As the Lon Morris College bankruptcy estate inches closer to a scheduled January auction, Jacksonville city officials don't hold out much hope of recovering a delinquent $25,600 water bill.
But they remain confident they will get the city's rodeo grounds back. And, arrangements already have been made to host the 2013 rodeo on that property.
However, it's costing the city a lot of money. The legal representation that has been necessary to ensure the rodeo grounds are not being sold by LMC without permission has cost the city way too much, Jacksonville City Attorney Joe Angle said.
Angle didn't have an immediate calculation of exactly how much, but it's no small amount — definitely in the thousands of dollars range. It's money that did not have to be spent, he said.
"They could have just given the property back to us without forcing us to go with them to court," Angle said Tuesday. "They could have said, 'Here. There's no way we're going to be able to spend $250,000 on improvements. Take it back.' I really thought that was what they would say."
Local municipal officials said Tuesday they fully expect the rodeo grounds to revert back to the city and not be included in the January auction.
Byron Underwood, president of the rodeo association, said he has no doubt whatsoever that the “PRCA Tops in Texas Rodeo” will take place in May as planned on rodeo grounds.
"City officials tell me they are either going to get it (the grounds) back or another organization will get it and the rodeo will go on," Underwood said. "I have already sent the application in for this year's rodeo, and I have the arena reserved for May 15 through May 18. The contracts have been signed and we are working on sponsorships right now."
Jacksonville City Manager Mo Raissi also felt strongly that the city would be victorious in the matter.
"There is no question about the rodeo," Raissi said Tuesday. "There is a contract. Even if the property is sold, the contract stipulates the grounds can be used by the rodeo for the next 15 to 20 years."
LMC Chief Restructuring Officer Dawn Ragan and Houston attorney Hugh Ray III did not immediately return a request for comment made Tuesday.
The rodeo grounds were deeded to the college with specific considerations in April 2009. One requirement was that the college invest $250,000 in improvements to the grounds, including painting, roof patching, and regular maintenance.
As part of the arrangement, LMC was required to permit the arena's use by the rodeo association for the annual PRCA Tops in Texas Rodeo event.
A special warranty deed, signed by LMC and Jacksonville employees, stipulated that if the improvements were not made, the property would automatically revert back to the city.
"Our position is, the school didn't spend the $250,000, so it should automatically return to us," Angle said. "The way it's set up, we're confident the debtors only want to show it for sale and will wait to be approved by us. We are in control as far as that is concerned."
Even if a high bid was made on the property, the bid would have to be approved by the city, Angle said.
In regard to the $25,600 in unpaid water bills the city is trying to reclaim from LMC, Jacksonville Finance Director Freddy Thomas said a claim has been filed against the college estate in bankruptcy court, listing the city of Jacksonville an unsecured creditor, Thomas said.
The debt started when said the college started paying its water bill late in March and had an outstanding balance for April, May, and June.
The college began making partial payments to the city, but the full amount owed was never recovered. Then the college filed for bankruptcy in July.