{"id":36154,"date":"2022-10-26T10:23:31","date_gmt":"2022-10-26T10:23:31","guid":{"rendered":"http:\/\/www.brandon.ddtest.info\/multisite-test\/judge-halts-amarillos-260-million-debt-maneuver-to-pay-for-civic-center-rejected-by-voters\/"},"modified":"2022-10-26T10:23:31","modified_gmt":"2022-10-26T10:23:31","slug":"judge-halts-amarillos-260-million-debt-maneuver-to-pay-for-civic-center-rejected-by-voters","status":"publish","type":"post","link":"http:\/\/www.brandon.ddtest.info\/multisite-test\/judge-halts-amarillos-260-million-debt-maneuver-to-pay-for-civic-center-rejected-by-voters\/","title":{"rendered":"Judge Halts Amarillo\u2019s $260 Million Debt Maneuver to Pay for Civic Center Rejected by Voters"},"content":{"rendered":"

\n<\/p>\n

\n Austin, TX<\/span>, 39 seconds ago<\/span> \u2014<\/span><\/span> A district judge ruled against the City of Amarillo in a lawsuit over a bond maneuver, voiding its approval of $260 million in non-voter-approved debt to finance a convention center expansion that voters rejected in 2020.<\/span><\/p>\n

Judge Bill Sowder <\/span>ruled<\/span><\/a> that the city failed to provide sufficient public notice on a host of different components, including the ordinance ordering the issuance of $260 million in Tax Anticipation Notes (TAN).<\/span><\/p>\n

He also found a lack of public notice for the addition of the civic center project to the Tax Increment Reinvestment Zone #1 plan, which allowed the city to shift the debt to the Interest & Sinking side of the tax rate equation. That incredibly convoluted distinction is important because had it been applied to the Maintenance & Operations side, it would have been subject to the state\u2019s 3.5 percent tax increase limit without voter approval.<\/span><\/p>\n

Sowder also ordered the city to pay $351,000 in attorney fees to plaintiff Alex Fairly, the Amarillo businessman who has dumped more than half a million dollars into fighting this debt issuance. The judge sided with Fairly on nearly every cause but has not issued an opinion explaining his reasoning on each item.<\/span><\/p>\n

Last week, without getting into the merits of the case and claims against the city by Fairly, Sowder issued an<\/span> order<\/span><\/a> granting the city\u2019s jurisdictional plea on certain contentions made by Fairly \u2014 specifically that the court had no jurisdiction to rule on the claim that the TANs were not properly classified as debt.<\/span><\/p>\n

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Regardless, unless Amarillo appeals further, the city is prohibited from following through on its debt issuance, leaving it back at square one for financing the project.<\/span><\/p>\n

\u201cI\u2019m just so thankful for living in a country with this system,\u201d Fairly told <\/span>The Texan<\/span><\/i>. \u201cI made many attempts to talk with the mayor and her crowd on this but got nowhere and unfortunately this [lawsuit] was my only option left.\u201d<\/span><\/p>\n

\u201cI\u2019m glad it\u2019s over, honestly. I\u2019ve been in some fights before but this was exhausting.\u201d<\/span><\/p>\n

Amarillo Mayor Ginger Nelson did not return a request for comment by publishing time.<\/span><\/p>\n

Two years ago, voters rejected a $275 million proposal from Amarillo for the project. Rather than wait the three-year moratorium on Certificates of Obligation (CO) after a ballot failure, this year, the council passed the issuance of $260 million in TAN.<\/span><\/p>\n

TANs function like a bridge loan to compensate for a gap in revenues and are rarely if ever used to finance capital expenditures.<\/span><\/p>\n

The city planned to issue the TANs and then refinance the debt with COs, another form of non-voter-approved debt, to pay off the sum over decades rather than a handful of years.<\/span><\/p>\n

Going forward, the city may appeal or even try to issue the TANs again but fix the public notice violations that caused its downfall.<\/span><\/p>\n

\u201cWe won because they did multiple things wrong and rushed the process, but the hole is there in statute for them to do this,\u201d Fairly said. \u201cWhat\u2019s next is seeing if the legislature can block this opening. If we don\u2019t get that, even with this win, then I wouldn\u2019t feel like we\u2019ve succeeded.\u201d<\/span><\/p>\n

Legislators have<\/span> vowed<\/span><\/a> to address this \u201cmost egregious abuse of Texas financing law\u201d highlighted by Fairly\u2019s suit, and the businessman said he has already been on the phone with multiple legislators about the victory and the prospect of following through during the 2023 session.<\/span><\/p>\n

Read more about the trial that occurred earlier this month<\/span> here<\/span><\/a>.<\/span> <\/p>\n<\/div>\n