Source: https://aaplaw.com/general/articles/covid-19-frequently-asked-questions/
Timestamp: 2020-03-30 12:04:00
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COVID-19 Frequently Asked Questions | Allensworth & Porter, L.L.P.
COVID-19 and Construction | FAQ
Published March 26, 2020 at 5:00 pm
Since March 24, 2020, we have received many questions from clients whose construction projects might be impacted by the City of Austin (COA) Stay Home – Work Safe Order and the similar Travis County (TC) Judge Order No. 2020-5: Relating the Declaration regard COVID-19. The following are brief answers to some of the most frequently asked questions. Please note that the Travis County and City of Austin Orders are not identical, in many cases were not clearly written, and so far, have been enforced in a manner that differs from the plain language of the Orders. As a result, the following is offered as our best guidance and should not be construed as legal advice for any particular project. We will continue to update this content as more information becomes available.
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We have ongoing projects with the State of Texas or the United States Government in Austin. Do the Austin or Travis County March 24, 2020 Orders halt construction on those projects?
For areas covered by both a city and county order (e.g., Williamson/Travis Counties & Austin), which order governs?
Is the construction of a grocery store (or other essential business) exempt under the City and County Orders?
We have a construction project that has both affordable housing and non-affordable housing components. Is the project exempt from the City and County Orders?
We have a construction project that includes public utilities. Is the project exempt from the City and County Orders?
For new residential construction, what is the effect of the City of Austin’s Order in surrounding cities, such as Leander, Kyle, Hutto, and Buda?
Is residential or commercial roofing installation exempt under the City of Austin or the Travis County Orders?
Can I have one person on site after the ban takes effect?
What is the penalty for a violation of the City of Austin and Travis County Orders?
Q: We have ongoing projects with the State of Texas or the United States Government in Austin. Do the Austin or Travis County March 24, 2020 Orders halt construction on those projects?
A: No. The City and County Orders do not apply to State or Federal projects.
Both Orders state that “[t]his Order does not apply to the Federal or State Government.” TC at § 6.d; COA at § 6.d. Further, in a letter issued on March 25, 2020, the Texas Attorney General clarified that “the State, its agencies and its property are not under the jurisdiction and authority of a local officer under the [Texas Disaster Act of 1975].” Paxton Letter, Mar. 25, 2020 at p. 2. Finally, the Orders also exempt, as “Essential Government Functions,” “all personnel working for companies (including their subcontractors) who perform work under contract to State or Federal Governmental Entities for which they are required under state or federal law to remain open[.]” To ensure absolute clarity, we recommend that you confirm with the contracting officer for your state or federal projects that they expect work to continue, and request clarification from them as to whether they intend to voluntarily follow the City of Austin’s Order.
Q: For areas covered by both a city and county order (e.g., Williamson/Travis Counties & Austin), which order governs?
A: Both orders apply, but in the case of a conflict between the two, the County order will govern.
City Mayors and County Judges both have authority to issue orders restricting movement in a disaster area. Tex. Gov’t Code § 418.108(g) (county judge and mayor may control ingress to and egress from a disaster area, and their authority includes the right to control the movement of persons and the occupancy of premises in that area). The county judge’s jurisdiction and authority in this regard applies to all areas of the county, even those within city limits. Id. at § 418.108(h) (the jurisdiction and authority of the county judge includes the incorporated and unincorporated areas of the county). In the event of a conflict between the city’s order and the county’s order, “the decision of the county judge prevails.” Id.
Q: Is the construction of a grocery store (or other essential business) exempt under the City and County Orders?
A: Yes. Construction of “Essential Businesses” like a grocery store, bank, gas station, healthcare facility, etc. should be exempt from City and County Orders. Construction of “Critical Infrastructure” should also be exempt.
The City of Austin and Travis County Orders generally exempt the performance of work and construction that supports an “Essential Business” or “Critical Infrastructure” The Orders also exempt “Essential Activities” which includes “providing essential products and services at an Essential Business, or Critical Infrastructure.” TC at § 6.b.; COA at § 6.b. City guidance has further clarified the City’s intent to allow construction of facilities defined in its Order as essential businesses. Guidance at § 2. Grocery stores are included as an Essential Business under the Order. Other examples of Essential Businesses include healthcare facilities, gas stations, banks, hardware stores, and certain educational institutions. Examples of Critical Infrastructure include transportation facilities, utilities, critical manufacturing facilities, fire and law enforcement facilities, and airports. The complete lists of Essential Businesses can be found in Section 6.e. of the Travis County Order and Section 6.f. of the City of Austin Order. The lists of Critical Infrastructure are attached as Exhibit B to the City of Austin Order and Exhibit C to the Travis County Order. Please be sure to check both orders as their lists are not identical. In the event of an inconsistency, the Travis County Order governs.
Note that exempted projects must still continue to comply with the Austin/Travis County Health Requirements included in each Order.
Q: We have a construction project that has both affordable housing and non-affordable housing components. Is the project exempt from the City and County Orders?
