Development Authority Scandal: relevant articles

You can do an advanced search through some Internet media services and find these. I listed only the two articles below because they are more applicable to the recent story regarding the use of city tax dollars to pay these debts. This should answer bad_ptc's questions on legal authority and accountability.

Wednesday, January 8, 2003
PTC Authority contracts may be illegal
By JOHN MUNFORD

A new legal opinion from Peachtree City's new municipal attorney and its bond counsel questions whether the city's development authority can legally operate the city's tennis center and amphitheater under its current contracts with the city.

Georgia law, which delineates the powers of development authorities, doesn't "appear" to "authorize a development authority to own, operate or manage an amphitheater or tennis center," according to the opinion from city attorney Theodore P. Meeker III and bond attorney Earle R. Taylor III.

The attorneys also indicated the city can "assume" the authority's current $1.456 million in debt only by creating a recreational authority to issue revenue bonds to repay the debt, or by holding a referendum to allow voters to approve a bond issue or by funding the debt through the city's bricks and mortar program and having the city assume operations of both facilities.

The city council and the authority had been in negotiations over how to pay for the authority's debt, part of it incurred by the recent tennis center expansion.

The authority planned to retire its debt over a 20-year period after council under then-Mayor Bob Lenox agreed in 2001 to guarantee the authority $265,000 a year from the city's hotel-motel tax revenues. The majority of the facilities budgets are funded by revenues from ticket sales, memberships and court fees but the hotel-motel tax funds have been used to subsidize operations also.

Incoming Mayor Steve Brown raised objections to the funding method and questioned the legality of the authority's management contracts for operating the tennis center and the Frederick Brown Jr. Amphitheater.

Last month, the authority announced it was hiking user fees and ticket prices at both facilities to lessen the reliance on the hotel-motel tax funding.

Tate Godfrey, chairman of the Development Authority of Peachtree City, said if he felt comfortable about the venue's future in the hands of the current city leadership, he "might not have a problem in seeing if someone else can take them" and operate both facilities. But Godfrey said he lacks the comfort level he's seeking, particularly with the rumors that Brown wants authority executive director Virgil Christian fired.

Brown previously denied that he was "out" to get Christian, but several weeks ago he called for Christian and all the authority members to resign because of what Brown called financial mismanagement. Brown has also referred to Christian as "the highest paid public official in the county."

"I feel like there's another agenda here to do something with these facilities," Godfrey said. "I just find it odd that after 10 or 12 years of doing this it's improper. Why didn't the bankers, lawyers and politicians say anything about this before?"

Godfrey said Tuesday that he hadn't seen the opinion from Meeker and Taylor but the authority would "evaluate it when we see it and go from there."

"I don't know what the city plans to do with this," Godfrey said.
Authority members have argued the tennis center and amphitheater are being operated legally because they help develop trade, commerce, industry and employment opportunities in the city. Both facilities are used to entertain industrial and business prospects and both are also shown to industrial and business prospects in tours of Peachtree City.

Currently, the authority manages the tennis center and amphitheater operations in exchange for monthly payments from the city's hotel-motel tax fund to subsidize both venues along with economic development initiatives. Both operations have been running at a deficit in recent years.

Last year, Mayor Brown asked the authority to cut back its dependence on the hotel-motel tax. Since then, representatives of the authority and council hammered out a new agreement that would cut the authority's share of hotel-motel tax funds by $85,000 this year to $180,000. Next year, the authority's take would be capped at a maximum of $140,000, but it would actually receive 15.113 percent of the hotel-motel tax collections.

In the third year, the authority must set a goal of reducing its hotel-motel tax funds to a maximum of $100,000.
The authority also stipulated in the agreement that it will no longer seek long-term debt to fund projects for the tennis center or amphitheater; instead, any such projects must be funded by the city.

That agreement, however, depends on the city assuming the authority's indebtedness, most of which was used to improve the tennis center and amphitheater, which are both owned by the city. Otherwise, the authority might be left with a significant cut in funding and no way to pay its loans back.

