IN THE SUPREME COURT OF THE ANTHONY A VERY and … · ANTHONY A VERY and SUSAN WILKINS, Appellants,...
Transcript of IN THE SUPREME COURT OF THE ANTHONY A VERY and … · ANTHONY A VERY and SUSAN WILKINS, Appellants,...
IN THE SUPREME COURT OF THE STATE OF GEORGIA
ANTHONY A VERY and SUSAN WILKINS,
Appellants,
v.
STATE OF GEORGIA, PAULDING COUNTY AIRPORT AUTHORITY, and PAULDING COUNTY, GEORGIA,
Appellees.
CASE NO. S14A0792
RESPONSE BRIEF OF APPELLEES PAULDING COUNTY AIRPORT AUTHORITY AND PAULDING COUNTY, GEORGIA
TALLEY, RICHARDSON & CABLE, P.A. W. Thomas Cable Georgia Bar No. 002690 J. Jayson Phillips Georgia Bar No. 576305 P.O. Box 197 Dallas, Georgia 30132 (770) 445-443 8
GRAY PANNELL & WOODWARD, LLP James R. Woodward Georgia Bar No. 775782 One Buckhead Plaza 3060 Peachtree Road, NW, Ste. 730 Atlanta, Georgia 30305 ( 678) 705-6280
BRINSON, ASKEW, BERRY, SEIGLER, RICHARDSON & DA VIS, LLP Norman S. Fletcher Georgia Bar No. 264100 Lee B. Carter Georgia Bar No. 595903 P.O. Box 5007 Rome, Georgia 30162-5007 (706) 291-8853
TABLE OF CONTENTS
INTRODUCTION 1
STATEMENT OF FACTS 2
I. THE PROJECT 2
IL THE APPELLEES' APPROVAL AND EXECUTION OF THE BOND RESOLUTION, THE SUPPLEMENTAL BOND RESOLUTION, AND THE IGA 3
III. THE BOND VALIDATION PROCEDURAL HISTORY 5
IV. THE VALIDATION ORDER ··················································· 7
V. SILVER COMET, LLC, THE BOND, AND THE AIRPORT 8
ARGUMENT AND CITATION OF AUTHORITY 9
l. THE SCOPE OF BOND VALIDATION PROCEEDINGS AND THE STANDARD OF REVIEW ONCE A BOND HAS BEEN VALIDATED 9
II. THE BOND WAS PROPERLY VALIDATED 10
A. The IGA is a valid agreement under the Intergovernmental Contracts Clause .- 1 O
B. The Bond does not violate the Lending Clause or the Gratuities Clause of the Constitution because no private party impermissibly benefits from the issuance of the Bond 16
1. The Bond does not violate the Gratuities Clause 16
2. The Bond does not violate the Lending Clause 17
C. Proper notice of the Validation Hearing was provided 19
D. The Open Meetings Act was not violated 22
CONCLUSION 24
1
TABLE OF AUTHORITIES
CASES PAGE(S)
Alexander v. Macon-Bibb County Urban Devel. Auth. & Urban Properties No. 47, 257 Ga. 181 (1987) 10
Ambac Indem. Corp. v. Akridge, 262 Ga. 773 (1993) 9
Berry v. City of East Point, 277 Ga. App. 649 (2006) 9
Clayton County Airport Authority v. State, 265 Ga. 24 (1995) 11, 13, 14, 15
Copeland v. State, 268 Ga. 375 (1997) 9
Nations v. Downtown Devel. Auth. of City of Atlanta, 255 Ga. 324 (1985) 12, 13
Nations v. Downtown Devel. Auth. of City of Atlanta, 256 Ga. 158 (1986) 11, 13, 14, 15, 17, 18
Rhodes v. City of Louisville, 121 Ga. 551 (1904) 21, 22
CONSTITUTION AND STATUTES PAGE(S)
GA. CONST., Art. III, Sec. VI, Para. VI 18
GA. CONST., Art. IX, Sec. II, Para. VIII 17
GA. CONST., Art. IX, Sec. III, Para. I(a) 11, 14
GA. CONST., Art. IX, Sec. V, Para. I(a) 10
O.C.G.A. § 6-3-20 12
O.C.G.A. § 36-82-60 12
O.C.G.A. § 36-82-75 5
11
O.C.G.A. § 36-82-76 20, 21, 22
O.C.G.A. § 50-14-l(b)(2) 24
O.C.G.A. § 50-14-2(1) 24
Ga. L. 1972, p. 3645 12
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INTRODUCTION1
Rather than focus on the merits of the Series 2013 Bond (the "Bond") and its
validation proceedings, Appellants attempt to distract this Court with innuendo and
conspiracy. The pertinent issue before this Court-whether the Bond and its
security are proper under the Georgia Constitution and Georgia law-has nothing
to do with Silver Comet, LLC ("Silver Comet"), despite Appellants' best efforts to
put Silver Comet at centerstage,
The sole purpose of the Bond is to finance the expansion of the parallel
taxiway at the Paulding Northwest Atlanta Airport (the "Airport"). It is to be
issued by the Paulding County Airport Authority (the "Airport Authority"), and it
is to be paid by the revenue the Airport Authority receives from Paulding County,
Georgia (the "County"). The County agreed to service the debt of the Bond in
exchange for its use of the expanded facilities and services provided by the Airport
Authority. The County's payments and the Airport Authority's provision of
services and facilities are memorialized in an intergovernmental agreement
between the two. The County's payments are the sole security for the Bond.
