Title: E. Liverpool v. Columbiana Cty. Budget Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as E. Liverpool v. Columbiana Cty. Budget Comm., 105 Ohio St.3d 410  , 2005-Ohio-
2283.] 
 
 
CITY OF EAST LIVERPOOL, APPELLANT, v. COLUMBIANA COUNTY BUDGET 
COMMISSION ET AL., APPELLEES. 
 
[Cite as E. Liverpool v. Columbiana Cty. Budget Comm.,  
105 Ohio St.3d 410, 2005-Ohio-2283.] 
County budget commissions—Allocation of Undivided Local Government Fund 
and Undivided Local Government Revenue Assistance Fund—R.C. 
5747.51, 
5747.53, 
5747.62, 
and 
5747.63—Evidentiary 
hearing 
unnecessary before allocation by alternative method adopted under R.C. 
5747.53 or 5747.63—Time extension for resolutions eliminating 
requirement of approval by largest city. 
(No. 2003-1003 — Submitted January 19, 2005 — Decided May 25, 2005.) 
APPEAL from the Board of Tax Appeals, No. 2002-T-1584. 
__________________ 
 
SYLLABUS OF THE COURT 
There are two methods of allocating Undivided Local Government Fund and 
Undivided Local Government Revenue Assistance Fund dollars to a 
county’s political subdivisions: the statutory method specified in R.C. 
5747.51 and 5747.62 and any alternative method adopted pursuant to R.C. 
5747.53 and 5747.63.  The statutory method requires a county budget 
commission to afford political subdivisions an “opportunity to be heard, 
under oath,” before allocating ULGF and ULGRAF dollars because those 
statutes contemplate a needs-based allocation.  The alternative method, 
however, does not require the budget commission to afford political 
subdivisions an opportunity to be heard under oath before allocating 
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ULGF and ULGRAF dollars because those statutes only require the 
county board of commissioners and the appropriate political subdivisions 
to approve the alternative formula before it is adopted by the budget 
commission. 
__________________ 
 
O’DONNELL, J. 
{¶ 1} The city of East Liverpool challenges a Board of Tax Appeals’ 
decision that determined that the Columbiana County Budget Commission had 
properly adopted and used an alternative formula for allocating the 2003 
Undivided Local Government Fund (“ULGF”) and Undivided Local Government 
Revenue Assistance Fund (“ULGRAF”) dollars to the political subdivisions 
within Columbiana County.1  For the reasons that follow, we reject the city’s 
challenge, and therefore we affirm the decision of the Board of Tax Appeals. 
{¶ 2} On August 29 and August 30, 2002, Columbiana County and 26 
political subdivisions in the county adopted resolutions approving an alternative 
formula for allocating 2003 ULGF and ULGRAF dollars to the county and to 
political subdivisions within the county.  The next day, at a public meeting to 
consider adopting the proposed alternative formula, the budget commission 
determined that although East Liverpool had passed a resolution rejecting it, the 
necessary approvals for adopting the alternative formula had been secured from 
the county commissioners and a majority of the county’s political subdivisions.  
                                                 
1.  {¶a} In Reynoldsburg v. Licking Cty. Budget Comm., 104 Ohio St.3d 453, 2004-Ohio-6773, 
820 N.E.2d 323, ¶ 12, we recently explained the nature of ULGF and ULGRAF funds: 
 
