department, during the established time period of each odd-numbered year, regarding the accessibility modification or renovation needed in the next two years for each project. Letters of intent shall include the following:

(a) A detailed description of the proposed project;

(b) The maximum estimated project costs;

(c) Justification for the project ; and

(d) An appraisal, if requested.

(2) If the applicant is a nonprofit corporation, the applicant shall submit with the request for community capital assistance funds, in addition to all other documents required by this rule, a certified copy of a corporate resolution that states the person who signs any documents required by this rule has the authority to bind the corporation, the articles of incorporation, the code of regulations , a current list of all trustees, officers, and members, and a certificate of good standing from the secretary of state's office.

(a) The articles of incorporation shall contain the following provisions in addition to those otherwise required by law:

(i) A provision that upon dissolution of the corporation, if such dissolution occurs within the length of the project agreement as required by this rule, the department or its successor shall be a party to any judicial proceeding or dissolution agreement and that the department or its successor may be distributee under such order or agreement to the extent of its participation and to the extent provided by law or the project agreement which originally set forth disbursal of funds to the corporation.

(ii) A nondiscrimination provision stating that services will neither be rendered nor denied on the basis of race, color, religion, national origin, disability, age, or unless programmatically justifiable, sex.

(b) The code of regulations , shall contain the following provisions in addition to those specifically provided by law:

(i) A provision stating that the board of trustees shall include persons living in Ohio.

(ii) A provision that no persons related by blood or marriage (to a degree of first cousin) shall constitute a majority of the board of trustees.

(iii) A conflict of interest provision to require disclosure of any conflict of interest, including requiring the abstention of a trustee in a vote on a matter affecting persons employed or to be employed by the corporation and related to the trustee by blood or marriage, and procedures for the resolution of conflicts.

(3) The request for funds shall be reviewed by the department and accepted or rejected for state funding. The applicant shall be informed, in writing, of the approval or disapproval of a project.

(4) The department shall provide technical assistance to any applicant upon request. Assistance to an applicant will be supplementary in scope and will not relieve the applicant of all responsibility to administer the project and comply with this rule.

(F) Responsibilities of the applicant

(1) Upon approval of a project and prior to any payment of state funds, the applicant shall enter into a project agreement with the department that assures the following:

(a) The applicant shall acknowledge receipt of a copy of the series II lease agreement and that applicant has read and fully understands the document and its binding effect on the applicant.

(b) The applicant shall assure the completion of the project in accordance with standards set forth by the department and other applicable federal, state, and local statutes.

(c) The applicant shall assure the operation of the facility in accordance with the project agreement.

(d) The applicant shall agree to use and maintain the property as a residential facility for persons with developmental disabilities for the length of the project agreement.

(e) If the project is not used for said purpose, the applicant shall pay to the department, on a pro rata basis, any state funds disbursed to the applicant. The terms of the project agreement shall expire as to the earlier of:

(i) Fifteen years from the date of the project agreement; or

(ii) The date when all capital bonds, any of the proceeds of which were expended for project costs, are no longer outstanding.

(f) If the applicant is a nonprofit corporation, the applicant shall execute a promissory note and mortgage between the department and the nonprofit corporation.

(2) The applicant shall begin work on the project within the biennium budget period funding the project. Any changes to the project or scope of work, including changes in the physical location of the project, require approval by the department. Project approval and state funding may be withdrawn at any time for failure to comply with the applicable assurances, certifications, or requirements stated in this rule.

(3) If all or part of the project defined in the scope of work is canceled by the applicant or the department, or not completed, the department reserves the right to withhold the monies allocated for the work not completed.

(4) The applicant shall not be the contractor for its own project.

(5) The applicant shall assure that the project is located upon, or will be located upon, real estate which the applicant owns in fee simple title or in which it has a leasehold interest. The applicant shall assure that the premises are, and shall remain for the term of the project agreement, free and clear of all liens, encumbrances, restrictions, and conditions which prevent or interfere with the use of the property for the purpose of the project.

