News broke before Christmas that the city of Atlanta went to market with about $188 million in bonds having “a financial poison pill” stipulation to undermine the breakaway Buckhead cityhood effort. After that occurred, the Atlanta City Council met and voted on specific language attempting to scare cityhood proponents. Yet there’s now more to the story, with cityhood proponents fighting back.
But first, some background. The bonds were presented to investors, according to Saporta Report reporter David Pendered. Then hours after the Council met to consider the poison pill, Atlanta sold millions of dollars’ worth of even more bonds according to records provided by an affiliate of the Municipal Securities Rulemaking Board.
The bottom line: Outgoing Mayor Keisha Lance Bottoms and the Council seek to establish financial consequences– likely in the tens of millions of dollars– for parts of Atlanta that de-annex, according to the Council-passed legislation. (Mayor-elect and Councilman Andre Dickens didn’t participate in the virtual City Council meeting and Councilman Howard Shook, who represents Buckhead, was the only Council member to vote “no” on the poison pill provision.)
The poison pill, according to the legislation, “is in the best financial interests of the City… in the event that the General Assembly of the state enacts a De-annexation Act…” Of course, the “de-annexation” refers to the Buckhead cityhood effort.
State Sen. Brandon Beach
If enacted, Pendered first reported that the provision would require Buckhead City to pay Atlanta its share of a debt — up to $198 million — in a lump sum a year after the new city is formed, according to terms outlined in the legislation. The amount of payment is to be determined if and when Buckhead City is established. The City Council would have to vote to call the debt, under the terms of the “extraordinary optional redemption” provision.
InsiderAdvantage has learned, however, that State Sen. Brandon Beach, R-Alpharetta and a member of the Fulton County legislative delegation, is already preparing to fend off this challenge. The senator tells InsiderAdvantage that he already is “in talks” with legislative counsel to “get around and alleviate the poison pill.” He’s doing this, of course, because the General Assembly must ultimately pass any cityhood legislation which would require a vote of the people affected— and he is one of the sponsors of the legislation. Stay tuned.
