The Fayette Citizen-News Page

Wednesday, August 14, 2002

Authorities' tax pacts 'invalid,' Council told

By JOHN MUNFORD
jmunford@TheCitizenNews.com

Peachtree City might end up taking its development and airport authorities to court to have their hotel-motel tax contracts declared invalid.

That's the recommendation from Winston Denmark, the independent attorney hired by the City Council to investigate the validity of the contracts, which were signed last year by then-Mayor Bob Lenox and representatives of each authority.

Denmark reported to the council that the contracts authorized by the council last year were not the same contracts signed by the mayor and the authorities. The agreements, Denmark wrote, "are unauthorized and therefore invalid."

The sticking point involved the city's ultimate control over a tax it levies. Mayor Steve Brown and council members Steve Rapson and Dan Tennant contend the contract they authorized would have allowed the city to change or delete the tax at the council's sole discretion. The documents signed by Lenox contained the provision that the council would have to get the authorities' OK to change the funding.

The contracts stipulate how much hotel-motel tax funding the authorities get to operate Falcon Field, the city tennis center and the city amphitheater.

"Once the court declares the contracts invalid, the City would be free to enter into new agreements with the authorities or support their operations on terms approved by City Council," Denmark wrote, adding that the city "has no obligation to continue payments to the authorities."

Council is slated to discuss the Denmark report at its regular meeting Thursday night at 7 p.m. at City Hall.

The investigation was ordered by council earlier this year after councilman Steve Rapson and Dan Tennant claimed the versions of the contracts signed by Lenox differed dramatically from the versions council approved last year.

The versions Lenox signed required both the city and the authorities to agree on any possible change to the hotel-motel tax funding, while the original agreement said the city could change the funding "at its sole discretion."

Lenox and others have claimed that the changes were shared with council members and the amended documents were provided to each council member the evening it voted on the matter June 7 of last year. But the council "books," the binders of information provided to council members, only contained the original version of the agreements, Denmark noted in his 29-page report.

Denmark also noted that during the June 7, 2001 meeting "no member of City Council, the city attorney, nor any member of the staff mentioned the revised Airport Authority agreement placed on the dais."

During the discussion of the contracts at that meeting, City Attorney Rick Lindsey specifically referred to the version of the contracts that was in the council book, Denmark added.

Denmark also said he found insufficient evidence to bolster claims that Lenox, Lindsey, City Manager Jim Basinger and others conspired to conceal or enact the revised versions of the hotel motel tax contracts "to protect the authorities' funding source from the incoming Brown administration, which many felt would be hostile towards the authorities."

"There is insufficient evidence to support the notion that any individuals acted in concert to conceal the nature of the agreements executed, to engineer a so-called 'bait and switch' or to engage in unlawful activity," Denmark wrote. "... In the end there were simply no facts or evidence which would give rise to the inference of wrongdoing."

But Denmark did not totally dismiss the possibility that the actions taken by Lenox and others were part of a conspiracy.

"By the same token, however, Special Counsel cannot definitively rule out the possibility that a conspiracy existed," Denmark wrote. "The lack of evidence works both ways."

At least one council member thinks taking the matter to court is not a good solution. Councilman Dan Tennant, in a letter to his fellow council members and staff members of the authorities, says the differences should be resolved at a public meeting between council and the authorities ... not in court.

"Further legal battles with the airport and development authorities are not the answer," Tennant wrote. (The full text of the letter is printed on Page 8A.) "The only things that avenue promises are more legal fees and even greater bitterness with one or more parties."

A meeting would allow all participants "... to literally sit down in a calm and reasonable manner to express our views, to iron out our differences, to voice our concerns, and to try to put the past behind us and move forward in a manner which benefits all, most importantly, the tax paying citizens of Peachtree City."

Tennant also said the "acrimonious behavior" from various parties debating the issue has built a level of mistrust in citizens.

"I don't know about you, but I think the average citizen is losing complete faith in our city government and the way it works, and the current combative and antagonistic atmosphere that pervades the leaders of this community is indeed becoming a cancer that is endangering the vitality and very life of public service in Peachtree City," Tennant wrote.