COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 74212 STATE OF OHIO, EX REL : UNNAMED COMMITTEE, ET AL. : : PETITION FOR WRIT OF Relators : : MANDAMUS vs. : : MOTION NO. 97511 COUNCIL OF THE CITY : OF BROOK PARK, ET AL. : : Respondents : : DATE OF ANNOUNCEMENT : OF DECISION : AUGUST 11, 1998 JUDGMENT : WRIT GRANTED. DATE OF JOURNALIZATION : ____________________________ APPEARANCES: For relators: J. Michael Murray, Esq. Jeremy A. Rosenbaum, Esq. Angie Greene, Esq. Steven D. Shafron, Esq. Berkman, Gordon, Murray & Devan 2121 The Illuminating Building 55 Public Square Cleveland, Ohio 44113-1949 For Respondents: David A. Lambros Director of Law 6161 Engle Road Brook Park, Ohio 44142 -2- SWEENEY, JAMES D., J. On March 24, 1998, the relators, the Unnamed Committee1, which circulated and submitted the relevant referendum petitions, and Donald Kitchel and Karen Turner, who are residents, qualified electors, taxpayers and signers of the relevant referendum petitions, commenced this mandamus action against the respondents, the Council of the City of Brookpark, the City of Brookpark and Roseanne Armstrong, Clerk of Council. The relators seek to compel the clerk to issue a certificate of sufficiency of the relevant referendum petitions to City Council and then to compel the City of Brookpark and its council to reconsider the relevant ordinances and either repeal them or submit them to the voters in the next general election. On May 29, 1998, the relators moved for summary judgment arguing that they had fulfilled all the requisites for referendum. On June 29, the respondents filed their brief in opposition to the relators' dispositive motion and moved for summary judgment on the grounds that the relators had not fulfilled the requisite of R.C. 731.32, which requires that whoever seeks a referendum on an ordinance shall, before circulating petitions, file a certified copy of the proposed ordinance with the city auditor. On July 9, 1998, the relators filed a reply brief. For the following reasons, this court grants the relators' motion for summary judgment, denies 1 The members of the unnamed committee are four businesses on Brookpark Road, Rocky's Entertainment Emporium, Inc.; Brookpark News & Books, Inc.; House of Books, Inc.; and Reilly's Steak House, Inc. -3- the respondents' motion for summary judgment and issues the writ of mandamus to compel the City Council of Brookpark to reconsider the relevant ordinances and either repeal them or have them submitted to the voters at the next general election. FACTUAL AND LEGAL BACKGROUND Relevant Provisions on Referendum Article XIII of the Brookpark Charter governs initiative, referendum and recall. Section 13.02 specifically concerns referendum. It provides in pertinent part that the electors of the city shall have the power to approve or reject at the polls any ordinance passed by the council except as provided by the charter. Within thirty days after the final passage by council of an ordinance, a petition, signed by registered electors of the city, not less in number than ten percent of the number voting at the last preceding general election, may be filed with the Clerk of Council, requesting that such ordinance be either repealed or submitted to a vote of the electors. When the petition is filed, the Clerk of Council shall first ascertain the sufficiency of the petition. If it is insufficient, then the electors proposing the petition shall have ten days after notification to correct the insufficiency. If it is sufficient, the council shall within thirty days after the filing of the petition reconsider the ordinance. If, upon such reconsideration, the ordinance is not repealed, the council shall submit it to a vote of the electors on the date fixed in the petition, or if no date is so fixed, then at the first general election in any year occurring more than ninety -4- days after the filing of the petition. Section 13.04 provides in pertinent part that the manner of signing, the method of circulating, and the other requirements of the Constitution and the laws of the State of Ohio regulating such petitions, shall apply except as otherwise provided by the charter. R.C. 731.32 provides in pertinent part: Whoever *** files a referendum petition against any ordinance or measure shall, before circulating such petition, file a certified copy of the proposed ordinance or measure with the city auditor ***. The City of Brookpark Auditor Until 1995, the City of Brookpark pursuant to its Charter had a public official designated as Auditor. Under Article VII, Department of Finance, the Auditor directed that department. Section 7.01 directed that the Auditor be elected. Section 7.02 specified the Auditor's duties. These included compiling estimates of revenues and expenditures for the budget, maintaining a general accounting system for the city government and its offices, submitting monthly financial statements to the mayor and council, annually auditing the accounts of all the offices of the city government and preparing a complete financial statement and report, supervising the assessment of all property within the city for taxation, prescribing the forms