Response to September 23, 2003

I. Adidas contract

The Adidas contract was never

intended to bind the Development Authority of Peachtree City ("DAPC")

to any guaranteed payout. Instead, the contract intended to provide that

the Peachtree Trading Post, Inc. ("the Trading Post") would

guarantee Adidas sales at the levels outlined. The agreement was not clearly

drafted. Representatives of Adidas have been contacted and they have indicated

a willingness to enter into an amended agreement which is in the process

of being drafted. In that agreement, the DAPC will have no financial obligation

for the purchase of any Adidas product.

II. FY 2002 Audit Recommendation

The recommendation referenced

Audit Agenda which was provided to the DAPC by the accounting firm with

its letter dated May 6, 2003. The recommendations were discussed at the

June 16, 2003, DAPC meeting.

During the 4 1/2 month period

since the recommendation of Maudlin & Jenkins have been provided,

members of the DAPC, primarily Brian Palmatessa and Scott Formel, have

devoted numerous volunteer hours to working with various members of the

management teams of both the amphitheater and the Tennis Center to improve

both their level and knowledge of and obtain additional control over accounting

functions. Although additional work does need to be performed, significant

strides have been made in improving accounting functions of both facilities,

as evidenced by the detailed budgets which have been presented at DAPC

meetings. This education process is ongoing and will continue in the future.

However, these changes cannot be made overnight.

III. Cash Flow Problem

Based upon a more detailed

review of the financial status of the DAPC, the performers for the remaining

dates at the Amphitheater will be paid and all payroll obligations will

be met. Authority members Bob Brooks and Scott Formel have been working

diligently to assist in resolving this issue. Indeed, Mr. Bradshaw indicates

that this matter "is being resolved immediately."

historically, the fall has always been the time when the DAPC has faced

a cash flow shortage. The Amphitheater's season is drawing to a close

and no sponsorship income is being received and few ticket sales are occurring

to generate revenue. Indeed, in the past, this is the time of the year

when the DAPC has been required to borrow money to meet its financial

obligations.

The cash flow issues this year

have been enhanced by the fact that the DAPC has been required to pay

significant sums to defend itself in the lawsuit brought by Kristi Rapson.

In addition, the Authority has also had to pay some of the outstanding

construction expenses for the completion of the Tennis Center expansion

to vendors who have been very insistent on being paid and have expressed

an unwillingness to wait on a bond issue or other solution to resolve

the outstanding debt of the Authority.

IV. Conversion to IN-house

Accounting

Various options are under consideration

DAPC by the City Council to move the venues toward a break even financial

position, all options were considered as to how to reduce existing costs.

One of the options which has been tried is to eliminate the need for outside

accounting services. To reverse this decision and hire an outside accountant

will certainly not help with cash flow issues as these professionals must

be compensated. However, at this time using an outside accounting firm

is still under consideration.

V. Hiring Freeze

When the hiring freeze was

proposed, it was not "clear" that existing positions that became

vacant after the hiring freeze occurred could not be filled. No new positions

have been created and filled since the hiring freeze took effect. The

majority of the positions that were filled were essential employees that

were required to maintain the operation of the facility. In any event,

it is clearly understood now that the hiring freeze now encompasses all

positions and no further hiring will take place without consent of the

DAPC.

VI. Capital Projects

No "consolidated final

report" with regard to the Amphitheater building renovation or the

Tennis Center expansion has been requested. However, the DAPC is currently

continuing to work on gathering additional details regarding the expenditures

for these projects.

VII. Executive Director's Compensation

As Mr. Bradshaw indicates,

proposals for revising the Executive Director's compensation have been

drafted and are currently under consideration.

VIII. Commingling of Funds

The DAPC has insisted in no

uncertain terms that the Trading Post and the DAPC be completely separated.

However, no "accounting report" has ever been requested by any

member of the Authority, including Mr. Bradshaw. The DAPC will continue

to be diligent in insisting that separate records be kept for the Tennis

Center.

IX. Rent for the Peachtree

Trading Post

A lease with regard to the

Trading Post's use of the Tennis Center's space and a method by which

DAPC employes may be used by the Peachtree Trading Post are currently

under consideration.

X. Elimination of Management

Committees

Although Mr. Bradshaw obviously

feels differently, a majority of the DAPC determined that the management

committees were not effective and certainly not the best use of time and

energies of the members of the Authority. Therefore, their use was discontinued.