Water District Officials At Odds After Complaint

Denton Record Chronicle
07:41 AM CDT on Thursday, June 22, 2006
By Peggy Heinkel-Wolfe / Staff Writer

State environmental officials have focused on two parts of an ethics complaint against the Mustang Special Utility District and have given the district 40 days to respond.

The complaint, filed May 15 by one of the district’s own directors, alleged illegal payouts, conflicts of interest and board actions that overstepped the board’s legal authority.

A letter from the Texas Commission on Environmental Quality focused on the last charge, but also told the district that it must answer several complaints detailed by director Mike Frazier.

The Mustang Special Utility District provides water and sewer service to about 100 square miles in northeastern Denton County, including some of the fast-growing areas along U.S. Highway 380 and portions of Little Elm, Frisco and Oak Point. The district is governed by an elected board of nine directors.

Board President M.L. “Sonny” Snow said Tuesday that the district took corrective steps at its regular meeting Monday. Snow hand-delivered a news release last week to the Denton Record-Chronicle suggesting elements that could end up in the district’s response to the commission.

But Frazier said he thinks the other directors are continuing to move toward either removing him from the board or forcing him to resign. He pointed in particular to a new resolution passed Monday that counts a director absent from meetings if the director owes the district money.

“That [resolution] creates an avenue to count me absent even if I’m present at the meetings,” Frazier said, adding that after being counted absent for 50 percent of the meetings, the board can remove him from his elected post.

The district board and Frazier disagree on whether he owes the district a reimbursement for legal expenses.

Frazier filed Freedom of Information requests in April and June 2005, seeking records focusing on communication among directors. In his request, he asked for information that could have been filed on directors’ personal computers and e-mail accounts. In addition, he filed a complaint of possible open-meetings violations with the Denton County District Attorney’s Office in May 2005.

Meanwhile, the board members sought legal help against the open-meetings complaint and information requests.

The state attorney general denied the portions of Frazier’s request that included directors’ personal computers and e-mails, and the district attorney found insufficient evidence on the open-meetings complaint. The district’s board of directors then requested $9,649.48 in reimbursement for its legal fees through a resolution. The resolution, passed in January 2006, called Frazier’s requests reckless and irresponsible.

In carrying two elements of Frazier’s ethics complaint forward, the commission’s letter states that the Mustang Special Utility District can sue and be sued. Specifically, the letter says that asking Frazier for legal fees appears to be “a civil matter which, if not resolved between the parties, would require civil court resolution.”

Snow said that he’s only heard that the letter is out there.

“I haven’t seen it yet,” he said.

Diego Abrego, who heads the environmental commission’s team that reviews water districts, confirmed that his response letter was mailed from Austin to the Mustang offices in Aubrey on or about June 9. The Denton Record-Chronicle received an electronic copy of the letter on June 12.

Frazier said that he received his copy in the mail Monday.

The commission’s letter also states that the district cannot write rules for board member qualifications more stringent than state law allows. Currently, directors must be at least 18 years old, live in Texas and either be a qualified voter in the district, own land in the district or be a user of facilities in the district. In addition, the directors must abide by a code of ethics.

Frazier’s complaint highlighted several conflicts between the code and an elected director’s ability to monitor and examine the utility’s actions.

The district board met Monday and made moves to correct some of the items outlined in Frazier’s complaint, including its bylaws for director qualifications, Snow said.

“We didn’t mean for it to be more stringent” than state law, Snow said. “In getting our bylaws set up, we were behind the 8-ball and missed a stitch or two.”

However, Frazier said he has already talked to state officials about amending his complaint to include the board’s latest action that made it possible to count elected directors absent when they are in fact present.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com .

COMPLAINTS AGAINST THE UTILITY DISTRICT

Below is a summary of the main points in the ethics complaint sent May 15 to the Mustang Special Utility District, and the district’s response in italics, in a June 5 news release.

The district adopted new bylaws in January that:

* are more restrictive for director qualifications that the state allows.

Chapter 49 of the Texas Water Code authorizes Mustang to adopt bylaws.

n limit a director’s ability to complain about the district more than state and federal laws permit.

District bylaws make a person accountable for frivolous, unreasonable, and groundless claims that are costly to defend.

The district adopted resolutions that:

* permit the general manager more spending than the bylaws allow.

Frazier’s complaint references general manager’s check-signing authority, not spending authority, which is consistent with the bylaws.

* demand reimbursement of legal fees incurred relating to open records requests and open meetings, which is not permitted under state law.

Resolution No. 011606-04 “respectfully requests full reimbursement” of funds.

* establish payment schedule for meetings greater than state law allows.

State law permits no more than $7,000 per year, and Mustang’s policy is consistent with state law.

The district adopted a code of ethics that usurps state authority by:

* permitting the removal of an elected director.

The Code of Ethics provides for the removal of a director, if the district’s attorney recommends it after a thorough investigation.

* limiting a director’s ability uphold his oath of office.

State law provides that a water district shall adopt a code of ethics and may adopt bylaws to insure the best practices at the local level.

* permitting an ongoing conflict of interest with district fuel purchases at a director’s private business.

Mustang director Peggy Morris has disclosed in an affidavit that she owns the Deliquick on U.S. Highway 380 and that Mustang employees are permitted in their discretion to make purchases, including fuel, at Deliquick.

SOURCE: Mustang Special Utility District documents