Austin Lawsuit Regarding Bonds for Project Connect Faces Unforeseen Hurdles

Austin Lawsuit Regarding Bonds for Project Connect Faces Unforeseen Hurdles

A legal entanglement centered on validating essential bonds for the creation of Project Connect, a proposed rail system for the city of Austin, has met with strong opposition from both the Texas attorney general’s office and local citizenry. These citizens are standing against the project initiatives of the Austin Transit Partnership (ATP).

The Oppositions

The city’s plans have been countered by Attorney General Ken Paxton, as well as by relevant dissenting voices from the public. Prominent amongst these are former City Council Member Ora Houston, ex-state Senator Gonzalo Barrientos and Mark Nemir, owner of the famed Dirty Martin’s hamburger joint on Guadalupe Street. They have procured the services of attorney Bill Aleshire, celebrated for his tireless endeavor against myriad governmental entities.

In a written correspondence with the Austin Monitor, Aleshire reveals, “We just filed (an) additional claim to block the issuance of the Bonds since ATP plans to use them for reimbursement of prior expenditures they made for planning and design for Light Rail.” He asserts that this move would contradict Texas law and could potentially lead to the bonds losing their tax-exempt status.

ATP’s Position

Casey Burack, ATP’s Executive Vice President of Business and Legal Affairs, has retaliated with a statement declaring, “State law allows Austin Transit Partnership and the City of Austin to use bond validation proceedings to get an expedited ruling from an impartial court. The OAG’s latest filing to delay the trial and attempt to force a premature ruling is only meant to delay bond validation proceedings with a lengthy appeals process – at the expense of Austin taxpayers.”

Insisting that the bond validation petition was filed in good faith with the vision of achieving clarity for Austin voters, Burack affirmed the ATP’s determination to further the cause for Austin Light Rail.

Court Proceedings

The issue questioning the authenticity of the bonds has been slated for trial on May 28. However, the attorney general’s office has initiated a motion seeking an extension. The arguments regarding this motion will be heard by the County Court at Law No. 2 under Judge Eric Shepperd.

Assistant Attorney General Alyssa Bixby-Lawson filed a “plea to the jurisdiction” to dismiss the lawsuit on the grounds of the court lacking subject matter jurisdiction over the case. In case of a potential dismissal by the court due to lack of authority, ATP in collaboration with the city would have full rights to solicit the Third Court of Appeals to examine the matter.

Shifting ATP Stand

Aleshire, in his amended petition, notes that ATP has altered its approach toward bond selling. ATP, along with the city, is now “only seeking declaratory relief with respect to ATP’s authority to issue the Initial Bonds, not any future obligations.”

This contrasts their original intent of obtaining court approval for their “financing program,” future bonds, and other obligations pursuant to the program. This significant change necessitated the republishing of public notice pertaining to their proposal under Texas law requirements.

The Attorney General’s Response

The attorney general’s office, in response to ATP’s new petition, requested a continuance on the May 28 hearing. According to the AG’s interpretation of the law, the court cannot advance until the first Monday after the 20th day following public dissemination of the proposed financial plans. This hints toward a possible hearing in June.