Entrance to the court room. Photo via Amarillo Pioneer Staff.

A crowd once again gathered at the Potter County Courthouse this morning as another hearing took place as a part of Alex Fairly’s lawsuit against the City of Amarillo over Civic Center improvement funding. The hearing focused on the city’s motion to require Alex Fairly post a $6 million dollar security against suit bond to remain a party to the lawsuit.

While no ruling was made today, arguments were made by the legal teams of both parties and several witnesses were called to testify on the matter.

The city’s argument in support of the motion centered on their contention that, if Fairly remains a party to the lawsuit, it will mean that closing on the Civic Center funding will be delayed, which could cause interest rates to rise which would impact taxpayers. The two main questions before the court were whether or not Fairly should be required to post bond and, if so, how much that amount should be.

Fairly’s team focused on potential violations of the Texas Open Meetings Act to show it had a good chance of winning the case at trial. The centerpiece of this portion of the hearing was testimony from City of Amarillo’s Assistant City Manager and Chief Financial Officer Laura Storrs. Storrs was questioned by Fairly’s attorneys about the agenda item authorizing the issuance of anticipatory notes.

Fairly’s team noted that the anticipatory notes are referred to by the posted agenda as “Texas Combination Tax and Revenue Notes,” despite the fact that the city did not have plans to use revenues to repay the notes. Storrs, who authored the wording of the agenda items, admitted during questioning that the wording was wrong. “It was a typo on my part” said Storrs, attempting to claim the mistake was inadvertent.

The city’s legal team attempted to minimize the incorrect agenda item, claiming that the wording might still be arguably legally valid.

Fairly himself also took the stand today to prove he has a legitimate claim and will suffer imminent irreparable harm should the city be victorious in their suit. Fairly noted his tax liability would be “substantially” impacted should the city win the lawsuit.

Another main argument by Fairly’s team was that, even if Fairly were removed from the lawsuit, the Texas Attorney General’s Office would still remain a party to the lawsuit, meaning it would still move forward. According to Fairly’s attorneys, this demonstrates that any delays to closing the notes, should the city win, would not be because of Fairly being a party to the lawsuit.

Fairly’s attorneys made the case that, should a bond be warranted, the amount should be determined by calculating the difference in interest accrued from when the closing was expected and when the closing would likely occur. Steven Adams of Specialized Public Finance, a firm advising the city, was called to the stand over the matter of the amount of the bond. During questioning by Fairly’s attorneys regarding their proposed methodology, Adams admitted that he had “not bothered to do that calculation.” Still, Fairly’s team maintained that no bond is warranted anyways.

Judge Sowder, who is presiding over the case, announced after closing arguments that he is requesting briefs from both legal teams by next Wednesday and responses to the briefs by next Friday. Sowder said that, once he receives those, he will review the documents over that weekend and make a ruling on Monday, August 1st. Sowder also stressed that, no matter how he rules, it should not be seen as him preferring one side or the other ahead of the trial scheduled for October.