0!?/G//V/41 IN THE SUPREME COURT OF OHIO
CASE NO. 2 .=» 1;? __1_rE~;Q_;) (G
STATE EX REL BOARD OF TRUSTEES OF ST. CLAIR TOWNSHIP, BUTLER COUNTY, OHIO
and
TOM BARNES TRUSTEE
and
GARY R. COUCH TRUSTEE
and
JUDY VALERIO TRUSTEE
Relators,
v.
CITY OF HAMILTON, OHIO
and
JOSHUA SMITH A ; CITY MANAGER OF HAMILTON [Ffl
and AFC“? EU £Tf.J1-I
CLERK or coum THOMAS VANDERHORST SUPREME coumoromo FINANCE DIRECTOR OF HAMILTON Respondents,
Original Action in Mandamus
MEMORANDUM IN SUPPORT OF THE COMPLAINT FOR WRIT OF MANDAMUS
COUNSEL FOR RELA TORS COUNSEL FOR RESPONDENTS
Gary L. Sheets (0019384) Heather Sanderson Lewis (0069212) Attorney At Law Director of Law 1731 Cleveland Avenue City of Hamilton, Ohio Hamilton, Ohio 45013 345 High Street lsheets fuse.net Hamilton, Ohio 4501 1 Office: 513-520-5517 Office: 513-785-7180 lewis mfitton.com
Catherine A. Cunningham (0015730) Richard C. Brahm (0009481) Kegler, Brown, Hill & Ritter 65 East State Street, Suite 1800 Columbus, Ohio 43215 (614)462-5486 Fax: (614)228-1472 [email protected] rbrahmagkeglerbrown.com IN THE SUPREME COURT OF OHIO
STATE EX REL BOARD OF TRUSTEES ) OF ST. CLAIR TOWNSHIP, BUTLER COUNTY, et al.
Relators, Case No.
avvv
MEMORANDUM IN SUPPORT OF THE COMPLAINT FOR WRIT OF MANDAMUS
CITY OF HAMILTON, OHIO et al. wvwwwvvw S.Ct.Prac.R. l2.02(b)(l)
Respondents
MEMORANDUM IN SUPPORT OF THE COMPLAINT FOR WRIT OF MANDAMUS TABLE OF CONTENTS
LEGAL QUESTION PRESENTED ...... 1
FACTS UNDERLYING THE COMPLAINT ...... 1
LEGAL ARGUMENT IN SUPPORT OF RELATOR'S COMPLAINT
Preposition of Law #1
Mandamus is the appropriate remedy for a township to compel a municipal corporation to make R.C. 709.19 lost tax revenue compensation payments to the township where that municipal corporation has secured a R.C. 503.07 boundary adjustment that removes territory from the township and relocates it into a paper township lying within the boundaries of the petitioning municipal corporation but refuses to the township pay the compensation provided by RC. 709.19. ..
Preposition of Law #2
When a municipal corporation’s R.C. 503.07 boundary adjustment petition is granted by county commissioners, R.C. 709.19(B) imposes a clear legal duty upon that municipal corporation to make and grants the township whose boundary has been adjusted and relocated a clear legal right to receive lost tax revenue compensation payments in an amount to be determined by either an agreement between the township and the municipal corporation or, absent such an agreement, the amount provided in R.C. 709. 1 9(C) and (D)...... 10
Preposition of Law #3
Where a municipal corporation is required by R.C. 709.l9(B) to make lost tax revenue compensation payments to a township in an amount defined by
R.C. 709.19(C) and (D), because R.C. 709.19(B) does not provide who is to compute the payment to be made, but does impose the duty to make such payment upon the municipal corporation, the municipal corporation has an attendant clear legal duty once each year to accurately and completely calculate, or cause to be calculated, the correct compensation due the township according to R.C. 709.19 (C) and (D)......
_i. Preposition of Law #4
Where a municipal corporation is required by R.C. 709.l9(B) to make lost tax revenue compensation payments to a township in an amount defined by R.C. 709. l9(C) and (D), because R.C. 709.l9(B) does not provide how
frequently the required payments are to be made, the municipal corporation is to be afforded a reasonable time to compute and then actually make the required payments. A reasonable time for computing and actually making the
required payment due the township is 30 days afier the municipal corporation
receives from the county treasurer the tax distributions it has received as a result of its boundary adjustment petition's granting. Where there are multiple distributions to the municipal corporation in a single year, there would likewise be multiple distributions by the municipal corporation to the township 30 days thereafter.
Preposition of Law #5
The uncodified language in Section 3 of 2001 Am Sub S.B. No. 5 does not relieve a municipal corporation of its duty to pay a township R.C. 709.l9(B) lost tax revenue compensation when the municipal corporation secures a R.C. 503.07 boundary adjustment because the property being removed from the township by that adjustment was armexed into the municipal corporation before Am 2001 Sub S.B. No. 5 took effect......
CONCLUSION .
