Friday, May 31, 2002
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Friday, May 31, 2002 |
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With deal in place, PTC's bond sale allowed to proceed By JOHN
MUNFORD
Questions over the legality of Peachtree City's hotel-motel tax contracts with the Peachtree City Airport Authority almost cost the city "well over $100,000." But some last-minute negotiations and an emergency called meeting of the authority Tuesday night seems to have solved the problem. The problem was with the city's issuance of bonds to refinance the airport authority's existing debt of $1.5 million which will result in savings from a lower interest rate. The action was approved by voters on a referendum in last November's general election, and the yearly payments that end in 2015 vary from a low of $155,000 to a high of $164,000. The city's bond attorney told officials Friday that since the validity of the city's intergovernmental contract with the authority is in question, another contract would be needed to make sure the city's plan to cover the debt was in writing, explained Mayor Steve Brown. A new contract was approved by the authority Tuesday night and signed by Brown Wednesday morning. Because the matter had to be handled quickly, council members were notified of the situation before Brown signed the contract, the mayor said. The old contract, signed by former Mayor Bob Lenox last year, has been called into question by council members who claim he didn't have authority to sign the deal because of a change that required the authority to agree with the city in order to reduce payments to the authority from the hotel-motel tax fund. Lenox claims that change was in the contract council voted unanimously to authorize him to sign at its June 6 meeting. The new agreement signed by Brown and the authority essentially says that the city agrees to take on the authority's existing debt and that in turn the authority will continue to provide the service of running the airport for the city, said authority attorney Doug Warner. Without the agreement, it could have cost the city "well over $100,000" in fees for the bond transaction, Brown said. It also could have forced the proceeds from the bond sale to be put into escrow, said authority attorney Doug Warner.
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