General Assembly Once Again Changes Rules on Disposal of Real Property

In 2015 Ohio’s General Assembly enacted R.C. 3313.413. This statute added another step to the process for disposing of real property worth $10,000 or more.  The statute required school districts to first offer the property to “high-performing” community schools, as designated by the Ohio Department of Education. These schools may be located anywhere in the state of Ohio.  Then, assuming no such high-performing school took up the offer, the district was required to offer the property to any start-up community school as well as any college-preparatory boarding school located within the district’s territory.

The designated list of high-performing community schools initially published by ODE contained 22 schools, so any district with an interest in selling a piece of real estate it owned was required to issue 22 offer letters, one to each these schools. Just as with the offer to community schools within a district’s territory, the offer to the high-performing schools could be for no more than the appraised value (the appraisal not being more than a year old) and the offer had to remain open for 60 days.

These relatively new requirements have now been modified by House Bill 438, which was signed in January and becomes effective on April 6.  Under the new law, districts are back to the previous system of only having to offer properties to community schools and college-preparatory boarding schools within their territory – including high-performing community schools.

Along with the change in territory is a change in prioritization for districts that receive an offer from more than one high-performing or other community school.  If a district receives notice from more than one high-performing community school, it must hold an auction at which only those interested high-performing community schools may bid. If no such high-performing community school expresses interest, the district may move on to the non-high-performing community schools and college-prep boarding schools. If two or more of these schools express interest, the district must hold an auction at which only the interested schools would participate.

If no community school or boarding school expresses interest, the district must hold a public auction for the property with at least 30 days’ prior notice in a newspaper of general circulation in the district.  If no bids are accepted through the auction, the district may then sell the property at private sale on its own terms.

ODE will continue to maintain and publish the list of high-performing community schools.

Competitive Bidding Threshold Increased

The threshold for competitive bidding with construction projects was increased in Senate Bill 3, which became effective March 16. Under the new law, construction or demolition projects in excess of $50,000 (the previous threshold was $25,000) must be advertised for bids. All other provisions of R.C. 3313.46 remain the same.

Note about Personal Property

District-owned personal property valued at more than $10,000 is required to be sold at public auction after 30 days’ notice. This statute has not changed (R.C. 3313.41). If a district adopts a resolution that school district property worth less than $2,500 (fair market value) is obsolete or unneeded, it may donate that property to eligible nonprofit entities. The board must adopt a procedure and must publish its intent to donate in a newspaper. Contact an Ennis Britton attorney for the specific requirements and applicability of the law to any personal property being considered for sale or disposal.