Although most of the authority's current $1.45 million in debt was for capital improvements, a portion of it is for operating expenses. The authority uses a revolving line of credit to pay expenses in months when revenue dwindles. Those funds are repaid again on a seasonal basis such as when summer concert season tickets are purchased at the amphitheater and when the tennis center gets its membership revenues.

Meeker and Taylor also indicated they were willing to meet with the development authority and its attorney to discuss their opinions in detail and "consider any contrary viewpoints that can be offered ... in an effort to clarify and resolve the issues addressed in this memo."

Members of the development authority are Tate Godfrey, Brian Palmitessa, Bob Brooks, Scott Bradshaw, Belinda Sward, Scott Formel and Doug Warner

Wednesday, January 8, 2003
Turns out, Mayor Brown was right . . .
By CAL BEVERLY
Publisher

Well, Ollie, it's a fine mess you've got us in.
Laurel and Hardy slapstick comedies come to mind with the latest chapter in the Peachtree City Tennis Center mess.

The new city attorneys and the city's bond attorney have issued an opinion that in effect says, Steve Brown was right.
Turns out the city's autonomous development authority is operating both the new tennis center and the Fred Brown Amphitheater in violation of state law and a Georgia Supreme Court ruling.
Further, state law prohibits the city from picking up the authority's $1.456 million debt, according to the Jan. 3 opinion from Theodore P. Meeker, III, the city attorney, and Earle R. Taylor, III, the city's attorney for borrowing issues.
In addition to state law against a city assuming debt of an authority, the state's constitution "also prohibits the city from 'assuming' or 'paying' the authority's debts without the assent of a majority of the city's qualified voters," the attorneys wrote.
The attorneys said even an intergovernmental agreement between the two parties can't get around the rules. "In summary, it is doubtful that the development authority is authorized by law to operate or manage either the tennis center or amphitheater on behalf of the city," the city's attorneys wrote.

So, the grand experiment fashioned under the reign of Mayor Bob Lenox in the early 1990s of having an industrial development authority run an entertainment venue and later an exclusive tennis center however successful or unsuccessful that role may be adjudged today is just simply unlawful.

Some questions arise.
How did we get into this mess? Why didn't previous city and bond attorneys do a little legal research to find out whether such facilities could be operated by an appointed group supposedly created to bring new industry to town?

The laws and cases cited in the Jan. 3 memo to the city seem overwhelmingly to shout, "You can't do this!"

Were the previous rulers and authorities so insulated from reality outside Peachtree City that they either ignored the laws and rulings or did they suppose regally that they could get away with it just because of who they were?
One wonders.

Another wonderment: Now what?
The city's new legal eagles have some possibilities.
"First the city can hold a referendum on whether the [$1.456 million] debt can be incurred," attorneys Meeker and Taylor wrote.
"The second option would be to have a recreation authority created by the Georgia legislature through local legislation," the memo said. "If a recreation authority was established, that authority could then operate and manage both facilities and could also make provision for the existing [debt] of the development authority."
Just like Mayor Brown has suggested.

OK. It's time for the development authority to recognize reality and Georgia law and get cranking on getting out of the amphitheater and tennis center business. Backed by snarling anti-Brown advocates, the authority could embark on a fruitless legal challenge to established state and case law and continue spending money they don't have on an unwinnable position.

Or the authority could face up to both legal and political reality and start ensuring a graceful exit from tasks it should never have embarked upon in the first place.

A new city recreation authority will be lawfully entitled to operate the two facilities, and likely will do those jobs well. Tennis welfare as we know it may end, subjecting the several hundred members of the tennis club to steeper fees. Amphitheater tickets may go up.

In both cases, financial reality requires that such specialized venues move toward self-sufficiency. In other words, as in any business, they should pay their own freight, carry their own weight, without being a drag on decreasing city tax revenues.

