Taxpayer liability in the failed $27.7 million Parkway East Public Improvement District (PID) will remain in limbo for at least another year because a federal trial has been delayed.

A trial slated for this October in federal court between Madison County and bond insurance company Radian Assurance has been delayed until July 18, 2016.

In early May, a default on the PID bonds was diverted after Radian's successor company, Assured Guaranty, made a payment in the amount of $686,096.43.

Another payment is due in November.

In April, a federal judge denied both parties summary judgment and in his ruling said that a contribution agreement at the center of the lawsuit does not have an expiration date.

When the PID was created, the county included a contribution agreement whereas the county would cover shortfalls in the amount of bridge loans so long as they county was reimbursed that money within two years.

The first shortfall payment made by the county was for $374,000 on Oct. 24, 2011, and payments have totaled over $2 million. The county has contended that since they have not been reimbursed for payments over two years they do not have to continue making contributions.

U.S. Federal Judge Carlton Reeves said the county will be on the hook as a contributor for the life on the bonds.

"The two-year limit, however, refers to the amount of time the District has to reimburse the County," his order reads. "It does not apply to the County's obligation to make bond payments. The first part of the agreement contains no time limit on the County's obligation to make bond payments..."
Board Attorney Mike Espy said the county has never contended whether or not the contribution agreement would expire, but it contends if more payments have to be made if there is no reimbursement within two years.

"When someone reimburses the county for the two year bridge loan made in 2011, then the county has no other choice but to step forward and continue the bridge loan/shortfall payments, as long as we are reimbursed," he said.

He continued, "Everyone expects that we are trying to get out of the contribution agreement.

"If it was written better, then that is what we would be trying to do. But it is what it is. We are tied to the language of this 2005 document. The county is obligated to continue if someone reimburses us."

Espy said the entire matter was complicated and unless there is a settlement reached between the PID and the insurer then it will go to trial.

In the Parkway East PID, 14 landowners agreed to a special assessment on their property in exchange for $27.7 million in bonds, of which nearly $22 million were used to build the 4.3-mile Galleria Parkway that connects Gluckstgadt to Madison and parallels I-55.