A West Lake Hills resident agreed to pay $67,000 in attorney fees and possibly as much as $76,000 more in civil penalties to settle a dispute involving a failed septic system.

The proposed judgment, which still must be approved by the state and a court, has been posted for public comment. After a 30-day period, the Texas attorney general will decide whether to approve the judgment.

If approved, the judgment will go to court for approval. If the judgment is rejected, a trial could go forward Dec. 6 .

The city sued Yaupon Partners LLC and Ray McMackin , who said previously that he is the sole manager of the real estate partnership. The city alleged that the septic system at 1100 Yaupon Valley Road leaked human waste into the groundwater within 10 feet of Little Bee Creek, which drains into Lake Austin, violating state and local health laws and causing a public health nuisance.

Under the judgment pending approval, Yaupon Partners and McMackin must comply with a permanent injunction that requires them to stop using the failed sewage system, vacate the premises, abate nuisance conditions and install a new onsite sewage facility that complies with state and local regulations, among other stipulations.

A new septic system has been installed and certified, and a certificate of occupancy has been issued, City Administrator Robert Wood said.

"That's all been taken care of now," he said.

McMackin said he started moving back to the Yaupon Valley Road property late last month. He had been living temporarily in South Austin.

Under the judgment, Yaupon Partners and McMackin would pay by March 14 $67,000 in attorney fees and costs — $65,000 for the city and $2,000 for the state. If the March 14 deadline isn't met, they would owe the city a $20,000 additional penalty. If Yaupon Partners and McMackin comply with the permanent injunction and demonstrate the inability to pay, they would not need to pay the city and state $76,116 in civil penalties for 1,316 days of violations from Oct. 30, 2006 , through June 7, 2010 .

The dispute, Wood said, "cost the city and residents of West Lake Hills a considerable amount, so I think it's fair and appropriate that he reimburse the taxpayers."

The judgment also states that Yaupon Partners and McMackin cannot sell or transfer the Yaupon Valley Road residence, 1400 St. Edwards Drive in Austin and 504 N. Austin St. in Marfa — three properties owned by McMackin or Yaupon Partners, Wood said — except with written approval of the city and until the city releases them from obligation .

McMackin also agreed previously to submit to the city and taxpayers a letter of "unqualified apology," which was to be drafted by the city and approved by McMackin and his lawyer. The city expects to receive this letter when the final judgment is approved, Wood said.