Cherokee County Development District No. 1 – notes on its history, taxes, neglect and eventual demise.
From: Tyler Morning Telegraph Wednesday, July 7, 2010
Cherokee County Development District No. 1 Re-Formed
By KELLY GOOCH
Staff Writer
Cherokee County Development District No. 1 has been re-formed to help attract people to the northwest part of the county.
Board member Harold Palmer, who is also general manager of Challenge Golf Group, said the development district will receive about $500 or $600 each month from tax revenue generated by Eagle's Bluff Country Club in Bullard. That money can then be used for things such as bringing new businesses and residences to the Lake Palestine and Eagle's Bluff area.
Palmer said there are no official proposed projects at this time, as the district board has not had its first meeting.
"We just got (the board) reactivated and are planning to have our first meeting in the near future," he said. "As soon as we can (get) together, we can get more long-range plans."
And Cherokee County Precinct 3 Commissioner Katherine Pinotti said she is interested to see what those plans are.
"They've got a lot of things on the table and need to sit down as a group and prioritize them," she said.
Palmer expects the board to meet at least quarterly and for the first meeting to take place in August.
Board members include Palmer, Stuart Meisenheimer, vice president of Austin Bank in Jacksonville, Carl Barron, a general contractor in Bullard, area resident Cary Byrd, and Monty Shank, head of the Upper Neches River Water Authority.
Palmer said the board was re-formed after Challenge Golf bought Eagle's Bluff and discovered that this group used to meet at the country club. The board was disbanded years ago because of lack of interest and lack of projects, he said.
"So we tried to reconstruct it and asked people to serve and resurrected the committee …," he said. "However we can best use the money to benefit the county and benefit the use of the area, this is what we want to do."
Commissioner Pinotti said she is pleased that the board was rejuvenated.
"I'm very happy," she said. "They have some great people on the board. They're really good people. When I saw these board members I thought district one is going to soar (and) they're going to do some great things for that area."
By 2004, the Cherokee County Development District No. 1 was dead. Whatever the reason, the members of the board of directors took no action to provide any plans or projects that met the criteria for development proscribed by Chapter 383 of the Texas Local Government Code. Over time, all the commissioners and the County Judge who authorized the district were replaced in office. The district was forgotten.
Dead? Oh Yeah.
As a new resident of Eagle’s Bluff in 2004, moving a home-based business from the Dallas area (where there are plenty of tax districts and authorities), I contacted the office of the Comptroller of the State of Texas about my obligations collecting sales taxes – particularly to identify the jurisdictions in which I operated. I knew I needed to collect 6.25% on behalf of the state and 0.5% for the county, but because CCDD No. 1 was listed in the comptroller’s “how to” instructions and I had seen the sign at the entrance, I asked about the district. The response was that CCDD No. 1 was not in operation. Of course, I don’t have this in writing, but neither have I ever seen the district on my pre-printed sales tax returns, nor have I been audited or asked to remit taxes for the district. I’ve been collecting sales tax in the district at a 6.75% rate.
So Here’s Where It Gets Complicated
Fast forward to late 2009. One of the old board members (the only one located so far) has written a note to the Comptroller of the State of Texas asking that they cease sending him checks – he just delivers them to the clubhouse anyway. And Leslie Grochowski, Ralph Martin’s accountant has sent a letter to the same Comptroller asking that they stop sending checks to her – they’re piling up, they’re never cashed, they’re being returned or destroyed, and the district’s dead anyway. Shortly after the start of 2010, David Carlile, the new owner of the Country Club and its surrounding development property, also sends a letter to the Comptroller indicating that he’s aware of Leslie’s letter, that she isn’t employed by the district, that her letter should be ignored, and that he’s working on a way to put those checks to use. (Of course, I’m paraphrasing and adding my own emphasis. These letters are all publicly available.)
Not long after Carlile’s letter, a representative of the Texas Comptroller writes a letter to County Judge Chris Davis – the head of the Cherokee County Commissioners Court – asking, in effect, “What’s going on over there?” He points out that he’s got letters from 3 different people, none of whom are authorized to speak for the district. Whether in this letter or elsewhere, the Comptroller’s office makes changes to send the checks to the judge.