PRAECIPE FOR SERVICE ...... 24 CASES AND AUTHORITIES
Cases:
Ac/tison v. Anchor Packing 120 C0,, Ohio St.3d 228, 2008-Ohio-5243, 897 N.E.2d 11 18 1115 ...... 5
Jewel! v. Valley Ca, 34 Ohio St, - N.E.- Ry. 601, 608, (1878)...... 15-16
Kallas v. Ohio Water Serv. Ca., 132 Ohio App.3d 421 725 N.E.2d 324 , (1999) ...... 21
Kilbreath V. Rudy. 16 Ohio St,2d 242 70. N.E.2d 658 (1968), paragraph one ofthe syllabus...... 5
Maynard V. Eaton Corp., 119 Ohio St.3d 443, 2008-Ohio-4542, 895 N.E.2d 145, 11 7...... 21
Roberts v. Treasurer, 147 Ohio App.3d 403, 41 1, 770 N.E.2d 1085 (2001) ...... 21
State V. Taniguchi, 74 Ohio St.3d 154, 156, 656 N.E.2d 1286 (1995) ...... 23
Stale v. Thomas, 148 Ohio St.3d 248, 2016-Ohio-5567, -N.E. 3d-, 11 11, ...... 22
State v. Waddell 71 Ohio (1995), St.3d 630, 631, 646 N.E.2d 821 (1995)...... 25
Slate ex relA1ty. Gen. v. Morris, 63 Ohio St. 59 NE. 496, 226, 230 (1900) ...... 15-16
State ex rel. Baker v. Indus. 143 Comm., Ohio St.3d 56, 2015-Ohio-1191, 34 N.E.3d 104...... 8
State ex rel. Foster v. Evati, 144 Ohio St. 65, 56 NE2d 265 (1944), paragraph eight oflhe syllabus ...... 25
State, ex rel. Harris, v. Rhodes, 54 Ohio St,2d 41, 374 N.E.2d 641 (1978) ...... 8
State ex rel. McClaran V. City ofOn/aria, 119 Ohio St.3d 105, 2008-Ohio-3867, 892 N.E.2d 440 11 15...... 10
State ex rel. Fressley V. Indus. Comm., 11 Ohio St.2d 141, 228 N.E.2d 631 paragraph six ofthe (1967), syllabus .1 1
State ex rel. Slaughter V. Indus. Comm., 132 Ohio St. 537, 9 N.E.2d 505, paragraph three ofthe syllabus...... 7
State ex rel. Ullmann v. 103 Hm/es, Ohio St.3d 405, 2004-Ohio-5469, 816 NE2d 245 118...... 10
Turner v. Dept. ofRehab. & Corr., 144 Ohio St.3d 377, 2015—Ohio- 2833, 43 N.E.3d 435 (2015) ...... ,8
Thornton V. Salalr, I 12 Ohio St.3d 254, 2006-Ohio-6407, 858 N.E.2d 1187 ...... 23.
Toledo City School Dist. Bd. ofEdn. v. State Bd. ofEdn,, 146 Ohio St..3d 356, 2016-Ohio-2806, 56 N.E.3d 950 22
Wilson v. AC&S, Inc., 169 Ohio App.3d 720, 2006-Ohio-6704, 864 N.E.2d 682 11 77 ...... 21
Ohio Attorney General Opinions:
-iii- 2005 Ohio Atty. Gen. Op. No. 2005-024 ...... 12
Authorities:
Ohio Constitution:
Ohio Constitution Section 28, Article II ...... 7, 22
Ohio Statutes
R.C. 503.07 ...... 1-23
R.C. 503.09 .....13 R.C. 709.023 20-21 R.C. 709.024 20-21
R.C. 709.19 - ...... ~ 0, 15-26
Ohio Uncodified Law
Am Sub 2001 S.B. No. 5 Section 3 ......
_;V_ LEGAL QUESTION PRESENTED
The legal question presented in this original action in mandamus is whether R.C. 709.19(B)
imposes a clear legal duty upon the Respondent City of Hamilton (hereafter “Hamilton”) and grants
Relator St. Clair Township a clear legal right to be paid “lost tax revenue compensation” in an
amount determined by R.C. 709.1 9((‘) and (D) upon the Board of Butler County Commissioners’ adoption of a R.C. 503.07 boundary adjustment resolution which adjusted the boundary between
Hamilton and St. Clair Township by removing territory from St. Clair Township and relocating that territory into a “paper township” named “Hamilton Township.”
FACTS UNDERLYING THE COMPLAINT
The facts giving rise to this action are simple, undisputed, and well-documented.
On September 14, 2016, Hamilton City Council received a Staff Report (Exhibit A to the
Complaint) from Respondent Hamilton Finance Director Tom Vanderhorst setting forth the reasons why City Council should immediately adopt an Ordinance authorizing Respondent City Manager
Joshua Smith to file an R.C. 503.07 boundary adjustment petition with the Board of Butler County
Commissioners (hereafter “Commissioners”).
The Staff Report’s “Background Infomtation” section explained why a boundary adjustment
was immediately necessary. It stated:
“Over time, the City has annexed property from four surrounding townships. No documentation has been located indicating that the City has ever filed a subsequent petition with the county commissioners to remove annexed territory from a township after annexations were completed Failure to remove the territory from a township
.1. following annexation results in the property being located in joint or overlapping jurisdictions -- both in the City and in the township following annexation. This may both affect taxation and voting. It appears that Butler County has treated annexations themselves as automatically removing the annexed territory from a township, leaving it solely in the City of Hamilton for both voting and tax purposes. St. Clair Township has recently raised questions with the Butler County Auditor about the allocation of inside millage. The township claims that the auditor has made a mistake in the past years by automatically removing territory from the township after annexations have occurred. Thus, the township is entitled to its share inside millage of and perhaps other taxes which have not been paid to the township. The assertion has been made that the township is entitled to its share ofthe inside millage both before and after the enactment of Amended Substitute Senate Bill 5 in 2002 and the township is entitled to be included as a taxing district within the City of Hamilton as taxes are determined, collected and distributed by the county in the " future.
“ In order to correct voting and tax entitlement issues, Hamilton would have to authorize a petition to be filed with the Butler County Board of County Commissioners asking that the territory previously annexed from the four various townships be consolidated into a new township (Hamilton Township) that would exist solely within the City ’s boundaries. Erecting this new township located entirely within the City should result in the portions of the inside millage attributable to property in the City of Hamilton continuing to go to the City and not going to any townships, essentially the position that exists today. Creating a new Hamilton Township should, by operation of law, create what is often referred to as a ‘paper township’ with no duties or responsibilities and no tax entitlements. This process would then straighten up any inaccuracies of the Butler County Auditor in failing to properly attribute taxes in the past and Butler County Board ofElections on voting districts and correct those errorsfor the future. Property annexed to the City of Hamilton after the effective date Amended of Substitute Senate Bill 5 cannot be taken out of the existing townships and therefore would not be included in Hamilton Township. Those properties (approximately 50 acres) would remain in the township and that township may be entitled to consideration in the allocation of inside millage by the County Budget Commission as we move forward "
The same evening as the Staff Report was presented, (September 14, 2016), Hamilton City
Council adopted Emergency Ordinance EOR2016-9-81 " ( hereafter “EOR2016—9-8 l and Exhibit
B to the Complaint). lt authorized and directed Respondent City Manager Joshua Smith to submit a R.C. 503.07 boundary adjustment petition to the Board of Butler County Commissioners. As instmcted, Smith submitted Hamilt0n’s R.C. 503.07 bounda.ry adjustment petition to the
.2. Commissioners on September 21, 2016.
