Legal Fees: Small towns spending big money - WECT, weather & sports Wilmington, NC

Legal Fees: Small towns spending big money

A single legal settlement in Oak Island recently cost residents a million bucks. A single legal settlement in Oak Island recently cost residents a million bucks.
A sewer project in Oak Island ran about $100 million over budget. A sewer project in Oak Island ran about $100 million over budget.

BRUNSWICK COUNTY, NC (WECT) - WECT has been investigating what local beach towns spend on legal fees. If you add up all the expenses for beach towns in Brunswick and New Hanover Counties over the last year, you'll see residents spent about $2.5 million on attorneys' fees and legal settlements.

A few of those towns - namely Oak Island and Bald Head Island - spent much more than average.

In fact, a single legal settlement in Oak Island recently cost residents a million bucks.

It's been an expensive decade in general for Oak Island. A sewer project ran about $100 million over budget. Construction wrapped up on a huge new Town Hall and fire station, and the bills started coming due. Then there were the legal bills for a number of lawsuits, some of which had been going on for 15 years.

We spoke to Oak Island Mayor Betty Wallace about why the legal expenses in her town are so high. "We had three people running for council last year that stated very firmly that they wanted to end some of these lawsuits, and if that meant going into mediation, to where nobody wins, nobody completely loses, that was their goal," she said about efforts to get costs under control.

Those candidates won election, and Mayor Wallace says the new town council is slowly but surely getting a handle on the town's finances.

The beach community of 7,000 residents paid out a $1 million settlement to end a lawsuit filed by Carmichael Construction. But the mayor feels that was more of a construction expense than a legal expense, since the battle had to do with cost overruns incurred during construction of the sewer system.

The town spent tens of thousands more settling two lawsuits with island residents. Moving forward, Mayor Wallace says the new council wants to be choosier about the battles it picks - and stick to issues that are legally defensible. 

"Even though in the short term you see higher expenses for attorney fees, in the long term, [settling these lawsuits has] stopped the bleeding," Wallace said.

Many residents of Oak Island are on fixed incomes and are feeling the economic pinch these legal battles have cost the town. That said, residents we spoke with feel things are moving in the right direction.

"It is easier to spend other people's money. There is no doubt about that," said resident Ted Bodenschatz. "But the character of the persons that we elected to this current council feel, I believe, that they are spending their own money, and look at it that way. I don't think that was the case with the past council."

One of the biggest legal battles driving expenses in Oak Island and other local beach towns has been in the fight to keep sand on the beach. Oak Island is one of several towns involved in a fight over erosion caused by dredging of the shipping channel to the Port of Wilmington. Some of the beach towns are actually fighting each other over who gets the sand dredged by the Army Corps of Engineers, and tax dollars are paying for all sides of that fight.

Here's a breakdown of what beach towns in New Hanover and Brunswick County spent on legal fees in the last 12 months, and along with some of the issues driving those expenses:

Bald Head Island (population 162): $649,886. Notable expenses: $93,000 paid to Rountree, Losee and Baldwin for general administrative issues and council meetings. $25,000 for bond counsel for Creek Dredging issue. Remainder spent on federal lawsuit against the US Army Corps of Engineers for failure to perform beach renourishment under the Sand Management Plan.

Calabash (population 1830): $17,281

Carolina Beach (population 5809): $89,240

Carolina Shores (population 3119): $4,638

Caswell Beach (population 408): $76,811. Notable issue: involvement in Village of Bald Head Island vs. the US Army Corps of Engineers federal lawsuit, regarding dredging and placement of sand on nearby beaches.

Holden Beach (population 589): $62,529. Notable issues: CAMA violation, legal services regarding Captain Jacks, and a bankruptcy case.

Kure Beach (population 2048): $96,880. Notable issue: construction problems with Ocean Front Park. Town says workmanship on park was not what they expected. They hired an outside legal firm to handle negotiations with the bonding company.

Oak Island (population 6961): $1,355,444. Notable issues explained in story.

Ocean Isle Beach (population 569): $14,143

Southport (population 2889): $40,036. Outsourced attorney G. Grady Richardson for $22,484, for successful lawsuit against Southeast Brunswick Sanitary District regarding a contract dispute.

Sunset Beach (population 3661): $21,984. Notable issue: hiring outside, specialized attorney for calling in developer bonds for a subdivision.

Wrightsville Beach (population 2521): $49,286. Notable issues: Beach strand smoking ban, use of public trust waters, civil citation appeals, proposed skateboard park, Unified Development Ordinance, curbside recycling franchise agreement, NCDOT issues, No Discharge Zone, Beach Nourishment Interlocal Agreement, Harbor Island residential parking district, personnel matters, land-use issues, and consultation on legislative issues

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