A: Mixed affordable/non-affordable housing projects should be exempt from the City of Austin Order based on guidance published by the City. Importantly, Travis County has not issued the same guidance. In the event of a conflict between the Travis County and City of Austin Orders, the Travis County Order will control. So, the exemption will only apply if Travis County interprets its Order in the same manner as the City. Currently, we do not have any indication that the County will vary from the City’s guidance.
The Austin and Travis County Orders generally exempt the performance of work in “Critical Infrastructure,” which includes “Construction, including . . .construction of affordable housing.” TC at Exh. C, § 2.n.; COA at Exh. B, § 2.p.
The Orders do not address what happens if part of your project is exempt and part of your project is not. However, the City has issued guidance that similarly references “Affordable housing projects” as an exempt critical facility and states that “if part of a construction project falls within one of the listed categories [including “Affordable housing projects”], but the project also includes other construction activities at the same site that do not fall within one of these categories, all construction activities at the project will be deemed to meet the definition of Critical Infrastructure under the Order.” Guidance for the Construction Industry (Guidance), Section 2. So, if your project includes some percentage of affordable housing, the City has stated its intent to deem the entire project a “Critical Infrastructure” exempt from the stay at home order. Currently, Travis County has not issued guidance about part of a project being Critical Infrastructure and how that affects classification of the remainder of the project. If Travis County were to reject the City’s approach it would constitute a conflict between the City and County Orders, and in that case the County Order would control, and a multifamily project would not be exempt even if it includes some affordable housing. Currently, we have not seen any evidence that Travis County is interpreting its Order differently than the City, but that possibility remains.
Q: We have a construction project that includes public utilities. Is the project exempt from the City and County Orders?
A: Possibly. Public works and utility construction are generally exempt under the Orders. City guidance documents suggest that the exemption would also apply to projects that include, but are not solely for, public works construction. Importantly, Travis County has not issued the same guidance. In the event of a conflict between the Travis County and City of Austin Orders, the Travis County Order will control. So, the exemption will only apply if Travis County interprets its Order in the same manner as the City. Currently, we do not have any indication that the County will vary from the City’s guidance.
The City of Austin and Travis County Orders generally do not prohibit people from performing work in “Critical Infrastructure,” “Essential Government Service” or “Government Functions” (two terms are used, but appear to have the same meaning), and “Essential Businesses.” TC at § 1; COA at § 1. In addition, the City has also issued guidance clarifying its intent to exempt “Public works construction projects” and “Construction of facilities that are defined in the Order as Essential Businesses, Essential Government Functions, or Critical Infrastructure.”
“Critical Infrastructure” includes “power, water, telecommunications, natural gas, and public utilities;” and “Construction, including public works construction. . . and other construction that supports . . . critical infrastructure.” TC at Exh. C; COA at Exh. B. “Essential Government Functions” include “all personnel working for companies (including their subcontractors) who perform work under contract to State or Federal Governmental Entities for which they are required under state or federal law to remain open.” TC at § 6.c.; COA at § 6.d. For “Essential Businesses” it includes IT services and their essential service vendors, including the provision of “telecommunications services, internet access, and broadband/communications services.”
While both Orders exempt public works and various types of utility work, the Orders themselves do not address what happens if you have a construction project that has both exempted and non-exempted components. However, in its recent guidance the City stated that “if part of the construction project falls within [Public works construction projects or Construction of facilities that are defined in the Order as Essential Businesses, Essential Government Functions, or Critical Infrastructure], but the project also includes other construction activities at the same site that do not fall within one of these categories, all construction activities at the project will be deemed to meet the definition of Critical Infrastructure under the Order.” Guidance for the Construction Industry (Guidance), Section 2. This guidance suggests that a project would be exempt from the City of Austin Order if it included some utility work. However, it is important to understand that the City’s guidance is not binding on the City, so application of the exemption in this manner is not certain.
Further, Travis County has not issued guidance stating that it intends to allow projects to move forward if they include some public utility or public works construction. If Travis County were to reject this approach it would constitute a conflict between the effect or enforcement of the City and County Orders, and in that case the County Order would control and a project with some utility work would not be exempt. Currently, we have not seen any evidence that Travis County is interpreting its Order differently than the City, but that possibility remains.
Q: For new residential construction, what is the effect of the City of Austin’s Order in surrounding cities, such as Leander, Kyle, Hutto, and Buda?
A: The City of Austin Order is limited to the city limits of Austin. However, both Travis County and Williamson County have issued their owner shelter-in-place orders. The Travis County Order is similar and arguably broader than the City of Austin Order. The Williamson County Order expressly exempts “residential and commercial construction” as an Essential Critical Infrastructure in Section 10.e. of the Order. WCO at § 10.e. To determine which order(s) apply, you need to determine which jurisdiction(s) your project is in.
Q: Is residential or commercial roofing installation exempt under the City of Austin or the Travis County Orders?
A: Yes, but only in some limited cases, such as installation on an existing residence or for affordable housing. Although the City of Austin and Travis County Orders have exemptions that arguably apply to residential or commercial roofing more generally, the Order language is not entirely clear. The City of Austin has taken the position that “[i]n general, commercial and residential construction activities are prohibited” except in narrow circumstances.
