We attending seeking help from our city council hoping a cooperative relationship could be formed. Listen to recording and hear that we were ridiculed, called liars and treated disrespectfully. After this meeting we realized that we needed to form PERG. The highlights of meeting include:

  • Mayor Tedder, Mr. Snodgrass and Mr. Pettke state XTO removed water only once in mid 2010. This claim is false and we have proven this.
  • Mr. Pettke states that DWG "sold XTO 10 million gallons of water from Pappy Elkins." We believe him but such a transaction was illegal. 
  • DWG claims to have records of all water removed from Pappy Elkins by XTO. This claim is false as DWG has no records of any water removal.
  • Mr. Pettke throws a temper tantrum and threatens to have two citizens removed from the meeting and used inappropriate language that was unbecoming of an elected official.

The statements by Councilmen Guy Snodgrass and Mike Pettke regarding the use of Pappy Elkins as a frack pond are the most newsworthy. Before listening to their comments (found starting at minute 43) recall what was said during the April 16, 2014 City Council meeting: 

  • Mayor Tedder and all members of City Council said water was used from Pappy Elkins "one time" - to frack three wells in mid 2010 (May and June).
  • Mr. Pettke was belligerent on this point - even threatened to have attendees removed from the meeting for suggesting otherwise.

We have compiled overwhelming evidence that Pappy Elkins was in fact used for frack water in December 2010/January 2011. In the May 21, 2014 City Council meeting the following was conveyed by Messrs. Snodgrass and Pettke:

  • Mr. Snodgrass - reiterates, once again, that water was removed from Pappy Elkins only "that one time" - referring to mid-2010 - and that there are complete records of all water put into and taken out of Pappy Elkins.

  • Mr. Pettke - undermines Mr. Snodgrass and contradicts everything he (and the entire City Council) said in the April City Council meeting by announcing; "we took water out one time - December 23, 2010 to January 6, 2011."   

This statement came as a surprise to everyone in the room. There are also a few items to consider regarding this revelation: 

  • ​It is true. XTO did take water out of Pappy Elkins in the Winter of 2010/11. 

  • XTO did so illegally - their valid permit expired in December 2010.

  • XTO posted an invalid permit at Pappy Elkins instead (see Resources).
  • There are NO meter readings of water removed from Pappy Elkins. We have asked for them and none have been produced. XTO has also confirmed that water was not metered coming out of the lake.

May 21, 2014 City Council Meeting

April 16, 2014 City Council Meeting

August 20, 2014 City Council Meeting

​The TCEQ has determined that the XTO pad site is located on top of an impoundment barrier that serves a the dam for Pappy Elkins Lake. This dam is now part of the inventory of dams regulated by the TCEQ. The primary objective of the TCEQ's dam regulations is safety.

We understand that various State and Federal regulations cover (or prohibit) the permissibility of drilling oil and gas wells on or around dams. We also understand that this is a subject area that DWG is currently reviewing with the TCEQ. 

Our concern is whether the dam has been compromised in any way as a result of 11 gas wells having been drilled and fraced. We believe a dam inspection will be required by TCEQ and we intend to cover this matter closely.         

XTO's Pad Site Resides on a Dam

​At this meeting, we asked the City Council questions about the facts underlying the substantial and undisclosed changes to the DWG 2011 Audit Report contained in the 2012 Audit Report prepared by the City's new audit firm from the Woodlands, TX. Our questions were not well received and Mayor Tedder attempted to prevent a PERG member from speaking at the start of his address during the Citizen's Comments portion of the meeting. Our questions went unanswered but for Mr. Pettke's remark that "the changes are normal when a new auditor is hired."

The actual statement of questions read at the meeting can be read on our Home page. Here are the highlights of the modified numbers:

  • The City hired a newly-formed audit firm from the Woodlands, TX in May 2013. They were the "low bid" and are charging $14,000 per year.
  • The 2012 Audit Report nearly tripled the profit of the City for 2011 compared to the real audit by our former, longstanding Arlington, TX firm. The report states the 2011 figures were provided by DWG.
  • The modified 2011 numbers include a nearly $500,000 increase in profits but no increase in cash or other assets - without disclosure.
  • Ending net assets appear to have been "managed" to a figure very close to the amount shown in the real 2011 Audit Report by a lowering of the ending net asset balance for 2010. So two years were changed.
  • ​These financials were used in various filings made by the City with the State of Texas related to the bond offering completed in May 2014. These filings are subject to federal securities laws overseen by the Securities and Exchange Commission.

We asked several questions during the meeting but received no answers. We need to know who is responsible for the changing of these numbers - but more importantly why it was done.

The new firm from the Woodlands does not opine to the 2011 numbers they published in their 2012 Audit Report - but they knew (or should have known) that significant changes were made and should have properly disclosed all of this in accordance with proper accounting practices.