Back ~ In Black?

It's a huge victory for the city."

No, those are not the words of environmentalists Bill Bunch, Robert Singleton, Mary Arnold, George Cofer, or even Al St. Louis. They're not even the words of the city's attorneys, the city council, and of special note, not the words of the daily paper of record. They belong to Mike McKetta, attorney for Circle C Land Corp., home of Gary Bradley, and the new commercial home of FM Properties. Go team.

It's a suprisingly generous comment for someone who just lost a big case. The 3rd Court of Appeals turned back the clock last Wednesday, reversing a 1994 ruling in a Hays County court that invalidated the Save Our Springs (SOS) water quality ordinance. The original lawsuit against the city over the SOS ordinance was brought by Circle C Land Corp. and several small landowners in Hays County, who were represented by McKetta and notably, Freeport-McMoRan attorney Roy Minton. Not only did the Court of Appeals affirm the legality of SOS and reverse the award of $321,500 in legal fees to the plaintiffs, its ruling also symbolized a victory for the public will -- for the Austin voters who overwhelmingly supported SOS in the 1992 referendum.

Spoiling a good party, Minton immediately announced last Wednesday that he will "take this to the Supreme Court," if necessary.

As expected, the Austin American-Statesman has not declared the return of SOS, or even a court win by the city, a victory. Instead, they said in editorials to "hold the confetti," and called it a "hollow" victory. The editors' reticence was echoed by headlines that read, "SOS decision clouds development projects," "Environmental-growth hassle flares once more under SOS," and "SOS moves to Republican-dominated Supreme Court." Did somebody say victory? Not us, reads the daily.

"Contrary to what the Statesman says, it's not a foregone conclusion that we'll lose," says Councilmember Jackie Goodman. The ruling "gives me confidence that we're fighting the good and righteous fight," adds Goodman, who supported funding the appeal. And to new Councilmember Daryl Slusher, that's sweet justice. "It's vindication for the people [on the council] who voted for the appeal... as for Ronney, Todd, and Mitchell -- turns out they were wrong," he says, referring to objections raised by Mayor Bruce Todd and Councilmembers Ronney Reynolds and Eric Mitchell against appealing the Hays court decision. Slusher and Goodman, who, along with colleagues Gus Garcia and Beverly Griffith, are expected to support funding the legal fight agianst any further appeals by the plaintiffs, both remark that the new ruling will be hard to challenge.

It certainly looks that way. The city won all 13 points of error cited in their appeal, and the detailed opinion written by Chief Justice Jimmy Carroll will be tough to argue against, says Save Our Springs Alliance lead counsel Bill Bunch. "It's a very sweeping ruling," he says, and will likely also deter other parties from challenging SOS in the future.

The appeals court decided, among other things, that the Hays County court erred in ruling that SOS is "unreasonable, arbitrary, and inefficient" according to section 26.177 of the Texas Water Code. That section of the Water Code, says the appellate court, is unconstitutional in that it "permits a court to review whether an ordinance is efficient and/or effective. Such a determination is one of public policy..." In any case, the court wrote, SOS is legal under the state's Local Government Code, which says that home-rule municipalities like Austin may "provide for the protection of and may police any watersheds," and exercise that authority "inside or outside the municipality's boundaries." All questions regarding its legality under the Texas Water Code, in other words, are moot. Thus, according to the appellate court, the Hays County jury should never have been asked to decide several of the questions on which it ruled. Another important point won by the city is that SOS was not an improper subject for a public initiative, as was determined by the Hays court. Leaving aside the obvious patronizing aspects of this claim by the plaintiffs, the appellate court ruled that no "common law" exists for determining what is too complicated for the public to understand. Besides, the judges wrote, the City of Austin was not allowed to show the Hays jury several points of evidence to prove that the public was informed at the time of the vote.

