BeltLine’s oversight questioned in two reports that could affect sales tax vote
By David Pendered
An audit by Atlanta’s city auditor has flagged expenses by the Atlanta BeltLine, including pension benefits that aren’t available to city employees and credit card expenses in one month of $9,835 for items including an executive retreat and staff dinner.
A separate report, this one by an outside consultant commissioned by the BeltLine advisory committee, determined that the BeltLine’s management needs to “develop consistent financial and progress reports.” The report suggested that management formalize “the advisory process so that [public] input is better integrated into ABI Board [Atlanta Beltline, Inc.] and city of Atlanta decisions.”
The two documents could influence the outcome of the proposed 1 percent sales tax for transportation improvements in metro Atlanta. Some voters, including a leader of the Tea Party Patriots, have raised general questions about how government officials actually will spend the $6.14 billion that’s to be raised if voters approve the tax on July 31. Having questions arise about the oversight of a project in line to receive some $600 million is less than helpful.
The Atlanta City Council has called a joint work session of its Finance and Community Development committees to review the audit and related matters. The meeting is set for July 9, at 3 p.m., at City Hall.
The city’s audit reviewed accounts for March 2011 and determined Atlanta BeltLine, Inc., which is the entity that oversees the BeltLine, pays pension benefits of 15 percent, which it said is 2.5 times higher than the 6 percent rate that city employees receive.
In addition, the audit determined that two employees had received pension payments totaling $26,000 on bonuses that had previously been granted.
In another finding, the audit determined that the BeltLine has about $28.4 million of tax revenues sitting in city coffers. That sum represents about 12 percent of the $226 million in TAD-related revenues that have been collected but not spent.
The audit states that no indication can be found as to whether the $226 million is available to be spent, is earmarked for some use, or even if it should be returned to the governments that collected the money – the city, Atlanta public schools and Fulton County.
City Auditor Leslie Ward conducted the performance audit, which was approved by the city’s Audit Committee. The audit covered Atlanta’s 10 tax allocation districts (TADs), which are Atlanta’s primary tool for urban renewal.
In practice, TADs allow governments to spark renewal in certain area by taking the increment of property taxes collected on new developments within a district, and spending that increment on roads, sewers, parks and other public amenities that will entice more development.
Invest Atlanta, the city’s development arm that oversees the city’s TAD program, has conducted an internal review that determined the city has a total of at least $68 million of unrestricted funds collected in all 10 TADs. That $68 million is presumed to be part of the $226 million sum “identified in the audit.
Invest Atlanta has responded to the audit and taken issue with several of its findings. Invest Atlanta created Atlanta Beltline, Inc. to serve as its implementation agent for the BeltLine, according to one response.
The audit recommended several steps be taken to tighten the oversight of the BeltLine TAD, as it did with the TAD program overall.
The audit also flagged some specific expenses that relate to ABI’s operating costs. The audit contained a headline that states: “It is not clear how Atlanta BeltLine, Inc.’s operating costs fit within the definition and categories of redevelopment cost under state law.”
The audit questioned some expenses that were included in a $1.3 million reimbursement request submitted in March 2011. The questioned expenses include:
- “$232,749 for staff salaries and benefits, which included pension contributions on previously granted bonuses totaling $26,000 to two employees. Benefits include a 15 percent contribution to employees’ pension accounts, which is considerably more generous than the city’s 6 percent contribution to employees’ defined contribution plan accounts;
- “$59,243 in payments to Invest Atlanta for shared services and allocated staff time;
- “$25,000 for two monthly retainer fees for a lobbyist;
- “$9,835 for credit card charges, travel and miscellaneous expenses, including an executive retreat and staff dinner.”
The review of the BeltLine’s management was commissioned by the Atlanta BeltLine TAD Advisory Committee. The committee retained BAE Urban Economics to review the years 2006 through 2010.
The review’s No. 1 finding in its summary of revenues and expenditures relates to public disclosure of spending. The document observes that ABI has published multiple documents, and goes on to state:
“Despite the publication of these documents, it is difficult to ascertain the pattern of expenditures over time compared to initial estimates, due to differences in the format and categories of expenditures reported at different points in time.
“In fact, one of the key recommendations included in this report is to create a standardized reporting format with consistent categories of revenues and expenditures / projects, in order to be able to clearly communicate the mix of revenues and expenditures to all interested parties.”
In a finding that relates to the transportation sales tax, the report calls for more public participation in the management of the BeltLine. The connection to the sales tax is the mandatory reports to the public of how the sales tax revenues are being spent.
In the case of the BeltLine, the report describes several shortfalls in public participation. Here are a few examples:
- “A striking aspect of the work for this report was the limited public description of the next Five Year Work Plan preparation process. This function, so vital to strong continued engagement with all stakeholders and advisory committees, should be set forth, discussed, and implemented in a systematic way. …
- “One of the key aspects of the BeltLine which sets it apart from most other Atlanta revitalization efforts is the very specific legislation outlining the creation of two comprehensive advisory bodies: the Tax Allocation District Advisory Committee (TADAC) and the BeltLine Affordable Housing Advisory Committee (BAHAB).
- “Both bodies have extensive talent and experience in community development, revitalization, affordable housing, economic development, finance, and the myriad of issues which will continue to affect the BeltLine’s transformative capacity. Both committees’ talent pool, and stakeholder input are necessary to BeltLine’s ultimate success.
- “Unfortunately, while both committees have been formed and commenced operations, and both committees have published extensive recommendations since their inception, the current status of these advisory bodies indicates that they have not achieved their full promise.