Editor’s Notes
John F. Schaffner
It seems that all of a sudden, the city of Atlanta is having a big problem with money — getting it, budgeting it, dispensing it to pay bills and finding proper ways to generate it to pay for development.
By now just about everyone has heard that the city has lost — at least for the time being — more than half of the anticipated bond funding for the proposed BeltLine project after the Georgia Supreme Court ruled that school taxes cannot be used as part of tax allocation district (TAD) funding for the BeltLine development. School taxes can only be used for school purposes, the court ruled.
Why didn’t lawyers and financial people know this? At least one Buckhead lawyer had a pretty good idea that was the case, or at least felt it should be the case.
That ruling will end up minimizing TAD funding in the city for more projects than just those for the BeltLine.
Likewise, most people are aware the city is facing a budget deficit for the fiscal year ending June 30. What no one apparently knows for sure is just how much that deficit is likely to be. The latest is that it will be $65 million. But it has been estimated as high as $75 million and may be even higher.
How did we get this budget deficit? The mayor and city financial folk put much of the blame on the sluggish economy. But that deficit is also laced with a great deal of stupidity and lack of financial common sense. You noticed, I did not accuse anyone of stealing or purposefully deceiving anyone. But you have to wonder when people forget to budget for things like payments for Underground Atlanta, pension funds, and much more. And what about those items that were allowed to be illegally purchased out of accounts?
Taxpayers, do you get the impression people in City Hall think we are absolutely stupid and incapable of catching on?
Now, we learn that the administration has failed to pay vendor bills — in some cases for as long as six months or more. One of those bills was for at least $2.7 million and for six months or more. And, the firm was disposing of our garbage for us.
What small business person in financial trouble hasn’t done the same thing…put off paying your bills until the creditors come knocking at the door?
Maybe the answer is that people at city hall don’t think that we are stupid…They are the ones who are stupid.
There are a few members of city council who have routinely challenged these things over the past several years, but they have pretty much been ostracized by the popular mayor, Shirley Franklin and the council members who are stuffed comfortably in her pockets. Even a few of them, however, are now beginning to question what is going on. The question is how culpable are they as council members. They sign off on the budgets, and on the overpayments and on change orders and on everything else that ends up costing more money.
I don’t have a masters degree in business from a prestigious business school — let’s say a Wharton or such — but I find myself questioning the way this city does business — even under the leadership of the “clean” Mayor Franklin. For instance, let’s look a couple of things I have questioned the mayor and city council members about via e-mails recently.
For instance, there have been several very interesting stories in the Wall Street Journal this month about a municipal suit that has provided new details about municipal bond bid-rigging. The first article on March 5 started out stating “some municipal governments are facing loss-producing bond deals where even their hedges are costing them dearly.”
Interestingly, a follow-up article on municipal bond bid-rigging stated that suits reveal details which include, for example “questionable payments made to brokers in a $453 million investment contract provided by Bank of America to the city of Atlanta.” This apparently is under investigation by the Justice Department.
I sent emails asking how this affects our city’s financial status. There were no forthcoming answers.
The point is that the city seemingly is out there wheeling and dealing in questionable ways, but is it paying attention to the basics — collecting the money not only due it, but readily available.
Another source tells me there is $6.5 million available to the city from the feds — that has been available for some time — that no one has gone to collect. Now, $6.5 million may not be a huge pot of gold in city government funding parlance, but I would think every bit helps.
The question is: Who is minding the store? Are they so wrapped up in wheeling and dealing that they are overlooking the easy money — and I don’t mean increased resident taxes.