PONDER - Some Town Council members did not declare financial ties to Devon Energy before denying a drilling moratorium, a move criticized by Remington Park residents who said the moratorium would have provided them relief.
Devon Energy is currently drilling two gas wells in Remington Park, the town's largest neighborhood. Company representatives have said that Devon plans, but has not yet sought permits for, two more wells at the same controversial pad site. A moratorium would have complicated the company's production plans.
Remington residents have questioned council members' financial interests with Devon after most of the council refused to impose a moratorium on new drilling permits earlier this month. The moratorium would have prevented any more new gas wells to be drilled under the town's current ordinance, which has not been revised in 10 years.
Devon officials have not indicated where the new wells will be drilled, so it's unclear which leaseholders, including council members, would benefit from the next two wells.
Mayor Scott McCarty made a plea for the moratorium during a special called meeting on July 21, in order to give town leaders a chance to address problems in the ordinance. But after council member Karen Finley's motion to impose a moratorium died for a lack of a second, the council voted 4-2 against the measure.
Council members Bruce Ashman and Alan Gorman, who voted along with Ryan Rouse and Randy Crider to deny the moratorium, both have gas leases with Devon Energy, county records show.
In addition, Ashman and his wife, Judy Ashman, have obtained $495,000 in business financing from Northstar Bank this year, secured in part by assigning leases to the bank, county records show. In December 2010, the couple leased 0.475 acres in Ponder to Devon, county records show. The couple's lease included the same concessions granted to the town in its newest leases with Devon, including a one-fifth royalty and a three-year term.
Bruce Ashman declined to be interviewed for this story.
Town Attorney John F. Boyle Jr. said that the legal test for a conflict of interest in Ashman's case would have two parts. First, the impact on the couple's property values would have to be greater than the impact on any neighboring property. Second, the impact on the couple's business would have to amount to more than 10 percent of their income each year in order to be considered a conflict of interest.
Gorman and his wife leased their 1.8-acre property in May 2001 with Mitchell Energy Co. for three-sixteenths in royalties. Devon bought Mitchell three months later, in August 2001. County tax records show the couple's mineral interest was pooled with Devon.
The royalties from the pooled interest rise and fall with the price of gas, Gorman said, and have averaged less than $1,000 a year for the past three years.
He's disclosed the matter to residents who have questioned him, he said, including letting them know that he has mineral interests from family property in Oklahoma, too.
As a longtime Dallas Area Rapid Transit employee in charge of certain contracts, he goes through training each year on conflict of interest, Gorman said. He understands that a conflict of interest comes into play when he or a family member works for the company that would benefit from his influence.
"If my beloved nephew worked for the company, I would need to recuse myself," Gorman said, by way of an example.
Residents of Remington Park asked for the ordinance revisions and the moratorium after a Devon drilling rig was erected less than 500 feet from a number of homes in the neighborhood. They have complained that the current ordinance is not protective of human health and asked for many changes to address the deficits.
Resident Wes Howard said he listened to the council's comments during the discussion about the moratorium and thought they were too focused on setbacks. The issues needed time best tackled under a moratorium, he said.
"I feel very let down," Howard said.
Residents also complained that the long-term impact will undermine the property values of the neighborhood. Remington Park is the town's only master-planned neighborhood. The developer has said the pad site takes about 20 lots from the future development of the neighborhood.
Friends have advised Veronica Kronvall to sell her home in Remington Park and move out of Ponder, but it's not that simple, she said.
"It's my first home," Kronvall said. "I would lose everything I've invested in it and have to go into an apartment."
Residents have also questioned whether the town itself has a conflict of interest in the pad site, although the mayor has said the town's income would be minimal.
Since 2001, the town has received about $2,200 in royalties; and less than $400 for the current fiscal year from its current leases with Devon.
In October 2010, town officials signed additional three-year leases with Devon for several parcels of land the town owns in the original town of Ponder, according to documents obtained in an open records request. The leases brought $3,150 in signing bonuses for about 3.7 acres, and leveraged a one-fifth royalty interest in any pooled well.
Devon has also paid the town $2,000 for water.
County records did not show direct ties between Randy Crider and Devon. However, records show members of his extended family, including his mother and maternal grandfather, have many leases with Devon.
Crider did not return calls for comment.
Councilwoman Finley said she had no idea which council members had leases with Devon prior to the moratorium vote. However, given the fact that many of the council members have lived in Ponder for a while and also owned property, she said she wasn't surprised by it.
However, she wasn't sure the solution for a small town was to exclude council members who did have leases.
"Somebody has to vote," she said.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her email address is email@example.com.