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updated 7/27/2010 11:01:51 PM ET 2010-07-28T03:01:51

A voter-approved ban on hiring and renting property to illegal immigrants was suspended late Tuesday by the Fremont City Council, less than two days before it was set to take effect in the eastern Nebraska city.

Council members voted 8-0 to delay an ordinance that is being challenged by two federal lawsuits, saying the move will save the city money in legal costs that officials have said could average $1 million a year.

About 100 people attended Tuesday night's meeting, and some told council members that the ordinance has already led to divisiveness.

"This law is not yet in effect, but it is increasing conflict and discrimination," Lesley Velez, 20, of Fremont said.

Terry Flanagan, a Fremont resident who supports the ban, said the council shouldn't second guess voters: "The citizens of Fremont have spoken. We should not delay this," he said.

The council narrowly rejected the ban in 2008, prompting supporters to gather enough signatures for the ballot measure. Voters approved the ban last month and it was scheduled to take effect Thursday.

The council also unanimously decided to hire Kansas-based attorney and law professor Kris Kobach, who drafted the ordinance and offered to represent Fremont for free to fight the lawsuits. Kobach also helped write Arizona's new controversial immigration law.

The city faces lawsuits from the American Civil Liberties Union and the Mexican American Legal Defense & Educational Fund, which both expected to ask a federal judge Wednesday to temporarily block the ban from taking effect. After Tuesday's vote, the ACLU of Nebraska said it and the city will ask the judge to block the ordinance pending a final court resolution.

"We're relieved that the Fremont City Council will suspend this discriminatory ordinance while it's being litigated," Amy Miller, the ACLU of Nebraska's legal director, said in a statement. "It was a responsible decision that will spare residents of Fremont from worrying about losing housing and jobs because of their appearance and accent pending a final resolution by the court."

The ordinance has divided the community between those who say it makes up for what they call lax federal law enforcement and others who argue it could fuel discrimination.

Although council members have insisted that any suspension would be aimed at saving money, some ban supporters remained skeptical.

"They see it as another attempt by the city to block this ordinance," Jerry Hart, a Fremont resident who petitioned for the ballot measure, said ahead of the vote.

City officials have estimated Fremont's costs of implementing the ordinance — including legal fees, employee overtime and improved computer software — would average $1 million a year.

Council president Scott Getzschman has said it's unclear how much money the city would save by suspending enforcement of the ordinance. He insisted the council is only trying limit legal costs, even if the savings are small.

Betty Faux, 69, who owns a lake house just outside the 25,000-resident community, where dozens of homes along a main residential street flew American flags Tuesday, said that's not a good enough argument.

"I think they should go ahead with it, especially since they've got somebody who will represent them for free," Faux said.

Kobach told The Associated Press earlier Tuesday that if the council delayed implementation, it would mean fewer court hearings in the litigation process, making the process of hearing the lawsuits shorter and cheaper for the city. He didn't immediately return a message after the vote.

The ordinance has put Fremont on the list with Arizona and other places in the national debate over immigration regulations. Arizona's sweeping law is set to take effect Thursday.

Kobach also helped write the Arizona law that directs officers to question people about their immigration status during the enforcement of other laws such as traffic stops and if there's a reasonable suspicion they're in the U.S. illegally.

It would require employers to use a federal online system that checks whether a person is permitted to work in the U.S.

It also would require people seeking to rent property to apply for a $5 permit at City Hall. Those who said they were citizens would receive a permit and would not have to provide documents proving legal status. Those who said they weren't citizens would receive permits, but their legal status would be checked. If they're found to be in the country illegally and are unable to resolve their status, they would be forced to leave the property.

Landlords who knowingly rent to illegal immigrants could be subject to $100 fines.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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