R.C. 503.07 provides in pertinent part that:
the on board, presentation of such petition, with the proceedings of the legislative authority authenticated, at a regular or adjourned session, shall upon the petition of a city change the boundaries of the township or erect such new township,
As mandated the above-quoted by language, on October 3, 2016, the Commissioners adopted their
Resolution 2016-10-03663 (hereafier “Resolution 2016-10~03663 and Exhibit D to the Complaint)
in which they granted Hamilton’s R.C. 503.07 boundary adjustment petition and relocated
approximately twenty-one and a half (21.5) square miles (Hamilton’s entire square mileage area
according to its 2015 Comprehensive Annual Report and Exhibit C to the Complaint) of territory
that formerly had been located in Relator St. Clair Township, Ross, Fairfleld and , Hanover
Townships and relocated it all into Hamilton Township.
R.C. 709.19(B), on which Relators’ mandamus claim is grounded, provides:
“(B) If unincorporated territory is annexed to a municipal corporation and excluded from a township under section 503.07 of the Revised Code, upon exclusion of that territory, the municipal corporation that annexed the territory shall make payments to the township from which the territory was annexed only as provided in this section, except that, if the legislative authority of the municipal corporation enters into an agreement under section 701.07, 709.191, or 709.192 ofthe Revised Code with the township from which the territory was annexed that makes alternate provisions regarding payments by the municipal corporation, then the payment provisions in that agreement shall apply in lieu of the provisions of this section.”
Relator St. Clair Township claims that upon the Commissioners approval of Respondent Hamilton’s R.C. 503.07 boundary adjustment petition which removed territory from St. Clair Township and
relocated it into Hamilton Township, R.C. 7 l 9.09(B) imposed a clear legal duty upon Hamilton and
granted St. Clair Township the clear legal right to be paid the lost tax revenue compensation
amounts set forth there.
R.C. 709.l9(B) sets forth two methods for determining how much compensation the responsible
municipal corporation must pay the township in lost tax revenue compensation. These two methods
are: (I) reach agreement with the township on how much to pay under R.C. 701.07, 709.191, or
709,192; or (2) pay the amount described in the statutory formula set forth in R.C. 709.l9(C) and
(D)-
Here, the first option is not in play. The Supporting Affidavit of the Relator Township Trustees
indicates Respondent Hamilton has not entered into an agreement with St. Clair Township to make
lost tax revenue compensation. Therefore, the statutory fomiula described in RC, 709. l 9(C) and
(D) is, by default, the formula for determining how much St. Clair Township is due.
However, despite the clarity with which R.C. 709.l9(B) speaks, Hamilton’s Law Director has
indicated in a letter to St. Clair Township’s legal advisor dated November 14, 2016 (attached to the
Complaint as Exhibit F) that Hamilton does not owe, and will not pay, St. Clair Township what the
letter calls “reparations.”' Hamilton’s refusal to pay is grounded upon its reading of uncodified law
1 Hamilton’s position is it is not responsible for the current and former auditor’s past mistaken tax distributions, and it is not liable, moving forward, for any lost tax revenue compensation payments afier having sought and received a boundary adjustment legalizing what
.4. found in Section 3 of200l Am Sub S.B. No. 5 (hereafter “SB. 5'') which provides:
“The provisions of Section 1 of this act shall apply only to annexation petitions filed on or after the effective date of this act. All annexation petitions filed before the effective date of this act shall be processed under the provisions of Chapter 709. of the Revised Code in effect at the time a particular petition was filed."
However, a number of things are immediately apparent about this claim: (1) it is based on uncodified
law over 15 years ago; the subject of (2) the uncodified law in Section 3 is “annexation petitions
filed on or after the effective date of 5]” [S.B. while the triggering event for owing R.C. 709.l9(B)
lost tax revenue compensation payments is a R.C. 503.07 boundary adjustment involving already
annexed territory; (3) the boundary adjustment action which triggers Hamilton’s duty to make lost
tax revenue compensation payments has been amended repeatedly since S.B. 5 was adopted and the
language of Section 3 has not inserted into the most recent amendment of R.C. 709.19.
Relator St. Clair Township submits the obvious reason why the General Assembly inserted the
uncodified language into Section 3 of SB. 5 was to avoid claims that the 3 new annexation
procedures which S.B. 5 added to the Revised Code could be applied retroactively to annexation
petitions that were already pending when SB. 5 went into effect, and thereby avoid claims those new
procedures ought to be given retroactive effect. “[I]t is generally true that laws that relate to procedures are ordinarily remedial in nature." Ackison v. Anchor Packing Co. , 120 Ohio St.3d 228,
2008-Ohio—5243, 897 N.E.2d 1118 fil15. And this Court has held that remedial laws can be given retroactive effect so as to apply to pending matters. State ex rel. Slaughter v. Indus. C 0mm., 132 was previously an illegal tax revenue distribution. Effectively, Hamilton gets to keep what it was illegitimately paid in the past and its doesn’t owe St. Clair Township anything in the future for having moved multiple square miles of St. Clair Township territory into Hamilton Township.
