The Peachtree

City Council has unanimously signed off on a deal to cut the hotel-motel

tax funds it provides to the city's development authority.

But before

it's official, the deal must be approved by the authority because of two

changes council required as part of its approval. The authority, which

operates the city's tennis center and amphitheater, must itemize what

projects and programs were funded by the $1.45 million debt the authority

has accrued. And city staff must reword a clause in the agreement that

allows the authority's debt to be taken over by the city.

Development

authority chairman Tate Godfrey said he was hopeful there would be no

problems meeting council's conditions.

"I am

very confident that we have a deal," Godfrey said Monday, adding

that he hadn't seen a copy of the newly worded language about the city

assuming the authority's debt. "We don't like being in debt, but

if you're going to operate and build first-class facilities, that's part

of the effort."

Mayor Steve

Brown, who originally wanted to table the deal to study the debt issue,

joined his fellow council members in approving the agreement with the

conditions at Thursday night's council meeting. Councilman Steve Rapson

abstained since his wife Kristi is suing the authority over alleged pay

inequities while she served as amphitheater director.

Before the

vote, councilman Murray Weed challenged Brown to approve the agreement.

"There

is a difference between being a community activist and a mayor,"

Weed said emphatically. "I ask you not only to support this, but

to wholeheartedly endorse it."

Earlier in

the discussion, Brown said the authority's debt is "technically"

not the city's responsibility. Weed said that may be true, but the authority's

only funding source is from the city and "ultimately, the city has

to pay it."

Weed also noted

that the loans taken out by the authority paid for facilities that are

owned by the city.

"We do

realize the $1.45 million is a great deal of money," Weed said. "But

the Development Authority is responsible for explaining how that money

was spent and I have every faith they will do so to our satisfaction."

The authority

has used revenues from the city's hotel-motel tax to subsidize operations

of the tennis center and amphitheater. Most of those facilities' budgets

are funded by ticket prices, court fees, membership fees and sponsorships.

The agreement,

which was initially approved by the authority at its meeting last week,

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 the hotel-motel tax funds

to a maximum of $100,000.

The authority

also stipulates 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.

The authority

would maintain the ability to get a short-term 90-day line of credit for

up to $180,000 to finance deposits for acts that will appear in the amphitheater's

summer concert series. The authority, which uses such loans once a year,

pays the funds back once it receives its revenue for ticket sales.

The agreement,

which must be renegotiated after the first three years, would automatically

renew each year unless the authority or council notifies the other party

in writing at least 90 days before the renewal date of a decision not

to renew the deal.

The agreement

does not address how much funding the city will provide for the authority

to perform its economic development efforts.

Godfrey credited

the council members and authority members who negotiated the deal for

devising a plan that would work.

"They

did it," Godfrey said, citing councilmen Dan Tennant and Murray Weed

along with authority members Bob Brooks, Brian Palmitessa and Doug Warner.

The authority also got support from council member Annie McMenamin.

"I'll

give a lot of credit to Dan Tennant," Godfrey said. "He told

us he wanted to work this out and he did."