Attorneys for the City of Fairfield have officially notified the City of Teague, via certified mail sent Thursday, May 16, 2019, that the Interlocal Agreement between the two cities is no longer in effect.

This, as Fairfield’s debt in connection with the Texas Department of Criminal Justice (TDCJ) water and wastewater project has been “fully paid and is no longer outstanding.”

The correspondence goes on to request, again, records from the City of Teague regarding their original bond payment to provide evidence that “all the money Fairfield has paid Teague over the life of the Interlocal Agreement has, in fact, gone towards the debt issued by Teague in connection with the Project.”

In the early 1990’s, the two cities partnered with TDCJ to provide water and wastewater facilities for the construction of the Boyd Unit prison located on Highway 84 between Fairfield and Teague.

In the original agreement, Fairfield had 55% ownership and was tasked with operation and maintenance.

Teague had 45% ownership and collected bond payments from Fairfield in the amount of $10,234.08 each month, to be used in paying down their debt, as stipulated in the Agreement.

In April of last year, the City of Teague was contacted with a request from the City of Fairfield regarding an early release from the Agreement, set to be completed in 2020, to allow Fairfield to pursue a new proposed bond with TDCJ for expansion and improvements to the water and wastewater facilities.

Instead, five months later, Teague filed suit against Fairfield for breaches of the interlocal agreement and facilities agreement, seeking monetary damages over $200,000 but not more than $1,000,000.

TDCJ’s much needed improvement project was effectively stalled.

After months in court, the original lawsuit was sent to the Tenth Court of Appeals on April 9, 2019 after District Judge Patrick Simmons granted in part and denied in part Fairfield’s Plea to the Jurisdiction.

Fairfield Council voted to amend their budget during a special Meeting on March 21, 2019 in order to pay off the TDCJ debt in the amount of $130,325.

According to City Administrator Nate Smith, the final payment has been deposited in an escrow defeasance agreement with the City of Fairfield’s lender, the Bank of New York Mellon Trust Company. This means that all the funds are secured until Certificate of Obligation maturity, showing that the debt is considered to be paid off.

As outlined in the Interlocal Agreement, satisfying the debt by either City in connection with the TDCJ project means the Agreement is no longer in effect.

As to what will happen with the monthly bond payments sent by Fairfield to the City of Teague, Smith declined to speculate, stating, “We need to know where they [Teague] are with their payments.”

In order to determine this, the City of Fairfield has requested the following information from the City of Teague:

–Bond Payment Schedule associated with the initial bond (not the 2005 refinancing);

–Documents showing the interest rate associated with the initial bond issuance;

–Documents showing whether the 2005 bond refinancing combined bonds or simply refinanced the initial bonds;

–Evidence that all the money Fairfield has paid Teague over the life of the Interlocal Agreement has, in fact, gone towards the debt issued by Teague in connection with the Project.

Last week’s correspondence to the City of Teague reads, “Our records show that, based on payments made by Fairfield to Teague over the years, Teague’s debt should have been paid long ago.

Teague Council met on Monday, May 20th as this edition was sent to press. Stay tuned for next week’s coverage.