.5. Ohio St. 537, 9 N.E.2d 505, paragraph three of the syllabus. “Section 28, Article II of the Ohio
Constitution prohibiting the passage of retroactive laws, has application to laws affecting substantive
rights, and has no reference to laws of a remedial nature providing rules of practice, courses of
procedure or methods of review. Kilbreath v. Rudy, 16 Ohio St.2d 70, 242 N.E.2d 658 (1968),
paragraph one of the syllabus.
Finally, it is worth mentioned that while R.C. 709.19 was most recently amended by the 131 General
Assembly in HB 233 effective August 5, 2016, (the version of R.C. 709.19 in effect when
Commissioners adopted Resolution 2016-10-03663), no such uncodified language appears in HB
233.
LEGAL ARGUMENT IN SUPPORT OF
RELATOR’S COMPLA T
Preposition of Law #1
Mandamus is the appropriate remedy for a township to compel a municipal corporation to make R.C. 709.19 lost tax revenue compensation payments to the township where that municipal corporation has secured a R.C. 503.07 boundary adjustment that removes territory from the township and relocates it into a paper township lying within the boundaries of the petitioning municipal corporation but refuses to pay the township the compensation provided by R.C. 709.19.
This is an original action in mandamus. In order to grant a writ of mandamus, a court must find that the relator has a clear legal right to the relief prayed for, that the respondent is under a clear legal
.6. duty to perform the requested and act, that the relator has no plain and adequate remedy at law.
State, ex rel. Harris, v. 54 Rhodes, Ohio St.2d 41, 374 N.E.2d 641 (1978). The three elements of
mandamus must be established clear and convincing by evidence. Turner v. Dept. ofRehub. & Corr. ,
144 Ohio St.3d 377, 2015-Ohio— 2833, 43 N.E.3d 435 (2015). The three elements are present in this
case and entitlement to the writ is demonstrated by clear and convincing evidence in the form of
legislation adopted by Hamilton and the Commissioners.
In order for a Relator to succeed upon a mandamus complaint, it must show a clear legal duty
on the part of the respondent arising from a statute. State ex rel. Baker v. Indus. Comm, 143 Ohio
St.3d 56, 2015—Ohio—1 191, 34 N.E.3d 104.
Relator’s clear legal right to relief claim i_s grounded on a specific statutory subsection— R.C.
709.19(B). It provides that if unincorporated territory is annexed to a municipal corporation and then
excluded from a township using R.C. 503.07, upon exclusion of that territo , the municipal
corporation that annexed the territory shall make payments to the township from which the territory
was annexed as provided in R.C. 709.19.
R.C. 709.l9(B) contemplates two preconditions to a municipal corporation’s duty to make lost tax
revenue compensation payments. First, annexation of territory by a municipal corporation (here
Respondent Hamilton) from a township (here Relator St. Clair Township). Second, exclusion of annexed territory from a township by he annexing municipal corporation using the boundary adjustment process set out in RC. 503.07. The recitals in Commissioners’ Resolution 2016-10-
03663 (Exhibit D to the Complaint) expressly state the boundary adjustment being approved was grounded on R.C. 503.07 and it was brought before the Commissioners by Respondent Hamilton.
.7. Because the two statutory pre-conditions in RC. 709. 19 to Hamilton’s clear legal duty to make lost
tax revenue compensation payments to St. Clair Township have both been satisfied. Hamilton’s clear
legal duty to make these payments has now attached as a matter of law.
As to the clear legal right element ofa mandamus claim, R.C. 709.19(B) is clear that the township
whose territory is removed a board of by county commissioners boundary adjustment action is
entitled to lost tax revenue compensation from the municipal corporation which sought the
adjustment for the territory removed from its jurisdiction upon approval of the adjustment. Thus,
the clear legal duty and clear legal right elements of this mandamus action are indisputably
established by clear and convincing evidence in this case.
The third and final element necessary for a writ of mandamus to issue is the absence of an adequate
remedy in the ordinary course of the law. State ex rel McClaran v. City of Ontario, 1 19 Ohio St.3d
105, 2008-Ohio-3867, 892 N.E.2d 440 15. To be 1] considered an “adequate” remedy, the remedy
must be complete, beneficial, and speedy. State ex rel. Ullmarm v. Hayes, 103 Ohio St.3d 405,
2004—Ohio—5469, 816 N.E.2d 245 118.
St. Clair Township Fiscal Officer’s affidavit reveals the township states is currently in fiscal emergency. As l-Iamilton’s staff report to its city council conceded, for decades, St. Clair Township was deprived of its lawful share of the inside millage due it because the Butler County Auditor incorrectly located l-lamilton’s boundary with the township and paid what should have been St. Clair
Township’s share of inside millage to Hamilton. Relator St. Clair Township is not only immediately
.3. entitled to lost tax revenue compensation as a matter of law, it needs that lost tax revenue to recover
its financial stability. Forcing St, Clair Township to expend its limited resources to pursue Hamilton
through a collection or declaratory judgment action first through the common pleas court, then
through the Twelfih District Court of Appeals, and ultimately before this Court is not a speedy
beneficial or complete remedy for monies R.C. 709.l9(B) says are due it right now. In summary,
Relator St. Clair Township contends the following reasons establish why this Court should find the
absence of an adequate remedy at law in this case:
(1) unless any potential adequate remedy at law that can be pursued in a lower court also
includes mandamus relief, St. Clair Township would only win the right to collect money
owed it, not the recognition that Hamilton has a clear legal duty to make payments provided
by RC. 709.l9(C) and and (D) St. Clair Township the clear legal right to be paid them;
(2) RC. 709.l9(B) and clearly unambiguously imposes a mandatary legal duty upon
Hamilton to begin paying St. Clair Township lost tax revenue compensation payments now,
not years from now when Hamilton has exhausted all avenues of avoiding its legal duty to
P3)’;
(3) due to the Butler Auditors’ County mistakes, for decades St. Clair Township has been
denied inside millage real estate tax dollars to which it was entitled as a matter of law, while
Hamilton has illegitimately profited from that mistake and now attempts to continue
receiving that windfall without compensating St. Clair Township.