This fight will continue at the Texas Supreme Court, says Minton, but who will he represent? That question has been floating around City Hall for days. Minton's clients in the Hays County trial were the small landowners, but many said his $450 per hour fee was paid by FM Properties, a subsidiary of Freeport-McMoRan. FM Properties had a stake in the suit since it owned a portion of Circle C Land Corp., and therefore had two irons in the fire with McKetta and Minton. During the 1995 Legislative session, however, FM Properties and Circle C won passage of bills that release them from Austin's regulations. FM Properties, and all large landowners, will benefit from a new law, Senate Bill 1017, which allows property owners with over 500 acres in a municipality's extraterritorial jurisdiction (ETJ) to seek permits from the Texas Natural Resource Conservation Commmission (TNRCC) if they can't get what they want from their local governments. Circle C simply got their own kingdom with HB 3193, creating a Circle C water district where they make up their own rules and answer only to a group of state-appointed district boardmembers. The new laws exempt FM Properties, and the majority of Circle C, from city water quality ordinances.

At the same time all this was going on, according to McKetta, Freeport acquired Circle C's stock in their non-residential properties. Accordingly, McKetta no longer has a client in the case. It's all up to Minton now.

An appeal of last week's decision is up to Freeport. Minton suggests that Freeport may be in "the catbird's seat," with property exempt from SOS while all other developers nearby will have to comply -- allegedly Freeport's land will be all the more valuable. But "that is not Freeport's attitude at all," claims Minton. "This [lawsuit] has almost nothing to do with water quality. It's about landowners being allowed to develop their property." Although Minton doesn't say it, Freeport may have to pursue this case. FM Properties is awaiting a decision from the U.S. Fifth Circuit Court of Appeals in their $75.55 million federal lawsuit against the city. In that case, a jury awarded Freeport $113,000 in damages for the "arbitrary and capricious" taking of their 4,000 acres near Barton Creek through the city's enforcement of SOS -- actually, the city enforced the SOS rules on only 25 acres of that tract -- and the city is appealing. But Freeport's case was based on the contention that SOS was deemed null and void by the Hays County jury. Thus, it serves Freeport's interests to see Circle C's case through to the bitter end.

So, what has the city won? A mere 15-minute halftime before another grueling legal fight? And what are the city's chances of another win?

The mood is subdued down at City Hall amid the chaos -- the less said, the better, seems to be the order of the day. With Freeport's threat, via Minton, hanging in the air, councilmembers and legal staff are unwilling to chance a "misspeak" to the press or public. Last Wednesday night in executive session, however, the council pressed staff for a legal opinion on the status of the SOS ordinance. Most of the issues raised are easy to imagine. Is the ordinance now in effect or isn't it? Is is retroactive, since it was never illegal in the first place? Will it cost extra if we have to fight an appeal at the Supreme Court? Can we, at this late hour, just chuck the whole thing and get Gary to run through a gauntlet of paddlers? By Thursday morning, the city's Public Information Office sent out a terse message answering at least one question: SOS is back on the books effective immediately. Other than that, information is scarce. Everybody from the city manager's office, the planning department, and the environmental programs division, are directing all questions to the Public Information Office, and that office's director, Michelle Middlebrook-Gonzalez, has just one thing to say: We don't know yet.

Yes, SOS is "alive and breathing," the city's lead outside counsel Tom Watkins pronounced to a small group of Save Barton Creek Association members Monday night, but Watkins is nervous and still in battle-ready mode; consequently he refused to answer any legal questions from the group's members. He likely will remain tight-lipped until after he briefs the council himself, this Thursday in executive session. The pow-wow is expected to garner some answers for the public -- one of them being that retroactive action on SOS is probably not going to happen, considering that the Texas Government Code strongly advises against it. That would mean that everyone who filed site plans with the city for development in the 112-square-mile Barton Springs Watershed zone where SOS is effective, between the Hays decision in November 1994, and July 31 at the reversal of that decision, will likely not be required to follow SOS regulations.

