AMARILLO, Texas (KAMR/KCIT) — In court documents recently filed in the 320th Judicial District Court of Potter County, officials with the office of Ken Paxton, the attorney general for the state of Texas, are asking the city of Amarillo to clarify a portion of its charter in relation to the maximum amount of ad valorem taxes in which the city can tax residents.
This request for clarification is in response to the ongoing litigation surrounding the funding mechanism the city of Amarillo approved for the expansion of and improvements to the Amarillo Civic Center Complex. According to previous reports by MyHighPlains.com, the Amarillo City Council voted 4-1 during its May 24 meeting to issue an amount not to exceed $260,525,000 in anticipation notes to fund the project.
After that approval by the city council, Amarillo Businessman Alex Fairly filed a lawsuit claiming that the use of the notes for the project was illegal. The city of Amarillo filed its own lawsuit in June, asking a Potter County Judge to validate the city’s use of the anticipation notes to fund the Civic Center project. On Tuesday, those two suits have since been combined into one.
According to previous reports, Fairly’s legal team claims that the city has not been forthright about how Amarillo residents would be impacted by an increase of taxes that would be necessary to pay for the project., a fact that they also reiterated during Tuesday’s hearing. During that same hearing, the city’s legal team stressed that the project would impact the city’s tax rate well under the maximum outlined in the city’s charter, going so far to say that its impact will be “well south of $1.”
The request for clarification from Paxton’s office surroundings Article III, Section 1(a) of the Amarillo City Charter. That portion of the city’s charger says the following:
“SECTION 1. – TAXATION
(a) The City shall have the power and is hereby authorized annually to levy and collect taxes not exceeding one dollar and eighty cents ($1.80) on each one hundred dollars ($100.00) of assessed valuation of all real and personal property within the City limits of the City of Amarillo, not exempt from taxation by the constitution and laws of the State of Texas; provided that all taxes levied and collected in excess of one dollar and thirty cents ($1.30) on each one hundred dollars ($100.00) of assessed valuation of such property shall only be levied and collected for the purpose of paying the interest on and creating a sinking fund to redeem water works bond of the City of Amarillo, legally issued under Section One of Article 4 of the Charter of Amarillo.”Article III Section 1(a) of the Amarillo City Charter
Officials with Paxton’s office are asking city of Amarillo officials to demonstrate to the Potter County judge why they should not be bound by the lower tax rate written in the charter, $1.30 per $100 of valuation.
“A plain reading of the above provision would reserve 50 cents of the $1.80 for paying debt services on bonds issued for water works utility improvements, with $1.30 remaining for all other purposes, including debt service not issued for water works purposes, such as the Notes,” the documents read.
In documents also filed Thursday, Fairly’s legal team officially requested that a jury trial be conducted for the combined case. The decision of whether or not the trial will be a bench trial or a trial by jury was not made during Tuesday’s hearing by the judge of the case, William Sowder, a retired 99th District Court Judge from Lubbock. Other decisions that have not been made by Sowder as of this story’s publication included the discovery process in the consolidated case as well as the date of the trial.
This story is developing. Check with MyHighPlains.com for updates.