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Guidance on gas rules costs city

Profile image for By Peggy Heinkel-Wolfe / Staff Writer
By Peggy Heinkel-Wolfe / Staff Writer

Three law firms, two consultants involved in rewrite of ordinance

Since 2011, Denton has spent more than $43,000 on consultants in reviewing the city’s natural gas ordinance, with the potential for thousands more to be spent before the work is done.

Documents obtained in an open records request show that the city has contracts with three different law firms and one technical consultant. Three of the four contracts have caps, providing for up to $165,000 in billable hours and related expenses. Another technical consultant has been advising the city staff without a contract.

Residents and some City Council members have been critical of Denton’s fitful progress on rewriting rules for natural gas drilling and production. However, records show consultants began working long before a council-appointed task force met earlier this year.

In addition, some billing notes show consultants advising the city on legal doctrines of vested rights and pre-emption. The city wrote a procedure for natural gas operators to claim vested rights — the ability to drill and produce gas under the city’s old rules. That matter has gone ahead of the other rewrites, having been reviewed by the Planning and Zoning Commission earlier this month.

City Attorney Anita Burgess said the work on rewrites is highly technical and requires help in a number of different disciplines. Further complicating matters is the fact that the oil and gas industry are regulated at the state and federal level.

“As such, from time to time, we need help,” Burgess said. “Many of these matters are not issues we would regularly encounter.”

Residents have been asking for changes to the ordinance ever since controversy erupted over drilling at Rayzor Ranch in 2009. The City Council changed some provisions in the ordinance in 2010. A council-appointed task force made about 40 recommendations for changes, and a minority report from the task force recommended other changes earlier this year.

In May 2011, attorney Terry D. Morgan amended his firm’s standing agreement with Denton to provide professional legal services relating to land use. The amendment includes a cap of $90,000. Most of the billings since then, about $22,000, have been related to the drilling ordinance. In addition, in billings dating from January 2011, notes show the firm consulted with Denton over vested rights at Hunter Ranch.

In May 2011, the city contracted with Lloyd Gosselink Rochelle & Townsend PC for up to $50,000 in legal services related to the rewrites. The firm has billed nearly $21,000 so far, with about half that amount accruing in August 2012, when the firm billed for about 55 hours of time. That firm’s invoices show the attorneys researching and advising on federal pre-emption in the Clean Air Act, as well as regulatory takings and vested rights.

The city also tapped Terry Cross, of McClure & Cross, which specializes in oil and gas issues and represents both mineral owners and oil and gas producers, in June 2011. He billed the city twice, $700 to attend the October 2011 task force meeting and another $700 on Oct. 5, 2012, to review the draft drilling ordinance. Cross’ contract contains no cap.

Many of the rewrites unveiled for Planning and Zoning this week — the third round since the beginning of October — included footnotes specifying which edits came from which law firm or technical consultant.

Some rewrites were suggested by Kenneth Tramm of Modern Geosciences, a technical consultant, yet the city has no contract or billing from Tramm, according to City Secretary Jennifer Walters. 

Some edits were suggested by Don Butler, a former task force member. The city signed a contract in July 2010 with New Tech Global for a maximum of $25,000 in consulting fees and expenses. To date, New Tech Global has submitted no bills, Walters said.

Karen Moss, the firm’s manager of regulatory affairs, said she was originally contracted to serve on the gas well drilling task force and as a technical adviser, but Butler has served instead.

“I think he may be waiting until it’s all done before he sends a bill,” Moss said.

Burgess said the fitful progress can be attributed to a combination of the rewriting process and issues of substance.

She wasn’t sure whether the City Council would approve the ordinance as it currently stands on Dec. 18, when a public hearing is scheduled, but the council would have the full range of options before it that day.

The council could also consider whether to again extend its moratorium on new drilling and production permits. The moratorium has been in place for nearly a year. 

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is