WHEN VILLAGES DISSOLVE Ohio Township Association 2016 Winter Conference Peter N. Griggs Brosius, Johnson & Griggs, LLC 1600 Dublin Road, Suite 100 Columbus, Ohio 43215 Telephone: (614) 464-3563 Email: pgriggs@bjglaw.net Vickie Fleming, Fiscal Officer Scioto Township, Pickaway County Telephone: (614) 877-4552 Email: VFleming@sciototownship.com
I. INTRODUCTION A. Since a township is a creature of statute, townships have only those powers expressly conferred upon them by statute or those necessarily implied therefrom. Trustees of New London Township v. Miner, 26 Ohio St. 452 (1875). B. Ohio Revised Code Tile 5 contains no provisions in relation to village dissolution. C. There are two statutory provisions that allow villages to dissolve. The provisions are contained in Ohio Revised Code Title 7. II. OHIO REVISED CODE 703.20 PETITION DISSOLUTION A. Villages may surrender their corporate powers upon the petition to the legislative authority of the village of at least forty per cent of the electors, to be determined by the number voting at the last regular municipal election. B. An affirmative vote of a majority of such electors at a special election, which shall be provided for by the legislative authority, and conducted, canvassed, and the result certified and made known as at regular municipal elections. C. If the result of the election is in favor of such surrender, the village clerk shall certify the result to the secretary of state and the county recorder, who shall record it in their respective offices. D. The corporate powers of such village shall cease. III. OHIO REVISED CODE 703.201 FORCED DISSOLUTION A. Forced dissolution process commences if the auditor of state finds, in an audit report issued under of section 117.11 of the Revised Code that a village has: 1. A population of one hundred fifty persons or less (determined either at the last preceding federal decennial census or according to population estimates certified by the department of development between decennial censuses); and 2. Consists of less than two square miles; and 3. That the village meets at least two conditions for surrendering corporate powers. B. If the above determinations are made by the auditor of state, the auditor shall send a certified copy of the report together with a letter to the attorney general requesting the attorney general to institute legal action to dissolve the village.
C. The report and letter shall be sent to the attorney general within ten business days after the auditor of state's transmittal of the report to the village. D. The audit report transmitted to the village shall be accompanied by a notice to the village of the auditor's intent to refer the report to the attorney general for legal action. E. Within twenty days of receipt of the auditor of state's report and letter, the attorney general may file a legal action in the court of common pleas on behalf of the state to request the dissolution of the village that is the subject of the audit report. 1. If a legal action is filed, the court shall hold a hearing within ninety days after the date the attorney general files the legal action with the court. 2. Notice of the hearing shall be filed with the attorney general, the clerk of the village that is the subject of the action, and each fiscal officer of a township located wholly or partly within the village. F. At the hearing on dissolution, the court shall determine if the village has the following: 1. A population of one hundred fifty persons or less; and 2. Consists of less than two square miles; and 3. Meets at least two conditions for surrendering corporate powers. G. If the court finds that the village meets these requirements, it shall order the dissolution of the village and provide for the surrender of corporate powers in accordance with section 703.21 of the Revised Code. H. The attorney general shall file a certified copy of the court's order of dissolution with the secretary of state and the county recorder of the county in which the village is situated, who shall record it in their respective offices. Upon the recording in the county recorder's office, the corporate powers of the village shall cease. I. Condition for surrendering corporate powers" means any of the following: 1. The village has been declared to be in a fiscal emergency under Chapter 118. of the Revised Code and has been in fiscal emergency for at least three consecutive years with little or no improvement on the conditions that caused the fiscal emergency declaration. 2. The village has failed to properly follow applicable election laws for at least two consecutive election cycles for any one elected office in the village.
