Council Watch

Behind Closed Doors: The Nature of the City's Lawsuits

Council Watch
By Doug Potter

This week, during yet another slow spell, let's take a look at another front on which the development war -- supposedly settled by the peacekeeping force of the Green Council installed in 1997 -- is still raging. Raging in the courts, that is. If the 1999 session of the Texas Legislature wasn't enough to convince you, and if the recent, um, shift in Statesman editorial policy hasn't given you pause, then consider this: The council's executive session agenda at its most recent meeting contained no fewer than four items pertaining to land development on the aquifer. As it happened, many of the items on the executive session agenda were not even discussed at the last meeting, Oct. 7, due to the time-consuming and mentally exhausting vote on the city's water deal with the Lower Colorado River Authority. And even if they had been, the very definition of executive session implies that the council's deliberations are, for the time being at least, between the council and the lawyers. That is, for them to know and us to find out. "The problem on talking about specific litigation," says Assistant City Attorney David Smith, "is that I'm not going to do it." Smith would only confirm for curious council watchers that "there's a lot going on" behind the closed doors.

There sure is. The Oct. 7 executive session agenda contained a little bit of everything. One item that sounded intriguing was a subdivision seeking "limited adjustment" exemptions from the SOS Ordinance (Item 8 on the executive agenda), a little-used provision for landowners who believe the ordinance is violating rights given them by the federal government (this one requires a public hearing first, so if the council approves their claim, you'll get a chance to comment before any exemption is given).

Other items may never see the light of day -- or if they do, as in the case of the recent settlement giving $9 million to Circle C for infrastructure expenses incurred before its annexation, it will be in the form of a brief announcement followed by a council vote. City officials say $9 million was a pretty good deal, considering Circle C's original request was for about $30 million. The lawsuit that produced that settlement isn't over, though; it appeared as Item 11 on the executive session agenda, and absent another settlement, Circle C Land Corp v. City of Austin is headed to court this winter, as other "developer reimbursables" are still in dispute between the two parties.

Items 13 and 14 on the agenda represent two lawsuits in the ongoing fight over "water quality protection zones." At issue is whether the Texas Legislature violated Austin's constitutional rights in 1995, when it established that the zones could be established in the extraterritorial jurisdiction of cities with a population over 5,000 that have "attempted to enforce three or more ordinances or amendments thereto" within a five-year period. The only city that those arcane standards applied to was Austin, so this was widely viewed as a way to exempt Austin-area developers from the city's increasingly useful water protection laws. In 1998, the city sued in Travis County to have these standards declared unconstitutional (Item 13: City of Austin v. LS Ranch Ltd., et al), and landowners sued in Hays County in defense of them, and in offense at the city of Austin's pending annexation of Circle C (Item 14: FM Properties Operating Co. v. City of Austin).

Both cases were won by the plaintiffs, meaning the Travis County court declared the zones unconstitutional, and the Hays County court upheld their constitutionality. The dispute headed for higher authority, and arguments were heard by the Texas Supreme Court in December of 1998. The ruling is expected "any day now, given when they were argued," in the words of one city attorney, though no one at the city seems to be holding their breath.

If water quality protection zones are upheld in court, Circle C's annexation will be invalidated. In that case, the city will get back the $9 million it recently handed over in the settlement of one part of the Circle C -- as well as a world of hurt from developers who will once again feel free to frolic in a self-regulated environment, without intervention from pesky Austinites trying to protect their community.

The 1704 Score

Then there's HB 1704 (Item 9 on the executive agenda, "Discuss legal issues concerning Chapter 245 of the Texas Local Government Code"). No telling exactly what "legal issues" were discussed, but council certainly had a lot to mull over. The SOS Alliance has been tapping its toe waiting for the city to challenge the law in the courts, but aside from a cryptic posting that appears from time to time on the council's closed-door agenda, nothing's shaking. SOS Alliance staff attorney Grant Godfrey says he'll try to force the issue presently, and to that end, the Alliance planned this week to file an appeal on a particular Planning Commission grandfather case that they believe is legally flawed. For one thing, says Godfrey, the subdivision's Interim Rural Residential zoning, which it received as a result of being annexed by the city, does not allow for the proposed density of the project. Furthermore, he adds, annexation-related zoning is not invalidated by the grandfathering provisions of 1704.

