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2 lawsuits go after different debts

By J. FRANK LYNCH
jflynch@theCitizenNews.com

Other than common defendants, there is a “substantial difference” between two lawsuits recently filed against Peachtree City and the city’s Development Authority, Mayor Steve Brown said.

In a letter sent to the media on Monday, Brown sought to clarify the two lawsuits:

“The $1 million in debt from Peachtree National Bank was not a lump sum loan,” the mayor wrote. “Instead, it was accumulated on an annual basis over a period of years. The funds were used for funding operations when the revenue ran out at the end of each summer.

“The real tragedy is that they never had a budget and that they were content with deficit spending to fund a local government operation,” Brown said.

“The lawsuit with Group VI and Foley is based on change orders that Former DAPC Executive Director Virgil Christian requested and signed for without there ever being a vote of the DAPC members,” Brown continued. “The city was never consulted about the changes ... and a budget amendment was never requested by the DAPC to fund any change orders.”

Brown emphasized that the city financed the expansion of the Tennis Center and paid the contracted amount for the construction to various contractors.

“We did not find out about the unauthorized changes/expenses until we kept receiving invoices for the project,” Brown said.

The mayor alleges that Christian took out a loan with Regions Bank for approximately $200,000 to cover the change orders, but that the DAPC board never approved that loan either.

Regions Bank recently made an offer to the city to settle the unpaid debt, but the City Council refused. So far, Regions has not taken legal action against the city.

Attorneys for the city are still reviewing the specifics of the Group VI and Foley Designs lawsuit, but Brown said the city was standing firm against the Peachtree National Bank claim.

“We’re prepared to take it to court,” he said.

In August, Peachtree National Bank filed suit against the city and DAPC seeking payment on nearly $1 million in outstanding loans made over a period of time ending last year. Those funds were allegedly used to fund operating expenses at the Tennis Center, which is a violation of law, Brown said.

Last week, Group VI Construction and Foley Design Architects filed suit against both the city and DAPC as well, demanding payment on nearly $229,000 in charges related to expansion of the Tennis Center in 2002.