(6) If leased property is being used, the following are required:

(a) The lease must be consistent with the series II lease agreement and clearly state that the property is to be leased for a minimum of fifteen years.

(b) The applicant shall certify that it has notified the owner of its intent to enter into a project agreement with the department and has obtained written commitment from the owner to permit operation of the facility for a minimum of fifteen years .

(c) The owner shall certify agreement to the project.

(d) The department shall have an opportunity to absolutely cure any default to avoid the reversion of the property to the lessor, and the department may at its option assume operation of the facility or may transfer or assign the leasehold interest and the operation of the program in the facility, upon approval of the lessor, which approval shall not be unreasonably withheld, to a nonprofit corporation or other agency to provide substantially similar services in the facility for the remainder of the lease term.

(e) The lease shall state the exact location of the space being leased, if only a portion of the property is being leased.

(f) Documentation shall be submitted establishing who owns the underlying land or building . If the applicant is subleasing part of a building , a copy of the prime lease with a certification that the copy is a true copy as well as the document that gives the lessor permission to sublet the property must be provided.

(g) Proof shall be submitted to the department that all leasehold interests are recorded in the county recorder's office.

(7) The applicant shall obtain the services of a registered architect or engineer to perform any design required for the project if required by the political subdivision having jurisdiction for the occupancy involved. Where permitted by law, the design work and related services may be performed by unlicensed persons.

(8) The applicant shall assure, for projects which equal or exceed twenty-five thousand dollars in design fees, that any architectural or engineering services for the project meet the requirements of sections 153.65 to 153.70 of the Revised Code.

(a) This fee shall cover design services, bidding costs, and construction observation.

(b) For projects that are one hundred thousand dollars or less, the acceptable architect fee is ten per cent of the construction costs only, not the total project cost.

(9) The applicant shall certify through the project agreement that all work will comply with Title III of the Americans with Disabilities Act,29 U.S.C. 12101, and all state and local codes and ordinances, including zoning regulations. Furthermore, the applicant shall certify that it will obtain all required plan approvals, permits, and inspections.

(10) The applicant shall solicit, or cause to be solicited, sealed competitive bids from no fewer than three contractors. If, after a good faith effort of the applicant, fewer than three contractors submit bids, the other contractor(s) shall submit a stated "no bid" on their letterhead. The bids shall be based on bid documents which are in written and/or drawn form and are sufficiently complete and clear so that all bidders are bidding on the same scope of work.

(a) For projects with a total estimated cost of less than fifty thousand dollars:

(i) The bids shall be solicited within sixty days of the effective date of the project agreement.

(ii) Bids may be solicited informally, without advertising, and submitted informally on the bidder's letterhead.

(b) For projects with a total estimated cost equal to or exceeding fifty thousand dollars :

(i) The project shall be advertised with a legal notice in a newspaper of general circulation to solicit bids from all interested contractors.

(ii) The notice shall be published once a week for not less than two consecutive weeks, with the bids due no sooner than eight days after the last date of publication.

(iii) The legal notice shall state the estimated construction cost.

(iv) The project may be bid as a single prime contract through a general contractor .

(v) The applicant shall prepare a bid tabulation sheet which shows the official estimate amount for the contract and lists all contractors who received bid documents.

(vi) The bid opening shall be open to the public. The person officiating at the bid opening shall sign and date the bid tabulation sheet to certify that it is an accurate record of the bid results.

(vii) The applicant shall submit to the department the completed and signed bid tabulation sheet and photocopy of the low bid for the contract.

(viii) No contract shall be awarded if the low bid received (aggregate bids if multiple contracts) exceeds the estimate by more than ten per cent.

(ix) The applicant shall not enter into contracts and construction shall not begin until notified by the department, in writing, that controlling board approval has been obtained. Any costs not authorized by the department shall not be reimbursed by the department.

(x) If the applicant is an agency of the county government, the bidding procedures shall comply with the conditions the county prosecuting attorney may require. If there is a conflict between the local and state requirements, the state requirements shall supersede the local requirements.