      {¶b} “The ULGF and the ULGRAF are established by R.C. Chapter 5747 to provide state 
financial support to smaller governmental units in the state.  Lancaster v. Fairfield Cty. Budget 
Comm. [1999], 86 Ohio St.3d 137, 712 N.E.2d 719.  Monies for these funds are collected by the 
state from such taxes as the sales tax, use tax, dealer-in-intangibles tax, public utility tax, income 
tax, and the franchise tax for the financial support of local government units.  See R.C. 5739.21, 
5741.03, 5725.24, 5727.45, 5727.84, 5747.03, and 5733.12.  The state disburses monies to each 
county and, in turn, the county’s budget commission determines the amount to be distributed to 
each eligible local subdivision in the county.” 
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Therefore, the budget commission unanimously adopted the proposed alternative 
formula. 
{¶ 3} Following the budget commission’s decision to adopt the 
alternative formula, East Liverpool appealed to the Board of Tax Appeals, which 
reviewed the record, concluded that all statutory requirements for adopting an 
alternative formula had been satisfied, and affirmed the county budget 
commission’s decision.  East Liverpool now appeals from the Board of Tax 
Appeals’ decision and presents this matter to our court. 
{¶ 4} East Liverpool presents three legal issues for our consideration: (1) 
whether the city had a right to notice and an opportunity to be heard at the 
meeting at which the county budget commission adopted the alternative formula, 
(2) whether the budget commission abused its discretion by not considering East 
Liverpool’s financial needs before adopting the alternative formula, and (3) 
whether the General Assembly’s 2002 amendments to R.C. 5747.53 and 5747.63 
apply to 2003 ULGF and ULGRAF allocations.  We answer the first two of these 
inquiries in the negative and the third in the affirmative. 
{¶ 5} In reviewing a decision of the Board of Tax Appeals, we must 
determine whether the board’s decision is reasonable and lawful, Columbus City 
School Dist. Bd. of Edn. v. Zaino (2001), 90 Ohio St.3d 496, 497, 739 N.E.2d 783, 
and we “will not hesitate to reverse a [Board of Tax Appeals’] decision that is 
based on an incorrect legal conclusion.”  Gahanna-Jefferson Local School Dist. 
Bd. of Edn.  v. Zaino (2001), 93 Ohio St.3d 231, 232, 754 N.E.2d 789. 
{¶ 6} There are two methods of allocating ULGF and ULGRAF dollars 
to a county’s political subdivisions: the statutory method specified in R.C. 
5747.51 and 5747.62 and any alternative method adopted pursuant to R.C. 
5747.53 and 5747.63 (the “alternative method”). 
{¶ 7} Concerning the first issue, whether a political subdivision must be 
given an opportunity to be heard when a county budget commission uses an 
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alternative formula—rather than the statutory method—for allocating ULGF and 
ULGRAF dollars, East Liverpool argues that it had a right to be heard under oath 
prior to the budget commission’s adoption of an alternative method.  The 
Columbiana County Budget Commission, however, claims that when it adopted 
an alternative formula for allocating 2003 fund dollars, it only needed to verify 
that the necessary governmental units had approved the proposed alternative 
method before the statutory deadline and did not need to hear evidence of 
financial need.  We agree with the commission. 
{¶ 8} In construing statutory provisions, we have long recognized that 
we will apply the plain meaning of the statute.  State ex rel. Bohan v. Indus. 
Comm. (1946), 147 Ohio St. 249, 251, 34 O.O. 151, 70 N.E.2d 888 (“it is the duty 
of courts to accord meaning to each word of a legislative enactment if it is 
reasonably possible to do so.  It is to be presumed that each word in a statute was 
placed there for a purpose”). 
{¶ 9} The statutory method specified by R.C. 5747.51 and 5747.62 
requires a county budget commission to afford political subdivisions an 
“opportunity to be heard, under oath,” before allocating ULGF and ULGRAF 
dollars because those statutes contemplate a needs-based allocation.2   
                                                 
2.  {¶a} The statutory method for allocating ULGF and ULGRAF dollars is detailed in two 
virtually identical sections – R.C. 5747.51(B) for ULGF funds and 5747.62(B) for ULGRAF 
funds: 
 
       {¶b} “The commission, after extending to the representatives of each subdivision an 
opportunity to be heard, under oath administered by any member of the commission, and 
considering all the facts and information presented to it by the auditor, shall determine the amount 
of the undivided local government fund [or undivided local government revenue assistance fund] 
needed by and to be apportioned to each subdivision for current operating expenses, as shown in 
the tax budget of the subdivision.  This determination shall be made pursuant to [the method of 
allocation detailed in this statutory section, i.e., ‘the statutory method’], unless the commission has 
provided for [an alternative] formula pursuant to section  5747.53 [or 5747.63] of the Revised 
Code.” (Emphasis added.) 
 
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{¶ 10} The alternative method under R.C. 5747.53 and 5747.63, however, 
does not require the budget commission to afford political subdivisions an 
opportunity to be heard under oath before allocating ULGF and ULGRAF dollars, 
because those statutes only require the county board of commissioners and the 
appropriate political subdivisions to approve the alternative formula before it is 
adopted by the budget commission.  Accordingly, when the commission and the 
county’s political subdivisions have already approved an alternative formula, the 
statutes do not require the commission to provide a hearing prior to adopting an 
alternative formula.3 
{¶ 11} The second issue before this court involves East Liverpool’s 
contention that the county budget commission abused its discretion when it 
adopted the alternative formula without considering East Liverpool’s financial 
needs.  Noting that this court has long upheld the use of alternative formulae for 
distributing ULGF and ULGRAF dollars, the commission argues that it properly 
followed the alternative method for allocating 2003 fund dollars to Columbiana 
County’s political subdivisions.  We agree. 
{¶ 12} Prior to a 2002 amendment, the alternative method required the 
county’s largest city to approve a proposed alternative formula before the county 
budget commission could adopt it and distribute the funds to the county’s political 
subdivisions.  Prior R.C. 5747.53 and 5747.63, 1991 Am.Sub.H.B. No. 298, 144 
Ohio Laws, Part III, 4475, and 1989 Am.Sub.H.B. No. 111, 143 Ohio Laws, Part 
II, 2636.  That former system enabled Columbiana County’s largest city, East 
                                                 
3.  {¶a} The alternative formula method for allocating ULGF and ULGRAF dollars is detailed in 
two virtually identical sections – R.C. 5747.53 for ULGF funds and 5747.63 for ULGRAF funds: 
 
       {¶b} “In lieu of the [statutory] method of apportionment of [ULGF and ULGRAF dollars], the 
county budget commission may provide for the apportionment of the fund under an alternative 
method * * *, [which] shall have first been approved by” the county board of commissioners and 
the appropriate political subdivisions and adopted “not later than the first Monday of August of the 
year preceding the calendar year in which distributions are to be made under it.” 
 
