Hamilton, St. Clair Twp. settle annexation lawsuit for $4 million

The city of Hamilton and St. Clair Twp. have settled a lawsuit over annexations for $4 million, including interest, after five years of legal wrangling in the Ohio Supreme Court and locally.

The city council met during an emergency executive session Wednesday and approved a “cooperative economic development agreement” with the township. The trustees approved the deal last week.

The agreement includes $3.5 million to be paid over 10 years and with interest will amount to nearly $4 million. The agreement also includes a future development plan that is mutually beneficial to both entities, according to a joint statement.

“The Hamilton City Council and the St. Clair Township Board of Trustees are pleased to announce they have come to terms on a cooperative agreement that provides them with an opportunity to pursue new growth opportunities that are mutually beneficial to both communities. Under the terms of the agreement, the following would take place:

  • The city and the township have identified 1450 Elkton Road and 2133 Hamilton Cleves Road are prospects for the next round of development in the area.
  • The properties can be more quickly annexed into the city upon petition from the owners to allow for the desired development to timely move forward.
  • Even though the properties are annexed into the city, they will remain within both jurisdictions, thus protecting both entities’ interests while fostering development.

The agreement also states if the properties — together they encompass about 120 acres — are eventually annexed, the city will provide public services and any income or lodging taxes will be split between the two, with Hamilton collecting 70% and St. Clair the rest.

“In closing, given that the geographic areas outlined in the agreement are limited, it offers both the city and the township an opportunity to assess this cooperative model as they both move forward to help make each community a better place,” the statement reads.

It also said neither side will be commenting further.

ExploreSettlement reached in annexation lawsuit between St. Clair Twp. and Hamilton

The township sued Hamilton in December 2017 in the Ohio Supreme Court, and after protracted litigation and complex calculations, it claimed the city owed at least $10 million, including interest for lost property taxes due to annexations. The city all along maintained it owed nothing.

The agreement spells out that each entity will pay their own legal fees for the protracted litigation. The city and township did not have the amounts they have paid readily available. By comparison, the village of New Miami finally ended its eight-year war with a group of drivers who took them to court over speed cameras in May. Taxpayers paid $487,943 in legal fees because the village’s insurance doesn’t cover that type of litigation.

Hamilton’s law director Letitia Block told the Journal-News she is working on tallying the legal bills, but would not say whether insurance covered any of it.

The two sides informed Butler County Common Pleas Court Judge Greg Stephens they had a reached a settlement on May 31, but Stephens said in a court filing they told him on Aug. 2 they hadn’t and needed more time because one of the elected officials who was needed to settle the case was ill. He gave them until Aug. 22 to consummate the deal or he would dismiss the case.

“With the availability of remote technology, including teleconferencing and zoom-like platforms, the necessity of further delay is not clear,” Stephens wrote. “It is also not clear why the parties reported a settlement in May if ‘essential’ elements were not resolved. Regardless of reason, the ongoing delay in concluding this matter is unacceptable and has reached the point of no return.”

The cash-strapped township has been fighting with Hamilton over an annexation law the trustees’ lawyer asserted entitled it to 12-years worth of compensation for money lost due to the annexations. The law was triggered in 2016 when the city asked the county commissioners to form a “paper township” to fix the fact that boundary adjustment approval wasn’t formalized by the county previously.

The township’s former legal adviser Gary Sheets —who has since retired — filed the initial lawsuit in the Ohio Supreme Court in April 2017, the high court kicked the case back to the County Common Pleas Court in March 2019. Outside counsel Curt Hartman and Chris Finney refiled the case locally for the township.

“I’m delighted,” Sheets said about the settlement. “I appreciate Curt Hartman and Chris Finney’s work to go the last mile.”

The high court denied the writ of mandamus saying while Hamilton owes the township the money, this particular form of legal action is not available because the township hasn’t proven how much the city owes.

“It is plain that under the current version of R.C. 709.19(B), a city is required to pay a township for tax revenue lost as a result of that city’s annexation and exclusion of township territory,” all but one justice wrote as a group. “The problem for St. Clair, however, is that in a mandamus action, a writ will not issue when a relator fails to meet its burden of proof with clear and convincing evidence. And that necessary factual predicate is missing here, as St. Clair has not shown with certainty the amount of lost tax revenue St. Clair Township is owed.”

The issue involves land Hamilton has annexed over the years from St. Clair, Fairfield, Hanover and Ross townships. In those annexations, the city did not get county commissioner approval for boundary adjustments, meaning residents in those townships should have voted for city council and township trustees, and the townships should have retained some of their property taxes, according to the lawsuit.

However, the auditor’s office adjusted the boundaries and thus the taxes, and the Board of Elections disallowed multiple jurisdiction voting because both believed the annexations were finalized. Sheets began investigating after the commissioners approved the paper township.

When the city was told about the probe, it received permission from commissioners to create a “paper township,” which adjusted the city’s boundaries to include the annexed properties.

The other townships elected not to join the lawsuit. Hanover Twp. Administrator Bruce Henry said they have an annexation agreement with the city that provides them an estimated annual payment of $8,000. Several years before this lawsuit was filed they did a study and found they should have been paid more money for some of the annexed land and they reached an agreement with the city and were paid $65,000.

He said the township believes the agreement provides them some protections, so they chose not to join St. Clair’s legal dispute.

“I think it helps us in terms of not letting any big parcels of Hanover Twp. be annexed,” Henry said. “It’s not in there (the agreement), it’s something that’s in the background. Hamilton may say that’s not true, but anyway it’s held and we feel it was in our favor.”

The other townships could be reached for comment.

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