Posted on 05/21/2002 7:30:33 AM PDT by Redbob
Cross Roads may land in court over development dispute 05/20/2002 By Tom Reedy / Staff Writer< CROSS ROADS — A dispute over a high-density subdivision near Cross Roads caused an upheaval during the last city election and now threatens to spill over into court.
Carol Roberts, a certified public accountant who served on a City Council committee to investigate the development, says she and Randy Wallace, a member of the city’s Comprehensive Planning Committee, have been singled out for harassment from the developer, Bob Shelton Enterprises of Denton.
But Mr. Shelton says he only wants them to tell what they’ve been telling other people about the project to determine if they’re telling the truth. If not, he will sue, he said.
Cross Roads, population 603, is just east of Denton on U.S. Highway 380. Last year, Mr. Shelton’s company bought 759 acres of land near the town’s southern limits for Cross Oak Ranch, a master-planned community that originally was conceived as home for more than 8,000 residents.
Former Denton County Judge Kirk Wilson, executive director for the development, said that almost 2,000 lots are awaiting only plat approval before marketing to builders can begin. "We’re going to have to get a little further down the road before we can say when our first lots are going to be sold, but we have serious purchasers that are interested in the development right now," Mr. Wilson said.
Cross Oak Ranch is divided into three parts. Approximately one-third of the development lies within the city limits of Cross Roads, one-third within the city’s extraterritorial jurisdiction (ETJ), and one-third within the city of Oak Point’s ETJ.
The developer sought to create a municipal utility district (MUD), a government entity with the power to tax that is used as a financing vehicle by developers to pay for water, sewer and drainage infrastructure costs.
In a regular development, those costs are paid by the developer and passed on to the lot buyers, but in a MUD development, the costs are paid for by bonds issued by the MUD that are paid back by taxes levied on the lots.
Since the project lies in three separate jurisdictions, the company sought to form three separate utility districts.
Cross Roads’ one-acre minimum lot size would have had to be changed to allow the development, and the City Council appointed the city attorney, two council members and Ms. Roberts to a committee to look into the pros and the cons of allowing a MUD inside the city limits.
According to notes furnished by Ms. Roberts and committee member Anna Graef, also a City Council member, the three MUDs would issue about $38 million worth of bonds to pay for water improvements, including a sewage treatment plant. The debt would be paid back by property taxes of about 75 cents per $100 valuation levied by the MUD. Other services the MUD decided to provide, such as police and fire protection, would add to the tax rate.
The committee members said they had talked to investment bankers who warned that the particular MUD being proposed had a higher than average ratio of assessed value to bond indebtedness, 9 percent compared to 3 percent for most MUDs, they said.
The committee said that since Cross Roads funds its entire city budget from sales tax receipts, the MUD would form two classes of residents within the city: those with a property tax and those without.
It also reported that the southern Denton County town of Flower Mound had a MUD within its city limits that defaulted on its bond debt. In order to avoid having the town’s credit rating lowered, Flower Mound had to assume responsibility for the bonds.
The committee also reported that Cross Roads would face a "very possible or even likely" situation in which the MUD residents would outnumber the other residents and could vote to have the city assume the bond indebtedness to spread the tax burden to the entire city. The committee recommended the City Council turn down the application to create the MUD within its city limits.
"We feel that not only is the approval of a MUD within our city limits not advantageous for Cross Roads, but there is a great potential for it to be detrimental in the long run," the report said. The City Council voted against the creation of the district, and a special meeting has been called for June 3 to talk about the one being formed in the town’s ETJ. The MUD within the ETJ of Oak Point has been approved by that town’s council.
The controversy polarized the town and spilled over into municipal elections, says Harv Kitchens, the new mayor who takes office next month. He said the election became a referendum on growth, and that anti-development forces elected him and three new council members in the contest earlier this month that drew about 75 percent of registered voters.
Now the developer wants to take depositions from Ms. Roberts and Mr. Wallace, of the Comprehensive Planning Committee, to determine if they’ve been spreading untrue or misleading information about the development. A court date of June 14 has been set to determine whether the depositions will be allowed.