Several provisions in the City of Austin Order arguably exempt residential or commercial roofing, including re-roofing projects.
First, the City of Austin and Travis County Orders exempt certain “Essential Activities,” including obtaining “Necessary Supplies and Services” and other “products necessary to maintain the safety, sanitation, and essential operation of residences[.]” TC at § 6.b.; COA at § 6.b. While this probably would not apply to new construction, to the extent you are remodeling a residential roof, the exemption arguably applies to providing supplies and services necessary to maintain the safety of the home. It is difficult to imagine a residence “operating” at all, much less in a safe and sanitary way, without a functioning roof.
Second, the Orders exempt “Critical Infrastructure,” including “Construction[.]” TC at Exh. C, § 2.n.; COA at Exh. B, § 2.p. Taken at face value, this exemption would broadly apply to all residential and commercial roofing. Note that the City has attempted to walk back that portion of the Order through recently issued guidance in which the City states that “residential construction activities are prohibited under the Order except” for:
1) “Affordable housing projects;”
2) “Construction of facilities for individuals experiencing homelessness;”
3) “Construction of facilities that are defined in the Order as Essential Businesses, Essential Government Functions, or Critical Infrastructure;” and
4) “Construction of facilities specifically required by the City in response to the current COVID-19 emergency[.]”
Guidance at § 2. If your residential or commercial roofing project is for 1), 2), or 4), it is exempt. The City’s “Guidance” on 3) is confusing and unhelpful since it simply references back to the Order, and so you will have to refer back to whether your roofing project falls under a separate exemption within the Order.
Third, the City’s list of “Essential Businesses” exempt from the Order includes several that arguably apply to certain roofing construction. The City’s Order exempts “Critical Trades” defined as “[p]lumbers, electricians, exterminators, pool cleaners, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, essential activities, Essential Businesses, Essential Government Functions, or Critical Infrastructure.” COA at § 6.f.ix. Arguably roofs are necessary to maintain safe, sanitary, and essential operations of residences, Essential Businesses, and Essential Government Functions. Remodels of existing projects are probably safer under the Order than new construction, but it is hardly clear from the face of the Order itself. For residential roofing, the Order treats “Residential Facilities and Shelters” as an “Essential Business.” “Residential Facilities and Shelters” is defined as “Residential facilities and shelters for seniors, adults, children, and animals.” COA at § 6.f.xvii. Because “shelter” is not defined, arguably residential construction fits within this. At the very least, “Critical Trades” providing services necessary to maintain the safety, sanitation, and operation of “Residential Facilities” are similarly exempt.
For residential or commercial roofing, the Travis County Order is not materially different from the City of Austin Order. Travis County’s Order includes the same “Essential Activities” for “Necessary Supplies and Services” to maintain the “safety, sanitation, and essential operation of residences[.]” TC at §6.b.ii. The Travis County Order has a slightly different definition of “Critical Infrastructure” but includes “Construction, including . . . construction of affordable housing or housing for individuals experiencing homelessness . . . and other construction that supports” essential uses, critical infrastructure, etc. TC at Exh. C, § 2.n. However, Travis County has not yet issued the same guidance attempting to narrow the scope of exempted construction, although we assume that it will generally interpret its Order as consistent with the City. Travis County’s Order also contains the same “Residential Facilities and Shelters” exemption, and a similar (but not identical) “Critical Trades” exemption for Essential Businesses.
Please bear in mind that the Orders are very confusing. There may be other exemptions that apply to the specific type of residential or commercial project that you are working on generally, depending on the specific work involved.
Finally, note that exempted projects must still continue to comply with the Austin/Travis County Health Requirements included in each Order.
Q: Can I have one person on site after the ban takes effect?
A: Yes, Minimum Basic Operations are allowed.
“Minimum Basic Operations” include the minimum necessary activities to (1) maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, and related functions, and (2) ensure employees and clients of the business are able to continue to work and receive services remotely. COA at § 6.g.
Note that minimum basic operations must comply with the Austin/Travis County Health Requirements included in each Order.
Q: What is the penalty for a violation of the City of Austin and Travis County Orders?
A: The penalty for either jurisdiction is a fine not to exceed $1,000 and/or up to 180 days in jail. We are not yet aware of any person or business being assessed a fine or jail time. TC at § 8; COA at § 8.
Amy Emerson is a partner and litigator at construction law firm Allensworth & Porter. Amy represents clients from all sides of the construction industry—including public and private owners, general contractors, and developers—and is frequently retained by inside and outside general counsel to handle construction and contract disputes, appellate work, and governmental immunity issues.
Will Allensworth helps clients across the construction industry—primarily owners, general contractors, architects, and engineers—resolve complex disputes, with a focus on payment claims and construction and design defect litigation. He serves as the Assistant Editor of the State Bar’s Construction Law Journal and is an Adjunct Professor at the University of Texas Law School, where he teaches Construction Litigation.
Karly Houchin works primarily with engineers and architects on professional liability cases and on complex, multi-party disputes. She represents clients in front of professional licensing boards and defends design professionals against design and construction defect claims, construction delay cases, and traffic control plan disputes. She also represents owners in closeout disputes.
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