AMARILLO, Texas (KAMR/KCIT) – According to documents filed in Potter County District Court Friday afternoon, the city of Amarillo’s legal team is responding to the final judgment made in the Civic Center funding-related litigation in October, asking Retired Judge William Sowder find facts and conclusions of law for the final judgment and ultimately request Sowder to “modify, correct or reform the final judgment.”
How did we get here?
According to previous reports by MyHighPlains.com, Sowder ruled in favor of Amarillo Businessman Alex Fairly, stating that the city of Amarillo’s use of $260 million anticipation notes to fund the expansion and renovation of the Amarillo Civic Center Complex was invalid and void on Oct. 25. This comes after the two-day trial in Potter County District Court in early October.
In his judgment, according to previous reports, Sowder ruled that the city of Amarillo violated the Texas Open Meetings Act by not providing sufficient notice on the subject of items during multiple public meetings, including meetings of the Amarillo City Council and the Tax Increment Reinvestment Zone No. One Board. Sowder also ruled that the ordinance surrounding the anticipation notes, Ordinance 7985, was void under multiple portions of the Texas Government Code, and ruled that the Civic Center Complex is not a public work under the code.
Sowder also ruled that Fairly would be awarded “reasonable and necessary attorneys’ fees and costs” during the span of the lawsuit, which could ultimately cost the city $376,000 through the final judgment and the potential of $70,000 more in costs if the final judgment is appealed, according to previous reports.
City’s request for findings of fact and conclusions of law
In a request filed Friday afternoon, the city of Amarillo’s legal team is asking for Sowder to prove his factual findings and conclusions in the Civic Center funding-related lawsuit. The team cites Texas Rule of Civil Procedure 296, which states that in any case tried in district or county court without a jury, parties are able to request the court to state in writing its “findings of fact and conclusions of law.”
According to the Texas Rule of Civil Procedure, this request can be filed within 20 days after the judgment is signed. The document, filed in Potter County District Court eight business days after the Oct. 25 judgment, requests that Sowder file his response 20 days from when the request was filed and that he “send copies of its findings and conclusions to all parties.”
Some of the factual items that the city is wanting Sowder to make clear are the Civic Center’s use as a public work, the involvement of the TIRZ No. One board, the setting of the city’s tax rate, the impact of the notes on property tax rates and attorneys’ fees. Citing portions of the Texas Government Code, the Texas Tax Code and the city’s charter, the city of Amarillo’s legal team is also asking the court to overrule his initial judgment in this case.
City’s motion to modify, correct or reform the final judgment
Accompanying the city’s request for Sowder to provide his factual findings and conclusions in the lawsuit, the city’s legal team also filed a motion to “modify, correct or reform” Sowder’s final judgment, claiming that Sowder’s judgment “is not supported by the law and/or the evidence.”
In this motion, the city lists out numerous reasons why portions of Sowder’s final judgment should be modified, corrected or reformed, declaring at points that portions of his judgment “is not supported by either the undisputed facts or the governing law.” Some of the items the city’s legal team covers in this motion include the actions of the TIRZ No. One board, the violations of the Texas Open Meetings Act, what kind of anticipation notes were approved by the Amarillo City Council during the May 7 meeting and the argument surrounding attorneys’ fees.
TIRZ No. 1 Board’s Actions
The city’s legal team claims that Sowder’s ruling surrounding the actions of the TIRZ No. One board is not valid because they were the actions of a governmental body not a party in the initial lawsuit.
In his ruling, Sowder said Item No. Five on the agenda for the May 5 TIRZ No. One meeting did not provide the public with “sufficient notice” of the meeting’s subject, ultimately violating the Texas Government Code.
“This Court erroneously ruled that the actions of a governmental body that is not a party to this lawsuit – here the TIRZ No. One Board – violated the Open Meetings Act and are therefore void,” the motion reads. “…It is black-letter Texas law that final judgment cannot be entered against a non-party.
Notes’ violation of Texas Government Code 1431.008(a)
In Sowder’s final judgment, he stated that Ordinance 7985 was void under Texas Government Code 1431.008(a), the portion of the code which outlines the guidelines for issuing anticipation notes payable from bonds. These guidelines state that bond anticipation notes must be approved through an election.
However, the city is challenging this ruling, since they state that the notes issued by the Amarillo City Council on May 7 surrounding the Amarillo Civic Center improvements and expansion were not bond anticipation notes, stating that the notes would “be annually assessed and collected in due time, form and manner, (as) a tax on all taxable property in the City.” The city’s legal team stresses that the notes in this case would be payable from ad valorem taxes, making that portion of the code inapplicable.
The city’s legal team went on to say that the city’s possibility to issue refunding bonds to refund the notes “does not transform the Notes into bond anticipation notes as a matter of fact or law.” The city stressed that they are able to refund outstanding bonds, notes or other obligations under Chapter 1207 of the Texas Government Code.
