AMARILLO, Texas (KAMR/KCIT) — As the legal teams for both the city of Amarillo and Amarillo Businessman Alex Fairly prepare for Friday’s pre-trial hearing and Tuesday’s bench trial, both teams have filed an influx of documents arguing various items, including counterclaims from Fairly’s team and whether or not there should be a jury trial in this case.
These documents are all leading up to Tuesday’s bench trial, which comes after William Sowder, the visiting judge overseeing the ongoing Amarillo Civic Center Complex-related litigation in Potter County District Court, combined Fairly’s lawsuit with the city of Amarillo’s lawsuit because of his belief that they cover the same subject matter.
According to previous reports by MyHighPlains.com, Fairly first filed his lawsuit against the city of Amarillo in late May, challenging the legality of an ordinance the Amarillo City Council passed during its May 24 regular meeting, giving them the ability to use $260 million in anticipation notes for improvements and the expansion of the Civic Center. The city of Amarillo then filed its own lawsuit, asking for a judge to validate the use of the anticipation notes in this case under Chapter 1205 of the Texas Government Code.
In documents filed on Sept. 21 in Potter County District Court, Fairly’s legal team outlined the overall case and their numerous allegations against the city of Amarillo, highlighting what they thought was the city’s “secret plan” to push the Amarillo Civic Center Project forward.
According to previous reports by MyHighPlains.com, Fairly’s team lays out this “secret plan” narrative, alleging that the city planned to add the project to a tax reinvestment zone, ultimately finance the improvements to the Civic Center Complex with anticipation notes and refinance those notes with refunding bonds.
“The Secret Plan, by its very nature, was meant to withhold certain information from the public while these plans were in development and to bypass, circumvent, and avoid facing the will of the voters,” the documents read at the time.
In the city of Amarillo’s response to these counterclaims from Fairly’s team, they continued to stress that the Civic Center Complex project is “an important public work” and which is in “dire need of renovation and modernization in order to better serve the residents of the city.”
“The City’s efforts to issue the Notes and begin the process of updating and expanding the Civic Center Complex has been stalled, at enormous expense to the City, by a single citizen, Alex Fairly, who harbors the mistaken belief that, since he does not agree with the City’s actions, those actions must be illegal,” the response, filed Wednesday morning in Potter County District Court, reads. “Mr. Fairly has taken a shotgun approach to this litigation, haphazardly firing off accusation after spurious accusation – all entirely unsupported by any evidence whatsoever – that the City, the City Council and the City staff have concocted a vast conspiracy to ‘perpetuate a fraud on [Amarillo’s] citizens’ by hiding ‘the true nature of’ the ordinance that authorizes the issuance of the Notes. Nothing could be further from the truth.”
In its response, the city’s legal team said that there is no evidence that Open Meetings Act violations occurred at the May 24 Amarillo City Council meeting, along with alleged violations at the May 5 meeting of the TIRZ One board and the May 10 meeting of the Amarillo City Council.
What the city believes the depositions and documents show thus far in the litigation process, an opinion stressed numerous times in the document, is that officials recognize the needs at the complex and how important it was for the city to take “what it hoped to be the quickest path to obtaining funds for the repair and improvement” of the complex. They stressed that the ordinance was properly authorized and should be validated in Tuesday’s trial.
In the city’s response, they also claimed that Sowder does not have jurisdiction over claims surrounding the notes and their characterization as debt, per portions of the Texas Tax Code. The city’s legal team said because the city has not calculated, or adopted, a tax rate to cover debt service on the notes, that a determination cannot be made in court based on events that have not occurred yet.
“The City has already set its tax rate for the 2022-2023 fiscal year, which does not include debt service on the Notes,” the response reads. “…Here, there is no indication that the City will fail. To adhere to the Tax Code’s requirements relating to the calculation, publication or notice requirements set forth in the truth in taxation provisions of the Tax Code when it sets a tax rate that encompasses the debt service requirements of the Notes.”
However, in Fairly’s response to the city’s response, Fairly’s legal team focused on the fact that the city did not impose a tax in the ordinance, a fact they said is clear in the statutory law. They said because of what the city said in its response, Fairly “should be relieved of the necessity of any further proof that Ordinance 7985 did not impose a tax.”