of receipts, vouchers, bill and claims for use by the city government, auditing the accounts of a city officer upon the end of his term, supervising the preparation of all payrolls and the payment of all bills, and performing such other duties consistent with his office as may be required by this -5- Charter, by ordinance of the Council, or by the general laws of the State of Ohio. In all, this charter section prescribed fourteen subsections of duties and responsibilities for the Auditor. In 1995, Brookpark amended its Charter to merge the offices of Auditor and Treasurer, and name the new official the Finance Director. The respondents attached to their motion for summary judgment a copy of Ordinance 8091-1995, which submitted the proposed charter amendments to the electors of Brookpark. The gravamen of this amendment was that [a]ll references to Auditor shall be changed to Director of Finance, and all references to Deputy Auditor shall be changed to Assistant Director of Finance. The new Article VII incorporated verbatim, all the identical duties and responsibilities of the Auditor as the duties and responsibilities of the Director of Finance, including the responsibility to perform such other duties consistent with his office as may be required by the general laws of Ohio.2 Thus, the Director of Finance, pursuant to the city charter, has the same duties as the Auditor did. Beginning in 1994 for fiscal year 1993, the City of Brookpark, through regularly passed ordinances, has contracted with an independent accounting firm, Ciuni and Panichi, to conduct the annual audit of the city. The ordinance limited the firm's responsibility to conducting the annual audit. Attached to the ordinance was a letter to the then City Auditor submitting a 2 This new Charter Article also incorporates other duties, which apparently were the duties of the Treasurer. -6- project proposal. This proposal stated that the specific work to be performed was the audit for 1993, rendering an opinion on the city's financial statement as to their conformity with generally accepted accounting principles and assisting Brookpark with its conversion from cash basis financial statements to generally accepted accounting principles. This letter also listed the many other services the accounting firm could provide, but did not explicitly state that such services would be provided to Brookpark. In subsequent years, the ordinance and its corresponding letter of services to be provided, limited the accounting firm's responsibility to the annual audit. The firm said it would advise the city about appropriate accounting principles, but the responsibility for the financial statements, including the maintenance of adequate records, internal control structure policies and procedures, the selection and application of accounting principles and the safeguarding of assets, would remain with the city. The firm also said that if it noted any major problems, it would notify the city. This remained the explicit scope of the independent accounting firm's duties until March 1998, when the contracting ordinance provided that in addition to performing the annual audit, the firm would assist the Finance Director in reaching the goal of preparing financial statements in accordance with generally accepted accounting principles. Each of these contracting ordinances were in effect for one year, running from January 1 to December 31. They were also passed as emergency ordinances after one reading. Council passed the -7- contract ordinance for 1997, Ordinance No. 8279-1996, on October 15, 1996, and the mayor signed it the next day. Its Section 2 specifically provided: This Agreement shall be in full force and effect from January 1, 1997 to December 31, 1997. The contract ordinance for 1998, Ordinance No. 8438-1998, was first read and passed on March 17, 1998, and the Mayor signed it on March 20, 1998. -8- Facts Relating to the Referendum On January 27, 1998, the Council of the City of Brookpark passed Ordinance No. 8398-1997, Public Indecency, and Ordinance No. 8395-1997, Adult Entertainment Businesses. These ordinances will comprehensively regulate the adult entertainment business in the City of Brookpark, e.g., the Adult Entertainment Business ordinance requires that every such business have a license to operate and that every employee of such a business also have a license to work there. On February 6, 1998, in order to comply with R.C. 731.32, the unnamed committee through its attorney filed certified copies of the two ordinances with the Director of Finance for the City of Brookpark. On February 19, 1998, the unnamed committee through its attorney filed with the Clerk of the Council of the City of Brookpark a referendum petition for each of the two ordinances. The Clerk of Council then submitted the petitions to the Cuyahoga County Board of Elections, which opined that there were sufficient signatures on each of the petitions. Then pursuant to the Brookpark Charter and the relevant Ohio ordinances, the Clerk of Council submitted the petitions to the City Council. The City Council placed the two ordinances on the agenda for the regular council