Middlebrook-Gonzalez says the city doesn't have the numbers yet on how many site plans in the Barton Springs Watershed have been filed during that period, but staff is working on it. Unless the council decides to make SOS retroactive, those developments will fall under the weaker "Composite" Comprehensive Watersheds Ordinance (CWO), or Composite II, as it is now called, which was "re-adopted" by the council following the Hays decision.

A little history is called for here on the Composite II, in order to understand the origins of the battle over SOS, and the ramifications of another loss for the city in court. The Composite was originally adopted in 1991 under Mayor Bruce Todd's lead as a compromise between a development-friendly ordinance recommended by the Planning Commission, and a stricter Interim CWO which was very similar to the SOS ordinance. The 1991 Composite vote was significant because it followed on the heels of the infamous 1990 PUD (planned unit development) revolt over Jim Bob Moffett's plans for the high-density Barton Creek PUD. The PUD was ultimately voted down, but the council had obviously waffled on protection of Barton Springs and Barton Creek, and continued to waffle by passing the Composite the next year.

Thus was born the Save Our Springs Coalition, led by Bunch and the Coalition's then-director Brigid Shea. Their petition drive led to a referendum on a new, strict water quality ordinance. The public voted almost two to one in favor of the SOS ordinance on August 8, 1992. As mentioned above, SOS harks back to the earlier Interim CWO, with strict impervious cover limits between 15-25% within the watershed, as opposed to the Composite which allows between 20-70%. SOS also lists 13 specific pollutants, and requires new developments not to increase the amount of contaminants measured before building takes place; the composite lists only four, and requires testing only after the development goes up. More importantly, the Composite allows variances and exemptions; SOS does not.

If the council adopted the Composite II last fall, why would SOS go back into effect now? The issue is a bone of contention between attorneys for both sides. Minton has argued that SOS is not in effect, since the council voted to adopt the Composite, with wording in the ordinance that it "apply to development within the Barton Springs Zone pending a final judgement and exhaustion of all appeals." But the council didn't replace SOS, contends Watkins, it only added the Composite to it. In addition, he says, the council voted 5-1-1 to adopt Composite II; 6 votes are actually required by city charter laws for the Composite rules to supercede SOS rules. Slusher says City Manager Jesus Garza is working on a way to remove the offending clause in the Composite II to avoid those legal hassles already brewing.

Minton says he will file a request for a stay of the appellate court's ruling, to keep the Composite II in effect until the end of his appeals, along with a request for a rehearing. The plaintiffs have 15 days from July 31 to do so; if the requests are rejected, they may have up to 60 days to file a "writ of application" to the Texas Supreme Court for a hearing. Unlike the lower courts, there is no automatic entry into the Supreme Court's docket -- plaintiffs must apply and have their cases chosen by the judges. According to Watkins, about one out of every ten plaintiffs that apply are heard. For the most part, the Texas Supreme Court, like the U.S. Supreme Court, hears cases that are based on principles and philosophy, which is probably why Minton wants to paint their appeal as a "property rights" issue. And yes, the Texas Supreme Court is led by a Republican majority, but bets are even as to whether they would lean more toward the property rights argument, or toward the essentially Republican principle of home rule autonomy.

In any case, gone are the days of algae ties, and probably, too, all-night hearings and harlequins dancing outside council chambers with bells and placards. The lawyers are battling now. And things are relatively calm on the environmental front. The public's fervor appears spent. Is there any energy left in Austin's grassroots for another war over the watershed? Goodman offers a sobering comment. "People are probably just tired of hearing about the SOS case and just want it to go away." Maybe that's true, but the reality is, the war has only just begun: If Bunch and sources at City Hall are to be believed, the council is planning further legal action against those two new laws that Circle C and FM Properties are basking in right now -- HB 3193 and SB 1017. Maybe the city has only begun to fight -- now, isn't that worth at least a little confetti?