Noticeably absent from this arrangement is Silver Comet. That is because
Silver Comet is not acquiring or leasing any of the land on which the taxiway
1 Appellees requested-and were granted-an extension of time in which to file this Response Brief. A copy of the Court's March 14, 2014 Order is attached hereto as Exhibit A.
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expansion will occur. Silver Comet is merely a private company that has entered
into agreements with the Authority related to aspects of the Airport other than the
taxiway expansion. Silver Comet is the proverbial red herring designed to distract
this Court from the true issue on appeal-whether the Bond complies with Georgia
, law. Because Georgia law and the undisputed record show that the trial court
properly validated the Bond, 2 Appellees ask this Court to affirm.
STATEMENT OF FACTS
l. THE PROJECT.
The Bond that the trial court validated is small in the scheme of bond
issuances. It is not to exceed $3,600,000 and is intended to fund the expansion of
the parallel taxiway at the Airport. (See R-468-536, R-541-590, R1031-1049.)
Basically, the taxiway-which is parallel to the landing strip and is what planes
use to taxi to and from the terminal-needs to be lengthened and widened to
accommodate commercial planes and to improve the overall safety of the airport
facility for both small private planes and larger commercial planes (the "Project").
2 Appellants attempt to use a comment made by the trial court at a subsequent . hearing that is not a part of the record to imply that Appellants' objections to the Bond are valid. (See Appellants' Br. at 2, 10-11.) This is disingenuous. The trial court's remarks were made at a hearing to determine whether Appellants should be required to post a $1,000,000 bond to pursue this appeal. In determining that a bond was not necessary, the trial court stated that Appellants had presented "meritorious and non-frivolous arguments" in opposing the validation of the Bond. Such comments do not endorse Appellants' position. Rather, the comments indicate that Appellants' positions do not lack substantial justification, as if the court was deciding an attorneys' fees request under O.C.G.A. § 9-15-14.
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(See T-51-58.) The real estate on which the taxiway expansion will take place is
owned by both Appellees-certain portions are owned by the Airport Authority
and other portions are owned by the County. (See T-51-55, T-63.)
To accomplish the Project, the Airport Authority and the County will enter
into an intergovernmental agreement (the "IGA"). (See R508-536.) Under the
IGA, Appellees agree to allow the joint use of their respective property to construct
the expanded taxiway. (See id.) Moreover, in exchange for the Airport Authority
agreeing to operate, maintain, and provide the airport facilities and services related
to the expanded taxiway, the County agrees under the IGA to pay the principal and
interest payments on the Bond. (See id.) These contractually required payments
will serve as the Bond's security. (See 1031-1049 .) Under this arrangement, the
County-and its citizens-receive greatly improved airport facilities and services
that will be provided by the Airport Authority. To the extent additional funds are
necessary to fund the County's payment obligations under the IGA, the County
agrees to use its taxing power to raise those funds. (See R-508-536.)
Il. THE ÁPPELLEES' ÁPPROVAL AND EXECUTION OF THE BOND RESOLUTION,
THE SUPPLEMENTAL BOND RESOLUTION, AND THE IGA.
During its September 18, 2013 meeting, the Airport Authority was presented
with-and unanimously approved-a bond resolution authorizing the issuance of
the Bond, which would finance the Project (the "Bond Resolution"). (See R-462-
464.) The Airport Authority also authorized the execution and delivery of the IGA
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between the Airport Authority and the County, which would form the security for
the Bond, at its September 18, 2013 meeting. (See id.) This meeting occurred at
the Airport Authority's regular meeting place-the terminal of the Airport-and
was open to the public. (See T-37-40.) Notice of the September 18, 2013 meeting
was provided by posting a public notice of the meeting at the Airport Authority's
office located at the terminal-as all other meetings of the Airport Authority are
noticed. (See id.) While a portion of the September 18, 2013 meeting was
conducted in executive session, the Bond Resolution was approved and all
business relating to the Bond and the Bond Resolution were completed prior to the
Airport Authority entering its executive session. (See R-462-467.)3
The Airport Authority later supplemented the Bond Resolution through a
supplemental resolution, which provided additional specificity with respect to the
Bond (the "Supplemental Bond Resolution"). (See R-541-590.) The Airport
Authority approved the Supplemental Bond Resolution at its October 22, 2013
meeting. (See R-539-540.) Like the September 18, 2013 meeting, the October 22,
2013 meeting was open to the public and subject to prior public notice. (See T-46-
48.) The Airport Authority also ratified all of its prior action taken at the
September 18, 2013 meeting during its October 22, 2013 meeting. (See R-539-
3 As set forth by the affidavit attached to the official meeting minutes of the September 18, 2013 meeting, the Authority entered into the executive session to discuss pending litigation unrelated to the Bond and the Bond Resolution. (See R- 465-467.)
