By Joel Hall
Riverdale City Councilman Rick Scoggins has filed a lawsuit in Clayton County Superior Court, asking the court to make the Riverdale Downtown Development Authority (DDA) return $735,750 of city funds used to purchase property on behalf of the city.
The suit also asks the court to declare the city's "Cleanliness of Property, Sidewalks, and Rights-of-Way" ordinance unconstitutional. It also challenges the way abstentions, during votes on issues, are interpreted by the city council.
According Riverdale City Attorney Deana Johnson, the city was served with the suit on Tuesday. Riverdale DDA Executive Director Michael Syphoe said he was served on Wednesday. The lawsuit seeks "declaratory judgment, preliminary injunction, permanent injunction, damages, and attorney's fees" against the city and the DDA.
In the complaint, Scoggins challenges a Feb. 11, 2008 intergovernmental agreement, in which the city gave the DDA $735,750 to purchase two properties on Wilson Road. The properties were to be used for a new municipal park, according to City Attorney Johnson.
Scoggins claims that he, "as a taxpayer, will continue to suffer immediate and irreparable injury as a result of the city advancing taxpayers' money to the authority, which has no funds or ability to repay the taxpayers."
According to Johnson, the DDA purchased the two properties on Feb. 26, 2008. On May 22, 2008, the DDA passed a resolution to deed the two properties back to the city and return funds left over from the purchase in the amount of $223,840. The city accepted the $223,840 in June of 2008, Johnson said.
"They're [Scoggins and his legal counsel are] claiming that was unlawful, and that the entire action should be voided," Johnson said. However, "that is absolutely the way DDAs operate. There is a state statute that gives the city the ability to create DDAs, and sets the scope of what they can do. This is well within that scope."
Official Code of Georgia Annotated (OCGA) Section 36-42-6 defines the powers given to downtown development agencies. Among having the powers to sell, purchase, and lease property on behalf of an entity, the code section states that development agencies can "receive and use the proceeds of any tax levied by a municipal corporation to pay the costs of any project, or for any other purpose for which the authority may use its own funds."
The code also states that one of the key functions of development agencies is to "receive and administer gifts, grants, and devises of money and property of any kind, and to administer trusts."
The intergovernmental agreement, which approved the city's advancement of $735,750 to the DDA, states that the money will be used solely for "purchasing properties located in the downtown development area that are available for purchase and are identified as in need of redevelopment ... covering the costs associated with said purchases, including closing costs, attorney's fees, title fees, survey fees, broker fees and related expenses customarily incurred when purchasing real estate."
The agreement also states that the DDA "agrees and covenants that it will reimburse the city in the amount of the advancement through any money made available by loans obtained by the authority for the purchase of real estate."
Scoggins' suit contends that "there is actually no requirement in the contract for the authority to use the city's funds to perform any services" and that the contract "funds only the acquisition of real estate by and for the authority on its own behalf." The suit asks the court to nullify the contract and order the DDA to repay the $735,750 to the city in full.
Johnson said the transaction should not come as a surprise to Scoggins. "This was done a year ago," Johnson said. "He participated in all of the meetings and all of the votes. There was never a 'this is illegal' or 'I don't think the DDA can serve in this role [from him].'"
Scoggins declined to comment personally about the lawsuit on Friday. His lawyer, Robert Mack, Jr., could not be reached for comment.
Scoggins, who is completing his second term on the council, is running for re-election in the Nov. 3 municipal election. Another claim made in his lawsuit is that the city lacks the legal authority to "enact an ordinance providing for sidewalk assessments," a direct challenge to the city's "Cleanliness of Property, Sidewalks, and Rights-of-Way" ordinance. According the suit, the city "has" and "intends to continue to enforce" the ordinance against Scoggins, who has been cited by the city for allegedly violating the ordinance.
The ordinance sets forth the duties of private property owners to keep their sidewalks clean and their yards free of "junk material," among other rules. On Dec. 10, 2007, the city council - whose voting members included Scoggins - approved the ordinance unanimously.
The suit also challenges the interpretation of the city's charter regarding majority votes of the city's four-member council.
Scoggins contends that on several occasions, the city has passed ordinances with two affirmative votes of the council and two members abstaining. In the suit, Scoggins claims "the affirmative vote of at least three council members is required to transact the business of the city" and is seeking "temporary and permanent injunctive relief."
Johnson said that in the past year, Scoggins, as well as other council members have abstained from voting without providing reasons. She said the Riverdale city charter differentiates between "no" votes and abstentions.
"The majority of the time, they abstain from voting after participating in the debate, which is unusual," Johnson said. "Normally, if you are going to abstain, you announce that before the debate and don't participate in the debate. Under the case law that interprets the language of the Riverdale charter, you don't count an abstention as a 'no,' it counts as 'nothing.' The mayor wouldn't have to vote to break the tie, because it would be two [votes] against nothing.
"Why would you abstain in order to hold up government," she added. "It's your obligation to vote, if you don't have a conflict."