It is also vital to recognize that the Ohio General Assembly intended the payments which R.C.
709.19 requires a municipality to be made are intended to compensate a township for lost tax
.9. revenue that occurs because a boundary adjustment petition has been sought and granted. Remember
R.C. 503.07 imposed a mandatory duty upon Commissioners to grant a city’s boundary adjustment
petition. Such revenue is necessary in order to allow the township to adjust to what will become its
future reduced revenue stream. To force a township whose tax revenue stream has already been
reduced the boundary adj ustment’s by result to wait for years while other-then—mandamus litigation
winds its way through Ohio’s judicial system would frustrate the General Assembly’s intent as
presented in the language of RC. 709.19. As this Court recognized in State ex rel. Pressley v. Indus.
Comm, 11 Ohio St.2d 141, 228 N.E.2d 631 (1967), paragraph six ofthe syllabus:
“The extraordinary remedies of statutory mandamus and statutory mandatory injunction are not plain and adequate remedies in the ordinary course of the law and the availability of these extraordinary remedies in the Common Pleas Court is not a ground upon which the Supreme Court can adopt or adhere to a rule that it is error for the Supreme Court or the Court of Appeals to exercise jurisdiction in a mandamus action filed originally therein.”
For all of the foregoing reasons, Relators a writ of mandamus is the appropriate remedy in this case.
Proposition of Law #2
When a municipal cor'poration’s R.C. 503.07 boundary adjustment petition is granted county by commissioners, R.C. 709.l9(B) imposes a clear legal duty upon that municipal corporation to make and grants the township whose boundary has been adjusted and relocated a clear legal right to receive lost tax revenue compensation payments in an amount to be determined by either an agreement between the township and the municipal corporation or, absent such an agreement, the amount provided in R.C. 709.I9(C) and (D).
In order to appreciate St. Township’s Clair claim for lost tax revenue compensation from Hamilton, an understanding of the effect of municipal armexations on township boundaries is essential. This understanding also sheds light on the significant consequences of a boundary adjustment.
.10- Ohio‘s Attorney General has frequently been asked to opine on annexation questions. Syllabus point
2 of 2005 Ohio Atty. Gen. Op. No. 2005-024, explains what happens to township and municipal
boundaries when an annexation is granted.
“ 2. Following an annexation other than a merger, if the annexing municipality does not initiate proceedings pursuant to R.C. 503.07 to make the boundary lines of annexed township territory identical with the limits of the municipal corporation, and if the electors of the unincorporated area of the township do not take action pursuant to R.C. 503.09 to exclude the annexed territory from being located in any township, then the annexed territory remains part of the township, inhabitants residing in the annexed territory are residents of both the municipal corporation and the township, and, unless a statute provides a specific exclusion, those residents are obligated to both taxes pay levied by the municipal corporation and taxes levied by the township.”
No merger or township elector-initiated exclusion petitions are involved in this case.
As a reading of the “Background Information” portion of Hamilton’s Staff Report to its city council
(Exhibit A to the Complaint) reveals, in 2016 St. Clair Township brought to the Butler County
Auditor’s attention that office’s unlawful distribution of real estate tax revenue. That illegality
consisted of present and former Butler County Auditors unilaterally changing county tax maps to
make it appear that Hamiltor1’s boundary with St. Clair Township had changed every time Hamilton
annexed territory from St. Clair Township, not just when Commissioners adopted
a boundary adjustment resolution using R.C. 503.07.: As a result of this unlawful distribution, territory which was legally supposed to be located in both Hamilton and St. Clair Township was
2 Hamilton’s inclusion of virtually its entire city limits in its 2016 boundary adjustment petition indicates Hamilton was of the opinion no previous boundary adjustments involving Hamilton and its surrounding townships had ever taken place.
.1]. instead treated as if it were no longer located in St. Clair Township at all} St. Clair Township was
thereby being deprived of real estate tax revenue to which it was lawfully entitled and that revenue
was instead distributed entirely (and unlawfully) to Hamilton. Since the Auditor’s mistake in
drawing the township boundaries with Hamilton included not only Hamilton’s boundary with St
Clair Township, but extended to all four (4) townships from which territory had been annexed into
Hamilton, the entire 21.5 square miles which make up Hamilton,‘ the city faced a substantial
reduction in real estate tax revenue should the boundary be restored to where it lawfully should have
been . Therefore, it is not difflcult to understand why Hamilton acted quickly to adjust its
boundaries- it had to in order to maintain the same level of real estate tax revenue as it had
theretofore been receiving. However, that boundary adjustment triggered the duty to pay lost tax
revenue compensation which is the focus of this case.
When a municipal corporation secures a boundary adjustment from county commissioners, that
resolution effectively removes from the targeted township the territory identified in the
commissioners resolution. When that territory is removed, the township will unavoidably suffer
some tax revenue loss because its tax base has been reduced in size. But due to the extraordinary
facts in this case- the county auditor had already wrongfully altered Hamilton’s boundary with its
3 Additionally, the Butler County Board of Elections political subdivision boundary lines were identically misdrawn. As a result, registered voters who resided in both the city of Hamilton and Clair St. Township were prevented from voting on township officeholders and upon township tax levies.
‘ No doubt correcting the Auditor’s records error on every single tax parcel in Hamilton twenty-one-and-a-half (21.5) square miles in order to provide for a township share of the real estate tax distribution would have been a Herculean task.
.12. four townships— Hamilton’s (4) boundary adjustment actually served to maintain intact the
wrongfully-established status quo by which St. Clair Township and its 3 sister townships were
denied real estate tax revenues that were lawfully theirs.