Once this is past, the city can begin getting the much-needed TDK Boulevard extension under construction and the development authority can turn its primary attention back to its lawful primary business of attracting new industry to our county.

Will that end the fractiousness in Peachtree City politics? One can only hope ....

Found another one on Development Authority Scandal

Submitted by Jones on Fri, 11/24/2006 - 8:32pm.

This one also has some relevance since Group VI is involved. This one kind of floored me. If I'm reading it correctly, the chairman of the Peachtree City Development Authority also worked for Group VI. It looks as though he voted on contract awards for Group VI that are linked to this lawsuit.

Wednesday, October 8, 2003
What about the law, what about ethics in PTC tennis scandal?
By CAL BEVERLY
Publisher

For Brutus is an honourable man;
So are they all, all honourable men
... I will not do them wrong; I rather choose
To wrong the dead, to wrong myself and you,
Than I will wrong such honourable men.

Mark Antony's speech from Julius Caesar, Act 3, Scene 2
The Development Authority of Peachtree City wants a do-over. Voting with a bare quorum of four members, the DAPC last week took back their management contract resignation.

"However, after much consideration, we believe that the management of these two now significant facilities is beyond the scope of a part-time, volunteer authority and that the expertise of the city's full-time employees is required to continue the ongoing operation and success of these venues," wrote Chairman Tate Godfrey in the resignation letter of Sept. 25, a week before the do-over.
Many of us could not agree more. So why did the DAPC take the tennis center and amphitheater back after only a week?

"Cooler heads," is what Peachtree City Councilman Dan Tennant says he is after, playing a power broker's role in the city-DAPC dispute. There's some exquisite irony in that role reversal, but whatever that says of politicians running for reelection, a few questions must be asked.

Here's the problem. DAPC Chairman J. Tate Godfrey is senior vice president, business development, for Group VI, a Peachtree City-based construction and real estate development company.
Group VI built the most recent expansion to the tennis center, for which it received only partial payment. DAPC still owes a large unpaid bill to Group VI, well over $200,000 in unpaid construction debt.

Godfrey voted at least twice in the past two weeks on issues that directly affect the debt repayment ability of the DAPC. Those votes directly affect the collection of an unpaid $200,000-plus debt owed by DAPC to Godfrey's employer, Group VI.

So far as I can determine, in neither of those two votes did Godfrey make a public disclosure of his potential conflict of interest. In neither of those two important votes did he abstain from voting.
His actions, or lack thereof, raise issues of law and ethics.

You can find the "Development Authorities Law" online as part of the Georgia code of laws. Refer to code section 36-62-5. In part (e)(1)(B) it requires the following of any DAPC member who is employed by any company doing business with the DAPC:
"... [T]he authority may purchase from, sell to, borrow from, loan to, contract with, or otherwise deal with any director or any organization or person with which any director of the authority is in any way interested or involved, provided (1) that any interest or involvement by such director is disclosed in advance to the directors of the authority and is recorded in the minutes of the authority, (2) that no director having a substantial interest or involvement may be present at that portion of an authority meeting during which discussion of any matter is conducted involving any such organization or person, and (3) that no director having a substantial interest or involvement may participate in any decision of the authority relating to any matter involving such organization or person."

Did Godfrey's two votes, one to resign the contract and the one to renege on the resignation, violate the code section quoted above? You be the judge.

Then there's the matter of ethics, specifically the Peachtree City Code of Ethics adopted as the law in the city most recently this past April.

The city code sections specifically apply to the DAPC and say this: "Sec. 62-83.Abstention. An official or employee who has an interest that he has reason to believe may be affected by his official acts or actions or by the official acts or actions of the city shall disclose that interest. Such official or employee shall abstain from participating in any such discussion, voting or otherwise participating in any official acts or actions affected by such interest. That interest shall be disclosed by such official or employee prior to there being taken any official act or actions. (Ord. No. 802, 4-17-03)."

Did the DAPC chairman and Group VI officer disclose his potential conflict of interest? Did he abstain from voting? Were his votes, absent disclosure, valid and binding?

