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

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.

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