A statement was released during Teague City Council meeting on Monday, September 17, 2018 issued by Messer, Rockefeller, Fort, PLLC, who is representing the City of Teague in a lawsuit against the City of Fairfield concerning an 28-year interlocal agreement for the Boyd Unit of Texas Department of Criminal Justice (TDCJ).
The statement reads as follows:
A lawsuit will be filed in Freestone County district court on behalf of the City of Teague against the City of Fairfield for breaches of an interlocal agreement and facilities agreement between the cities regarding management of funds from the Texas Department of Criminal Justice, violations of the Texas Open Meetings Act, and for declaratory and injunctive relief.
The suit is based on a 1990 facilities agreement and 1992 interlocal agreement between the cities and the Texas Department of Criminal Justice, whereby the Texas Department of Criminal Justice agreed to construct a correctional facility in Freestone County provided that Fairfield and Teague would provide water and sewer utility services to the facility. Both cities jointly own the water and sewer utilities. Both cities issued significant long-term debt to fund this operation. Fairfield agreed to operate and maintain the facility and to pay Teague for 45% of the associated revenues. The lawsuit will allege that Fairfield never established the special revenue account and has failed to pay Teague.
Fairfield recently hired W.D. Brown & Associates, PLLC to perform a forensic audit of Fairfield’s financial statements, accounts and expenditures. This auditor, in response to a request for qualifications, reported that its team consisted of professionals with forensic accounting and investigative experience including former FBI agents, computer forensics specialists and CPAs. The lawsuit will allege that the forensic auditor in its Forensic Investigatory Services Report revealed waste by Fairfield, transference of funds potentially against the advice of Fairfield’s own bond counsel, that the overall operations of Fairfield appeared chaotic with no clear lines of authority, the filing and records of Fairfield were disorganized, improper allocation of payroll costs, an overstatement of $281,790.76 in the Sept. 30, 2017 Beginning Fund Balance, and that critical documents were missing from Fairfield’s records, including mandatory conflict of interest disclosures.
In sum, Fairfield has failed to honor its obligations under the agreements. Because of Fairfield’s alleged misuses and misappropriations of special revenue funds, the City of Teague will seek monies that are due under the agreements. Compounding Fairfield’s mismanagement of records and revenues are numerous alleged violations of the Texas Open Meeting Act. The lawsuit will allege that Fairfield’s city council conducted multiple illegal meetings. The City of Teague seeks actual damages rightly owed under the agreements, as well as injunctive relief against Fairfield. It is anticipated that the actual damages will be significant.
As of press time, there was no comment from Fairfield Mayor Kenny Hughes, as he had not yet received a copy of this statement.
The “Times” will follow this issue as it develops.