“If the Court is inclined to grant the City’s plea, the City must be judicially estopped from denying that it did not impose a tax in Ordinance 7985,” the response from Fairly’s team, filed Wednesday afternoon in Potter County District Court, reads. “…This judicial estoppel would essentially invalidate the Ordinance and the notes as both would be in violation of Texas Government Code 1431.008(b).”
Ultimately, the response reads that Fairly’s allegations surround that the city violated “statutory substantive and procedural requirements” imposed by law surrounding tax-supported debt. The documents go on to say that Fairly believes that the city of Amarillo is seeking to “impose and allocate tax moneys illegally” through various means.
“These complaints relate to an illegal allocation of City resources directly from the imposition of tax revenues,” the documents claim. “These issues are ripe because the City Council has already voted upon the Ordinances Fairly challenges, which are inextricably intertwined to the plans for the Civic Center the City seeks to finance with the notes. So, all of these issues relate directly to the tax anticipation notes and the Ordinance the City is asking the Court to validate and declare legal.”
Fairly’s motion for a Jury Trial
In documents filed from Fairly’s legal team in Potter County District Court on Tuesday afternoon, the team once again requested that this litigation be conducted as a jury trial.
According to the document, this comes after Fairly filed a jury demand for this litigation on June 28, a request that Sowder denied on July 11, saying that Fairly is not entitled to a jury trial under Chapter 1205 of the Texas Government Code and that there are only legal issues to be resolved by the Court in this case.
Fairly’s team continued to stress that his allegations related to potential violations of the Texas Open Meetings Act at the two Amarillo City Council meetings and the TIRZ One Board meeting constitute a decision from a jury, determining if a quorum gathering occurred outside of a public meeting. The document stresses that Fairly “is entitled to a jury to make factual determinations in the trial of this case.”
The city of Amarillo’s legal team’s response to Fairly’s team’s motion for a jury trial mirrors the original answer Sowder gave on July 11. Officials said in documents filed Wednesday afternoon that there are not any issues in the case that must be decided by a jury. The city is asking for Sowder’s prior ruling to stand and that the scheduled bench trial proceed.
The city’s legal team cited the “plain text” of Chapter 1205 of the Texas Government Code, which “requires the court to resolve issues of both fact and law.” The team goes on to say that a jury trial, in this case, would “indefinitely delay the adjudication. of the Notes,” with jury selection potentially delaying the trial for months.
“…The clear intent of the (Expedited Declaratory Judgment Act) is to provide municipalities with a speedy determination of a security’s validity, preventing a single disgruntled taxpayer from injecting delay and unnecessary costs in what should otherwise be an expedited process,” the documents read.
In the Texas Attorney General’s legal team’s response, filed Wednesday afternoon in Potter County District Court, officials reiterated their position from the July 5 hearing.
“The Attorney General does not agree with the City’s position that Chapter 1205 does not provide for a jury trial and the expedited nature of Chapter 1205 does not allow for a jury trial,” the documents read.
The Texas Attorney General’s team cited portions of the Texas Constitution that “maintains a right to trial by jury,” along with the portion that says “In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right to trial by jury…”
“The City requests declarations which are likely questions of law to be determined by the Court, and Mr. Fairly must show that there are material factual issues that need to be decided by the jury,” the documents from the Texas Attorney General’s legal team state. “The Court previously ruled that Mr. Fairly ‘is not entitled to a jury trial due to the provisions of Chapter 1205 of the Texas Government Code and/or there are only legal issues to be resolved in this case by the Court.’ However, there remains a dispute between the City and Mr. Fairly as to whether the information obtained during discovery created a material factual dispute requiring a finding by the jury.”
In its response, the city’s legal team said that whether or not Fairly is entitled to a jury trial in this case, they believe the bench trial should still occur.
As of Thursday afternoon, no additional documents surrounding the counterclaims or the motion for a jury trial had been filed in Potter County District Court. According to previous reports, the pre-trial hearing is scheduled for 9 a.m. on Friday in Potter County District Court. The bench trial for this litigation is scheduled for 9 a.m. on Tuesday in Potter County District Court.