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540.) There was no executive session during the October 22, 2013 meeting and
Appellants have not made an allegation of a violation of the Open Meeting Act at
this meeting.
The County approved the terms of the Bond Resolution and authorized the
County to enter the IGA with the Airport Authority at its regular meeting on
October 8, 2013 (the "County Resolution"). (See R-594-596.) The October 8,
2013 meeting was open to the public and notice of the meeting was posted
publicly. (See T-46-48.) The County approved the Supplemental Bond Resolution
during its regular meeting on October 22, 2013, which was also open to the public
and subject to proper public notice. (See id.)
Ill. THE BOND VALIDATION PROCEDURAL HISTORY.
Following its approval of the Bond Resolution, the Airport Authority, on
September 30, 2013, provided written notice to the Paulding County District
Attorney that it intended to issue the Bond, which included a certified copy of the
Bond Resolution. (See R-15-17.) Approximately nine days later, on October 9,
2013, the Paulding County District Attorney filed a Petition against the Airport
Authority and the County, which set forth all information required by O.C.G.A. §
36-82-75, such as the name of the governmental body seeking to issue the bond,
the amount of the bond to be issued, for what purpose the bond is to be issued,
what interest it is to bear, how much principal and interest is to be paid annually,
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when the bond will be paid in full, and the security to be pledged for payment of
the bond. (See R-7-88.) On October 10, 2013, the Paulding County Superior
Court issued a Rule Nisi requiring Appellees to show cause why the Bond and the
security for the payment of the Bond should not be confirmed and validated at a
hearing on October 28, 2013 (the "Validation Hearing"). (See R-89-90.)
On October 9, 2013, the Clerk of the Paulding County Superior Court
submitted a notice to be published in the official legal organ of Paulding County
the Dallas New Era-relating to the Bond and the Validation Hearing (the
"Notice"). The Notice was published on October 17, 2013 and October 24, 2013,
and stated that a bond was scheduled to be issued to "pay the costs of acquiring,
constructing, extending and improving the landing field for the Paulding Northwest
Atlanta Airport, and ... pay any expenses necessary to accomplish the foregoing."
(See R-91-92.) The Notice further stated that a hearing related to the Bond was
scheduled to take place on October 28, 2013 at 9:00 a.m. at the Paulding County
Courthouse and informed all Paulding County residents that they may intervene
and object to the Bond. (See id.)
After the Notice was published and on the morning of October 28, 2013,
Appellants filed a Motion to Intervene and raised five objections as to why the
Bond should not be validated. (See R-163-180.) Thereafter, the parties appeared
for the 9:00 a.m. call of the case. Subsequently, the trial court permitted the
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intervention, allowed Appellants limited discovery, and rescheduled the Validation
Hearing to December 2, 2013. (See R-198-201, R-272-273.)
On December 2, 2013, following limited discovery between the Parties,4 the
trial court held the Validation Hearing, at which the Parties called and examined
four witnesses and introduced a total of twenty-one exhibits. (See R-1059.) The
Parties also presented substantial legal arguments to the trial court in support of
their respective positions-both in the form of pre-hearing briefs and at the
Validation Hearing following the submission of evidence. (See R-316-457, R-799-
822, R-1059.)
IV. THE ORDER VALIDATING THE BOND.
Following the hearing and after reviewing the evidence, the trial court issued
its findings of facts and conclusions oflaw on all of the objections raised by the
Appellants. (See R-1031-1049.) The trial court disagreed with the Appellants on
each of their objections and, among other things, found: (1) that the Bond and its
security-i.e., the County's agreement to service the debt of the Bond, as set forth
in the !GA-satisfied the Intergovernmental Contracts Clause of the Georgia
Constitution and the Revenue Bond Law; (2) that the Bond did not violate the
Gratuities Clause or the Lending Clause of the Georgia Constitution; (3) that notice
4 Appellants attempted to enlarge this bond validation proceeding by seeking financial information from Silver Comet, LLC, a non-party. The trial court appropriately quashed Appellants' efforts to discover information irrelevant to this bond validation proceeding, which Appellants have not appealed.
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of the Validation Hearing and the issuance of the Bond had been provided; and ( 4)
that the Bond Resolution and the Supplemental Bond Resolution were approved
during public meetings of the Appellees. (See id.) Based on these findings, the
trial court validated the Bond. (See id.) This appeal followed.
V. SILVER COMET, LLC, THE BOND, AND THE AIRPORT.
Appellants-both before the trial court and now on appeal-focus their
energies on non-party Silver Comet, in an effort to paint a picture of back-room
deals and alleged unscrupulous behavior. Such efforts are misguided and
improper.
