Bd. of Educ. of the Loveland City Sch. Dist. v. Bd. of Trs. of Symmes Twp.

• Decision Date: 04 May 2018
• Docket Number: C–170419,NOS. C–170407,S. C–170407
• Citation: 111 N.E.3d 833,2018 Ohio 1731
• Parties: BOARD OF EDUCATION OF the LOVELAND CITY SCHOOL DISTRICT, and State ex rel. Board of Education of the Loveland City School District, Plaintiffs–Relators–Appellants/Cross–Appellees, v. BOARD OF TRUSTEES OF SYMMES TOWNSHIP, and Symmes Township, Ohio, Defendants–Respondents–Appellees/Cross–Appellants.
• Court: Ohio Court of Appeals

111 N.E.3d 833

2018 Ohio 1731

BOARD OF EDUCATION OF the LOVELAND CITY SCHOOL DISTRICT,

and

State ex rel. Board of Education of the Loveland City School District, Plaintiffs–Relators–Appellants/Cross–Appellees,

v.BOARD OF TRUSTEES OF SYMMES TOWNSHIP,andSymmes Township, Ohio, Defendants–Respondents–Appellees/Cross–Appellants.

NOS. C–170407

C–170419

Court of Appeals of Ohio, First District, Hamilton County.

Date of Judgment Entry on Appeal: May 4, 2018

Ennis Britton Co., LPA, and Gary T. Stedronsky, Cincinnati, for Plaintiffs–Relators–Appellants/Cross–Appellees.

Squire Patton Boggs (US) LLP, Scott A. Kane and Joseph P. Ashbrook, Cincinnati, for Defendants–Respondents–Appellees/Cross–Appellants.

OPINION

MOCK, Presiding Judge.

{¶ 1} Plaintiffs-relators-appellants/cross-appellees Board of Education of the Loveland City School District and State ex rel. Board of Education of the Loveland City School District (collectively "Loveland School Board") filed a complaint against defendants-respondents-appellees/cross-appellants Board of Trustees of Symmes Township and Symmes Township, Ohio, (collectively "Symmes Township") in which they sought a declaratory judgment, a writ of mandamus and injunctive relief. The trial court granted summary judgment in favor of Symmes Township on all of Loveland School Board's claims because they were barred by the applicable statute of limitations. We find no merit in Loveland School Board's four assignments of error, and we affirm the trial court's judgment. We also hold that Symmes Township's cross-appeal was improper, and we, therefore, dismiss it.

I. Factual Background

{¶ 2} In 1991, Symmes Township passed Resolution No. F–9101, which authorized and approved the Symmes Station Development Tax Increment Financing Project ("STIF") to make infrastructure improvements in the vicinity of Fields Ertel and Montgomery Roads. Resolution F–9101 declared these improvements to be a public purpose and authorized a 100 percent real-property-tax exemption for more than 90 acres of privately-owned property. The resolution also stated that the exemption was to last for 30 years, subject to earlier termination upon the retirement of the tax-increment debt.

{¶ 3} In April 1993, Symmes Township passed resolution F–9303, which authorized the issuance of notes for the purpose of financing the public improvements. Symmes Township entered into service agreements with the owners of the real property in late 1993.

{¶ 4} Under those agreements, owners of the real property made service payments called PILOT payments in lieu of paying real-estate taxes. Those payments were paid into a special tax-increment-equivalent fund to pay for the construction of the specified public improvements. The agreements stated that they would expire on the earlier of December 31, 2010, or "the day following the date on which the final payment of principal * * * and interest on the Bonds or any refunding issues thereof is made or deemed to be made to a trustee for the benefit of the holder or holders thereof." Even after the service agreements expired, Symmes Township continued to collect PILOT payments from the property owners.

{¶ 5} The tax-increment-equivalent fund was pledged as security for the principal and interest on the notes authorized in Resolution F–9303. The debt owed on the notes was guaranteed solely by the tax-increment-equivalent fund.

{¶ 6} The development of the property subject to the STIF was successful. It was ultimately developed into a number of retail establishments and a large apartment complex.

{¶ 7} In 2003, Symmes Township passed Resolution F–0303 to amend Resolution F–9101 to specify additional public infrastructure improvements that could be funded by the STIF. It subsequently adopted Resolutions F–0304, F–0305 and F–0306, which related to the debt instruments used to fund the public infrastructure improvements. At the time those resolutions were adopted, approximately $400,000 in notes used to finance the original improvements set out in F–9101 were still outstanding, unmatured and unpaid. The township claimed that it sought to refinance the debt so that it could continue to use the funds generated by the STIF for the additional improvements.

{¶ 8} The original STIF notes were special revenue obligations that limited Symmes Township's liability to tax-increment revenue. Resolution F–0304 provided for the refunding of the outstanding STIF debt with general-obligation bonds. Those bonds were not secured with PILOT payments from the tax-increment-equivalent fund. Instead they were secured by "the full general obligation of the Township" and "the faith, credit and revenue of said Township."

