Observers have said that an Austin, Texas, public transit agency spent more than $61,000 in legal fees fighting a $500 Occupational Health and Safety Administration fine.

The Austin American-Statesman reported on Wednesday that fined for failing to file OSHA required paperwork, Capital Metro successfully appealed the fine, saying it was a "political subdivision" of the state and not an independent private company.

The newspaper also reported that the union representing Capital Metro workers says the federal agency, effectively winning exemption from oversight by OSHA, could lose substantial federal funding as a result.

The heart of the issue is Capital Metro and StarTran, an agency-created entity managing most of the employees who drive and maintain the buses, are linked, StarTran alleges, making them a "political subdivision" of the state, not an independent private company.

It has also been reported that Capital Metro interim Chief Executive Officer Doug Allen said the reason for spending so much money on lawyers was to legally establish OSHA does not have a stake in Capital Metro's operations.

Allen said, "Obviously, it's not just about a $500 fine. Under OSHA come a lot of duplicative, in our position, administrative and compliance costs. We've got our own safety plan, and we're reviewed on a semiannual basis" by the Federal Transit Administration. (With Inputs from Agencies)