Facing a lawsuit that claimed the city of Reynoldsburg and Etna Township violated Ohio's open meetings law and a change in state law concerning joint economic development zone (JEDZ) agreements, Reynoldsburg City Council voted June 30 to repeal a joint JEDZ plan with the township.
Council members voted 5-0 to repeal the agreement in a special meeting held Monday morning. Councilmen Mel Clemens and Scott Barrett were absent.
The agreement would have granted Etna Township the ability to levy Reynoldsburg's 1.5-percent income tax on 1,497 acres in the township and given Reynoldsburg the ability to collect the tax, generating about $400,000 annually. It could have affected anyone working in the designated zone and taxed the net profits of any business operating in the zone over the next 99 years.
Under the agreement, Reynoldsburg could have kept 20 percent of the money collected, with 70 percent going to the township and 10 percent to a JEDZ improvement fund.
Etna Township voters ultimately would have had to approve the JEDZ in a special election Aug. 5, but that will not be held now, Reynoldsburg Attorney Jed Hood said.
One of the businesses operating in the zone filed a lawsuit May 27 in Franklin County Common Pleas Court. The Ascena Retail Group claimed both Reynoldsburg City Council and Etna Township trustees met either privately or in executive session in violation of Ohio's open meetings law before they voted May 5 to approve the JEDZ contract and the special election.
The complaint also named the Licking County Board of Elections as a defendant.
Hood said Etna Township trustees indicated they also would repeal the JEDZ in a special meeting scheduled July 1, after ThisWeek's press time.
He called the lawsuit "defensible."
"This repeal is not an indication that there was any wrongdoing," Hood said.
He said when House Bill 289 was signed into law June 5, "it changed the rules of the game" for JEDZ agreements.
The state legislation outlaws the creation of any new JEDZs after Jan. 1 and requires JEDZ agreements not yet approved by voters to be "recalled" until a joint economic development review council can approve the contract's economic development plan.
"I feel very strongly that since the state law has passed, it is clear that the state legislation has made it more difficult to establish JEDZs," he said. "I think the city of Reynoldsburg must repeal the contract in order to comply with that law."
Councilman Dan Skinner said he voted for the repeal because "it is best for our citizens if we follow state law, since our agreement could have been affected by the changes in the law."
Councilman Chris Long said discussions by council members about the lawsuit convinced him to support a repeal of the contract.
"I think in discussions we thought that it would not be a prudent use of taxpayer dollars to fight the lawsuit," he said.
"We did everything we were supposed to do to make a legitimate JEDZ, but the rules changed on us," Councilman Barth Cotner said. "We would not be able to move forward on the plan as suggested."
Hood said the new state requirements are clear: "The General Assembly wants to limit a township's ability to create a JEDZ."