Silver Comet is involved with the overall transformation of the Airport into
a regional hub for commercial flights. (See R-823-832, R-840-852.) It is not,
however, involved with the Project that the Bond is intended to finance. The
Project is simply the expansion of the parallel taxiway, which is-and must
remain-entirely public. That is the entirety of the Project, and it in no way
involves Silver Comet. It is not uncommon or improper for an airport authority to
bring in a private company to operate certain portions of a public commercial
airport. See, e.g., United States General Accounting Office, Testimony Before the
Subcommittee on Aviation, Committee on Transportation and Infrastructure by
Gerald L. Dillingham at 1 (Feb. 29, 1996) ("the Federal Aviation Administration
(FAA) has permitted and even encouraged some privatization, such as contracting
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for airport management or allowing private companies to develop and lease
terminals .... ") (available at http://www.gpo.gov/fdsys/pkg/GAOREPORTS-T-
RCED-96-82/pdf/GAOREPORTS-T-RCED-96-82.pdt). This "reliance on the
private sector is crucial to reducing costs and improving services." Id. at 4. And
that is exactly what the Airport Authority has done with Silver Comet-contracted
with a private entity better equipped than the Airport Authority to operate certain
portions of the Airport terminal. (See R-840-852.) Contrary to Appellants'
assertions throughout their brief (see Appellants' Br. at 3, 9, 10, 18, 20), Silver
Comet has not agreed, in any of its agreements with the Airport Authority, to make
any payments to the Authority to be used for paying principal or interest on the
Bond.
ARGUMENT AND CITATION OF AUTHORITY
l. THE SCOPE OF BOND VALIDATION PROCEEDINGS AND THE STANDARD OF REVIEW ONCE A BOND HAS BEEN VALIDATED.
Bond validation proceedings are narrow in scope. The trial court must
consider the bond and the security for the bond, evaluate whether the proceedings
by the issuer of the bond were lawful, and determine whether the issuer followed
the statutory procedures. See Ambac Indem. Corp. v. Akridge, 262 Ga. 773, 775
(1993); Berry v. City of East Point, 277 Ga. App. 649, 651 (2006). On appeal, "the
trial court's findings of fact in a bond validation proceeding will not be set aside if
there is any evidence to support it." Copeland v. State, 268 Ga. 375, 380 (1997).
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Moreover, even if evidence before the trial court was in conflict, the trial court's
findings will not be disturbed on appeal, if there is evidence to support them. See
Alexander v. Macon-Bibb County Urban Development Authority and Urban
Properties No. 47, 257 Ga. 181, 185 (1987). Here, because the trial court's order
validating the Bond is supported by sufficient evidence-namely, that the Bond
was validly approved by the Appellees, that the IGA is valid security for the Bond,
and that all statutory procedures were followed-Appellees ask this Court to
affirm.
Il. THE TRIAL COURT PRO PERL Y V ALIDA TED THE BOND.
A. The IGA is a valid agreement under the Intergovernmental Contracts Clause of the Constitution.
Before a political subdivision, like the Appellees, can incur a "new debt,"
the Constitution, generally speaking, requires the assent of a maj ori ty of its
qualified voters. See GA. CONST., Art. IX, Sec. V, Par. I(a). But the Constitution
provides for certain exceptions to the "new debt" prohibition, including its
Intergovernmental Contracts Clause.
The (intergovernmental contracts) clause does not supersede other provisions of the Constitution, such as the debt clause, which place limitations on the powers of government. It merely carves out exceptions. It is clear a [county] may enter into a contract authorized by the intergovernmental contracts clause for the future expenditure of funds without violating the debt clause of Art. IX, Sec. V, Par. l(a).
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Nations v. Downtown Devel. Auth. of City of Atlanta, 256 Ga. 158, 160 (1986)
("Nations IF') ( citations and punctuation omitted). The Intergovernmental
Contracts Clause authorizes political subdivisions-like the Appellees-to enter
into contracts "not exceeding 50 years" "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." GA. CONST., Art. IX,
Sec. III, Par. I(a); see also Clayton County Airport Authority v. State, 265 Ga. 24,
25 (1995).
To paraphrase, an intergovernmental agreement must meet four elements to
satisfy the Intergovernmental Contracts Clause of the Constitution:
(1) the contract must be between proper governmental entities;
(2) the term of the contract must not exceed 50 years;
(3) the contract must expressly relate to the provision of services or the joint or separate use of facilities or equipment; and
(4) each party must have express independent power and authority to provide the activities, services, or facilities that are the subject of the contract.
Appellants do not dispute that the first two elements are met: Appellees are proper
governmental entities; and the term of the IGA does not exceed 50 years. (See
Appellants' Br.)
The fourth element is also met because Appellees have the authority to issue
revenue bonds and use the proceeds for the purpose of paying all or part of the cost
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of any "undertaking," which expressly includes expanding airport facilities. See
O.C.G.A. § 6-3-20, et seq. ("Counties, municipalities, and other political
subdivisions are authorized, separately or jointly, to acquire, establish, construct,
expand ... airports and landing fields for the use of aircraft .... "); O.C.G.A. § 36-
82-60, et seq. (the "Revenue Bond Law"); Ga. L. 1972, p. 3645, et seq. (the "Act")
(local act of the General Assembly giving power to the Paulding County Airport
Authority to provide an airport facility to the County).
