When a city stumbles, the real test is whether it learns—and whether taxpayers can see and feel that change. For Amarillo, the Prop 1 audit saga has become exactly that kind of test. After months of public scrutiny, multiple audits, millions in unspent funds, and the looming threat of IRS noncompliance penalties, residents deserve to know: Has Amarillo actually corrected course?
Based on the presentation delivered Tuesday by Assistant City Manager Donny Hooper, the City says “yes.” But understanding what that answer really means requires looking closely at what went wrong, what was uncovered, and what’s been done since.
How We Got Here: Millions in Bond Funds Left Unspent
Prop 1 dates back to 2016, when Amarillo voters approved nearly $90 million in general obligation bonds intended for streets and infrastructure improvements. These were issued in three stages:
$12.9 million in March 2017
$19.4 million in July 2018
$57.2 million in 2021
According to former Interim City Manager Floyd Hartman, by March 2024 the first two issuances had been fully spent. But only 46% of the 2021 bond had been used, leaving $30.6 million untouched well past the intended timeline.
That problem triggered a series of audits—including an external forensic audit by DFG Forensic Account Services—which concluded that Amarillo was out of compliance with an IRS rule requiring 60% of bond proceeds to be spent within three years. Falling short of that mark doesn’t only look bad; it risks tax penalties and complications for future bond issuances.
To regain compliance, the City moved the remaining funds into a low-interest account while the council scrambled to allocate them to eligible street projects. The deadline for spending 85% of the issuance is February, a date that’s rapidly approaching.
What the Audits Actually Found
During his council presentation, Hooper explained that DFG’s audit thoroughly analyzed activity from the beginning of the 2016 bond program through March 2024. The auditors examined the balances of each bond, asked whether any funds were missing, and cross-checked City accounting with internal audits.
They also investigated “mens rea”—criminal intent. That meant looking for signs of fraud, concealment, or personal benefit. According to Hooper, the audit found no probable cause of intent or knowledge of wrongdoing by any City employee. Importantly, the auditors concluded that no bond funds were missing, misappropriated, or misapplied, and that the account balance included the $34.6 million expected.
This matched the City’s internal audit and confirmed that while the situation appeared messy, it wasn’t criminal.
Instead, DFG identified systemic issues:
Manual documentation tracking instead of modern software
Underused project-tracking tools
Too many project transfers, creating confusion between Capital Projects and Development Engineering (CPND) and the Finance Department
Financial software installed before 2002 and never updated
In other words, Amarillo wasn’t robbed—it was still using workplace technology from the era of dial-up internet.
The audit recommended clear fixes:
A dual-authorization system for transferring project funds
Mandatory use of project management software
Adoption of modern financial software
Better communication and centralized data
A “360-degree view” of project status for all departments involved
These aren’t exotic solutions; they’re the kind of changes a well-run city should already have in place. But acknowledging the shortcomings is the first step toward correcting them.
So What Has the City Actually Done?
After being promoted to Assistant City Manager in late 2024, Hooper said City Manager Grayson Path assigned him two major tasks:
Ensure the remaining Prop 1 funds were spent on time and communication problems were addressed
Ensure drainage bond projects were properly managed through construction and capitalization
Hooper and Chief Financial Officer Laura Storrs undertook a full review of capital improvement plan (CIP) activities. Meanwhile, newly promoted Managing Director of CPND, Jerry Danforth, began evaluating processes within his department.
Between January 2024 and early 2025, the City says it implemented all audit recommendations, including:
Updating the financial software in January
Requiring staff to use project-management tools
Creating or improving procedures that control how funds are transferred
Developing dashboards for each project to make funding and scheduling more transparent
Hooper told the council that Amarillo currently has around $1.3 billion in identified—but not yet funded—projects. That figure doesn’t even include the wastewater treatment facility upgrades that will eventually need financing.
His argument was that clearing up financial visibility now will help the City prioritize and direct excess funds to the most urgent infrastructure needs later.
Have the Lessons Truly Been Learned?
On paper, Amarillo appears to have taken meaningful steps. Software has been updated. Processes have been tightened. Leadership roles have been adjusted. And, most critically, the City is now racing to get the final portions of the bond funds spent by the IRS deadline.
But residents shouldn’t simply accept a list of completed tasks as proof that the situation is resolved. The City’s failure wasn’t just one of poor software or unclear communication. It was a failure of oversight, prioritization, and long-term planning.
The Prop 1 funds did not go unspent overnight. Years passed without meaningful correction. Internal teams struggled to understand the full picture of the bond’s status. And it took external pressure—including a forensic audit—to force a serious review.
Whether Amarillo has truly “learned something” will only be clear over time, and taxpayers will have to watch for:
Whether the city meets the February IRS deadline
Whether the new software prevents similar issues in future bond programs
Whether project dashboards are made public or kept internal
Whether the City maintains transparency, not just compliance
Whether Amarillo will proactively modernize systems instead of waiting for a crisis
Updating technology is a good start. Changing culture is a longer journey.
Meanwhile: More Debt Issued for Water, Fleet, Streets, and Parks
While the City works to clean up past bond issues, it continues to move forward with new debt—highlighting just how important functional financial systems are.
The council approved:
$6 million in bonds for new water lines in northwest Amarillo (not expected to raise water rates)
$7.5 million for fleet replacement
$500,000 for the Vineyards Public Improvement District (PID)
$1 million for the Pinnacle PID
PID-related debt will be paid by the districts themselves through assessments, not general tax dollars.
In addition, the council took the first step toward issuing up to $30.31 million more for street resurfacing, artillery reconstruction and construction, and park amenities for the Colonies PID.
In other words: Amarillo continues to borrow, because Amarillo continues to need infrastructure work.
That makes it even more essential that the City avoid repeating the mistakes of Prop 1.
Conclusion: Progress—But Proof Still Pending
The Prop 1 situation wasn’t a scandal, but it was a wake-up call. Audits showed no criminal intent and no missing funds, but they exposed serious weaknesses in Amarillo’s project management and financial processes.
City staff have taken steps to fix those weaknesses, but the real evidence will show in whether Amarillo delivers projects faster, communicates more transparently, and remains compliant with federal rules from here on out.
For now, the City appears to be moving in the right direction. But the community should keep asking the same important question:
Did Amarillo actually learn something?