Another problem area is Section 62-81, incompatible employment: "No official or employee shall engage in or accept employment with or render services for any private business or professional activity when such is adverse to and incompatible with the proper discharge of his official duties or would tend to impair his independence of judgment or action in the performance of his official duties. (Ord. No. 802, 4-17-03)."

Do you think that a $200,000 debt owed by DAPC to Godfrey's employer might "impair" Godfrey's objectivity on DAPC's financial affairs?
And this one: "Sec. 62-89.Disclosure of relationships.
"(a)Each party subject to this article shall disclose to the city council, either orally or in writing, the following information:
"(1)Any current business interests between or among any parties subject to this article, with a description of such involvement;
"(2)Any business interests between or among any parties subject to this article which have been terminated within the past six months; and
"(3)Any business interests between or among any parties subject to this article anticipated in the next six-month period.
"(b)Additionally, each party subject to this article shall inform the city council, either orally or in writing, of any business relationship entered into with another party subject to this article, within ten days of such contractual or implied relationship.
"(c)Failure on the part of any party subject to this article to comply with the provisions of this section shall be deemed to be a violation of this article. (Ord. No. 802, 4-17-03)."
Was this done? If not, why not?
If the chairman should have recused himself from voting on the management contract, what effect does that have on the bare-quorum 4-0 vote to rescind the management contract resignation? If only three could vote on the matter under the city code, is the resignation still in effect and unrescinded?

These are questions of law and ethics, involving a public official. Whatever you think should happen to the tennis center and amphitheater, no one, including public official Dan Tennant, should imagine that these questions can any longer be ducked.

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Law and ethics: Dan Tennant?

Submitted by johenry on Sun, 11/26/2006 - 8:52pm.

This column from Cal Beverly is down right funny. Is he really asking flip-flop Dan to seriously take law and ethics into consideration?

Tate Godfrey and all the other authority boys couldn't keep their hands out of the cookie jar. Dan Tennant wanted to be part of that elite club sooooo bad.

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Remember PCDC ???

Submitted by 30YearResident on Sun, 11/26/2006 - 2:56pm.

Isn't Group IV the old PCDC, same folks, just under a different name... apparently, still doing the same stuff to the PTC taxpayers.

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No, they are not PCDC

Submitted by IMNSHO on Sun, 11/26/2006 - 3:40pm.

PCDC is now Pathway Communities. Group VI may have folks that were involved on both, I really don't know. But they're *not* PCDC.

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Why DPAC's debt should NOT be paid

Submitted by bad_ptc on Fri, 11/24/2006 - 9:41pm.

Just a few "News Articles" that I had time to research.
Jones, I included yours as well.

Part 1 of 2

Part 2 of 2

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tennis center debacle

Submitted by dollaradayandfound on Mon, 11/27/2006 - 8:17am.

Is it just me or do I get the distinct impression that our town management and the town attorney want to pay the debts of the old development authority, even if the loan was misarranged, illegally signed, and poorly built; and, with much of the money used to pay for "non capital" uses?
Are banks, especially ones partially owned by locals, more worthy of a loan repayment than say, I am?

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Citizens Fully Support The Taxpayer's Tennis Center Heist

Submitted by Git Real on Sat, 11/25/2006 - 6:52pm.

Sorry Bad. You worked hard and presented an awesome list of articles and factual events regarding the heist of the PTC Taxpayer's wallet. But you wasted your time. You see there are far more important issues than the theft of a million dollars of the PTC City's future budget. There is the Black Friday Shopping Stampede, planning Christmas parties, the Tech / Dawg game......etc. After all a million dollars is piddly shooey these days and by no means should it stand in the way of anybodys everyday routine. Just consider it a little seed money for future development projects.

Perhaps you should just blend in with the rest of the sheep and just git along and shut up. Besides that, isn't there an update on the the Cruise wedding on the Entertainment Tonight this evening?

