Wednesday, April 13, 2016 by Jo Clifton

Bastrop’s legal fees: $1 million in 15 months

The city of Bastrop, with a population of less than 8,000, has spent more than $1 million in legal fees during the past 15 months, according to records obtained through a public information request. Those records show that the city paid nearly $473,000 to the law firm of Jo-Christy Brown, an Austin lawyer who acts as city attorney for Bastrop.

But the payments to Brown – which have been a source of tension at City Council meetings since at least last December – are only half of the fees Bastrop has paid to law firms around the state.

In addition to its payments to Brown, Bastrop has paid seven other law firms. Of those, the firm of Frisco attorney William Bundren has claimed the highest salary.

Overall, Bundren was paid $281,185.02 for work on several matters, including two lawsuits involving Pine Forest Investments Group LLC through Feb. 4, 2016.

Bundren represents the city of Bastrop as well as Bastrop County and the Bastrop Independent School District in a complicated dispute with developer Robert Leffingwell, a property owners association and several individual landowners. Bundren got the lion’s share of the money fighting Leffingwell’s group, Pine Forest Investments Group LLC, and the other litigants. He received $216,884.99 between Jan. 1, 2015, and Feb. 11, 2016, for work on that case, according to city records. Leffingwell is the brother of former Austin Mayor Lee Leffingwell.

Bastrop Council Member Gary Schiff told the Austin Monitor that he was not surprised by the $1 million figure. “I have tried … I proposed we hire an in-house attorney,” Schiff said in response to a question about whether he was concerned about the city’s high legal bills.

“I believe if we had our own in-house attorney, we could get a much bigger bang for the buck,” he said. Although he made the proposal, Schiff said, he was unable to get a second on the motion. “Nobody else on the Council seems to care. … Nobody is supportive of getting an in-house attorney.”

However, Schiff believes that the city will recoup any legal fees spent on the Pine Forest litigation. He said, “A substantial amount of the legal fees are built into lawsuits. … We’ve got a big lawsuit going with the Pine Forest Unit 6. The city is paying all the legal fees at this point for the county and the school district, so that’s really a confined number. When that suit is settled, the first amount of money that comes out will come back to the city. So the city’s not actually liable for those fees.”

Council Member Kelly Gilleland also told the Monitor that she believes Bastrop will recoup its fees when the lawsuit is over and the city sells the land on which the city, county and school district have foreclosed for back taxes.

Austin attorney Bill Aleshire represents three homeowners who live in Pine Forest who have been impacted by city, county and school district litigation decisions.

Aleshire explained that the original developer sold lots in Pine Forest without putting in streets, sewers and waterlines. The people who bought those lots couldn’t develop them because there was no infrastructure and they didn’t pay the taxes. They got behind on the payments, so the law firm for the governments tried to foreclose on 300 to 400 lots. But the governmental entities discovered that the properties might not be worth very much at auction because they lacked infrastructure, Aleshire said. So Leffingwell made an agreement with the city that he would develop the properties and when the lots were sold, the governmental entities would get their taxes back.

At some point a dispute arose over the contract between Leffingwell and the city, with the city declaring Leffingwell in violation of the contract. In addition, there is a dispute between the county and the homeowners association.

In court documents filed on behalf of the three homeowners who live in Pine Forest Units 7-12, Aleshire wrote, “This case is about an unusual mess. It is unusual – outside a communist country, that is – to see government officials so intensely eager to possess and control private property and to invade and take over a private property owners’ association.

“This government takeover mess is piled on top of flawed foreclosures of property for unpaid taxes. The underlying real estate development dispute in this case – which should be restricted to Pine Forest Unit 6 – did not have to spread its impact to Pine Forest Units 7 through 12 where the third-party homeowners own homes.”

When informed about the Council members’ assumption that the city’s legal fees would be reimbursed by land sales, Aleshire said, “It is becoming obvious to me that Bastrop officials have declared war on homeowners in Pine Forest who don’t even live in the ‘war zone’ of Unit 6. They are planning to plunder the treasury of the property owners association for Units 7-12, trying to tag them with the exorbitant legal fees the local governments incurred because they won’t sit down and settle this case.”

Bastrop also paid the Austin firm of Terrill and Waldrop more than $232,000 between Aug. 6, 2015, and Feb. 11, 2016, for work on a variety of well permits, including hearings before the State Office of Administrative Hearings, city records indicate.

The city also paid the firm of McCreary, Veselka, Bragg and Allen PC of Round Rock nearly $25,000 to work on various cases described generally as relating to property taxes and utilities. In addition, the city paid Austin lawyer Kathryn Holton nearly $18,000 for work as a municipal court prosecutor, according to city records.

Three other firms received the remaining amount of the more than $1 million for their advice, according to city records.