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Liverpool – with 12 percent of the county’s population – to secure a higher 
percentage of the local government funds. 
{¶ 13} Effective August 29, 2002, however, the General Assembly 
amended R.C. 5747.53 and 5747.63 to allow ULGF and ULGRAF money “to be 
distributed among subdivisions under an alternative apportionment scheme 
without the approval of the largest municipal corporation in the county.”  Title to 
2002 Sub.H.B. No. 329.  As explained by this court, pursuant to R.C. 5747.53(C) 
and 5747.63(C) as amended by that act, “the legislative authorities of two or more 
political subdivisions that together have the majority of the county’s total 
population may now adopt resolutions eliminating the requirement that the 
legislative authority of the largest city of that county approve a[ ] ULGF or 
ULGRAF alternative apportionment method for the next year’s distribution of 
funds.”  State ex rel. Satow v. Gausse-Milliken, 98 Ohio St.3d 479, 2003-Ohio-
2074, 786 N.E.2d 1289, ¶6.4  On August 28 and 29, 2002, 26 political 
subdivisions, encompassing a majority of the county’s population, passed 
resolutions to eliminate the requirement that East Liverpool approve the 
alternative formula. 
{¶ 14} The budget commission’s August 2002 alternative formula 
distributed local government funds among the county’s political subdivisions in 
amounts related to each subdivision’s share of the county’s population.  In 
particular, the formula first allocates 50 percent of the fund dollars to Columbiana 
County and $15,000 to each of the county’s political subdivisions and to the 
county parks.  The formula then distributes the remaining fund dollars among the 
county’s political subdivisions in proportion to their populations. 
                                                 
4.  This amendment applies only to counties in which (1) the largest city has a population of 
20,000 or less and (2) that city’s population is less than 15 percent of the county’s total population.  
R.C. 5747.53(C) and  5747.63(C).  Belmont, Clermont, Columbiana, Geauga, and Perry Counties 
are currently affected by the provision.    
 
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7 
{¶ 15} According to the Board of Tax Appeals, the Columbiana County 
Budget Commission adopted a “fair and impartial” alternative formula in August 
2002.  Since nothing contained in the record before us contradicts that conclusion, 
we agree that the budget commission did not abuse its discretion when it adopted 
an alternative formula for allocating 2003 ULGF and ULGRAF dollars. 
{¶ 16} The third and final issue is whether the General Assembly’s 2002 
amendments to R.C. 5747.53 and 5747.63 applied to the budget commission’s 
2003 ULGF and ULGRAF allocations.  East Liverpool claims that the 2002 
statutory amendments did not become effective in time for the other political 
subdivisions to eliminate the requirement that it approve an alternative formula 
for 2003 and, therefore, that the budget commission improperly adopted the 
alternative formula on August 31, 2002.  The Board of Tax Appeals rejected this 
argument. 
{¶ 17} R.C. 5747.53(C) and 5747.63(C) set the same deadline—the first 
Monday in August—both for adoption of resolutions eliminating the requirement 
of approval by the county’s largest city (first paragraph of subsection (C)) and for 
approval and adoption of alternative methods of apportionment (second 
paragraph).  But for 2003 only, the General Assembly extended the time by which 
“an alternative method of apportionment may be adopted and approved” to 
September 2, 2002.  Section 3(A) of 2002 Sub.H.B. No. 329, eff. August 29, 
2002.  East Liverpool contends that the extension is couched in terms that do not 
apply to resolutions eliminating the requirement of approval by the largest city.  
The county budget commission argues that the General Assembly used broad 
language intended to apply to both deadlines as part of an overall process for 
adopting alternative methods of apportionment.  We agree with the budget 
commission.  The General Assembly originally set the same deadline for both 
actions.  As the Board of Tax Appeals pointed out, it is therefore reasonable to 
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conclude that the General Assembly intended the single time extension in Section 
3(A) to apply to all actions required to adopt an alternative method. 
{¶ 18} For the foregoing reasons, the decision of the Board of Tax 
Appeals is affirmed. 
Decision affirmed. 
 
MOYER, C.J., RESNICK, PFEIFER, LUNDBERG STRATTON, O’CONNOR and 
LANZINGER, JJ., concur. 
__________________ 
 
John R. Varanese and Charles L. Payne, East Liverpool City Law 
Director, for appellant. 
 
Roetzel & Andress and Stephen W. Funk; and Robert L. Herron, 
Columbiana County Prosecuting Attorney, for appellee Columbiana County 
Budget Commission. 
 
Richard A. Horning, for appellees Columbiana County township trustees. 
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