City of Hillsboro agrees to cover finding for recovery against former auditor, legal fees

Following a 28-minute executive session to discuss personnel during their Nov. 14 meeting, Hillsboro City Council voted unanimously to approve two ordinances to reimburse a former city auditor for a finding for recovery issued by the state and related legal fees following the city’s 2022 audit.

The finding was issued over two years after a much-debated retirement payment to a former Hillsboro Municipal Court clerk. As previously reported, in February 2024, the Ohio Auditor’s Office issued the finding for recovery against former Hillsboro Municipal Court clerk Diane Seeling and former City Auditor Alex Butler “and his bonding company Cincinnati Insurance Company, jointly and severally, in the amount of $20,054, in favor of the City of Hillsboro’s General Fund.”

Council entered the executive session prior to considering first readings of ordinances and resolutions, at the request of Law Director Randalyn Worley, with council member Jason Brown inviting former city auditor and current Highland County Auditor Butler to enter the session with council and administration.

There was no discussion of either ordinance in open session.

After suspension of the three-reading rule, council first voted 7-0 to approve an ordinance authorizing payment of attorney fees under the moral obligation doctrine as an emergency.

According to the ordinance, this covers “the payment of Mr. Butler’s legal fees in the amount of $4,530.75.

“Pursuant to the moral obligation doctrine, a municipality has the authority to enact an ordinance appropriating money to pay a claim which is by law unenforceable against it, but which on principles of justice and equity constitute a moral obligation of the municipality,” the ordinance says. “Former city auditor Alex Butler incurred certain legal fees in relation to a finding for recovery concerning a payment made to former municipal court clerk Diane Seeling that [was] opined by the former city law director, Fred Beery, to be lawful.

“Council finds that Mr. Butler relied on legal advice to remit payment, along with a court order, and was not reckless or negligent in his actions, and therefore, Council finds that under the moral obligation doctrine, payment of attorney fees is warranted.”

As reported over two years ago, former Hillsboro Municipal Court Judge David McKenna issued an order Sept. 8, 2021 that “the city shall pay accumulated benefits” for a retiring municipal court employee “according to the city policy and bill the Highland County commissioners for their proportional share of the full amount.”

As previously reported, when the city was notified of the proposed finding for recovery in November 2023, current law director Worley wrote that the city acted on legal opinions from former law director Fred Beery and a court order by former Judge McKenna.

"Mr. Beery advised city officials that the court order was lawful and instructed them to comply with the order,” Worley wrote. “The city, in reliance on the legal counsel's recommendation and in adherence to the court order, fulfilled its obligation by compensating Ms. Seeling accordingly.

"In light of these circumstances, we kindly request that the Auditor of State refrain from making a Finding for Recovery against the city of Hillsboro. The decision to make the payment was based on legal advice, and the city acted in good faith under the belief that it was following a lawful court order."

Council also voted 7-0 to suspend the three-reading rule and to approve and adopt an ordinance authorizing a repayment plan in accordance with ORC 9.24(B)(2), also as an emergency, for the finding for recovery.

According to the ORC under that section, “A finding for recovery is unresolved unless: The debtor has entered into a repayment plan that is approved by the attorney general and the state agency or political subdivision to whom the money identified in the finding for recovery is owed. A repayment plan may include a provision permitting a state agency or political subdivision to withhold payment to a debtor for goods, services or construction provided to or for the state agency or political subdivision pursuant to a contract that is entered into with the debtor after the date the finding for recovery was issued.”

“Council desires to fully resolve the Finding for Recovery by authorizing a repayment plan,” the ordinance says.

For more from Thursday’s meeting, see: https://highlandcountypress.com/news/kathryn-hapner-sworn-hillsboro-cit…

and

https://highlandcountypress.com/news/real-estate-purchase-parking-lot-r….

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