You obviously never paid attention when you were on campus. OHIO University often ignores the city. As evidenced by the words in the article from the Universities Legal Council where they do not have to abide by local rules. This has been going on forever. I get it ain’t “text book”, but textbooks are not always 100% applications in real world issues either.
When I was at O.U. in the 1970's , the only "local" news we got was The Post.
They never had anything about issues between O.U. and Athens.
As far as "abiding by local Rules", as I posted, Athens' "Flood Damage Prevention" Ordinance references the underlying authority granted by the State of Ohio Constitution.
Plus, Flood Plains are under the jurisdiction of the Federal Government.
Obviously ,for the reasons you stated, Athens may do some "saber rattling",
but right now, that seems to be as far as they'll go.
Only way that may change, is if, down the road, something bad happens.