Wednesday, October 8, 2003
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Wednesday, October 8, 2003 |
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DAPC 'shell game' revealed By J. FRANK LYNCH
The "crown jewels" in Peachtree City's civic crown, the Fred Brown Jr. Amphitheatre and the city Tennis Center, are coming off their best years yet, observers insist, even if the future of the quasi public-private authority that managed them remains in doubt. But statements on accounts maintained by the Development Authority of Peachtree City, requested by city officials after the authority "resigned" on Sept. 25 from its agreement to run the venues, provide some of the first hard evidence of the DAPC's questionable bookkeeping practices, dubbed a "shell game" by Mayor Steve Brown. Starting with the 2003 fiscal year, the DAPC was to receive approximately $265,090 in hotel-motel tax revenues for operations. That amount, by agreement, was not scheduled to change for the next seven years. Another $247,367 in annual payments showed up on the city's 2003 spending plan as well, where it will stay until 2018 to pay off a 15-year loan obtained through the Georgia Municipal Association by the city to complete the most recent amphitheater renovations and to pay to expand the Tennis Center. As collateral for the loan, the city, not the development authority, offered up City Hall and the Leach Fire Station on Ga. Highway 74. All total, some $512,463 in funds were funneled last year by the city to the DAPC, but the city had no way of monitoring where that money, all of it proceeds from the hotel-motel tax, went once it was deposited into DAPC accounts. Paul Salvatore, Peachtree City's finance director, was suprised to find out last week that the DAPC was lumping the entire $265,090 into one account, "Economic Development," though the city has been designating the tax revenue, distributed in monthly payments, for very specific uses: $25,000 each to supplement the Amphitheater and economic development efforts, and a whopping $155,000 to supplement the Tennis Center. Another $60,096 added by the DAPC under "Economic Development" was earmarked specifically by the city to pay down "existing debt service," the interest payments on $1.5 million in short-term loans owed by the DAPC, alledgedly borrowed to meet operating expenses, said Salvatore. The balances on the other two DAPC accounts, one for operations at the amphitheater, another for the tennis center, suggest that had the city's appropriations been credited under the proper accounts, both facilities would have finished the fiscal year last week in the black. The Sept. 25 records show the amphitheater made $1.426 million last season on $1.314 million in expenses, or a profit of about $111,000. The Tennis Center, meantime, had revenues of $897,761, while expenses as of Sept. 25 totaled $963,153, a deficit of more than $65,000. Mayor Brown said at Thursday's council meeting that those figures prove that the DAPC had been using profits from the amphitheater to cover red ink at the tennis center, which managers agreed not to do when they raised ticket prices to shows at The Fred last year. Brown said the $111,945 surplus at the concert venue would easily cover the tennis center's losses this year, and that explains why everyone associated with the facilities were crowing about the success of the season. It's a "shell game," said Brown, especially when considering that the "Economic Development" fund is also in the red for the year. "That's the account they are drawing off of to pay the legal fees in the Kristi Rapson lawsuit," said Salvatore, admittedly perplexed by the whole arrangement. The federal equal pay lawsuit filed by Rapson against the DAPC cost the authority more than $90,000 in legal fees last year, according to information leaked to the media recently. The DAPC had not bought liability insurance to cover such lawsuits. According to Salvatore, it was all drawn from "Economic Development," which as of Sept. 25 was in the red by $6,712. "I can't find any other explanation for why they'd disperse the funds like this," he said. Had the Rapson lawsuit not been an equation, and the DAPC had dispensed the subsidies from the hotel-motel tax into the accounts as directed in the city budget, both the tennis center and amphitheater would have been operating clearly in the black on Sept. 30, the end of the spending year, Salvatore insists. McMullen, on the job for barely four months, worked around the clock and through the weekend in the days after the DAPC first said it was quitting the venue business, only to see the DAPC renege on its offer less than a week later to start negoatiations with a potential private management group. At last Thursday's council meeting, McMullen briefly described the three alternatives his staff came up with to keep the venues operating until a better long-range solution could be found. When the DAPC went back on its resignation offer, the hard work from McMullen, Salvatore, Assistant City Manager Colin Halterman and others went by the wayside, insiders at City Hall say. After the council meeting, an angry affair that ran on past 11:30 p.m., a clearly frustrated McMullen summed it up this way when asked his opinion of the latest DAPC turn a day earlier: "We've got to solve this problem," he said. "We've got to. I've been here five months and I haven't made any progress at all." "We've got to solve this," he said again. "It's destroying the reputation of the city."
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