Clarification: This story has been updated to address the status of the lawsuit.
AMARILLO, Texas (KAMR/KCIT) — During Tuesday’s regularly scheduled Amarillo City Council meeting, members voted to move forward with a funding plan for the city hall project.
After years of research and planning, the Amarillo City Council has officially approved a funding plan to renovate the Amarillo Hardware Building into a new city hall.
Back in November, the council decided that renovation and upkeep of the existing city hall building, which is more than 55 years old, was not the best option. The City purchased the Amarillo Hardware Building in November of 2020, citing failures in the existing city hall structure.
On Tuesday, the council approved a funding option authorizing the issuance of tax and revenue notes for the project. As a result, the City of Amarillo will take a short-term note from a bank for $23.9 million to be paid off over a term of five years.
Assistant City Manager Laura Storrs said the council authorized approximately $11.2 million in revenue recovery funding made available through the American Rescue Plan Act for the project.
“On the options we brought forward today, we recommended that council utilize that $11.2 million that was recognized for revenue recovery,” said Storrs. “So now, it’s basically a cash form to help buy down the full cost of the project. So, in rough numbers, that accounts for about a third of the project.”
Storrs said the other two-thirds of the debt issuance approved Tuesday will be split between revenue from property taxes and water and sewage bills.
From a five-year standpoint on that banknote, Storrs said that equates to approximately a $0.02 increase on the property tax side.
“So, what that translates to on a $100,000 home, that would be a $20 increase per year. So per month, that would be about $1.67 per month,” said Storrs.
Regarding water and sewage bills, Storrs said, “We quote 10,000 gallons of water use per month as an average bill and what that would look like to an average bill, is it would increase $2.67 per month. If we’re talking someone that’s using the minimum, that gets a minimum bill, and that’s using 3000 gallons of water per month, we’re looking at $1.43, approximately per month increase.”
Storrs said taxpayers will not see either change on their bills until next year.
“We would have somewhere between 9 and 10 to 11 months before the property tax rate would take effect and we’d have about nine months before anything would change on a water and sewer rate.”
Ultimately, Storrs said this option was preferable to council members as the total cost and taxpayer burden could be lowered in the future.
“Between now and then, we’re always looking at any outstanding debt we have,” Storrs added. “And if there’s a favorable way to lessen the impact to our citizens, we’re always looking for those opportunities.”
She continued, “Thankfully, we’re triple-A rated by Standard and Poor. So, that allows us to capture the lowest interest rates on our debt that are available at the time. Now, interest rates are slowly creeping up right now but anytime we have an option to relook at our outstanding debt, and we can take advantage of a lower interest rate or more favorable term, those are things that we bring forward to council.”
Storrs said in the city’s second installment of ARP funding, there could be more revenue recovery applied to the project to buy down the debt.
The City said it will close on the banknote in mid-January.
“So, we would have the dollars on hand to start a project pretty much right away, or after the holiday season,” said Storrs.
The city council was given two other options to fund the project, including calling a municipal bond election and issuing certificates of obligation (CO’s).
In late August, the council withdrew a previous notice to issue CO’s for the project after a petition and lawsuit were filed. Craig Gualtiere, the owner of Roasters Coffee & Tea, claimed the city was using the CO’s to fund “Proposition A,” a $275 million bond proposal intended for improvements to the Amarillo Civic Center Complex which was voted down in 2020.
The City denied those claims, arguing the Amarillo Civic Center and Amarillo City Hall are completely separate projects.
During Tuesday’s meeting, Amarillo City Manager Jared Miller clarified the lawsuit has been dismissed and said there was “no barrier to issuing CO’s.” Gualtiere told MyHighPlains.com that portions of the lawsuit are still pending.
There was some discussion about whether issuing the tax and revenue notes was the best option. Place 1 Councilmember Cole Stanley argued for placing a municipal bond election on the May 7, 2022 ballot.
Before the vote to approve funding the project, Miller said the City wanted to avoid a bond election, which the council did by approving the tax and revenue notes.
The measure was approved by a vote of 3-1. Mayor Ginger Nelson, council members Freda Powell, and Eddy Sauer voted in favor. Stanley voted against it, while Howard Smith was absent from the meeting.