According to state law, the Planning Commission can't reject a subdivision application if it meets all legal requirements, but the commission nonetheless voted in August to delay amid lingering questions on the subdivision's legality. The applicant, Circle C, sued the commission. Finally, Planning Commissioner Susana Almanza switched her vote for delay to a "yes" vote, securing Planning Commission approval and causing the lawsuit to be dropped.

SOS believes that the Land Development Code gives it the right to general appeal of the Planning Commission decision. And since a disputed Planning Commission ruling would go before the council for resolution, the council would finally have to come clean with its intentions regarding 1704: Take the Legislature's action lying down or come out swinging (an option which seems unlikely, given the interval that's passed since the session ended).

City Attorney Smith seriously doubts that SOS will be allowed to bring its appeal. "In terms of [them] jumping in the middle of our land development process, there's no provision" in the code, Smith said. SOS hopes to push ahead anyway, but Godfrey doesn't sound optimistic about the city's involvement. "If the city was going to fight any aspect of HB 1704, they could probably find it in this case," he says. "The fact that they're approving it tells me they don't want to do it."

Spillar Thriller

There has been hope of late that much of this could come to a peaceful resolution, in the form of an agreement between the city and Gary Bradley over his Spillar Ranch -- more than 1,000 acres that lie southwest of Circle C (see "Rural Riddle," Chronicle, Oct. 15). Bradley wants city utility service for his project, which would include a golf course, a hotel, and about 700 homes, and in return, he and his partners (including builder Clark Wilson Homes) are willing to subject the grandfathered property to tighter environmental controls than the law requires. Complicating the negotiations is the fact that the city and Bradley have been down this road before, and with disastrous results for Austin. Bradley wrangled city utilities with the promise of annexation, only to persuade the Texas Legislature to pass a law letting him out of his promise. The new proposal hints at annexation for Spillar but provides no guarantees. Both sides continue to trade offers with one another, but a final agreement is reportedly a long way off. Though the status and details remain secret, several sets of general offers have been traded publicly. The city is reportedly holding firm in its insistence that nothing less than SOS-level compliance with impervious cover limits will do. Their offer called for mitigation land to bring grandfathered property down to SOS-mandated limits. Bradley countered with an offer to instead pay mitigation fees, as provided for in the SOS/ RECA/Chamber of Commerce agreement, in an amount that could exceed $4 million.

Could a Spillar Ranch agreement spell the end of all litigation between Bradley and the city? Memos traded by the two parties indicate the possibility that one aspect of the Spillar Ranch agreement would be that "all litigation between Bradley interests and the City of Austin will be resolved." City Attorney Smith would say only that there was "daily communication" going on between the city, Bradley, and his people, and that nobody knows when or where it will all end. As for longtime Bradley nemesis Council Member Daryl Slusher, he says of the agreement, "The odds are against it, but I wouldn't rule it out. It would be good for the whole region -- a historic event."

'Undignified' Behavior

Mark Rose's instant gratification on the night of the city's approval of the $100 million water deal with LCRA didn't sit well with Council Member Daryl Slusher. The crowd had barely begun dispersing after the council's 7-0 approval of the deal when City Manager Jesus Garza handed over full payment for the water before a large audience. In a memo to Garza, Mayor Kirk Watson, and the rest of the council the following Tuesday, Slusher questioned the action and its motives:

"I found this scene undignified and unnecessary," Slusher wrote, "as well as cavalier treatment of the citizens' money. It also smacked of everything being decided in advance and the council discussion and vote being just a formality."

The memo then charged that the episode was indicative of problems that had plagued the LCRA water deal from the start: "In my view this was an unfortunate end to a process that left much to be desired. In particular there was a lack of citizen involvement on the front end, even a lack of council involvement on the front end."

Garza told the Chronicle that the payment was made so quickly because, "We thought there were going to be some legal actions" that could thwart the deal, "maybe by someone affiliated with SOS." Garza went on to say that, "It was never meant as a disrespectful thing to the council or to the public, [though] I understand how Council Member Slusher feels."

Slusher, for his part, says he and Garza have talked things over. "He said there was no intent to be undignified or cavalier with the money." Slusher said though he still disagrees with the city manager's actions, the two have mended fences, and that the incident was, to coin a phrase, "water under the bridge."

This Week in Council: No council meeting again this week, but our dedicated public servants will be back next week, Oct. 28. end story

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City Council, Gary Bradley, development, HB 1704, Lower Colorado River Authority, SOS Alliance, Spillar Ranch, Daryl Slusher, Assistant City Attorney David Smith

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