Then, Mr. Carlile writes a letter to Judge Davis offering to straighten things out – a proposal for the County Commissioners to reconstitute the board of directors of CCDD No. 1 with a qualified slate of candidates: Mr. Palmer, Mr. Meisenheimer, Mr. Barron, Mr. Byrd and Mr. Shank. On June 28, 2010, the Cherokee County Commissioners vote on a motion matching Mr. Carlile’s request, without discussion, to seat this new board of directors. Judge Davis receives a letter dated June 29, 2010 (the next day) from Mr. Palmer describing a meeting of all the appointed board members at which Mr. Meisenheimer was elected President and Mr. Palmer elected Secretary.
Making News
The Tyler Morning Telegraph of July 7, 2010 contained Kelly Gooch’s article titled “Cherokee County Development District No. 1 Re-Formed”. It caught the attention of several Eagle’s Bluff residents who quickly contacted Dr. Katherine Pinotti (the County Commissioner for our 3rd precinct, and one of those quoted in the article) to ask how this had happened, whether any residents had been involved, what it might mean to resident taxpayers, and (at least for my part) to chide her for excess enthusiasm about making resolutions without the facts. Mr. Palmer, when asked, says “the district board has not had it’s first meeting.”
Within only a few days, Dr. Pinotti, Judge Davis and the other Cherokee County Commissioners had all been contacted by one or more residents of the district to comment or complain. Mr. Byrd and Mr. Shank, both residents, indicated that they had not been notified or even asked about their nomination and appointment to the board. Mr. Shank never attended nor voted at the board meeting mentioned in Mr. Palmer’s letter to Judge Davis. Mr. Meisenheimer, who is apparently Mr. Carlile’s nephew, is not a registered voter in Cherokee County and thus not qualified for the new board, nor is Mr. Palmer, who is a registered voter in Gregg County. Oops. The residents who commented, of course, were those who had some prior experience with CCDD No. 1, like myself, or those keeping tabs on Eagle’s Bluff’s new owner and management. They universally had no idea that the district was still collecting the extra 0.5% sales tax at the Country Club, or even what Chapter 383 of the Texas statutes meant. But, they universally understood the difference between public and private politics – and responded quickly.
A Brief Break for Opinion
There is a bit of a “back door” flavor to this story, but I’m not as exercised as some of my neighbors. I can’t speak for him, but I’d guess Mr. Carlile’s minions discovered CCDD No. 1 while going through the remnants of the paperwork associated with their acquisition of the assets and liabilities of Lake Palestine Associates. Maybe they looked at the club’s sales tax returns and wondered where that extra 0.5% was going. Maybe they found old checks lying around. If they made a reasonable effort to look, they may have found $93,000 sitting unclaimed in the Texas general fund and a dormant vehicle (the board) to claim it. Perhaps they would never be able to legally justify new projects within their development to promote “tourism,” but surely the proceeds of sales taxes they mostly collected themselves within the district – if properly spent – should be spent by them.
I don’t know of a single resident of the district or knowledgeable member of Eagle’s Bluff Country Club who has indicated they begrudge the new owner anything to which he’s entitled for the club and for the benefit of his investment. Whether we’re impressed or discouraged by his efforts to manage and grow his investment and our neighborhood, it appears we’re unanimously in favor of his success. We are cautious. We’re even suspicious at times. We exhibit a wide range of sensitivity and behavior when there’s smoke blown our way. In short, this would have gone better if it had been done in public.
Undone
On Monday, July 26, 2010, the Cherokee County Commissioners Court, upon a motion from Commissioner Pinotti, voted unanimously to reverse their prior authorization of Mr. Carlile’s slate of directors for the board of Cherokee County Development District No. 1, effectively putting the district back in the dormant state that prevailed before its “rejuvenation.” Judge Davis extemporaneously suggested that residents and property owners of the district ought to get together, perhaps with interested commissioners and the County Attorney Mr. Caldwell, to decide how to proceed. He indicated he would continue to send warrants for the district back to Austin.
A meeting of more than a dozen Eagle’s Bluff residents also took place with Dr. Pinotti in attendance to discuss the district. That meeting suggested that the interested residents preferred to dissolve the district if possible, either by a vote of a properly appointed board of the district or, upon petition of affected residents and landowners, by the Commissioner’s Court, without replacing the board. Commissioner Pinotti and various residents are continuing to investigate how this might be done.
And Finally
Installment III of this series contemplates you being asked officially what you think about CCDD No. 1. You may not want to get involved. Just give it your consideration.