On Dec. 8, 2015, about 30 people participated in a protest at the City Council meeting. Many of those protesting carried signs referring to the high cost of Bastrop’s legal fees compared to other cities in the area. Others protested about what they considered unfair treatment and mistakes on the part of the city’s planning and permitting staff.

City Secretary Ann Franklin said the most recent population estimate for the city of Bastrop is 7,218 people.

The city of Elgin, with a population of approximately 9,000, has budgeted $22,481.53 for legal services for Fiscal Year 2015-16, according to the city’s website.

Giddings reported that it had budgeted $30,000 for legal fees for the fiscal year that ended Sept. 30, 2015, and $35,000 for the fiscal year ending Sept. 30, 2016. Giddings’ population was listed as 5,009 as of 2013 on www.suburbanstats.org.

Records from Lampasas, which also uses the Brown law firm as its city attorney, show that the city has budgeted $30,000 for legal services for FY 2015-16. Its population is estimated at 6,681, according to www.suburbanstats.org.

Bastrop citizen Judith Hoover was one of those complaining about the city’s high legal fees at the Dec. 8 meeting. In addition to the complaints about the city’s attorney, Hoover said the city does not in fact work to preserve the historic character of the city but instead threatens people like her tenants even when they have obtained the appropriate permits to work on their property.

Hoover also wrote a letter to the editor that appeared in the Austin American-Statesman on Jan. 10, 2016, complaining about the amount of money being paid to the city’s attorney.

Council Member Kay Garcia McAnally responded with her own letter to the editor defending the city manager and city attorney Brown. In her letter, McAnally said Bastrop is unique. “We are on the edge of one of the fastest growing cities in the nation and as such, in some regards, we find ourselves functioning more like a fast-growing city of 35,000 people – not a smaller more rural town of 8,000 or so.”

Council Member Gilleland told the Monitor that she thought one way Bastrop could reduce its legal fees was by hiring a paralegal as a city employee. That person could attend some of the meetings and do some of the work currently being done by the city’s contracted attorney. She said she didn’t think the city was quite ready for its own full-time city attorney, however.

Deborah Jones, who is running on May 7 against Gilleland for Place 5 on the Council, said of the situation with the city’s ballooning legal fees, “It’s a really big mess.” She said she had spent a lot of time trying to understand why the legal fees are so high and why Bastrop is involved in so many lawsuits.

Jones, a rural single-family real estate appraiser, said she thinks the Council and the city manager call on Brown for too many meetings and for advice that may not require a lawyer.

“In my opinion, you have a good example of the tail wagging the dog,” Jones said.

“When you go to the city to get permits and ordinances, the city manager and the city attorney get involved in that, case by case. They don’t really have a rule book. Instead, they judge each project on a case-by-case basis. Every project is sitting on the city attorney’s desk. … There’s no consistency in the interpretation,” she said.

In addition, “Once you do get through and get a permit, you’re at the mercy of the city manager and the city attorney,” Jones said. Also, she said city attorney Brown sits as legal counsel for Bastrop’s board of adjustment. Since many of the complaints that the board of adjustment hears are about actions of either Brown or City Manager Mike Talbot, it does no good to ask the board for help, she said.

Council candidate Bill Peterson is running for Place 1, currently occupied by Dock Jackson, who is running for county commissioner. When the Monitor told Peterson about the $1 million in legal fees, he said he knew that they were high but he did not know exactly how much they were.

“They need to be trimmed quite a bit,” Peterson said. In addition, he said, “The city’s got to work more diligently to solve some of these problems before they get to the legal process. It’s the only solution.”

The Austin American-Statesman reported in mid-January that the Bastrop City Council would soon be considering whether to move toward hiring in-house counsel. However, Talbot submitted a letter of resignation on Feb. 23.

On March 25, the newspaper reported that Council had refused to accept Talbot’s resignation and had retreated from the idea of hiring a full-time city attorney. Talbot also requested and got a new clause in his contract, which, according to the Statesman, “triggers his involuntary resignation if the city council continuously acts in a way” that Talbot interprets as interfering with his job duties.

In response to an email about hiring an in-house attorney, Talbot told the Monitor, “Yes, I have done that research and have determined that at this time it’s more cost effective for the City to operate as we currently are while making plans to gradually move towards an in-house City Attorney.”

Under his new contract, Talbot also received a 5.5 percent raise from his 2015 salary, according to the Statesman. Talbot did not respond to a phone call and email from the Monitor requesting comments about the legal fees.

Update: In response to an email about hiring an in-house attorney, Talbot told the Monitor, “Yes I have done that research and have determined that at this time it’s more cost effective for the City to operate as we currently our while making plans to gradually move towards and in-house City Attorney.”

Photo by Larry D. Moore [CC BY-SA 4.0], via Wikimedia Commons.

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Bastrop: Bastrop is a city and the county seat of Bastrop County. It's located about 30 miles southeast of Austin

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