Ohio Public Law Update

    View Author Fall 2005
    There is a growing interest by Ohio political subdivisions in regional approaches to development, especially joint programs by two or more subdivisions. These joint development efforts can extend beyond borders and bring together entities that in the past have not worked together. One such approach to cooperative development is the joint economic development district (JEDD). A JEDD is a separate, distinct political subdivision created by a contract between a municipality and a township in accordance with a statutory scheme. The statewide provisions governing JEDDs are Sections 715.72 to 715.83 of the Revised Code.

    The statutory purpose for a JEDD is the facilitation of economic development in the state and in the region of the municipality and township that are the contracting parties. These parties each contribute resources and share in resulting development. Typically, the township has land available for development, and the municipality has utilities and possibly expertise in planning, promotion and development. The territory of the JEDD is usually an area or areas in the township and must be without residents. The JEDD is governed by a board of directors with representation from the municipality, the township, the business owners and the workers in the JEDD, all in accordance with statutory provisions and the establishing contract. An important feature of the JEDD is the authority of the board of directors to levy an income tax at a rate up to the rate levied by the municipality that is a contracting party. The income tax is collected in the JEDD, and those revenues are shared by the municipality and the township based on the formula established in the contract after allocating some amount to the JEDD itself.

    Squire Sanders has been involved in the creation of JEDDs in Summit County, including the original four JEDDs created in the mid-1990s by the City of Akron and its surrounding townships, and in Ashtabula, Cuyahoga, Geauga, Lorain and Portage Counties and in the Dayton area. Each of these situations has unique features, including the kinds of contributions of each party, the method of sharing the income tax revenues and the proposals for restrictions on annexation.

    The process of creating a JEDD is not easy. Negotiating and drafting the JEDD contract is often a lengthy process. Once the contract has been prepared, the petition process is initiated. Creating a JEDD requires a petition from a majority of the property owners in the JEDD and another petition from a majority of the business owners in the JEDD. The municipality and the township must also approve the contract (if the township trustees' approval is not unanimous, the contract must be approved by the voters at an election in the township).

    A JEDD may not be for everyone. But in the right situation, a JEDD can serve well to foster regional economic development benefiting not only the contracting parties but the region and the state. Other joint development structures include joint economic development zones (JEDZ), cooperative economic development agreements (CEDAs) and regional councils of governments.

    To learn more about joint economic development districts and other such structures, please contact Barry Keefe (bkeefe@squirepb.com or +1.216.479.8535), Pamela Hanover (phanover@squirepb.com or +1.216.479.8763) or Christopher Franzmann (cfranzmann@squirepb.com or +1.614.365.2737).

    Recent Legislation of Interest: Senate Bill 167

    Senate Bill 167 has been passed and will take effect when Governor Taft signs it. The Bill places a one year moratorium (ending December 31, 2006) on the use of eminent domain by any political subdivision of the state if the property to be taken is located outside of a blighted area, within the meaning of Revised Code Section 303.26, and if the primary purpose of the taking is for economic development that will result in ownership of the property by any private person. The prohibition does not apply to the use of eminent domain related to streets, walkways or other ways open for public use, public utilities, parks and recreation, or buildings and grounds used for governmental purposes.

    If a public body uses eminent domain in violation of the prohibition during the moratorium period, that public body will not be entitled to receive funding for capital improvements under a Chapter 164 Ohio Public Works Commission program or otherwise by act of the General Assembly, and will not be entitled to receive an award for funding under the Department of Development's shovel-ready site program.

    The Bill creates a 25-member legislative task force to study the use of eminent domain and its impact on the state, the effect of the recent United States Supreme Court decision in Kelo v. City of New London, 125 S. Ct. 2655 (2005) on the use of eminent domain in the state and the overall impact of state laws governing the use of eminent domain on economic development, residents and local governments.

    This temporary prohibition on the use of eminent domain applies to takings initiated on or after the effective date of the Act. A public body involved in a pending eminent domain action should consult with its legal counsel as to whether that action is subject to the prohibition contained in the Act.

    Recent Decisions of Interest

    A city-owned ice rink leased to a commercial entity is not entitled to real property tax exemption where the commercial lessee hoped for profit; majority of revenues came from private rentals; exclusive responsibility for taxes, use, occupancy, management and operation resided in commercial lessee; and ice rink employees were not considered public employees. Parma Hts. V. Wilkins, 105 Ohio State 3d 463

    Police officer photographs are exempt from disclosure under the Public Records Act because they constitute "peace officer residential and familial information." State ex rel. Plain Dealer Publishing Company v. Cleveland, 106 Ohio State 3d 70

    State-employee home addresses are generally not "records" under R.C. 149.011(G) and are thus not subject to disclosure under the Public Records Act. State ex rel. Dispatch Printing Co. v. Johnson, 106 Ohio State 3d 160

    Village clerk does not have authority to refuse to certify an initiative petition pursuant to R.C. 731.28 based on substantive issues not evident on the face of petition. State ex rel. N. Main St. Coalition v. Webb, 106 Ohio State 3d 437

    Confidential law-enforcement records are exempt from disclosure under Public Records Act where release of the records would create a high probability of disclosure of the identity of suspect who has not been charged with the offense to which the records pertain. State ex rel. Musial v. N. Olmsted, 106 Ohio State 3d 459

    Management contract for county nursing home was void because it had not been competitively bid pursuant to R.C. 307.86. CommuniCare, Inc. v. Wood Cty. Bd. of Commrs., Court of Appeals, Sixth Judicial Circuit,161 Ohio App. 3d 84

    The Ohio Supreme Court has accepted an appeal of the decision in Norwood v. Horney, Court of Appeals, First Appellate District, 161 Ohio App. 3d 316, which upheld the city's use of eminent domain for an urban renewal project based on city's finding that area was in danger of deteriorating into a blighted area.

    Following an annexation other than a merger, unless action is taken by the annexing municipality pursuant to R.C. 503.07 or by the electors of the unincorporated area of the township pursuant to R.C. 503.09, the township boundaries remain unchanged, inhabitants in the annexed area are residents of both the municipal corporation and the township and, unless a statute provides a specific exclusion, are (i) obligated to pay taxes levied by both entities and (ii) entitled to vote on officers, issues and tax levies of both entities. 2005 Op. Att'y Gen. No. 2005-024

    A board of county commissioners has (i) no authority to impose upon a juvenile court a charge for rental of space for the court's operations, whether such space is in the courthouse or in another county building, and (ii) a duty to appropriate funds requested by a juvenile court, so long as such funds are reasonable and necessary to the court's administration of its business. 2005 Op. Att'y Gen. No. 2005-028

    A board of county commissioners (i) may not make personal contact with individual vendors to notify them of specific bidding opportunities but may develop a vendor notification list to publicize bidding opportunities, so long as the county also complies with all statutory notice requirements, and (ii) has no authority to adopt a system of preferences for county products and contractors. 2005 Op. Att'y Gen. No. 2005-029

    When a lien of the state for real property taxes has attached to a parcel of real property sold by judicial sale to which R.C. 323.47 applies, a local rule of court may not require that a prorated portion of the taxes not appearing on the tax duplicate at the time the deed is transferred be paid from the proceeds of the sale. 2005 Op. Att'y Gen. No. 2005-034

    A board of township trustees (i) is required to provide fire and rescue services and emergency medical services to a facility owned and operated by the county board of mental retardation and developmental disabilities if the facility is located within the township fire district and (ii) may not charge that county board for that facility's use of such services. 2005 Op. Att'y Gen. No. 2005-036