The limited issue on appeal with respect to the validity of the IGA under the
Intergovernmental Contracts Clause is whether the third element is met-whether
the IGA relates to the provision of services or the joint or separate use of facilities
or equipment. Appellants contend that the IGA is not "for 'services' or the 'use of
facilities or equipment" and thus violates the Georgia Constitution. (See
Appellants' Br. at 12-17.) This argument-which relies entirely on Nations v.
Downtown Development Authority of City of Atlanta, 255 Ga. 324 (1985)
("Nations I")-fails as a matter of law.
First, the record shows that the IGA relates to both "services" and the "use
of facilities." (See generally R-468-536, R-541-590.) In exchange for the County
servicing the debt of the Bond (see R-519 (Article 4.2)), the Airport Authority
agreed to operate and maintain the Project (see R-520 (Article 5.2)), which thereby
provided the County-and its citizens-with an improved "facility" they are
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permitted to use. Moreover, the expanded parallel taxiway is being constructed on
real property that is owned by the County and the Airport Authority. (See T-51-55,
T-63.) It is only through the joint use of each other's property-their respective
"facilities"-that the Project could take place.
The Project also provides "services" to the County that were previously
unavailable-namely, the service of commercial flights. Without an expansion of
the parallel taxiway, it is difficult-if not nearly impossible-for larger planes
used in commercial flights to maneuver to and from the landing strip. Through its
operation and maintenance of the Project, as required by the IGA, the Airport
Authority is providing these "services" to the County and its citizens.
Consequently, the IGA is valid under the Constitution's Intergovernmental
Contracts Clause.
Appellants argue that Nations I demands a different result and that Nations
II and Clayton County Airport Authority are inapposite. (See Appellants' Br. at 13-
17.) But contrary to Appellants' position, the facts of this case are nearly identical
to those in Clayton County Airport Authority. There, a county and an airport
authority entered into an intergovernmental agreement whereby the authority
agreed to issue bonds to pay for the acquisition and expansion of an existing
airport. 265 Ga. at 24. In exchange for the use of the airport's services and
facilities, now maintained and operated by the airport authority, the county agreed
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to service the debt of the bond. Id. at 24-25. The intervenors argued, and the trial
court agreed, that "this consideration did not constitute lawful 'revenue' for the
Authority, but was, instead, an unconstitutional 'new debt' incurred by the County
without the assent of the majority of its qualified voters." Id. at 24 (citation
omitted).
On appeal, this Court disagreed and found that the county's agreement to
service the debt of the bond was valid under the Intergovernmental Contracts
Clause:
[ a ]lthough the consideration which the County agrees to pay for the use of the expanded airport facility is not set forth in a definite dollar amount, there is no constitutional or statutory provision which specifies how the consideration necessary to support an intergovernmental contract must be expressed by the parties to such a contract. See Nations v. Downtown Devel. Auth. of the City of Atlanta, supra at 159, 345 S.E.2d 581 (upholding an intergovernmental contract wherein the consideration was expressed in terms of "an amount equal to the debt service on the bonds issued"). The only requirement is that the intergovernmental contract itself "must deal with activities, services, or facilities which the contracting parties are authorized by law to undertake." Art. IX, Sec. III, Par. I(a) of the Ga. Const. of 1983.
Id. at 25. There, like here, the county had "contracted 'for the use' of an airport
facility which the Authority proposed to acquire and expand." Id.
The Court then looked to the powers granted to the airport authority and the
county to determine whether they were authorized to enter into the contract, which
formed the security of the bond:
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[b ]y law, the Authority is granted broad authority to undertake to provide an airport facility for the County. Ga.L.1994, pp. 4305, 4311 et seq. Pursuant to Art. IX, Sec. II, Par. III(a)(9) of our constitution, the County is authorized generally to undertake to provide for "[p]ublic transportation" and, pursuant to O.C.G.A. § 48-5-220(14), the County is authorized specifically to expend tax revenues to provide for an airport facility.
Id. Because the airport authority and the county were authorized to enter the
intergovernmental contract relating to the use and expansion of the airport, it was
deemed "a valid intergovernmental contract." Id. Stated differently, "the County's
promise to pay 'for the use' of the expanded airport facility 'is a debt, but it is a
debt authorized under the constitution."' Id. ( quoting Nations II). Consequently,
this Court reversed the trial court because "the contractual consideration represents
the authority's lawful 'revenue pledged to the payment of its bonds .... " Id.
The contractual arrangement between the County and the Airport Authority
under the IGA is indistinguishable from that set forth in Clayton County Airport
Authority. Here, like Clayton County, Paulding County has agreed to service the
debt of the Bond in exchange for its use of the Airport's expanded facilities-e.g.,
the expanded taxiway-and the concomitant expanded services-e.g., commercial
flights. In exchange, like the Clayton County Airport Authority, the Paulding
County Airport Authority has agreed to operate and maintain the taxiway
expansion for the benefit of the County and its citizens. Because the structure of
the IGA is indistinguishable from that in Clayton County Airport Authority, it is
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valid under the Intergovernmental Contracts Clause of the Constitution. 5
B. The Bond does not violate the Lending Clause or the Gratuities Clause of the Constitution because no private party impermissibly benefits from the issuance of the Bond.
