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30 Oct 08

Find Result - 345 S.E.2d 581

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the City and DDA restructured certain portions of the lease
The City now proposes to acquire the project property and convey it to the DDA. The City will lease the property back from the DDA
12 more annotations...
- and sublease it to a private developer which will sublease it to the commercial tenants. The DDA will issue $85,000,000 in bonds, paying the City for the **583
  conveyance of property and constructing the project from the bond proceeds
- The City will pay rent to the DDA in an amount equal to the debt service on the bonds issued. The DDA *160
  will assign these rents to the trustee to be deposited in the Revenue Fund from which the principal and interest due on the bonds will be retired.
- whether the proposed lease between the City and the DDA is a contract authorized by the intergovernmental contracts clause such that the future rental payments required under the lease are not a debt of the City of Atlanta which violates the debt clause, Art. IX, Sec. V, Par. I(a).
- The appellant argues that the lease does not deal “with activities, services, or facilities which the contracting parties
  are authorized by law to undertake or provide,
- and therefore fails to come within the requirements of the intergovernmental contracts clause.
- the City has the power “[t]o provide
- an urban redevelopment project
- facilities for
- there are facilities which the City is authorized by law to provide because under the Urban Redevelopment Law the City may provide facilities in connection with an urban redevelopment project, including facilities leased to private enterprises for commercial use. The City's promise to pay the rent (from whatever source of income the City may have, including **584
  taxes) is a debt, but it is a debt authorized under the constitution
- Appellant takes the position that the City's pledge to use its taxing power to make up any shortfall in the rents is an unconstitutional lending of credit to the private developer.
- the City has not pledged or loaned its credit to anyone. Rather, the City has pledged its taxing power to make up any deficit in the rents
  it is obligated to pay under a valid intergovernmental contract.
- this pledge of municipal taxing power is permissible under the intergovernmental contracts clause.

Find Result - 338 S.E.2d 240

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$85,000,000 in revenue bonds, the proceeds of which will be used in part to reimburse the City for its costs in acquiring any property needed for the project, and, in part, to finance construction of the project
the City will lease the project property to the DDA
52 more annotations...
- DDA will sublease the commercial portions of the project to a private developer who will provide central management
- A fixed portion of the profits
- will be paid to the developer. The developer will pay to the DDA a fixed percentage of this amount
- and who will, in turn, sublease the commercial facilities to private operators
- the DDA agrees to pay as rent to the City all project revenues which will be deposited directly into the Revenue Fund, from which fund the principal and interest on the revenue bonds are to be paid
- Additionally, the DDA will pay to the City $10 per annum in rent.
- DDA assigns all of its interest in the lease to the trustee, NBG
- the City proposes to assign all its interest in the lease to the trustee
- The proposed lease will also require the DDA to covenant to use its best efforts to issue the bonds and permit the proceeds to be used to acquire and construct the project.
- to make up 90 percent of any shortfall which exists because project revenues are inadequate to pay the bondholders. The City will agree to include in its budget each year an amount sufficient to pay anticipated sums due
- the City will promise
- the City agrees that if
- here is not on deposit in the Debt Service Account in the Sinking Fund moneys sufficient to pay the interest, or principal, premium and interest
- the City shall
- pay the amount of such deficiency to the Lessee
- provided, however, that the amount required to be paid by the City
- shall not exceed ninety percent (90%) of the interest, or principal, premium and interest (including principal payable by reason of mandatory redemption), payable
- The City shall include within its budget each year an amount sufficient to pay any sums anticipated to be paid during such year by the City under the provisions of this paragraph (b).”
- that “the bond obligations are guaranteed by the City
- The City states
- The appellants point to 1983 Georgia Constitution, Art. IX, Sec. V, Par. I ^FN3 which fixes an upper limit of debt which may be incurred by the City, and prohibits the incurring of any new debt by the City without the consent of a majority of the qualified voters
- the intergovernmental contracts clause of the Constitution ^FN4 authorizes the City to contract with the DDA and that the payments
- consent of the voters was not obtained
- are payments under an intergovernmental contract and therefore not a debt which violates the debt clause
- which may be made
- the City's undertaking in § 5.4(b) goes beyond the authority existing under the intergovernmental contracts clause.
- it does not authorize every type contract, but only those regarding, “joint services, for the provision of services, or for the joint or separate use of facilities or equipment” and must deal with “activities, services, or facilities which the contracting parties are authorized by law to undertake or provide.” The clause does not supersede other provisions of the Constitution, such as the debt clause
- Section 5.4(b) creates a debt of the City
- unless it constitutes an exception
- We hold it is not a contract authorized by the intergovernmental contracts clause.
- because it is a contract authorized by the intergovernmental contracts clause
- The debt incurred
- and no
- shall never exceed 10 percent of the assessed value of all taxable property
- new debt without the assent of a majority of the qualified voters
- may contract for any period not exceeding 50 years with each other
- for joint services, for the provision of services, or for the joint or separate use of facilities or equipment; but such contracts must deal with activities, services, or facilities which the contracting parties are authorized by law to undertake or provide.”
- here the City's promise to use its taxing power to pay up to 90% of any shortfall due the bondholders should the project proceeds prove to be insufficient is not a contract for services or joint services, nor is it a contract for the joint or separate use of facilities or equipment
- The City
- will receive rent from the DDA for the land and for the facilities
- This latter obligation is a debt which does not come within the exceptions created by the intergovernmental contracts clause and is therefore barred by the debt clause.
- In
  Building Authority of Fulton County v. State of Georgia
- facilities or equipment
- The guarantee of the City is not a contract for services
- Neither is the guarantee an activity, service or facility which the City is authorized by law to undertake or provide
- the guarantee is a loan of the credit of the City for the benefit of the developers and in violation of 1983 Georgia Constitution
- Appellants contend
- Appellants contend
- Appellants argue
- We hold the trial court erred in failing to require the limiting of § 5.1 to 50 years and the elimination of § 5.4(b) from the lease and their effects upon other portions of the Plan. In other regards the trial court's order validating the issuance of the bonds is affirmed. Since the 25-year option of § 5.1 and § 5.4(b) are severable from the Plan and the lease they may be removed and the issuance of the bonds validated.
- Here the city is not paying rent; it has agreed to guarantee the private developer's rental payments to the authority. This the city cannot do.
- the city cannot appropriate money for or lend its credit to a private developer.

