AP Badge #06: Public Works Retainage-AP Badge #6 Recording

Video Transcription

Video Summary

This training explains how school district accounts payable staff should handle Public Works contracts and retainage. Public Works applies whenever the district contracts for construction, alteration, repair, or improvements to district property (land, buildings, and built-in systems/furnishings), excluding movable equipment. Identifying Public Works early is critical so vendors bid correctly, pay prevailing wages, and understand retainage timing.<br /><br />Before any payment, required documentation includes a contract/purchase order, the contractor’s retainage option (escrow, district-held, or retainage bond), an approved Intent to Pay Prevailing Wages for the contractor and subcontractors, and for projects over $150,000, a payment and performance bond.<br /><br />Retainage protects the district by ensuring taxes, subcontractors, and materials are paid. Rules: no retainage for $0–$2,500; 10% (no bond) or 5% (with bond) for $2,500–$150,000; over $150,000 requires 5% with bond or 0% with retainage bond. Retainage is calculated on the pre-tax subtotal, and AP may issue two warrants when using escrow.<br /><br />Retainage is released 45 days after completion once required releases/affidavits and any lien resolutions are obtained. For contracts over $35,000, notices and releases involve Revenue, L&I, and Employment Security. Lien priority follows state rules, and legal counsel may be needed.

Keywords

school district accounts payable

public works contracts

retainage requirements

prevailing wage compliance

payment and performance bond

retainage release process

lien resolution and priority