Appellants next contend that the Bond violates the Lending Clause and the
Gratuities Clause because, according to Appellants, the Bond impermissibly
benefits a private party, Silver Comet. (See Appellants' Br. at 17-22.) Like their
first contention that the IGA violates the Intergovernmental Contract Clause of the
Constitution, this constitutional argument also fails as a matter of law.
l. The Bond does not violate the Lending Clause.
In full, the Lending Clause provides that:
The General Assembly shall not authorize any county, municipality, or other political subdivision of this state, through taxation, contribution, or otherwise, to appropriate money for or to lend its
5 Appellants also cite to Section 5.4 of the IGA to argue that the IGA violates the Intergovernmental Contracts Clause and is not proper security for the Bond. (See Appellants' Br. at 17 .) This argument also lacks merit. Section 5 .4 states that the Airport Authority may sell, lease, or donate all or a portion of the Project, but only after it has received an opinion from a "nationally recognized bond counsel" that such a transfer would not adversely affect the tax-exempt status of the Bond. (R- 520 (Section 5.4).) As Section 5.4 implies, any transfer of the Project by the Airport Authority jeopardizes the Bond's tax-exempt status, which is based upon the Project being used for governmental purposes within the meaning of Section 141 of the Internal Revenue Code. In fact, under the IGA the Airport Authority and the County both agree not to take any action that would adversely affect the tax-exempt status of the Bond. (See R-521(Section 5.5).) Moreover, irrespective of Section 5.4 of the IGA, the Airport Authority cannot "give away" the Project without violating the Gratuities Clause of the Constitution. See, e.g., Odd Fellows v. City of Thomasville, 226 Ga. 4, 8 (1970). Without question, the provisions of the Constitution trump any rights the Airport Authority may have under the IGA.
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credit to any person or to any nonpublic corporation or association except for purely charitable purposes.
GA. CONST., Art. IX, Sec. II, Para. VIII. This Court made it clear in Nations II that
a municipality or county may pledge its credit or taxing power in order meet its
own legally authorized obligations. Nations II, 256 Ga. at 161 ("We hold that this
is a valid use of the City's credit for its own lawful purposes and obligations and is
not violative of Art. IX, Sec. II, Par. VIII."). And that is exactly what the County
has done here; it has entered into a valid intergovernmental agreement with the
Airport Authority to service the debt of the Bond in exchange for the use of the
Airport Authority's expanded airport services and facilities that the Project will
enable. The County agreed to pledge its credit and taxing power to meet its own
obligations under the I GA-and not those of any private party.
To argue that the Bond somehow violates the Lending Clause, Appellants
rely on agreements that are irrelevant to the Bond and its validation proceedings.
Nowhere in the Bond Resolution, the Supplemental Bond Resolution, the IGA, or
any minutes of the Appellees' meetings that approved the Resolutions and the IGA
does it state that a private party's payments are in any way relied upon as security
for the bond issuance. The sole security for the Bond is the County's agreement to
service the debt. (See R-1044 (the IGA "constitutes the sole security for the Series
2013 Bond.").) Like the City of Atlanta in Nations II, the County has agreed to
pledge its credit and taxing power in order to meet its own contractual
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obligations-not the obligations of any private party. Nations II, 256 Ga. at 161.
· The Bond therefore does not violate the Lending Clause of the Constitution.
2. The Bond does not violate the Gratuities Clause.
Appellants also argue that the Bond violates the Gratuities Clause because
the Bond, according to Appellants, improperly benefits Silver Comet without the
public deriving a substantial benefit in return. (See Appellants' Br. at 19-22.)
Again, Appellants' argument is misplaced.
The Gratuities Clause prohibits the General Assembly from granting "any
donation or gratuity or to forgive any debt or obligation owing to the public." GA.
CONST., Art. III, Sec. VI, Para. VI. "The United States Supreme Court has
interpreted this provision as not applying to a 'conveyance in aid of a public
purpose from which great benefits are expected."' Campbell v. State Road &
Tollway Authority, 276 Ga. 714, 718 (2003) (quoting McLucas v. State Bridge
Bldg. Auth., 210 Ga. 1, 11 (1953) which quotes Georgia v. Cincinnati So. Ry., 39
S.Ct. 14 (1928)). "Similarly, this Court has repeatedly held that there is no gratuity
when the state receives a substantial benefit in exchange for the use of public
property." Id. (citation omitted).
Conspicuously absent from Appellants' argument are the great benefits that
will result from the issuance of the Bond. The Project the Bond is intended to
finance is one small piece of the Appellees' master plan to tum its small, relatively
18
local Airport into a regional hub for commercial flights. This will provide the
citizens and businesses of Paulding County-along with the citizens and
businesses of the surrounding counties-an alternative to Hartsfield-Jackson
Atlanta International Airport. While Appellants (and those that have heavily
invested in Hartsfield-Jackson) may prefer that the Airport remain small and
relatively inconsequential, that is not in the greater public's best interest. Plus, the
expansion increases the overall safety of the facility, regardless of whether the
plane is commercial or private. The Project, simply stated, affords the County and
its citizens a substantial benefit.