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Chump Change

Submitted by Voice of Fayett... on Mon, 11/27/2006 - 2:30pm.

The Development Auth settlement for a million bucks is chump change for the fancy folks in PTC. Theyre more worried about watching Desperate Housewives than a piddling sum of money like that. Just let those business folks have it they must deserve it.

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Sex, DPAC & Bad PTC's Research

Submitted by Git Real on Fri, 11/24/2006 - 11:04pm.

Wow Bad....what an awesome amount of time and research. How soon we forget. Thanks for all the information and hardwork which lays out the case that the taxpayers are fixing to take it where the sun doesn't shine.

But I say it won't matter. There will certainly be more important issues than reading your long and factual diatribes. The big game is tomorrow. After all what's more important? The PTC Taxpayers taking it up the wallet or the Dawg / Tech game?

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Time line of amphitheater, tennis center: By John Thompson

Submitted by bad_ptc on Fri, 11/24/2006 - 5:12pm.

The history of one of the two entities under the Development Authority of Peachtree City's control dates back to Fayette County's celebration of the Bicentennial in 1976.

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Jonesie, ponder this

Submitted by swmbo on Fri, 11/24/2006 - 5:10pm.

You ask some very thought-provoking questions. How did we get into this mess? Why didn't previous city and bond attorneys do a little legal research to find out whether such facilities could be operated by an appointed group supposedly created to bring new industry to town?

So, let me pose one to you:

Are you sure the responsible parties actually asked for legal counsel on this issue before embarking on the path? Sometimes, the best way not to hear bad news is not to ask for any news.

-------------------------------
If you and I are always in agreement, one of us is likely armed and dangerous.

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Asked? Are you kidding?

Submitted by Robert W. Morgan on Sat, 11/25/2006 - 7:46am.

Lenox, Brooks, Warner, Truitt and others don't ask, they just do. They are driven by a sincere desire to improve the city and very strong egos that enable them to ignore those pesky little laws that apply to lesser beings. Again, they are sincere, but obviously overlooked or ignored the law.

The conflict question with Tate Godfrey and previously Tom Farr also has an obvious answer - sure there was a conflict. That was normal since only about 2% of the people in PTC actually volunteer to do anything - so naturally successful business people in a small town will have multiple and conflicting roles.

So what does that mean? Did they act illegally? Sure did.
Should they be punsihed? Yep. Fire them.
Should the structure of the Development Authority be investigated? Changed? Yes indeed.

Does all of that mean that the city can avoid payback of the debt because they allowed an illegal entity to act illegally under the city's charter and did nothing about it for 10 years? No it does not.

Attorneys and judges are very non-emotional about these things and there is no doubt whatsoever that the city is responsible for the debt. As others have said - settle it now and get it over with before we buy new houses for several attorneys.

Then you all can get back to your favorite sport - bashing individuals and accusing them of secret back-room deals and illegal profiteering. You all act like Democrats with a wealth-envy problem.

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Robert, we seem to agree, in part.

Submitted by swmbo on Sat, 11/25/2006 - 2:22pm.

Lenox, Brooks, Warner, Truitt and others don't ask, they just do. They are driven by a sincere desire to improve the city and very strong egos that enable them to ignore those pesky little laws that apply to lesser beings.

Your first sentence encompasses my point; my impression is that they never asked legal counsel. They probably did assume that they had the "juice" to be able to "ignore those pesky little laws." However, desire, intent, sincerity . . . those tend to be in the eye of the beholder and, when the taxpayers are left holding the bag, it's hard to see that someone meant well.

One thing to keep in mind is that the "all-volunteer" board likely got something out of their participation. It may not have been money; it may have been political connections or access to certain business opportunities. And, while that may not rise to the level of "secret back-room deals" or "illegal profiteering", those things have value, too.

You say that few people in PTC volunteer for things so that, the natural and probable consequence of the few successful business people's participation is conflicts of interest. I'll bet if anyone really disclosed what benefit the volunteers got, lots of people would say they would gladly have volunteered to get in on some of that. Forgive my skepticism but, in my experience, the conflicts of interest come from a desire to keep a good thing "among a few close friends."