Because the Ohio General Assembly has long understood the impact of a loss of tax revenue on local
governments, it has provided a mechanism for softening that blow in the R.C. 709.19 by providing
a weaning period for the loss oftax revenues that follows a boundary adjustment. This explains why
the current version of R.C. 709. 1 9(B) provides that if unincorporated territory is annexed to a
municipal corporation and then excluded from a township under R.C. 503.07, upon exclusion of that
territory, the municipal corporation that annexed the territory shall make payments to the township
from which the territory was annexed. Thus, Hamilton’s duty to pay St. Clair Township lost tax
revenue compensation is clearly and simply a matter of statutory constmction. The plain words of
R.C. 709. impose l9(B) the clear legal duty upon Hamilton to make lost tax revenue compensation
payments and bestow the clear legal right A to receive those payments upon St. Clair Township if and
when Hamilton chooses to use R.C. 503.07 to remove territory within its city limits from one
township and relocate it into another.
Unfortunately, resort to a writ of mandamus is necessary because Hamilton refuses to comply with
its clear legal duty to pay St. Clair Township lost tax revenue compensation.
For these reasons a writ of mandamus should be issued directing Hamilton to make lost tax revenue compensation payments to St. Clair Township as provided in R.C. 709.19.
.13. Preposition of Law #3
Where a municipal corporation is required by R.C. 709.19(B) to make lost tax revenue compensation payments to a township in an amount defined by R.C. 709.19(C) and (D), because R.C. 709.l9(B) does not provide who is to compute the payment to be made, but does impose the duty to make such payment upon the municipal corporation, the municipal corporation has an attendant clear legal duty once each year to accurately and completely calculate, or cause to be calculated, the correct compensation due the township according to R.C. 709.19 (C) and (D).
While R.C. 709.19 imposes a duty on a boundary adjustment making municipal corporation
to make lost tax revenue payments to a township following the granting of a R.C. 503.07 boundary
adjustment petition and while R.C. 709.l9(C)and (D) provide the computation which is to be used
to compute the amount to be paid, R.C. 709.19 fails to address whose responsibility it is to compute
the amount owed the township in lost tax revenue compensation. Normally, in the years prior to the
boundary adjustment, the county auditor would be computing the millage due both the municipality
and the township in their overlapping territory. But this is an unusual case. For here, the county
auditor was not computing both the municipality and the township’s share of real estate tax before
the boundary adjustment occurred. Rather, the auditor was paying Hamilton l0O% of both
HamiIton’s and St. Clair Township’s share of the real property tax collected. Thanks to the Butler
County Auditor’s mislocation of the boundary between St. Clair Township and Hamilton, his office
never had to determine the St. Clair
Township’s share of the real estate tax collected because there had never been one.
Where authority is given to do a specified thing, but the precise mode of performing it is not prescribed, the presumption is that the legislature intended the party might perform it in a reasonable
.14. manner. State ex rel Gen. Atty v. Morris, 63 Ohio St. 496, 59 N.E. 226, 230 (1900) citing Jewel!
v. Valley Ry. Co, 34 Ohio St. - N.E.- 601, 608, (1878). Because Hamilton has a duty to make the
payment, Hamilton should similarly be made legally responsible for fairly, honestly and in good faith
computing the amount of the payment with such assistance from the county auditor, St. Clair
Township representatives, and third party experts as is necessary for an accurate determination.
For this reason a writ of mandamus should be issued to the Respondent Hamilton directing it to
compute the amount of the lost tax revenue compensation it owes Relator St. Clair Township
according to RC, 709. 1 9(B) and (C).
Preposition of Law #4
Where a municipal corporation is required by R.C. 709.l9(B) to make lost tax revenue compensation payments to a township in an amount defined by R.C. 709.l9(C) and (D), because R.C. 709.l9(B) does not provide how frequently the required payments are to be made, the municipal corporation is to be afforded a reasonable time to compute and then actually make the required payments. A reasonable time for computing and actually making the required payment due the township is 30 days after the municipal corporation receives from the county treasurer the tax distributions it has received as a result of its boundary adjustment petition’s granting. Where there are multiple distributions to the municipal corporation a in single year, there would likewise be multiple distributions by the municipal corporation to the township 30 days thereafter.
While R.C. 709.19 imposes a duty on a municipal corporation to make lost tax revenue payments to a township upon the granting ofa R.C. 503.07 boundary adjustment petition and while R.C.
709.19(C)and provide the (D) computation which is to be used to arrive at the that payment, R.C.
709.19 does not state how frequently the municipal corporation must make the required payments to the township. In this instance, the issue presented is not the product of the county auditor’s failure
.15. to properly perform his boundary drawing duty, but of ambiguity in RC. 709.19 itself.
Where authority is given to do a specified thing, but the precise mode of performing it is not
prescribed, the presumption is that the legislature intended the party might perform it in a reasonable
manner. State ex rel/itly. Gen. v. Morris, 63 Ohio St. 496, 59 N.E. 226, 230 (1900) citing Jewel‘!
v. Valley Ry. Ca, 34 Ohio - St. 601, 608, N.E.- (1878). Because Hamilton has a duty to make the
lost tax revenue payment spelled out in R.C. 709.19, but R.C. 709.19 does not provide how often
those payments are to be made, a reasonable period of time within which to make a lost tax revenue
compensation payment would be 30 days after it receives from the county treasurer the tax
distribution which was redirected to the city as a result of the granting of its boundary adjustment
petition.
For this reason a writ of mandamus should be issued directing Respondent City of Hamilton to pay
the amount of the lost tax revenue compensation it owes Relator St. Clair Township within 30 days
of Hamilton’s receipt of those funds which were redirected from Relator St. Clair Township to
Respondent City of Hamilton from the county treasurer.
PROPOSITION OF LAW #5
The uncodified language in Section 3 of 2001 Am Sub S.B. No. 5 does not relieve a municipal corporation ofits duty to pay a township R.C. 709.l9(B) lost tax revenue compensation when the municipal corporation secures a R.C. 503.07 boundary adjustment because the property being removed from the township by that adjustment was annexed into the municipal corporation before 2001 Am Sub S.B. No. 5 took effect.
