Wednesday, September 24, 2003
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Wednesday, September 24, 2003 |
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Resignation rocks PTC Auth. Vice-chairman 'stunned' over bad cash flow info, undisclosed Adidas obligation By CAL BEVERLY
The resignation letter Tuesday from the vice chairman of the Peachtree City Development Authority lays out a devastating picture of an appointed government entity facing unforecast cash flow problems, an undisclosed $366,306 sponsorship obligation and an unfocused budgeting process still without "an adequate level of knowledge and control over the accounting function" a year after an independent audit called for such rudimentary accounting procedures. Scott Bradshaw, citing his "grave concern" over the bleak financial situation facing the Peachtree City Tennis Center and Fredrick Brown Amphitheater, resigned after his attempt to have the appointed authority discipline an unnamed manager was rebuffed by the group during a closed session last week. The Citizen made attempts to reach Bradshaw, members of the Authority and other city officials for comment Tuesday afternoon just before final publishing deadline. "We have received highly optimistic financial reports throughout the year," Bradshaw wrote, "and I was stunned to learn on Sept.. 15, two weeks before the end of the fiscal year, of serious cash flow problems. "It was clear ... that the DAPC would have difficulty meeting the final payroll ($36,000) and paying the band ($50,000) for the last performance of the concert series on Sept. 26 and 27," Bradshaw wrote. "Three Authority members have been placed in the untenable position of meeting with staff to resolve this problem." Perhaps most devastating was Bradshaw's discovery of a sponsorship agreement with shoe manufacturer Adidas that obligated the Authority to guaranteeing $366,306 in sales of Adidas products through the privately owned Trading Post tennis pro shop onsite at the Tennis Center. "The Authority made the huge guarantee in exchange for the promise of $15,000 per year in t-shirts, hats, travel bags, etc., for distribution at tennis tournaments and the Amphitheater," Bradshaw wrote. "The agreement further provides the DAPC Executive Director [Virgil Christian] a Level 1 position on the Adidas Advisory Board." That February 2002 agreement, Bradshaw, charges, "was never discussed or voted on by the Authority." Bradshaw, a well-known developer, also charged that the privately-owned pro shop was commingling funds with those of the Authority, mixing the Authority's court fees with the pro shop's sale of clothing and tennis rackets. "I have no reason to believe there is wrongdoing in connection with these transactions," Bradshaw wrote. He called for better accounting procedures to accurately define which money was which. The outgoing member said the Authority faces further cash flow problems after spending $130,000 more than it took in during the previous year. "The best action seems to be to defer payments to vendors, which in some cases are past due, and hold checks that are already written but not mailed," Bradshaw said. "Unfortunately, the necessary deferrals of major financial obligations will contribute to even more severe cash flow problems in the new budget year," Bradshaw wrote. He said an outside auditing firm was cut as a cost-saving measure by the executive director without authorization by the Authority. "This major change was made without vote by the Authority," Bradshaw wrote. "The Authority should give serious consideration to immediately engaging the services of an outside accountant." Bradshaw further detailed the lack of any specific accounting for more than $2.2 million in money spent on expanding and renovating the Tennis Center and the Amphitheater administrative office. "Members of the Authority have been provided with a variety of somewhat disconnected change orders, contracts and partial lists of unpaid suppliers and subcontractors," Bradshaw wrote. "It is very difficult for anyone to clearly understand the total financial picture related to these capital expenditures." Bradshaw also charged that Christian had violated an Authority directive to implement a hiring freeze several months ago. "The Executive Director has subsequently replaced two full-time and two part-time employees in clear violation of the mandate," Bradshaw wrote. Contacted Tuesday, Bradshaw said that no illegal activities have occurred on the part of the Authority members, but, "Some poor decisions were made and they could have been better managers."
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