But I am reluctant to accept the idea that somehow they don't deserve some of the criticism they're getting as pay back for their "good intentions." And I would go so far as to suggest that they knew all along that they could just stiff the taxpayers for the bill if their business plan (assuming that one ever existed) went awry. The public rarely comes out on top when a private entity manages public funds or assets.

And that's not wealth envy . . . just good-ol' conservative accountability.

-------------------------------
If you and I are always in agreement, one of us is likely armed and dangerous.

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Dope. swmbo

Submitted by mudcat on Sat, 11/25/2006 - 8:25pm.

Too defensive. You must have been involved.
meow

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Robert, you make me laugh

Submitted by bad_ptc on Sat, 11/25/2006 - 9:54am.

"The conflict question with Tate Godfrey and previously Tom Farr also has an obvious answer - sure there was a conflict. That was normal since only about 2% of the people in PTC actually volunteer to do anything - so naturally successful business people in a small town will have multiple and conflicting roles."

Robert there are some 35,000 adults running around PTC. You're telling me that out of 700 people, your 2%, we had to pick 5 that all had a conflicts of interest?

Did they act illegally? Sure did.
Should they be punished? Yep. Fire them.

Okay Robert, I'll hold their arms and you can slap them on the wrist with a feather.

How about we let the courts settle this.

Then PTC can sue the people who entered into these illegal transactions, the bankers and lawyers who didn't know any better and were the only people who "volunteered".

What about going after Virgil Christian?. Oh that's right, his lawyer said that it was just a "mistake" that he signed contracts with Addia's and put PTC on the hook for the guarantee.

What about the loans that were used to pay operating expenses? Was that a "mistake" too?

Please!

How about holding people accountable for their actions?

Isn't that what we're trying to teach our children?

If that's your way of teaching our kids right from wrong, Chief Murry's budget is going to need the $1,000,000 a hell of a lot more than the "volunteers".

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Forgive me, badptc

Submitted by Robert W. Morgan on Sat, 11/25/2006 - 8:35pm.

I didn't scrutinize my numbers carefully. I said 2% volunteered in PTC and you correctly pointed out that mathematically that would be 700 people.

I must recant. No way 700 people are involved as volunteers in this town - 300 is more like it. The other 37,700 sit on their butt and 10% of them complain and the rest don't have a clue.

I apologize for the error. Someone else can calculate the exact % - very small isn't it?

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If 300 volunteered, I'd be amazed

Submitted by bad_ptc on Sat, 11/25/2006 - 9:37pm.

I'd bet that the number is closer to 100.

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A lawyer talking!

Submitted by dollaradayandfound on Sat, 11/25/2006 - 8:30am.

You use the word sincere and "pesky little laws" as if you can be for both. You can not!
Yes one can do civil dosobedience if at the same time they surrender for their punishment.

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Malpractice at work

Submitted by loanarranger707 on Sat, 11/25/2006 - 8:01pm.

By the way, hasn't it occurred to anybody that all the people who participated in the events which led to this debacle acted on the advice and with the participation of legal counsel? The word "malpractice" is not just for doctors. There is as much, if not more, malpractice among attorneys as there is among health care practitioners. Why is it that nobody dares say the obvious, namely that the attorneys involved were negligent and did an incompetent job? In other words, that they committed malpractice!

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Malpractice? Sure is, but by whom?

Submitted by mudcat on Sat, 11/25/2006 - 8:21pm.

Go dig it out. Did the council, mayor or development authority members seek legal advice or not? Did they take that advice or did they ignore it? Who was mayor? Who was on council? Who was the city lawyer?

If you want to spend the time to answer all those questions, you will find that sometimes the lawyer is right and sometiimes he is wrong. You will also see that certain of city's leaders ignored legal advice and plowed ahead. Who specifically, may surprise you.

Check it out.
meow

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