{¶ 9} Resolution F–0305 authorized Symmes Township to issue bonds for the purpose of park-land acquisition. Resolution F–0306 authorized it to combine the park-land acquisition debt and the outstanding $400,000 debt from the 1991 infrastructure improvements into a single consolidated bond issue.

{¶ 10} The STIF continued to be successful. It generated funds to pay for the purchase of a park, the construction of a park maintenance building, the construction of a safety center, and the purchase of police and fire equipment.

{¶ 11} Loveland School Board filed its complaint on March 11, 2016. It alleged that the "refinancing" of the original STIF debt instruments in 2003 was actually the retirement of that debt, and that the STIF should have terminated at that time. It further alleged that the expansion of the scope of the public improvements funded by the STIF in Resolution F–0303 was improper, and that Symmes Township had improperly spent PILOT payments from the tax-increment-equivalent fund on expenditures that were not necessary for the development of the subject property as originally specified in 1991.

{¶ 12} Both Loveland School Board and Symmes Township filed motions for summary judgment. In its motion, Symmes Township argued that it was entitled to judgment as a matter of law because Loveland School Board's complaint was filed outside of the applicable statute of limitations.

{¶ 13} The trial court found that the six-year statute of limitations set forth in R.C. 2305.07 for actions "upon a liability created by statute" applied. The court also found that the cause of action accrued in 2003 when Symmes Township amended the STIF and, as argued by Loveland School Board, failed to terminate the STIF when it refunded the original securities with general-obligation bonds. Thus, the court determined that the Loveland School Board's claims were time-barred. It entered judgment in favor of Symmes Township on all counts of Loveland School Board's complaint. Both parties have appealed the trial court's judgment.

II. Improper "Cross–Appeal"

{¶ 14} Symmes Township has filed what it refers to as a "cross-appeal," although it was filed under a separate appeal number. Even if it were a cross-appeal, App.R. 3(C)(1) provides that "[a] person who intends to defend a judgment or order against an appeal taken by an appellant and who also seeks to change the judgment or order * * * shall file a notice of cross-appeal within the time allowed by App.R. 4." App.R. 3(C)(2) further provides that "[a] person who intends to defend a judgment or order appealed by an appellant on a ground other than that relied on by the trial court but who does not seek to change the judgment or order is not required to file a notice or cross-appeal or raise a cross-assignment of error."

{¶ 15} The trial court granted summary judgment in Symmes Township's favor. The township does not seek to change the judgment from which Loveland School Board has appealed. Consequently, its use of a "cross-appeal" to assert its arguments is improper, and we dismiss the appeal numbered C–170419. See SP9 Ent. Trust v. Brauen , 3d Dist. Allen No. 1-14-03, 2014-Ohio-4870, 2014 WL 5510413, ¶ 60–64. Nevertheless, we can still address the township's arguments as we would any appellee's, and we do so where appropriate. See McCarthy v. Sterling Chemicals, Inc. , 1st Dist. Hamilton Nos. C–110805 and C-110856, 2012-Ohio-5211, 2012 WL 5471457, ¶ 9.

III. TIFs Generally

{¶ 16} Tax-increment financing (TIF) is a "method for funding public improvements in an area slated for redevelopment by recapturing, for a time, all or a portion of the increased property tax revenue that may result if the redevelopment stimulates private reinvestment." Princeton City School Dist. Bd. of Edn. v. Zaino , 94 Ohio St.3d 66, 68, 760 N.E.2d 375 (2002), quoting Meck & Pearlman, Ohio Planning and Zoning Law , Section T 15:29, 704 (2000). Townships may declare improvements to real property to be exempt from property taxes and to require the owner of the property to make service payments in lieu of the real-property taxes that would have been payable on the improvements had the property not been exempt. A township that receives service payments in lieu of taxes must establish a public–improvement-tax-increment-equivalent fund and deposit the payments into that fund. It must use the moneys deposited into that fund to pay the costs of the public improvements or the principal and interest on bonds or notes issued to pay the costs of the public improvements that are necessary for the development of the exempted real property. Princeton City School Dist. at 68, 760 N.E.2d 375, quoting 3 Princehorn & Shimp, Ohio Township Law , Section T 2.6, 42 (2000).

{¶ 17} The General Assembly enacted R.C. 5709.93 et seq., which authorize townships to construct public improvements that will benefit specified parcels of property through TIF programs. It has empowered townships to redirect tax receipts attributable to the increase in value of the benefited parcels to a fund out of which a township pays for the improvements. Princeton City School Dist. at 70, 760 N.E.2d 375.

IV. Former R.C. 5715.27(F) does not Apply

{¶ 18} We begin our analysis with Symmes Township's argument that the statutory procedure set forth in former R.C. 5715.27(F) provides Loveland School...