For years, the Rocky Creek Ranch on Chaparral Road in Killeen has been little more than pasture land crisscrossed with dirt roads and dotted with cattle.
But when the property was purchased from late Texas rancher Glenn Womack in 2013, a new frontier opened on Killeen’s southern boundary — driven by a new, if controversial, vision.
The Turnbo Ranch subdivision, a creation of Killeen developer Bruce Whitis, will be the first step to accommodate a Killeen-area population projected to hit 217,893 by 2037 — a boom of nearly 75,000 residents in 20 years.
But the development’s creation has not been without its turmoil.
Beginning in 2013, Whitis lobbied the city to help him create the subdivision as a municipal utility district — a self-taxing entity of which there are few precedents in the Central Texas area.
When the Killeen City Council approved an agreement with Whitis to create the development in 2013, Killeen residents and city leaders were left with unanswered questions on exactly how the development would look, how it would affect the city and exactly what their agreement stipulated.
On March 27, the Herald reported Whitis used family and friends to accommodate the creation of the 3,750-home, $238-million development that is scheduled to break ground late this year. In doing so, Whitis created a governmental entity of his own, with the ability to levy property tax on its residents and issue municipal debt with a board of directors he handpicked.
According to the Texas Water Code, Whitis’ leverage of family to create the district is legal, but raises concerns of partiality and qualifications in board affairs.
In 2012, Whitis used nearly the exact same process to create a separate municipal utility district on the outskirts of Belton — that time with far different terms for the neighboring city.
One of the central differences: Killeen ratepayers are on the hook for millions in infrastructure improvements that are tied to the district, and Belton residents are not.
While the renewal of interest in the Turnbo Ranch subdivision has started conversation anew on the state of development in the city of Killeen, city management is trying to wrap its arms around future growth.
Meanwhile, others are looking back into the past to determine how the city arrived at its current state.
A UNIFIED VISION
As the new leader of the city of Killeen, City Manager Ron Olson has taken a forward-looking approach to rewriting the policies of an often rudderless city administration.
While Olson has been briefed on the Whitis development, he said his interest is not whether the contract was created in the best interest of Killeen residents but how the city can keep up its end of the contractual agreement.
“I have not spent a lot of time to decide whether it’s a good thing or a bad thing because it doesn’t really matter,” Olson said. “It’s a binding contract, and the question is ‘how do we live up to what we’ve committed to?’”
Olson’s greater concern — and one that he has expressed multiple times during his first three months with the city — is the assessment that the city and City Council have not acted with a unified vision for growth and development.
“My sense is that (growth and development) sort of evolved, and we need to get to the point where we are out in front of these issues instead of behind them,” Olson said.
That takes working with developers, a group of business leaders that Olson called “important stakeholders” in the city’s growth.
“The developers are a part of every community in the United States of America,” Olson said. “They are people who are intimately connected with the community — they invest a lot of money, and they are not unique to this community.”
'THEY ALL HAVE INTERESTS'
However, there is a line between being a business leader and a direct influence in local politics.
Residents have recently chafed at Whitis’ involvement in council campaigning through the Prosperity Central Texas general-purpose political committee, which donated more than $25,000 to local and state campaigns in 2016.
In 2016, Whitis was the sole financier for the PAC, for which former Killeen Mayor Dan Corbin is treasurer, according to Texas Ethics Commission documents.
No filing documentation is available for the group in 2017.
Although the PAC did not contribute to any City Council campaigns for the May 6 district elections, the group paid for a slew of flyers with attached mail-in ballot applications and endorsements for particular candidates.
In District 3, the flyers promoted the candidacy of Councilman-elect Jim Kilpatrick and his endorsement from local police employee association groups.
In early April, Kilpatrick and Councilman Juan Rivera — whose 2015 and 2016 campaigns were funded in part by Whitis — appointed three directors from the Turnbo Ranch board to ad hoc council advisory committees directing plans for transportation and water/sewer/drainage in future city plans.
The transportation committee’s first meeting was held Tuesday at City Hall. The members include Kilpatrick, Rivera, Councilman Jonathan Okray and Miguel Diaz, a Killeen Realtor and elected member of the development board.
Olson said he did not see an inherent conflict of interest in representatives from one elected government advising and guiding another.
