Jekyll Island Authority Under Reporting Revenues for Ten Years

Coastal Viewpoint ^ | 2-26-08 | Bryant Arrington

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JIA FIGURES DON'T ADD UP

ATLANTA – According to Senator Jeff Chapman (R-3rd District), the Jekyll Island Authority (JIA) has withheld important financial information from its public documents prior to its 2007 annual report.

In an effort to validate some claims made by the JIA, Senator Chapman researched information in the State Archives which could not be obtained from the JIA. After further review by accounting experts, it was discovered that by cross-referencing State audit reports by the Georgia Department of Audits and Accounts against public financial reports published by JIA, the figures did not match.

“We have long been told,” Senator Chapman stated, “that the JIA has been struggling to keep its financial nose above water. After comparing the recent State audit with the Authority’s public documents, we discovered that the Authority has under reported its revenue by $11,330,368 million over the past ten years in its Annual Consolidated Statement of Earnings.”

Senator Chapman questions why and how this money was hidden from public view and put into a reserve account for capital projects. This practice does not follow Generally Accepted Accounting Principles and is highly unorthodox.

Without public disclosure of all revenue, JIA has given the distorted impression that it was on the brink of financial insolvency. This dismal fiscal picture thus provided much of the justification for the massive development project offered by Linger Longer, supposedly needed to bring the State Park back to fiscal health.

As one example of its financial accounting methods, Jekyll Island State Park revenues were so understated in 2006 that the Authority reported in its original report that it was operating in the red in the amount of $210,575 when, in fact, it was in the black that year with a profit of $1,950,081, which is a difference of $2,160,656.

As of the recent 2007 report, released in January 2008, the JIA has revised its public reporting and eliminated the hidden reserve account, thus reflecting different figures for 2006 from its original annual report, but JIA still does not explain past practices or make any mention that the reporting method changed in 2007.

Further, our Senator Jeff Chapman disclosed that the JIA has relied upon flawed figures to show a 47 percent drop in visitor traffic since the mid-1990s. The vast majority of the alleged drop, according to Dr. Ken Cordell, a nationally recognized authority on methods of monitoring public land visitation, must have been a change in the JIA’s traffic-count method in 1997 – a change that gave the appearance of a 1.5 million drop in visitors for that year alone. The JIA has denied making a change in its traffic count method, but it has found no records to validate that view one way or the other. As a comparison, records kept by the Department of Audits reveal that parking fee revenues from 1996 to 1997 barely changed at all. Hotel room nights for 1997 are also consistent with the previous year, which seems to make it impossible that Jekyll could have experienced a 1.5 million drop in visitors, as the JIA claims.

Rather than go back and analyze their numbers, the JIA claims that Department of Transportation (DOT) records show a huge drop in Jekyll Causeway traffic from the early 1990s through 2007. A close review of DOT records provided more accurate information. It appears that the JIA must have taken DOT records and compared one-day traffic counts recorded on peak season dates to those taken on off-season dates. In addition, even if the numbers had been compared apples to apples, the DOT says that their figures are scientifically invalid indicators of annual visitation due to the number of variables not taken into account in their 24-hour counts.

Sen. Chapman points out that JIA and Linger Longer are now falsely painting his legislative package, SB 426, SB 427, and SB 428, as being against revitalization. “The fact is that anyone who dares to disagree with their plan for a beachfront town center is accused of being against the revitalization of Jekyll Island. There happens to be many thousands of Georgians, myself included,” stated Sen. Chapman, “who fully support rebuilding Jekyll’s hotels and convention center but without commercializing the park’s most popular public beach. My legislation allows for responsible revitalization without impacting the natural beach setting. If Longer Longer’s proposal is really what is best for the people of Georgia and not just for private interests, the JIA and Linger Longer should welcome debate in the General Assembly.”

“With this latest revelation of irregular JIA accounting practices, I believe the Legislature must do its due diligence,” Senator Chapman stated. “We cannot just delegate our authority over to the JIA without better accountability to the people. In addition, we have a responsibility to let the legislative process unfold. Whose voices and whose vision will we allow to prevail? Whose voices should count more,” he asked, “the Authority’s voice and its private partner, Linger Longer, or the people’s voice?”

Senator Chapman represents Brantley, Camden, Charlton, Glynn, and McIntosh counties, which comprise the Third Senate District. For further information about bills sponsored or co-sponsored by Sen. Chapman, visit his website at www.jeffchapman.us or contact him directly at 912-399-8683. His email is: jeff.chapman@senate.ga.gov

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