Moreover, any indirect benefits that businesses who choose to invest in the
Airport receive are akin to the benefits that property owners receive when a new
highway is built adjacent to their property. It is true that the adjacent property
owners may receive benefits greater than the general public from the new highway,
but those benefits are not "gratuitous" in violation of the Constitution. Rather, the
benefits provided to the public by the new highway-like the benefits provided to
the County by the Bond and the Project-are substantial. See Campbell, 276 Ga.
at 718 (holding that because "the use of federal funds to construct public
transportation projects is for a public purpose and results in substantial benefits to
the state," no violation of the Gratuities Clause existed). Because the use of
County funds to expand the parallel taxiway at the Airport is for a public purpose
19
and results in substantial benefits to it and its citizens, the Bond does not violate
the Gratuities Clause.
C. Proper notice of the Validation Hearing was provided.
Appellants next argue that the citizens of Paulding County received
insufficient notice of the Validation Hearing. (See Appellants' Br. at 22-25.) Like
their other arguments, this too is without merit.
Appellees recognize that the Notice contains a scrivener's error: it names
the issuer of the Bond as the "Paulding County Industrial Building Authority"
rather than the "Paulding County Airport Authority." (See R-91-92 (emphasis
added).) But, contrary to Appellants' contention, this error does not result in there
being "an overwhelming likelihood of confusion" (Appellants' Br. at 24); nor does
it demand that the Bond should be invalidated (id. at 25).
O.C.G.A. § 36-82-76, the public notice provision of the Revenue Bond Law,
requires:
[p ]rior to the hearing of the case, the clerk of the superior court of the county in which it is to be heard shall publish, once during each of the two successive weeks immediately preceding the week in which the hearing is to be held, a notice to the public that on the day specified in the order providing for the hearing of the case the same will be heard. Such publication shall be in the newspaper which is the official organ of the county in which the sheriffs advertisements appear.
This notice "is designed to give information to the citizens of the municipality,
county, or political division ... of the pending proceeding to confirm and validate
20
[the bond]." Rhodes v. City of Louisville, 121 Ga. 551, 552-54 (1904). .
"[S]ubstantial compliance with this section of the [Revenue Bond Law relating to
public notice] is all that is required." Id. "If the notice is sufficient to put the
individual citizen on notice that the municipality, county, or political subdivision
of which he is a resident is seeking to validate bonds, and the time of hearing of the
proceeding, the statutory purpose has been subserved." Id.
Here, Appellants make much ado about nothing. Read literally, the Revenue
Bond Law does not require the notice to include the exact corporate name of the
issuer; all it requires is that the date and time of the validation hearing be provided.
See O.C.G.A. § 36-82-76. But even if Rhodes can be read to require additional
information, such as the specific name of the issuer of the bond, the Notice
provides that information-and more. The Notice named the Airport Authority
and the County as the defendants in the validation proceeding, and stated that a
bond was scheduled to be issued to
• "pay the costs of acquiring, constructing, extending and improving the landing field for the Paulding Northwest Atlanta Airport, and . . . pay any expenses necessary to accomplish the foregoing";
• that a hearing related to the Bond is scheduled to take place on October 28, 2013 at 9:00 a.m. at the Paulding County Courthouse;
• that the Bond would not exceed $3,600,000;
• that the County would service the debt of the Bond; and
21
• that the Validation Hearing would address the validity of the IGA between the County and the Authority.
(See R-91-92 (emphasis added).) Given the significant detail provided by the
Notice-both about the Bond and the Project-it is difficult to understand
Appellants' contention that proper notice was not provided to the citizens of
Paulding County. The limited scrivener's error in no way effected or inhibited any
ordinary taxpayer, who objected to the Project, from seeking to intervene. The
sufficiency of the notice is demonstrated by the very intervention of the Appellants
in this case. Because the Notice, at a minimum, substantially complies with
O.C.G.A. § 36-82-76, Appellants' argument to the contrary should be disregarded.
See Rhodes, 121 Ga. at 552-54.
Moreover, even if there is any question about the Notice's substantial
compliance with O.C.G.A. § 36-82-76, it is undisputed that Appellants, in fact,
received notice of the Validation Hearing. Appellants filed their Motion to
Intervene before the first scheduled Validation Hearing and were permitted to
intervene. (See R-163-180, R-200-201.) As the trial court held, the limited error,
if there was one, "did not impair notification to the residents of Paulding County of
the time, date and place of the proceeding." (R-1038-1039.) Consequently, "the
statutory purpose has been []served," Rhodes, 121 Ga. at 554, and no harm can be
claimed.
22
D. The Airport Authority complied with the Open Meetings Act.
Appellants' final argument is that Airport Authority violated the Open
Meetings Act by going into an executive session during its September 18, 2013
meeting. (See Appellants' Br. at 25-28.)6 The fallacy of Appellants' position is
demonstrated by the undisputed record.
