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Bastrop’s Pine Forest legal fees still rising

Wednesday, August 24, 2016 by Jo Clifton

The city of Bastrop has paid nearly $652,000 to the attorney representing the city, Bastrop County and the Bastrop Independent School District to wrangle with Robert Leffingwell, the other owners of the Pine Forest Investment Group LLC and the homeowners association at Pine Forest.

City records show that attorney William Charles Bundren of Frisco started collecting fees from Bastrop in February 2015. This month alone, he has collected $212,108. Some of the fees that Bundren collected this month were generated in March, some in April and some in May, according to city of Bastrop records.

Prior to hiring Bundren, former outside counsel Jo-Christie Brown, who effectively served as city attorney, collected nearly $58,000 for work on the matter from 2010 to 2015. Brown resigned under pressure from members of the City Council in July.

Council Member Deborah Jones, who campaigned on putting an end to the city’s high legal bills, responded via text message to the Austin Monitor‘s request for a comment about the amount paid Bundren. She said, “As we speak our interim City Manager is reviewing all invoices related to attorneys who have worked and are working for the City of Bastrop. In my opinion there are issues. I will be directing the City Manager to bring in a forensic accountant before the end of the year.”

The Monitor first raised the issue of Bastrop’s high legal bills in April.

Bastrop also spent more than $22,000 on engineering and planning for Pine Forest during 2010 and 2011 and an additional $15,000 from 2012 through 2014 on engineering, according to city documents.

Bastrop contracted with the Pine Forest group to develop 262 lots in Unit 6 that were supposed to become a residential subdivision. After a dispute over a drainage study, the city nullified the contract, leading to the lawsuit, a countersuit and an additional legal action by some members of the Pine Forest Property Owners Association.

Austin attorney Bill Aleshire represents three members of the Pine Forest Property Owners Association who live in Units 7-12. He told the Monitor, “There’s nothing about this case that makes sense, and spending $652,000 on one lawyer is crazy. I’ve said from the beginning, this case should have settled.”

District Judge Carson Campbell surprised observers, as well as the attorneys for both Leffingwell and the three homeowners who are suing, by ruling the contract invalid at the end of a May hearing. The reason it was such a surprise was that there had been no discovery or depositions and no trial on the question of the contract’s validity.

The matter was scheduled to come up again at an August hearing, but that hearing was postponed after attorney Ben Wetmore, who represents Leffingwell’s group, filed a motion seeking Campbell’s recusal. That motion was rejected.

Wetmore told the Monitor on Tuesday that the new date for the hearing is Sept. 21. Wetmore, Bundren and Aleshire will all present motions for the judge’s consideration.

Aleshire’s clients attempted to separate their homeowners group from the owners of Unit 6. In May, Campbell disallowed the separation and also ruled that at least one of the homeowners had committed fraud, which Aleshire sharply disputes. He said there was no evidence of fraud presented at the hearing.

The $652,000 paid to Bundren could have been used to complete the development and reimburse the city, the county and the school district for the homeowners fees owed to them, Aleshire said. “It also could have been used to put fire hydrants in units 7 through 12 – that’s where my clients live,” he said.

Under an interlocal agreement, the city has paid the bills for itself and the other two governmental entities, hoping that at the end of the lawsuit the government would be successful, sell off the lots and make enough money to repay itself for the ever-increasing mountain of legal fees. It is not clear when the lawsuit will be over.

The Austin American-Statesman reported after a May hearing, “At their 2012 selling price of $2,000 per lot,” a ruling in favor of the city would mean “$524,000 would go to the governments — though many are assessed today at $4,000, according to the Bastrop Central Appraisal District.” At $4,000 per lot, the governments would garner $1,048,000. But with legal bills still climbing, and the likelihood that the losing party will appeal to the 3rd Court of Appeals, it is hard to imagine that the city, the county and the school district will eventually get much more than they have invested in legal fees.

Update: According to Tracy Waldron, Bastrop’s chief financial officer, the city reports legal fees on a fiscal year basis. For the fiscal year starting October 2015 through August 24, 2016, Waldron told the Monitor Wednesday that the city had spent $1,264,586. During the previous Fiscal Year, October 2014 through September 2015, she said the city spent $530,501 on legal fees.

Photo by Billy Hathorn made available through a Creative Commons license.

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