.15- The Hamilton Law Director’s November 14, 2016 letter (Exhibit F to the Complaint) cited
the uncodified language in Section 3 of 2001 Am Sub SB. No. 5 (hereafter “SB. 5'') as excusing
Hamilton from having to pay St. Clair Township any lost tax revenue compensation for the territory
that was removed from St. Clair Township by Resolution 2016-10-03663. The reason no lost tax
revenue compensation is due, according to Hamilton, is the territory it had the commissioners
remove from St. Clair Township had been annexed into Hamilton before the S.B. 5 version of R.C.
709.19(B) became effective in 2001. Effectively, Hamilton claims Section 3 of S.B. 5 operates to
exclude any territory annexed from a township into a municipality before 2001 from being subject
to the duty, set forth in R.C. 7(|9.l9(B), to pay lost revenue compensation .
Because the language of Section 3 in SB. 5 was the only reason Respondent Hamilton’s Law
Director gave for refusing to pay St. Clair Township the lost tax revenue compensation required by
R.C. 709.l9(B) as a result of the boundary adjustment it secured in Resolution 2016-l0-03663, it
is worth repeating here:
“The provisions of Section 1 of this act shall apply only to annexation petitions filed on or after the effective date of this act. All annexation petitions filed before the effective date of this act shall be processed under the provisions of Chapter 709‘ of the Revised Code in effect at the time a particular petition was filed.”
Some historical perspective shows why Section 3 does not support Hamilton’s claim. The passage of S.B. 5 was a contentious battle between municipal and township interests. It substantially altered existing annexation statutes. One of the chief alterations S.B. 5 made was the addition of new
“expedited” annexation petition procedures. These procedures eliminate county commissioner discretion requiring by commissioners to approve an annexation if the annexation petition meets
.17. certain statutory requirements.
R.C. 709.023 and 709.024 are examples of expedited annexation procedures. In those expedited
annexation procedures, one of the legislative compromises which took place was the ability to utilize
an expedited annexation petition process also resulted in the annexed territory being forbidden from
being removed from its township using the R.C. 503.07 boundary adjustment process unless the
township and the municipal corporation first negotiated either: (A) a R.C. 709.192 preannexation
agreement, or (B) a R.C. 701.07 cooperative economic development agreement. See R.C.
709.023(H) and R.C. 709.024(H). A similar prohibition on removal from a township following
annexation is found in RICA 709.16(H), which concems the armexation of municipal , county or state-
owned property such [but territory is most likely already tax exempt]. Thus, following the enactment
of S.B. 5 in 2001, to the extent a new “expedited” annexation petition permitted by R.C. 709.023(H)
and R.C. 709024 was utilized, resort to a R.C. 503.07 boundary adjustment was only possible
following an agreement with the affected township.
Section 3 was inserted into S.B. 5, at least in part, because the General Assembly recognized
statutory enactments which amend the methods and procedures that can be utilized to pursue a
statutorily-provided legal process can be applied retroactively to pending matters, Wilson V. AC&S,
Im:., 169 Ohio App.3d 720, 2006-Ohio-6704, 864 N.E.2d 682 1'] 77. Recognizing this, the contentious battle which culminated in the passage of S.B. 5, the foreseeable new battles which would no doubt erupt if the newly-enacted “expedited” procedures were allowed to be applied to already pending annexation petitions [when S.B. 5 took effect], it was not only reasonable, but quite
.13. prudent, for the General Assembly to provide that those new annexation petition procedures could
not be applied to pending annexation petitions when SB. 5 took effect but , rather only annexation
petitions filed afier S.B. 5 took effect. Of course, this discussion’s relevance turns on whether R.C.
709.19(B) is a statute about annexation petition filing procedures. But R.C. 709.109(B) is not a
statute about annexing territory. Rather, R.C. 709.19 is a statute about what happens when a
township’s boundary is changed because a city or village petitioned county commissioners for a R.C.
503.07 boundary adjustment. And a boundary adjustment is not even possible until the
property which is sought to be removed has already been annexed.
I-Iamilton’s reliance on Section 3 also has a retroactive law violation tone to it. That is, Hamilton
armexed the territory it sought to remove from St. Clair Township in 2016- well before SB. 5 [and
thereby R.C. 709.l9(B)] took effect. To now impose a requirement that Hamilton pay lost tax
revenue compensation upon its removal of property from St. Clair Township changes the law in
effect when that territory was annexed, and therefore is unlawfully retroactive because it attaches a
new obligation to a boundary adjustments which was not present when the property was annexed.
But those arguments lack merit for a number of reasons.
The first reason why Section 3 of SB. 5 is inapplicable to Hamilton‘s recent boundary adjustment is this court has already ruled Ohio political subdivisions are not protected against retroactive legislation modification of their funding streams. Toledo City School Dist. Bd. of Edn. v. State Bd.
0fEdn., 146 Ohio St.3d 356, 2016-Ohio-2806, 56 N.E.3d 950. There, this Court summarized its ruling as follows:
.19- “The avenues examined all converge at the conclusion that political subdivisions are not entitled to the protection of Article II, Section 28. Prior to the 1850-1851 constitutional convention, the law that had developed in the country was that retroactivity provisions protected the vested rights of individuals and private corporations and that public corporations did not have vested rights.” *** “Accordingly, we hold that the Retroactivity Clause, Article 11, Section 28 of die Ohio Constitution, does not protect political subdivisions, like school districts, " that are created by the state to carry out its governmental functions. ***
The second reason why Section 3 of SB. 5 is inapplicable to Hamilton’s recent boundary adjustment
is Ohio‘s annexation and boundary adjustment laws are all statutory in origin and do not create any
vested rights in favor of cities or villages. Assuming, for the sake of argument, political subdivisions
did enjoy constitutional protection against retroactive laws, annexation and boundary adjustment
laws do not create a “vested right” that is entitled to constitutional protection. “...[A] right does not
vest unless it constitutes more ‘mere than a expectation or interest based upon an anticipated
continuance ” ofexisting law.’ Roberts v. Treasurer, 147 Ohio App.3d 403, 41 l, 770 N.E.2d 1085
(2001) and Kallas v. Ohio Water Serv. Co., 132 Ohio App.3d 421 725 , N.E.2d 324 (1999).
