Contractors topped requirements in Cleveland’s Fannie Lewis Law, Mayor Frank Jackson would like to expand efforts

February 22, 2018 GMT

Contractors topped requirements in Cleveland’s Fannie Lewis Law, Mayor Frank Jackson would like to expand efforts

CLEVELAND, Ohio – Over the last five years, companies covered by Cleveland’s Fannie Lewis Law exceeded targets for employing city residents and low-income workers, a review by the city concluded.

The Office of Equal Opportunity’s review, made public this week, found that more than $232 million was paid to Clevelanders by companies covered by the law from 2013 through 2017.

And over time, some large private employers, not bound by the law, have started voluntarily applying the guidelines, Mayor Frank Jackson said in an interview.

Now, the mayor would like to extend the concepts to areas such as goods and services. That might require legislative action, but Jackson is confident that City Council would work with him on the idea.

What’s the strategy?

The Fannie Lewis Law requires that contractors on capital improvement projects use Clevelanders for 20 percent of the work hours. Employers are also required to show good-faith that they gave 4 percent of the work to Clevelanders with low incomes.

For example, for 1,000 work hours, the law would require Cleveland residents work 200 and would urge 8 of those 200 hours go to low income workers.

If they don’t meet the 20-percent target, the contractors can face fines. In 2017, the city assessed fines totaling $22,241, data from the city shows.

The idea behind the law is that Clevelanders should share in the benefits of large public contracts through employment. The hiring goals are part of a larger strategy of creating sustainable economic development by also investing and buying locally.

The Office of Employment Opportunity collects data on how well companies meet the requirements of the law. It was used as part of the review that it is required to prepare every five years.

From 2013 through 2017, Clevelanders worked nearly 1.4 million hours or about 24 percent of the nearly 5.8 million hours spent on public improvement contracts. Of that 1.4 million hours, about 660,000 hours -- about 9 percent -- were worked by people who qualified as low-income employees.

The law has survived legal challenges in Cuyahoga County Common Pleas Court and the 8th Ohio District Court of Appeals. But the state appealed the case to the Ohio Supreme Court, where it is pending.

Cleveland’s Office of Equal Opportunity enforces the law and other parts of Cleveland’s city codes. And, it works with the Greater Cleveland Partnership, the region’s chamber of commerce, to promote use of community benefits packages -- binding agreements that can encourage use of small local businesses and female and minority business enterprises and support of job training for projects.

The OEO review also includes several recommendations for changes. Among them are steps toward better communications with contractors and job training groups to improve participation and to develop mentorship programs, including at Max Hayes High School.

What’s been the reception?

Over time, several private and nonprofit employers have adopted the guidelines, Jackson said.

A breakthrough came when University Hospitals applied the rules to its privately funded Vision 2010 plan with more than $700 million to in construction projects. Among them were a new cancer hospital, intensive-care unit, an emergency-medicine unit and some parking garages at University Circle in Cleveland, as well as the new Ahuja Medical Center in the Chagrin Highlands near Interstate 271.

Other projects followed – work at the Jack Casino, the county administration building and the Huntington Convention Center of Cleveland. The Cleveland Clinic also adopted them.

The law applies to work on the Opportunity Corridor, a boulevard under construction now that will connect Interstate 490 at East 55th Street with University Circle. The state of Ohio agreed to encourage contractors to involve small local businesses and those run by women and minorities.

What’s next?

Jackson wants to extend the concept of community benefits to include the procurement of goods and services.

The idea is that hiring and spending locally helps make the local economy more sustainable. He hopes the private sector cooperates, too.

That could encourage companies that distribute goods and services to establish a presence in Cleveland, even if they’re not based here, in hopes that they can capture some of the business.

“That’s where we want to go next,” Jackson said. “We want it to be part of what the private sector does, even though we don’t require it.”