Court Opinion

ID: 3752063
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:11:55.980366+00
Date Added: 2024-06-11T18:03:52.618696
License: Public Domain

R. C. 349.04 prescribes the method of selection of the board of trustees to exercise the powers of the new community authority which method such section provides "is deemed to be a compelling state interest." Such section provides that the organizational board of commissioners shall appoint at least three, but not more than six, citizen members of the board of trustees to represent the interests of present and future residents of the new community district and one member to serve as *Page 223 
a representative of local government. The section further provides that "the developer shall appoint a number of members equal to the citizen members to serve as representatives of the developer."
The cities of Trotwood and Dayton have entered into contracts with the developer which include an agreement that the members of the board of trustees appointed by the developer shall be approved by such cities.
The majority opinion states:
"This is a reasonable arrangement, involving no one's rights other than the statutory right of the developer, and may be said to be in furtherance of the state's interest in a manner not required by the statute. What we have here is an individual statutory right which may be waived."
I am unable to agree with this conclusion. Since the section makes the method of appointment of trustees a matter ofcompelling state interest, the developer cannot waive the state's interest. The contracts, in this particular, are contrary to the established public policy laid down by the legislature and are void. This court should so hold and should find merit in plaintiffs' second assignment of error.
The trial court, in addition to reasoning that the developer "may waive his right to appoint members of the board of trustees," as mandated by R. C. 349.04, reasons further that the developer may, notwithstanding his agreement to make appointments if approved by the cities, proceed to make appointments without approval.
If he should do so, then the question arises whether the statute is unconstitutional in providing that it is a matter ofcompelling state interest that the developer shall appoint members of the board of trustees to represent his interests. When the legislature speaks within the powers conferred by the Constitution, its statutes form the public policy of the state.
In addition to mandating the appointment of members of the board of trustees by the developer, R. C. 349.04 (C) provides:
All of the powers of the new community authority shall be exercized by its board of trustees. A majority of the *Page 224 
board shall constitute a quorum, and a concurrence of a majority of a quorum in any matter within the board's duties is sufficient for its determination, provided a quorum is present when such concurrence is had and a majority of those members constituting such quorum are trustees not appointed by the developer. All trustees shall be empowered to vote on all matters within the authority of the board of trustees, and no vote by a member appointed by the developer shall be construed to give rise to civil or criminal liability for conflict of interest on the part of public officials."
R. C. 349.06(I) empowers the board to contract with the developer for, among other things, construction of communityfacilities. R. C. 349.06(J) permits the new community authority through its board to accept grants, loans and commitments of guarantee, including guarantees of community authority bonds from the United States, the state or other public body and to accept financial assistance as may be provided by federal or state laws.
R. C. 349.08 authorizes a new community authority to issue bonds and notes for the construction of community facilities. R. C. 349.10 authorizes the community authority to secure the payment of such bonds or notes by mortgage on community facilities and by pledge of the income source of the authority.
It is contended by plaintiffs that such sections are unconstitutional as being in violation of Sections 4 and 6, Article VIII of the Ohio Constitution. These sections provide:
4. "The credit of the state shall not in any manner, be given or loaned to, or in aid of, any individual association or corporation whatever * * *."
6. "No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise * * * to raise money for, or loan its credit to, or in aid of, any company, corporation or association * * *."
It is entirely possible that the members of the board of trustees appointed by the developer to represent the interestsof the developer, with the added vote of a member *Page 225 
of the board of trustees not appointed by the developer, could control the affairs of the new community authority. Such control would make it possible for that majority of a quorum present at any board meeting to contract with the developer for the construction of public facilities which would not be in the public interest but which would be of great assistance to the developer in the development and sale of his private land and buildings. The possession of such power has a tendency to induce the developer's appointees, who are to represent his interests, to act so as to benefit the developer and interferes with the unbiased discharge of the duties of such appointees to act solely in the public interest.
This court should hold that since the developer has such a measure of control the application for and acceptance by the new community authority of loans, grants and guarantees of its bonds by the state or other political subdivision, constitutes a violation of Sections 4 and 6, Article VIII of the Ohio Constitution. It has been held many times that the legislature cannot do indirectly what it cannot do directly.
In Bazell v. Cincinnati, 13 Ohio St. 2d 63, the court held that the determination of what constitutes a public municipal purpose is primarily a function of the legislative body of the municipality, subject to review by the courts, and such determination by the legislative body will not be overruled by the courts except in instances where that determination is manifestly arbitrary or unreasonable. Such a holding is also applicable to the means of achieving a public purpose authorized by the legislature.
Even though it could be said that the legislation here does not violate the provisions of Article VIII, this court should hold that the provisions of R. C. 349.04, relating to the appointment of members of the board of trustees of a new community authority are arbitrary and unreasonable and not reasonably necessary to the accomplishment of the purposes of R. C. Chapter 349.
Further, this court should conclude that R. C. 349.06 (C), by absolving the members of the board of trustees appointed *Page 226 
by the developer from any civil or criminal responsibility for their actions which may constitute a conflict of interest, as well as the provisions of R. C. 349.04, mandating the appointment by the developer of members of the board of trustees to represent his interests, manifestly represents an arbitrary and unreasonable exercise of legislative power not reasonably necessary to the accomplishment of the purposes of chapter 349 and are, therefore, unconstitutional.
The contracts between Trotwood and Dayton and the developer, in providing that the members of the board of trustees appointed by the developer must have the prior approval of the cities, indicate that they too consider the provisions of R. C. 349.04, relating to appointments by the developer, to be arbitrary and unreasonable and not reasonably necessary to the accomplishment of the purposes of R. C. Chapter 349.
This court should reverse the judgment of the Court of Common Pleas, holding that the aforesaid contracts are not void and in concluding that defendants were entitled to a judgment as a matter of law on all issues posed herein. *Page 227