3. The village has been declared during an audit conducted under section 117.11 of the Revised Code to be unauditable under section 117.41 of the Revised Code in at least two consecutive audits. 4. The village does not provide at least two services typically provided by municipal government, such as police or fire protection, garbage collection, water or sewer service, emergency medical services, road maintenance, or similar services. "Services" does not include any administrative service or legislative action. 5. The village has failed for any fiscal year to adopt the tax budget required by section 5705.28 of the Revised Code. 6. A village elected official has been convicted of theft in office, either under section 2921.41 of the Revised Code or an equivalent criminal statute at the federal level, at least two times in a period of ten years. The convicted official with respect to those convictions may be the same person or different persons. J. This procedure is in addition to the procedure of section 703.20 of the Revised Code for the surrender of the corporate powers of a village. IV. OHIO REVISED CODE 703.21 RIGHTS AND LIABILITES OF VILLAGE A. The surrender of corporate powers by a village under section 703.20 or 703.201 of the Revised Code does not affect vested rights or accrued liabilities of the village, or the power to settle claims, dispose of property, or levy and collect taxes to pay existing obligations. 1. However after the presentation of the petition mentioned in section 703.20 of the Revised Code or receipt of the audit report and notice mentioned in section 703.201 of the Revised Code, the legislative authority of the village shall not create any new liability until the result of the election under section 703.20 of the Revised Code is declared or the decision of the court of common pleas under division (C) of section 703.201 of the Revised Code is declared, or thereafter, if the result, in either case, is for the surrender of the village's corporate powers. 2. If the auditor of state notifies the village that the attorney general may file a legal action under section 703.201 of the Revised Code, but the attorney general does not file such an action, the village shall not create any new liability for thirty days after receipt of the auditor of state's notice. B. Due and unpaid taxes may be collected after the surrender of corporate powers, and all moneys or property remaining after the surrender belongs to the township or townships located wholly or partly within the village. C. If more than one township is to receive the remaining money or property, the money and property shall be divided among the townships in proportion to the amount of
territory that each township has within the village boundaries as compared to the total territory within the village. D. After the surrender of corporate powers, all resolutions of the township or townships into which the village's territory was dissolved shall apply throughout the township's newly included territory. E. If the Village property is not needed by the Township, the Township should follow the procedures contained in Ohio Revised Code 505.10 for the disposition of such property. V. WHAT IF DEBT EXCEEDS ASSETS A. The law does not provide any mechanism to address this issue. The Township may be responsible for the village debt even if they had no decision in incurring that debt. B. New Rome Case Study-Treated like a receivership 1. Take Inventory 2. Liquidation of Assets 3. Established Village Dissolution Account 4. Notified all creditors to submit claims for debt 5. Published Notice in paper for unknown creditors 6. Prioritized claims 7. Rejected any new obligation and/or claim after audit was sent to AG 8. Fiscal Officer distributed monies and sent letter notifying all creditors township was not responsible for any remaining debt C. Public records of Village VI. ZONING ISSUES A. If a Township has adopted a zoning resolution that applies to all of the unincorporated area of the Township, does the zoning resolution now apply to the area formerly composed of the village? B. The operative part of O.R.C. 703.21, enacted in 2012, provides that [a]fter the surrender of corporate powers [of the village], all resolutions of the township or townships into which the village s territory was dissolved shall apply throughout the township s newly included territory. 1. Does the phrase all resolutions literally mean all resolutions, including a township s zoning resolution?
C. In 2000, before the addition of the statutory language quoted above in O.R.C. 703.21, the Ohio Attorney General issued an Opinion on the process for zoning a previously unzoned portion of a Township. 1. In the Opinion, the Attorney General ultimately opined that such additional territory (that had not been previously zoned) could only be zoned by either: (a) initiating a new zoning resolution for the additional area to be zoned and submitting the issue to electors residing within that area, or (b) by repealing the existing zoning resolution and enacting a new zoning resolution covering the area previously zoned and the additional area to be zoned and by submitting the issue to electors residing in both areas. 2. Both of these options required submitting a proposed zoning plan to electors residing in the area to be zoned in order to obtain their consent. K. No case law has yet interpreted whether the phrase all resolutions includes a township s zoning resolution, and the statute does not provide a definition or other clarifying guidance. L.