The third reason why Section 3 of S.B. 5 is inapplicable to l-lamilton’s recent boundary adjustment
is I-lamilton’s current predicament is the product of its own inaction. When S.B. 5 was enacted [and
R.C. 709. l 9(B) was amended to provide for the payment of lost tax revenue compensation upon the adoption of a R.C. 503.07 boundary adjustment resolution], it became the subject of a statewide referendum which delayed its effective date. This Court well knows this because the effective date of S.B. 5 was the subject of an appeal decided this by Court in 2006- Thornton v. Salak, 112 Ohio
St.3d 254, 2006—Ohio—6407, 858 N.E.2d 1187. lfHamilton had wanted to avoid its R.C. 709.19(B) duty to pay St. Clair Township lost tax revenue compensation, all it had to do was file a R.C. 503.07
.20. boundary adjustment petition with commissioners within the 90 day between when S.B. 5 was signed
by the govemor- July 27, 2001- and the date it was to go into effect- October 26, 2001. It had the
opportunity to avoid the impact ofR.C. 709.l9(B) and it failed to take advantage of it.
The fourth reason why Section 3 of S.B. 5 is inapplicable to Hamilton’s recent boundary adjustment
is Hamilton’s reading of Section 3 stretches the meaning of “uncodified” law beyond its breaking
point. Hamilton either deliberately ignores or ineptly fails to recognize: (a) what uncodified law is,
and that the uncodified law (b) does not automatically continue to apply to future legislative
renactments of a statute unless the uncodified language is repeated in the reenactment.
What is uncodified law? Uncodifled law is a provision that is not law ofa general and permanent
nature and thus does not receive a permanent Ohio Revised Code section number. State v. Thomas,
148 Ohio St.3d 248, 2016-Ohio—5567, -N.E. 3d-, 1 citing 1] 1, Maynardv. Eaton Corp, 1 19 Ohio St.3d
443, 2008-Ohio-4542, 895 N.E.2d 145,1] 7. According to the “A Guidebookfar Ohio Legislators"
148 (14th Ed. 2015-2016) written the Ohio by Legislative Service Commission, uncodified law is
“Law ofa special nature that has a limited duration and operation and is not assigned a permanent Ohio
Revised Code number.” section Uncodified law is also occasionally called “temporary law." Maynard
v. Eaton Corp., at it is not 117. So, surprising that in State v. Thomas, supra, this Court recognized the uncodified language in an earlier legislative enactment [Senate Bill 2] did not automatically continue to operate when the General Assembly later amended many of the same statutes years later [in H.B.
86]. The City relies on the uncodified language in Section 3 ofS.B. 5 as adopted in 2001. But R,C.
709.19 has been repealed and reenacted repeatedly since 2001- most recently by the 1313‘ General
-21- Assembly in H.B. 233, effective August 5, 2016. There is no uncodified language in H.B. 233 which
says in effect» R.C. 709.19 applies only to annexations and annexation petitions which were approved
after Section 3 0f200l Am Sub S.B. No. 5 took effect.
The fifth reason why Section 3 of S.B. 5 is inapplicable to 1-1amilton’s recent boundary adjustment
action is that its construction of Section 3 violates a basic tenant of statutory construction. "There
is no authority under any rule of statutory construction to add to, enlarge, supply, expand, extend or
improve the provisions of the statute to meet a situation not provided for." State ex rel. Faster v.
Evatt, 144 Ohio St. 65, 56 N.E.2d 265 (1944), paragraph eight of the syllabus. While both sentences
in Section 3 expressly refer “annexation to petitions,” Hamilton wants Section 3 to apply not only
to “annexation petitions” but also to “boundary adjustment petitions” filed. The two are not the same
and they are not interchangeable. Each accomplishes a different purpose. In fact, a successful
annexation petition must always precede a boundary adjustment petition.
The sixth reason why Section 3 of S.B. 5 is inapplicable to Hamilton’s recent boundary adjustment
action is that the construction ofsection 3 it seeks violates the basic tenant of statutory construction
that courts interpreting a statute must give effect to the words explicitly used in the statute. They may not delete words used or insert words not used. State v. Taniguchi, 74 Ohio St.3d 154, 156, 656
N.E.2d 1286 (1995), citing Stale v. Waddell (1995), 71 Ohio St.3d 630, 631, 646 N.E.2d 821 (1995).
Section 3 of SB. 5 actually reads “The provisions of Section 1 of this act shall apply only to annexation petitions filed on or after the effective date of this act.” Had it not included the words-
“only to annexation petitions filed” and instead read “The provisions of Section 1 of this act shall
.22. apply on or after the effective date of act.” this It would have been a closer but still not winning
argument.
CONCLUSION
For all the foregoing reasons and more which will be presented in Realtor’s Merit Brief if necessary,
Respondent Hami1ton’s claim that Section 3 of S.B. 5, as adopted in 2001, trumps the version of
R.C. 709.19(B) enacted in H.B. 233 in 2016 is meritless.
For all the foregoing reasons and more which will be presented in Realtor’s Merit Brief if necessary,
Relator St‘ Clair Township asks this Court to issue a peremptory writ.
For all the foregoing reasons and more which will be presented in Rea1tor’s Merit Brief if necessary,
Relator St. Clair Township is entitled to a writ of mandamus commanding Hamilton to pay St. Clair
Township lost tax revenue compensation.
Respectfully submitted
1731 Cleveland Avenue Hamilton, Ohio 45013 (513)-520-5517 [email protected]
.23- PRAECIPE FOR SERVICE
TO THE CLERK:
Please serve a copy of this Memorandum In Support along with the Summons and Complaint by Certified Mail with return receipt requested, to each of the three Respondents identified in the caption/cover page of the Complaint using the addresses set forth in there.
~ heets (0019384) ~ ~ for Relators
.24.