The record shows that the Airport Authority was presented with-and
approved-the Bond Resolution during the "open" portion of its September 18,
2013 meeting. (See R-462-464.) Only after the Authority had completed its
business with respect to the Bond and the Bond Resolution did it enter a "Closed
Session." (See id.) And while the official meeting minutes do not reflect the
specific reason for the closure of the meeting, a certified affidavit of the Chairman
of the Authority does, as contemplated by O.C.G.A. § 50-14-4(b)(l). (See R-465-
467.) This certified affidavit was filed with the official minutes of the September
18, 2013 meeting, is publicly available, and specifically stated why the Authority
entered the "Closed Session"-to discuss pending litigation unrelated to the Bond.
6 Appellants also refer to a November 12, 2012 meeting of the Authority when it entered into a "Closed Session." (See Appellants' Br. at 26.) This meeting, which did not approve the Bond Resolution or the Supplemental Bond Resolution, is wholly irrelevant to this bond validation proceeding. The only relevant meetings are the September 18, 2013 meeting, where the Bond Resolution was approved, and the October 22, 2013 meeting, where the Supplemental Bond Resolution was approved. Appellants only contend that the September 18, 2013 meeting violated the Open Meetings Act. But, as described above, the record shows that no such violation occurred.
23
(See id.) Discussing pending litigation is one of the express exceptions to the open
meetings requirement. See O.C.G.A. § 50-14-2(1). Based on this record, there has
been no violation of the Open Meetings Act.
Moreover, to the extent the Authority's failure to explain the reasons for
entering a "Closed Session" in its official meeting minutes can be considered a
violation of the Open Meetings Act, it has no bearing on this bond validation
proceeding. Prior to entering the non-public portion of the September 18, 2013
meeting, the Airport Authority discussed, voted on, and approved the Bond
Resolution and the IGA. (See R-462-464.) Thus, to the extent any actions taken
during the "Closed Session" are considered non-binding, see O.C.G.A. § 50~14-
1 (b )(2), those non-binding acts cannot render the Bond invalid. Plus, any and all
actions taken during the September 18, 2013 meeting that could potentially be
considered "void" were later ratified and approved during the Authority's October
22, 2013 meeting (See R-539-540.) and Appellants do not contend there was any
violation of the Open Meetings Act at this meeting. As a result, the Bond cannot
be invalidated due to any alleged violation of the Open Meetings Act.
CONCLUSION
Because the trial court properly validated the Bond, Appellees ask this Court
to affirm the trial court's Validation Order.
24
Respectfully submitted this 7th day of April, 2014.
P.O. Box 197 Dallas, Georgia 30132 (770) 445-4438 (770) 505-4871 (fax) [email protected] [email protected]
P.O. Box 5007 Rome, Georgia 30162-5007 (706) 291-8853 (706) 234-3574 (fax) [email protected] [email protected]
One Buckhead Plaza 3060 Peachtree Road, NW, Suite 730 Atlanta, Georgia 30305 (678) 705-6280 [email protected]
TALLEY, RICHARDSON & CABLE, P.A.
BY: Isl W. Thomas Cable W. THOMAS CABLE Georgia Bar No. 002690
BY: Isl J. Jayson Phillips J. JAYSON PHILLIPS Georgia Bar No. 576305
BRINSON, ASKEW, BERRY, SEIGLER, RICHARDSON & DA VIS, LLP
BY: Isl Norman S. Fletcher NORMAN S. FLETCHER Georgia Bar No. 264100
BY: Isl Lee B. Carter LEE B. CARTER Georgia Bar No. 595903
GRAY PANNELL & WOODWARD, LLP
BY: Isl James R. Woodward JAMES R. WOODWARD Georgia Bar No. 775782
Attorneys for Appellees Paulding County Airport Authority and Paulding County, Georgia
25
SUPREME COURT OF GEORGIA Case No. S 14A0792
Atlanta, March 14, 2014
The Honorable Supreme Court met pursuant to adjournment.
The following order was passed.
ANTHONY AVERY et al. v. STATE OF GEORGIA et al.
Y our request for an extension of time to file the brief of appellee in the above case is
granted until April 07, 2014
A copy of this order MUST be attached as an exhibit to the document for which the
appellee received this extension.
SUPREME COURT OF THE STATE OF GEORGIA
Clerk's Office, Atlanta
I certify that the above is a true extract from the minutes of the Supreme Court of Georgia.
Witness my signature and the seal of said court hereto affixed the day and year last above written.
~À~,Clerk
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing RESPONSE
BRIEF OF APPELLEES has been served by United States Mail, with sufficient
postage attached thereto, addressed as follows to the parties:
Charles K. McKnight, Jr. Gary J. Toman
NATIONS, TOMAN & MCKNIGHT, LLP
1230 Peachtree Street NE, Suite 2330 Atlanta, Georgia 30309
Donald R. Donovan Steven J. Messinger
PAULDING COUNTY DISTRICT ATTORNEY'S OFFICE
280 Constitution Blvd., Suite 2072 Dallas, Georgia 30132
This 7th day of April, 2014.
P.O. Box 5007 Rome, Georgia 30162-5007 (706) 291-8853 (706) 234-3574 (fax) [email protected]
BRINSON, ASKEW, BERRY, SEIGLER, RICHARDSON & DA VIS, LLP
BY: Isl Norman S. Fletcher NORMAN S. FLETCHER Georgia Bar N o. 2641 OO