TIRZ No. One Texas Open Meetings Act and Texas Tax Code Violations
In Sowder’s final judgment, there were many rulings surrounding the city of Amarillo’s violations of the Texas Open Meetings Act, stating that various agenda items during the May 10 Amarillo City Council meeting and the May 24 Amarillo City Council meeting surrounding the TIRZ No. One-related ordinance and the funding-related ordinance “did not provide the public with sufficient notice of the subject of the meeting,” resulting in violations of the Texas Government Code and the ultimate decision for the ordinances to be void.
In relation to the TIRZ No. One-related ordinance ruling, the decision surrounding Ordinance 7980, the city’s legal team said a specific notice is sufficient if it informs that some action will be considered regarding the topic and is not required to identify “the possible consequences of the ordinance being considered.”
The city’s legal team said that the agenda items for both the first and second readings of the TIRZ No. One related ordinance, occurring during the May 10 and the May 24 meetings, satisfied the notice requirements and also included a transmittal memo that described the ordinance which “specifically disclosed and described to the public the actual changes that were to be (and eventually were) made” to the TIRZ No. One project plan.
In relation to the TIRZ project plan, Sowder ruled that the city of Amarillo violated Chapter 311 of the Texas Tax Code by not publishing a notice in a newspaper regarding an amendment to the overall plan seven days prior to the May 10 and May 24 meetings.
The city stressed its belief that the procedural requirements of that portion of the tax code do not apply in this case, because the complex was already in the “geographic boundaries of the zone,” that the zone’s finance plan was not changed by the amendment ordinance and that the zone “would incur no additional costs as a result of adding the Civic Center” to the plan.
“Thus, publication of notice under Chapter 311 was not required,” the motion states.
Civic Center Funding Texas Open Meetings Act Violations
A similar argument regarding the Texas Open Meetings Act was made to the May 24 agenda item surrounding the funding-related ordinance, Ordinance 7985.
The motion reads that the item, along with its accompanying transmittal memo, described the ordinance as a whole in detail, informing citizens that the City Council “would consider a debt issuance relating to the Civic Center Complex.”
The team cited the testimony of Don Tipps, a member of the public who testified during the two-day trial, where he “admitted that he attended the May 24, 2022 meeting because of what he read in the agenda” regarding the item.
Civic Center as a public work
In his ruling, Sowder said that because the construction of the Civic Center Complex is not a public work, the funding-related ordinance is void. However, the city’s legal team challenged that ruling, stating that while Chapter 1431 does not define the term “public work,” a civic center complex, along with related municipal buildings including convention centers, are constituted as public works under other chapters of the Texas Government Code, including Chapter 1504 and Chapter 2252.
Officials with the city stressed that the Civic Center, like the current facility, would continue to be used for public events like concerts, graduations and conventions.
“The repairs to and expansion of the Civic Center in this case… clearly constitute a public work under Texas Law,” the motion reads. “The Legislature and Texas courts have defined a ‘public work’ to encompass a broad range of governmental projects, including civic centers… As such, the Civic Center is undoubtedly a public building and the improvements to the Civic Center qualify as a public work.”
In the last part of the judgment, Sowder ruled that the city is required to pay Fairly more than $350,000 in attorneys’ fees, with the addition of more costs in case of appeal. The city said that under Chapter 1205 litigation does not authorize Fairly to receive any attorneys’ fees, stating that awarding Fairly these fees “would be neither equitable or just.”
However, the city did stress that if fees are awarded, they should be reduced and limited to the fees incurred until the date when the city filed its Chapter 1205 action.
The city also stressed its belief that the final judgment should be modified, corrected or reformed to declare that the tax notes and, ultimately Ordinance 7985, “are legal, valid and incontestable,” for the reasons laid out in previous documents including its pretrial brief and its reply in support of the city’s motion for security against suit.
“For the reasons above, and subject to the City’s reservation of rights described herein,” the document concludes, “the City respectfully requests that this Court grant the City’s motion to Modify, Correct or Reform the Final Judgment in full and modify, correct or freeform this Court’s Final Judgment signed on October 25, 2022, in the ways requested above. The City further respectfully requests that this Court grant the City any and all other relief to which it is entitled.”
According to the agenda for Tuesday’s meeting of the Amarillo City Council, the council, along with city officials, is expected to hear an update surrounding this litigation in the meeting’s executive session.
The agenda states that the “City Council may convene in Executive Session to receive reports on or discuss” the lawsuit, consulting with their attorney “about pending or contemplated litigation or settlement of same or on a matter in which the attorney’s duty to the governmental body under the Texas Disciplinary Rules of Professional Conduct conflicts with this chapter.”
The agenda specifically lists the “cause number” of the Civic Center funding-related lawsuit is listed under in Potter County District Court.