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City of Atlanta goes to court, alleging city schools owe it millions

By Maggie Lee

The city of Atlanta is suing Atlanta Public Schools, claiming that the schools are not keeping up with payments owed for bonds. And schools say they have not seen any evidence that money is owed.

The city of Atlanta says APS is not paying back money that the city has borrowed to pay for various educational needs.

The city does not run schools, but it did before 1973. But under an old law, the city has been able to sell bonds “for educational purposes.”

The city paints itself as basically a pass-through: it borrows the money, sends the money to APS, and APS remits money back to the city over the years to pay off those bonds. The city’s lawsuit says it sold such a bond as late as 2007 and paid off portions of the bond principal in 2014 and 2016.

The suit, filed July 3 in Fulton County Superior Court, alleges that, “the city, on numerous occasions, has requested that APS honor its obligation to levy the necessary taxes to service this debt, however, APS has refused to comply with the request.”

The city puts the obligation for the principal and interest due at more than $9 million.

As of Tuesday morning, an APS spokesman said via email that the schools had not yet been served with a copy of the lawsuit, but that they were aware a suit had been filed.

“As background,” APS spokesman Ian Smith wrote, “we have previously been in talks with the city about the issue to understand it from their perspective but to date the city has provided us no information that shows that APS owes the city for these bonds.”

He said that going forward, as this is a matter of litigation now, APS will not comment further.

A spokesperson for the city of Atlanta wrote in an email that “due to our obligation to taxpayers and APS’ refusal to come to the table on this matter, we have taken the necessary action to make taxpayers and the city of Atlanta whole.”

The city and schools spar frequently enough.

APS itself says the city still has not paid it $10 million owed under a January agreement reworking the schools’ participation in zones all across the city where a portion of property taxes are used for economic development instead of schools and general government. In that case, the city has said the funds have been set aside, but not paid yet, due to litigation by a third party regarding that agreement.

In 2018, one of the first things Atlanta Mayor Keisha Lane Bottoms did was announce with APS Superintendent Meria Carstarphen the end of a years-old property dispute between the two governments. The city’s name was on some dozens of school properties, dating back to when the two were the same legal entity. But under the administration of Mayor Kasim Reed, the city had started to refuse to hand over deeds when APS wanted to sell properties. Which was also the subject of some litigation.

APS and the city also went through about three years of fighting over property taxes from along the BeltLine, which ended in 2016 with a deal that saw the schools get some — but not all — of the money it had expected.

Update: After SR first published this story, APS sent a further statement, pushing back on the city’s allegation that APS has not come to the table. APS spokesman Ian Smith’s statement says that APS has tried “time and again” over two different mayoral administrations to resolve issues relating to the bonds. He said the two sides met on April 25 this year and  APS requested documentation from the city about the bonds, so that APS could evaluate the city’s contentions. Smith said that information hasn’t arrived yet, but that after a second request, the city promised it by July 12. Smith also said Carstarphen reached out to the mayor twice in June requesting a meeting to resolve the TAD [the $10 million issue above] and any other related issues.


2019-cv-323411 original complaint

2007 bond statement

Maggie Lee

Maggie Lee is a freelance reporter who's been covering Georgia and metro Atlanta government and politics since 2008.


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