“I don’t see it as any more of a concern than anybody else that wants to lobby the City Council,” Olson said. “They all have interests, and they have legitimate interests, and they have a right to express those concerns. I just don’t see it as different than any other interest group — of which there are many.”
District 4 City Councilman-elect Steve Harris had a different take on the role Whitis played in getting the Turnbo Ranch agreement passed in 2013.
Harris, who previously served on the council from 2013-15 and was elected back to the seat May 6, said he questioned the relationship between Whitis and city leadership at the time, including former City Manager Glenn Morrison, Corbin and former Deputy City Attorney Scott Osburn.
“They were given a golden ticket,” Harris said. “This thing was forced through no matter what type of logic against it was brought up.”
Harris was one of two opponents in the 5-2 vote in June 2013 approving the city’s consent agreement with WB Development. Council members Jose Segarra, Elizabeth Blackstone, Wayne Gilmore and Jared Foster voted in support, while Harris, Jonathan Okray and Terry Clark voted in dissent.
Harris, who was elected to the council for the first in May 2013, said the process to approve the agreement was hurried through a number of special workshops — a process during which Harris said city staff did not adequately answer council members’ concerns about the stipulations in the development contract.
Harris singled out Osburn, the former public works director who was appointed in October 2013 after working as deputy city attorney for seven years, as the city staff member most responsible for not addressing his questions.
Osburn resigned from his position Sept. 2, 2016.
Josh Welch, manager with WB Development, said that the details of the development contract refute Harris’ concerns.
“The development is the most restricted project I know of in the area,” Welch said. “The consent that was finally given included design standards, required open space, parks, and amenities so there should not be any concerns.”
'TOO MUCH COINCIDENCE'
Harris’ primary concern at the time was the city’s ability to provide water to the development as Texas struggled through a five-year, once-in-a-generation drought event that did not subside until 2015.
“The problem is, (Whitis’ company) couldn’t build it because all the other water suppliers said no,” Harris said. “I asked Osburn ‘what about the water? Do we have the water supply to supply the MUD and us at the same time?’ He never gave me a straight answer.”
Osburn allegedly said if the city did not reach an agreement with Whitis, the developer could appeal directly to the Texas Commission on Environmental Quality to create the district — forgoing city cooperation and not allowing the city to impose design standards on the subdivision.
Chapter 54 of the Texas Water Code, which outlines the formation of municipal utility districts, allows developers to go directly to the state for approval if negotiations with cities do not bear fruit.
“The commission shall allow creation or inclusion of the land in a proposed district upon a finding that the city either does not have the reasonable ability to serve or has failed to make a legally binding commitment with sufficient funds available to provide water and wastewater service adequate to serve the proposed development at a reasonable cost to the landowner,” the code reads.
Minutes from those workshop meetings are not available online.
Regardless, the city did find a solution to the water problem in February 2014, when the council approved a funding agreement with the Bell County Water Control and Improvement District No. 1 for a $50-million treatment plant on the shores of Stillhouse Hollow Lake to provide greater water pumping capacity to south Killeen.
Harris said he was not made aware of a possible agreement for the plant until very near the agreement was signed — and not when he was asking pointed questions in 2013 about the city’s water capacity.
“That’s just too much coincidence,” Harris said. “It’s almost like we built a water plant solely to serve the development.”
Four years removed from the agreement’s signing, Harris said one of his first orders of business as a council member will be to request an internal investigation of the development agreement to examine the relationship between Whitis’ company and city staff in the months leading up to the vote.
Harris said he planned to bring the investigation item up for a vote at a coming workshop. Most of his concerns, Harris said, were centered on unanswered questions.
“The deals that were made, none of it good business sense — none of it,” he said. “You have people on the council who already had their minds set whether it made sense or didn’t.”
Harris’ concerns did not end at the treatment plant. According to him, the council was told in 2013 the city would work to sign an interlocal agreement with Bell County to aid in providing public safety service to the development.
Director of Public Information Hilary Shine said the city currently has no contract with the county in place.
“There is no agreement for the City’s provision of emergency services,” Shine said. “The MUD is located in the ETJ, so the county would provide those services as primary response.”
If an interlocal agreement were to be pursued at a later date, the city would potentially need to accommodate the development with more public safety employees and vehicles.
So what does the MUD offer the city of Killeen?
