Seventh Court of Appeals rules in favor of Fairly in Civic Center lawsuit

The Seventh Court of Appeals ruled Thursday that the Amarillo City Council violated the Texas Open Meetings Act when it passed a $260 million spending end-around to pay for the Amarillo Civic Center project previously rejected by voters.

Last year, the council issued $260 million in tax anticipation notes (TAN) — which do not require voter approval — as a way to move its civic center project forward; voters rejected that project’s proposed general obligation bonds in 2020. Because it was within three years of the failed election, the council could not issue the spending in Certificates of Obligation (CO), another form of non-voter-approved debt.

The TANs had a seven-year-long lifespan, but the council’s plan was to pay off the TAN debt by issuing COs after the moratorium passed.

TANs function like a bridge loan, a mechanism intended to get a locality past a revenue dry spell — not typically used for capital expenditures.

This maneuver led to a suit by Amarillo businessman Alex Fairly last summer, alleging that the council violated open meetings law. In October, a trial court judge sided with Fairly’s case, stating that the city failed to provide sufficient public notice of the meeting at which it adopted the ordinance.

“Both the agenda and transmittal memo for [the TAN item] omit language for the proposed ordinance as well as any related contract terms or supporting documents,” the opinion reads. “Had citizens been given access to such information, they would have learned the City was intending to use Ordinance 7985 to authorize borrowing $260.525 million with Frost Bank — roughly doubling the city’s debt.”

It continues, “And finally, if citizens had been able to know the terms of the ordinance or documents, they would see the City was proposing to finance the project over a seven-year term, not over 30-years the City’s staff described during the city council meeting.”

The appeals court also affirmed the trial court’s award of attorneys fees to Fairly.

Fairly released the following statement:

"I’m grateful it’s over. It’s time to move on – and I think Amarillo did last May. 

"We shouldn’t overlook the lessons to be learned – the small group of people who thought their opinions were more important than the taxpayer’s wishes still wield enormous influence and power. 

"Everyday Amarilloans now know they have a voice and that justice is possible when we stand up for right and good."

The City of Amarillo released the following statement:

"Outside legal counsel for the city of Amarillo is reviewing this item. The city will not comment on pending cases and will not have any comment until further review and receiving direction from council.”