Properties Magazine May 2017 : Page 47

dents of a specific geographic area, or provide a bid incentive to do so. The constitutionality of the State’s law was challenged by the City of Cleveland when it filed a complaint against the State in the Cuyahoga County Common Pleas Court request-ing temporary, preliminary and permanent injunction against the State from enforcing HB 180. The City argued that HB 180 is uncon-stitutional because it violates and restricts the City’s home rule powers. In defense of the statute, the State argued that it was empowered by the Ohio Constitution to enact HB 180. Specifically, the State argued that Article II, § 34 of the Ohio Constitution allows the State to enact laws that provide for the comfort, health and safety, and general welfare of all employees. The State argued that § 34 was a “broad grant of authority to the legislature to provide for the welfare of all working persons.” The State relied heavily on the Ohio Supreme Court’s prior ruling in which the Supreme Court upheld another State statute that pro-hibits any political subdivision from requiring an employee to reside within the political subdivision as a condition of employment (e.g. laws that mandate all employees of a city police department must reside in the city). law, so the Court did not analyze that issue. On the second issue, the Court determined that the Fannie Lewis law was not an exercise of Cleveland’s police power, but instead held that the Fannie Lewis Law was an exercise of self-govern-ment to create contractor requirements for public projects within Cleveland. Notably, the Court held that the law is decision. You can expect that this is a fight that will go all the way up to the Ohio Supreme Court. At what cost? The Court’s opinion is an important one for contractors working on public projects in Ohio. With the judge’s ruling in favor of Cleveland’s constitutional right to enact the law, contractors can expect to see more municipalities taking action by passing similar laws to provide opportunities for their own residents. Bidders should consider the type of project and the source of funding which may affect the enforceability of a residency requirement. Vetting unknown lower-tiers and properly addressing lower-tier risk will be criti-cal to project success. A proactive evaluation of the project bidding require-ments will enable contractors to make an informed decision about whether the project is a risk worth taking. P Nora E. Loftus ( is a construction attorney at Frantz Ward LLP in Cleveland. For more information, visit The Cuyahoga County Court ruled in favor of the City of Cleveland’s home rule powers and affirmed the City’s constitutional authority to create laws relating to public improvement projects funded by the City. not a residency requirement because it does not require a contractor to employ residents of the City. The State recently appealed the Cuyahoga County Court’s decision, so there is a chance it may be reversed. But it will be several months or more before briefs are filed, arguments take place, and the appellate court issues a Cleveland prevails The Cuyahoga County Court dis-agreed with the State’s argument and ruled that the State did not have authority to enact HB 180 because the law did not provide for the comfort, health and safety, or welfare of employ-ees. Instead, the Court concluded that the State was attempting to dictate the terms by which municipalities may contract for workers on construction projects within their territory. The Court also analyzed whether the statute could take precedence over a local ordinance despite the munici-pality’s Home Rule authority. A State law takes precedence when the fol-lowing three requirements are met: (1) the ordinance is in conflict with the statute; (2) the ordinance is an exercise of police power, not local self-government; and (3) the statute is a “general law.” The parties stipulated that Cleveland’s ordinance was in conflict with the State EXPERTS IN CREATING PROJECTS BUILT WITH EXCEPTIONAL SERVICE  Ƥ  Worship Ɣ Education û Healthcare Ɠ Municipal  ƣ Commercial ȣ Hospitality Ä Multi-Family GE NE ERA L CO C NT TRA ACT C OR S • CO O NS S TR UC CTI T ON M AN A AG GER S D SI DE S GN G /B UI LD ER S • SU BC B ON TR AC CTO RS R • BI B D PA CK AG GE SP S EC E IA A LI L ST S P .216.938.5050 • F .216.938.5033 • 47

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