Development Authority Scandal: Bailout begins Wednesday night

The meeting on the bailout of the development authority scandal loans is November 29 at 6:30 PM. There have been several great discussions on this web site regarding the matter. Here are some articles on the matter to help you make up your mind. I will post some others tomorrow.

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 ....

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.

Want Higher Taxes??? Goooood! Don't Show up WED.

Submitted by skyspy on Tue, 11/28/2006 - 12:44pm.

Make sure you don't show up Wednsday Night at 6:30pm. Sorry Harold, most of us don't like the idea of higher taxes. Having a secret meeting, just at the time when everyone is getting off of work, doesn't get it.(oh I know it isn't secret, you got it in the paper while everyone was on vacation....brilliant) I hope people won't be as complacent this time.....Maybe the citizens could win ...just once!

Or you could be lazy ...not go and let the white collar criminals win again!!!!!

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Tennis bailout

Submitted by dollaradayandfound on Tue, 11/28/2006 - 10:34am.

There will almost certainly be a civil suit by taxpayers if this one-sided bunch at city hall votes to pay any portion of the bad and illegal loan that the old development authority (Warner, Formel, Brooks, Godfrey, Bradshaw etc.) and the Peachtree National Bank (don't know who Board was)made with each other.
The city asked Judge English to throw it out. Apparently he didn't do so. They are all lawyers, I'm afraid. Without developers there wouldn't be half as many lawyers.

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Taxpayer lawsuit?

Submitted by mudcat on Wed, 11/29/2006 - 5:19am.

What are you smoking dude? Who in this town has the gumption and resources to pursue an expensive (and futile) lawsuit over something as trivial as this?

Look at the turnout for local elections and you'll immediately see that 80% of us don't care at all. You couldn't get 100 signatures on a petition supporting a lawsuit unless you were dishonest about the severity of the issue. The issue, by the way, is the current mayor cleaning up an old problem. Those that you accuse of wrongdoing were investigated and cleared by the GBI. That's a pesky little fact that will not be ignored by a judge or jury.

And who do the taxpayers sue? The city? So taxpayers suing taxpayers so that taxpayers can pay themselves something after the lawyers take 30%?

Or do you think you can go after the old group individually? Two of them happen to be deceased, 2 have moved, 1 of the 2 remaining resigned and went public with his concerns.

Not a good case to pursue.

meow

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2 of the Worthless Crooks Are Dead? Good!

Submitted by skyspy on Wed, 11/29/2006 - 8:51am.

Mudcat that is by far the best news I have heard out of this whole dirty deal. I know you should never speak of the dead unless it's good........there are 2 fewer white collar crooks in the world....it's good.

If this payoff does not go to a city wide vote, like a true bond referendum would, and should. I think we should be able to sue the city council members personally, for not following the law, and for not looking out for our best interests.

As you have stated mudcat aka Harold, people in this city are complacent, 80% of them won't vote anyway. At least by putting it to a vote the bond will be legal. You will still get what you want.

Just between us, how much of a kickback are you getting?

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So skyspy it has been 10 days

Submitted by mudcat on Sat, 12/09/2006 - 8:11am.

Council did as predicted, Judy grandstanded a little and the tennis center suit is settled. Properly, in my view - although the idea that it won't increase taxes is just a stupid statement and a little insulting. I mean, why can't the mayor or someone on council have the courage to say that yes, it will cost the taxpayers, but it is the right thing to do?

Now, how is that effort to recall the mayor going or the idea to have a citizen lawsuit against council and all those others things that you and maybe 4 others (with multiple screen names) seem to care about?

Any luck in getting anyone intersted? No, I didn't think so.
meow

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mudcat or bob or harold

Submitted by skyspy on Sat, 12/09/2006 - 9:15am.

whoever you are. What's the matter? Are you worried that the citizens are organizing against you? You sound scared? Why would someone who is not guilty of wrong doing even ask a question like that?

Yes there was a very low turnout at this special dog and pony show harold put on........the taxpayers won't start crying until their taxes are raised next year.

Spend all of the money you got under the table wisely.....maybe give it to charity for a tax write off.

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Dope, Answer the question

Submitted by mudcat on Sat, 12/09/2006 - 7:55pm.

I have no involvement in this thing at all, other than being a keen observer.
So answer the question and stop with the unrelenting drumbeat of bribes and payoffs.
meow

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Tsk tsk tsk mudbob

Submitted by skyspy on Sat, 12/09/2006 - 9:41pm.

Where is the money that can't be accounted for? Did you hide it in the bottom of your litter box?(in which case we don't want it back, or at least not those bills we'll take fresh ones if you please)

You would love to know what the average angry citizen has planned wouldn't you? Do you lose sleep over this?

You know this doesn't necessarily have to be a class action suit, even one person with money for a retainer could cause problems here.

Got to get back to work...later fat kitty

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