28 Oct 08

Ga. Constitution: Art. IX

georgiainfo.galileo.usg.edu/conart9.htm - Preview

Paragraph I
shall never exceed 10 percent
of the assessed value of all taxable property
40 more annotations...
- no such county, municipality,
  or other political subdivision shall incur any new debt without
  the assent of a majority of the qualified voters
- all local school systems
- authorized
- to incur debt in excess of 10 percent
- shall continue
  to be authorized to incur such debt.
- Paragraph II.
- may incur debt on behalf of any special district
- Such debt may be incurred
- where
  the county
- shall
  have, at or before the time of incurring such debt, provided for
  the assessment and collection of an annual tax within the special
  district sufficient in amount to pay the principal of and interest
  on such debt within 30 years
- no such county, municipality, or other political subdivision shall
  incur any debt on behalf of such special district without the
  assent of a majority of the qualified voters
- No such county, municipality, or other political subdivision shall
  incur any debt on behalf of such special district in an amount
  which, when taken together with all other debt outstanding
- exceeds 10 percent
- shall be placed in a sinking fund to be held on
  behalf of such special district and used exclusively to pay off
  the principal of and interest on such debt
- The proceeds of the tax
- Such moneys shall be held and kept separate and apart from all
  other revenues collected
- Paragraph III
- The governing authority
- may provide for the refunding of outstanding bonded
  indebtedness without the necessity of a referendum
- provided that neither the term of the original debt
  is extended nor the interest rate of the original debt is increased.
  The principal amount of any debt issued in connection with such
  refunding may exceed the principal amount being refunded in order
  to reduce the total principal and interest payment requirements
  over the remaining term of the original issue.
- The proceeds of
  the refunding issue shall be used solely to retire the original
  debt.
- The original debt refunded shall not constitute debt
- but the refunding
  issue shall constitute a debt
- Notwithstanding the debt limitations
- the governing authority
- and without the necessity for a referendum
- may, subject to the
  conditions and limitations as may be provided by general law:
- (1) Accept and use funds granted by and obtain
  loans from the federal government or any agency thereof pursuant
  to conditions imposed by federal law.
- (2) Incur debt, by way of borrowing from any
  person, corporation, or association as well as from the state,
  to pay in whole or in part the cost of property valuation and
  equalization programs for ad valorem tax purposes.
- Paragraph V.
- The governing authority
- may incur debt by
  obtaining temporary loans in each year to pay expenses.
- The aggregate
  amount of all such loans shall not exceed 75 percent of the total
  gross income from taxes collected in the last preceding year.
- Such loans shall be payable on or before December 31
- No such loan may be obtained
  when there is a loan then unpaid
- No
  such county, municipality, or other political subdivision of this
  state shall incur in any one calendar year an aggregate of such
  temporary loans or other contracts, notes, warrants, or obligations
  for current expenses in excess of the total anticipated revenue
  for such calendar year.
- Any county,
  municipality, or other political subdivision of this state shall
  at or before the time of incurring bonded indebtedness provide
  for the assessment and collection of an annual tax sufficient
  in amount to pay the principal and interest of said debt within
  30 years
- Paragraph V
- The proceeds
  of this tax, together with any other moneys collected for this
  purpose, shall be placed in a sinking fund to be used exclusively
  for paying the principal of and interest on such bonded debt.
- Such moneys shall be held and kept separate and apart from all
  other revenues collected and may be invested and reinvested as
  provided by law.

21 Aug 08

Marbury v. Madison, 5 U.S. 137 (1803)

ul451.gsu.edu/...5.US.137.html - Preview

1. Has the applicant a right to the commission he demands?

6

2. If he has a right, and that right has been violated, do the laws of his country afford him a remedy?

7

3. If they do afford him a remedy, is it a mandamus issuing from this court?
To withhold the commission[...], therefore, is an act deemed by the court not warranted by law, but violative of a vested legal right.