Mr. Shelton, the developer, said Ms. Roberts and Mr. Wallace have made false statements about the districts.
"We believe they are trying to interfere with our ability to form a MUD," he said, but he said he could not identify the false statements. "The lawyers have all those notes; they made all the meetings," he said.
Dallas lawyer Ike Schuppe, who says he’s the general legal counsel for the development, agreed. "Carol Roberts and Randy Wallace have been against any development out there from Day 1, and municipal utility districts are an integral part of that development," Mr. Schuppe said. "If they are interfering with the creation of those districts in an unlawful way, I want to know about it."
But he also could not identify exactly what false and misleading statements the two have made. "I have not been a party to those conversations," Mr. Schuppe said, which is why, he said, the developer is asking the court to allow the two to be deposed.
"We know that they have talked to a variety of people about the creation of the municipal utility district and other Cross Oak Ranch related matters," he said. "We also believe that some of that information was misleading, wrong, and that a lot of the conversations and correspondence was with the intent to prevent the municipal utility districts from being formed."
Mr. Schuppe said the law that allows a deposition to be taken to find out information upon which a lawsuit could be based, known as a "Rule 202 deposition," is a relatively new one.
"Obviously people have the right to participate in government ¼ and as long as people are being truthful in what they say, they have an absolute right to do that, so when you seek to take a deposition under this rule, it is to determine who have you been talking to and what have you been saying and have you been truthful in what you have been saying, rather than rushing out and filing a lawsuit when you don’t know exactly what all the facts are," he said.
Ms. Roberts says she’s never been given a specific answer as to what she is supposed to have said.
"I would be happy if they said, ‘Carol, you did this.’ I have never said anything that’s false," she said.
Mr. Wallace said that on the advice of his attorney, he would not talk about the case.
Ms. Roberts also declined further comment, but she issued a written statement in which she reprised her role on the committee:
"I HAVE NEVER rendered information that I KNEW was FALSE or MISLEADING! At no time, was my conduct as a member of the Cross Roads MUD committee, UNLAWFUL," the release says (capitals in original).
Outgoing Mayor Doug Daffron, who supported the development, blames Ms. Roberts and Mr. Wallace for his election defeat.
"Those two individuals have actively worked in every avenue they could to prevent this development from occurring," he said. "They’ve been very active with local government people and also with the state. This very same group frightened our residents into believing that a development for our town would be bad, and they got me out based on that." Mr. Daffron said that growth is inevitable for the town, and that by trying to obstruct it the town is losing its only opportunity to control it.
Mr. Kitchens, the mayor-elect, disagrees. He says he feels that the city can fend off development as long as the residents want.
"The reason I say that is that Bartonville and Double Oak have been able to do it in light of Lewisville and Flower Mound and Argyle coming in all around them with high density, yet they’ve been able to maintain their two-acre minimum," Mr. Kitchens said. "If I hadn’t seen that as an example, I don’t know that I would be so positive and aggressive to say that we’re going to be able to keep our one-acre minimum."
Mr. Kitchens said Ms. Roberts served the city well with her research into the MUD. "My opinion is she didn’t spread any false information," he said.
"She’s a CPA and she crunched the numbers and presented them in a very factual manner with documentation as to why it was not appropriate to do this," he said. "I really think this business with Shelton and Kirk Wilson is all a matter of harassment, and they’re trying to intimidate this town all through this whole process."
But Mr. Shelton said he doesn’t have time for such games and wants only to be able to develop his property in a lawful way.
"We’re not in the business of suing people; we only want to be left alone to do business," Mr. Shelton said. "If they told the truth, then it’s over with. If not, I intend to take legal action." TOM REEDY can be reached at 940-381-9593.
Where’s the general interest in this?
Aside for the fact that it’s yet another example of lawyers run amok, it’s worth noting that the front men for this developer are the cronies of Dick Armey’s son and recent congressional candidate Scott Armey, who has a long history of cozy relations with developers in Denton County.
They tried to buy an election and a city council favorable to their plans, and failing that, have tried to make it too costly for anyone to oppose them.
Their candidates lost decisively, but they've continued the lawsuit to punish their opponents.
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