(11) No funds for the project shall be used by the applicant unless the mechanics, laborers, or workers are paid the prevailing wage rates as described in section 176.05 of the Revised Code.

(12) The applicant shall ensure that all contractors comply with all applicable federal, state, and local laws in the conduct of the work related to the project. The applicant shall ensure that the contractors shall accept full responsibility for payment of all workers' compensation and unemployment compensation insurance premiums, all income tax deductions, social security deductions, and any and all other taxes or payroll deductions required for all employees engaged by contractors in the performance of work on the project.

(13) All contracts awarded by the applicant for the project shall contain provisions by which:

(a) The contractor agrees that in the hiring of employees for the performance of work under the contract or any subcontract, no contractor, subcontractor, nor any person acting on his or her behalf shall by reason of race, creed, sex, disability or military status as defined in section 4112.01 of the Revised Code, or color, discriminate against any citizen of the state in the employment of labor or workers who are qualified and available to perform the work to which the employment relates.

(b) The contractor agrees that no contractor, subcontractor, nor any person acting on his or her behalf shall in any manner discriminate against or intimidate any employee hired for the performance of work under the contract on account of race, creed, sex, disability or military status as defined in section 4112.01 of the Revised Code, or color.

(14) The applicant shall ensure that the project provides for an affirmative action program for the employment and effective utilization of disadvantaged persons whose disadvantage may arise from cultural, racial, or ethnic background, or other similar cause including, but not limited to, race, religion, sex, disability or military status as defined in section 4112.01 of the Revised Code, national origin, or ancestry.

(15) In awarding contracts for the project, the applicant shall ensure that equal consideration be given to contractors, subcontractors, or joint venturers who qualify as a minority business enterprise as defined in section 122.71 of the Revised Code.

(16) The applicant shall indemnify, and hold harmless, the department from any and all liabilities, claims, and actions arising from the project including, without limitation, any liens of contractors, subcontractors, material suppliers, or laborers.

(17) The applicant shall keep all financial records in a manner consistent with generally accepted accounting procedures. Documentation to support each action shall be filed in a manner allowing it to be readily located. Such documentation shall be maintained by the applicant until fifteen years after the project is completed, or the date when all capital bonds, any of which were expended for project costs, are no longer outstanding, whichever is earlier.

(18) The applicant shall ensure that the work outlined in the scope of work has been completed.

(G) Reimbursement

(1) The applicant shall pay for all approved costs and then be reimbursed by the department after submittal of appropriate paid receipts.

(2) Projects with maximum total project costs under fifty thousand dollars shall be reimbursed on a schedule established by the department.

(3) Upon submission of paid receipts for reimbursement, the applicant shall certify that the construction contractor selected was the low bidder and that the applicant has obtained an affidavit of release of liens from all prime contractors on the project.

(4) Upon submission of paid receipts for reimbursement, the applicant shall also certify that it or its agent has inspected the work and that it complies with the scope of work outlined in the project agreement, the drawings and specifications, and any other construction documents.

(5) The applicant shall identify the final submission of receipts as the last to be submitted. The final submission of receipts for reimbursement shall include a letter from the contractor(s) stating that the work has been completed in accordance with the construction documents.

(6) The department reserves the right to audit the expenditure of state funds to determine whether they were applied to the project. The department may bring action to recoup any funds expended for purposes other than the project or not expended in conformance with the procedures outlined in the project agreement and in this rule, or if the applicant breaches the project agreement in any manner.

Effective: 07/01/2011
R.C. 119.032 review dates: 04/13/2011 and 07/01/2016
Promulgated Under: 111.15
Statutory Authority: 5123.04 , 5123.351 , 5123.36
Rule Amplifies: 5123.04 , 5123.351 , 5123.36
Prior Effective Dates: 08/11/1989 (Emer.), 10/30/1989, 09/10/1990 (Emer.), 12/09/1990, 05/16/1996, 03/20/1997, 08/30/2001

5123:1-1-18 Distribution of community assistance funds for purchase of housing. [Rescinded].

Rescinded eff 6-21-04