While the Turnbo Ranch build out will be a massive engineering endeavor, Killeen officials have asked few questions about the quantity and type of potential job opportunities the development could bring in the coming decades.
Killeen Director of Public Information Hilary Shine said the city has not performed any form of economic impact study to determine job creation or retail capture from the development’s future residents.
The lack of analysis echoes that of the city of Belton, which also did not perform a full economic impact study for job growth when it agreed to the creation of Whitis’ Three Creeks subdivision in 2010.
“The issue we looked at was the extension of water and sewer services to the area, and we saw that as positive because of the return on the investment by the developer,” Belton City Manager Sam Listi said.
Welch said the development would be a future economic driver — given Killeen can capture the retail potential.
“The MUD will bring susbtantial additional sales tax revenues into the city,” he said. “Rooftops are the largest driver of commercial economic activity.”
The agreement between the city and the developer also does provide for reimbursements on infrastructure projects and allows the city the right to inspect properties in the development and impose design standards.
Listi said municipal utility districts effectively work as financing mechanisms for developers — allowing them to build developments at their own rates while paying off millions in debt over a period of decades.
But as WB Development captures the property tax revenue from the development’s residents, the city will not benefit from that revenue until possible annexation at a later date.
As far as monetary recovery, Killeen will not levy a premium return on its water and sewer service per its agreement. The contract stipulates that the district, as a customer of the city of Killeen, will have water rates that match those of Killeen rates.
“If we get wholesaler water prices here in Killeen, why would we want to give out family discounts?” Harris said.
Olson said the agreement with the MUD is workable in the near future, but points to bigger issues in the city’s planning.
“The issue with this MUD, really any MUD in the state, is a question of figuring out how to work with property owners that have the right to work with their property and do it in a way that is compatible with city plans,” Olson said. “I think we need to back up a little bit and do some work on what our polices are around growth management. That hasn’t been done yet.”
ROAD TO MUD NO. 2
December 2012 — Killeen City Council votes down a planned unit development proposal from Bruce Whitis to create a 4,000 home development south of Chaparral Road; the agreement would have required the city to annex the land and extend utility infrastructure out to the property
Feb. 17, 2013 — Whitis comes back before the Killeen City Council with a proposal for a municipal utility district on the same four-mile tract of land south of Chaparral Road in Killeen’s extraterritorial jurisdiction; under the new arrangement, Killeen would not have to annex and would not have to extend build water infrastructure on the land.
Feb. 17, 2013 — Former City Manager Glenn Morrison sends an email to the City Council directing them to not answer the Herald’s questions on the proposed district, saying the council could violate Texas Open Meetings Act rules by responding; “In order to avoid any potential violations of open meetings law and to allow this discussion to take place in public meetings as intended by the Open Meetings Act, it is best that you not respond to this reporter’s request,” the email stated.
Feb. 20 — City Council extends discussion on the MUD after original plans had the council voting on the agreement with only 10 days of deliberation; Austin-based attorney Ty Embry, an expert on MUDs in Texas, said “We’ve had to move very quickly on this, pretty much more quickly than any situation I’ve dealt with.”
March 6, 2013 — With just three weeks from the district’s first proposal, the City Council disapproves the MUD agreement with Whitis; “We certainly aren’t giving up on the project,” WB Development project manager Garrett Nordyke said. “If we can breathe some more life into the project, we are looking forward to doing that.”
July 28, 2013 — Consent agreement comes back up for council vote with reimbursements from developer included in the contract; “I think we have made some great improvements through negotiations, and the question is: Can we push the developer anymore than we already have?” former Killeen Mayor Dan Corbin said.
July 31, 2013 — Killeen City Council approves agreement during contentious 4-3 vote with Jonathan Okray, Steve Harris and Terry Clark voting in dissent; Councilwoman Elizabeth Blackstone is the deciding vote in approving the agreement; “It’s a tough decision. I like the development. I just don’t like how it’s being done,” said former Councilman Richard “Dick” Young said. “I don’t like the MUD.”
August 8, 2013 — City Manager Glenn Morrison signs agreement with Whitis approving the creation of Turnbo Ranch
November 2014 — Two relatives of Whitis vote in a Bell County general election formally creating the district and establishing a board of directors comprised of past Killeen officials and Whitis’ relatives
Late 2017 to early 2018 — WB Development scheduled to begin building district