meeting on March 17, 1998, for reconsideration. It also asked the law director to examine the petitions. On March 17, the law director opined that the petitions were fatally deficient because they had not been filed with the Auditor as -9- required by R.C. 731.32. The law director reasoned that the independent accounting firm, which performed the audit, was the official who, in fact, performs the duties of City Auditor and thus is the official with whom the filing for R.C. 731.32 should be made. The city council after receiving this opinion removed the two ordinances from the agenda. This mandamus action followed. DISCUSSION OF LAW The parties agree that the requirement of filing a certified copy of an ordinance with the City Auditor before circulating a referendum petition pursuant to R.C. 731.32 is mandatory. State ex rel. Citizens for a Better Beachwood v. Cuyahoga County Board of Elections(1991), 62 Ohio St.3d 167, 580 N.E.2d 1063; State ex rel. Nimon v. Village of Springdale (1966), 6 Ohio St.2d 1, 215 N.E.2d 592; and State ex rel. Mika v. Lemon (1959), 170 Ohio St. 1, 161 N.E.2d 488. The parties also agree, pursuant to Ohio precedent, that if a city does not have an official designated as Auditor, then the filing pursuant to R.C. 731.32 is to be made with the official who in fact performs the duties of city auditor. State ex rel. Donahue v. City of Bellbrook (1975), 44 Ohio St.2d 36, 336 N.E.2d 635, syllabus and Edward Rose of Ohio v. McLaughlin (1970), 22 Ohio App.2d 190, 259 N.E.2d 754. The respondents also submit this deficiency as the only reason for denying the referendum petitions; they argue no other point. Nor do the parties raise whether mandamus is the proper remedy. Nimon; and State ex rel. Watkins v. Quirk (1978), 59 Ohio -10- App.2d 175, 329 N.E.2d 1302. Thus, the sole issue is, who is the official who is the Auditor in fact of the City of Brookpark, the Director of Finance who has the identical Charter imposed responsibilities as the former Auditor or the independent accounting firm who conducts the audit? This court holds that the Director of Finance for the City of Brookpark is the official who is the de facto auditor and with whom filing should be made for purposes of R.C. 731.32. First, the Director of Finance is a public official. The Charter, the primary document of government for the City of Brookpark, creates the position of the Director of Finance. The evidence before this court indicates that he is an elected official. The independent accounting firm is an independent contractor, a private person, and not located in the City of Brookpark. The firm is not a public official. The relevant case authority first specifies that the filing under R.C. 731.32 is to be made with a public official. The Supreme Court of Ohio in Donahue held that the filing in the absence of an official so designated as auditor is to be made with the official who, in fact, performs the duties of City Auditor. The court of appeals in Watkins ruled that the city finance director was the proper official to receive the filing. 59 Ohio App.2d at 183. Similarly, the court in Edward Rose stated that where there is no city auditor any proposed ordinance and any initiative or referendum petition must be filed with the official to whom the duties of auditor have been assigned - that is, with the auditor in fact, whatever his official title. 22 Ohio App.2d -11- 193. Second, the Director of Finance pursuant to the Charter has the responsibility to perform all the exact, identical duties which the Charter imposed upon the Auditor before 1995. This includes the responsibility to [p]erform such other duties consistent with his office as may be required by this Charter, by ordinance of the Council or by the general laws of the State of Ohio. Section 7.02(p) of the Brookpark Charter. The duty to accept filings under R.C. 731.32 would fall under this general incorporation clause. Moreover, the respondents themselves in their attachments admit that the Director of Finance performs the duties of Auditor. Attached to the respondents' motion for summary judgment is the affidavit of Thomas Zammikiel, Executive Assistant to the Mayor of the City of Brookpark. In Paragraph 4 of his affidavit he stated as follows: Typically an Auditor acts more as the chief accountant of a municipality, usually not performing such duties as investments and reconciliation of bank accounts, whereas the Finance Director has a far wider responsibility of the management of the funds of the municipality and the processes which affect those funds as opposed to simply preparing documents and reports and recording figures for those reports. While the Finance Director performs these functions, he/she manages the entire fiscal processes of the municipality. (Emphasis added.) Thus, while the Director of Finance may perform many other duties, he in fact performs the duties of City Auditor. In contrast, the independent accounting firm performs only one -12- or two of the many duties of the Auditor, the annual audit and occasionally aiding the Auditor/Director of Finance in developing forms for accounting. The accompanying letters from the independent accounting firm makes clear that the Director of Finance and his department retain the duties to prepare financial statements (the firm will only assist in their preparation), maintain adequate records and internal controls, select and apply accounting principles and safeguard assets. Thus, the Director of Finance overwhelmingly performs the duties of City Auditor. Significantly, neither the contracting ordinance nor the scope of employment letters provide that the independent accounting firm will perform such other duties consistent with the office as may be required by the charter, ordinance of Council or the general laws of the State of Ohio. Given the limited scope of the independent accounting firm's employment, without explicit authorization there is no certainty that the independent accounting firm would necessarily have to accept the filing of ordinances pursuant to R.C. 731.32. In contrast, the Director of Finance did accept the filing. Next, the respondents face a timing problem in claiming that the independent accounting firm was, in early 1998, the de facto Auditor with whom the filing for purposes of R.C. 731.32 should have been made. Ordinance 8279-1996 contracted with the independent accounting firm to conduct the annual audit for the year ending December 31, 1996. Pursuant to the ordinance, the contract was in effect until December 31, 1997. Ordinance 8438- -13- 1998, employing the independent accounting firm to conduct the annual audit for the year ending December 31, 1997, was not passed until March 17, 1998. Thus, on February 6, 1998, when the unnamed committee needed to file the certified copies of the relevant ordinances to comply with R.C. 731.32, the independent accounting firm was not then currently employed by the City of Brookpark pursuant to ordinance. The respondents argue that it was through these contracting ordinances that the unnamed committee would know who the actual Auditor was. Without a contracting ordinance in effect in February 1998, the unnamed committee could not draw that inference. Finally, this court notes that most of the courts, addressing the issue of which official performs the duties of Auditor if no official is so designated, have ruled that the Finance Director performs those duties. In Donahue, the Supreme Court, after noting that the Finance Director of the City of Bellbrook was responsible for accounting, collection and custody of public funds, control of disbursements and advising on financial matters held that the Director of Finance was the Auditor in fact. In State ex rel. Blackwell v. Bachrach (1957), 166 Ohio St. 301, 304, 143 N.E.2d 127, the court noted that [a]lthough the city of Cincinnati has neither an auditor nor clerk, the finance director of Cincinnati performs the duties customarily performed by such designated officials. Similarly, In Watkins the court of appeals recognized the Finance Director as the proper official to receive the filing. See also, David Rose of Ohio - The director of finance being the -14- auditor in fact, although not in name, the required filings must be made with him. 22 Ohio App.2d at 192. In summary, the Director of Finance is a public official, and the independent accounting firm is not. The Brookpark Charter imposes on the Director of Finance the identical duties that the Auditor had, and the independent accounting firm performs only a small fraction of those duties. The respondents in their submissions admitted the Director of Finance performs the duties of the Auditor. There is no certainty that the independent accounting firm had the duty to accept the filing, and the Director of Finance is required to perform such other duties as may be required by the laws of Ohio. In February 1998, the City of Brookpark had not passed a current ordinance hiring the independent accounting firm. The majority of courts considering this issue have ruled that the finance director is the de facto Auditor. Therefore, this court holds that for purposes of R.C. 731.32, the City of Brookpark's Director of Finance is the official who performs the duties of Auditor. The unnamed committee, thus, fulfilled the requirements of R.C. 731.32 by filing the certified copies of the relevant ordinances with the Director of Finance. The respondents have not otherwise contested the unnamed committee's referendum petitions. The relators have the legal right to the fulfillment of the referendum provisions. Under the Brookpark Charter, the Clerk of Council has the duty to submit the referendum petitions to the City Council, which then has the duty to reconsider the ordinances, either to repeal them or to submit -15- them to a vote as provided by the Charter. Accordingly, this court grants the writ of mandamus and orders the Clerk of Council, to the extent necessary,3 to submit the referendum petitions to the Council of the City of Brookpark. This court further orders the Council of the City of Brookpark to fulfill its duty, pursuant to the Brookpark Charter provisions on referendum, to reconsider the relevant ordinances. The respondents to pay costs. ANN DYKE, P.J., and LEO M. SPELLACY, J., CONCUR. JAMES D. SWEENEY JUDGE .