Town bypasses normal channels to aid major development

Introduction

Talbot County officials weren’t enamored of the town of Trappe’s desire to build a major housing development, so they twice turned down the Eastern Shore hamlet’s efforts to upgrade local sewer and water capacity, in 2004 and 2005. And theoretically, that should have been the end of it. But it wasn’t.

Five years’ worth of state and locals records obtained by The Center for Public Integrity reveal an unprecedented and, at least temporarily, successful campaign by Trappe to go around the normally required county approval to get permission for the upgrades directly from the Maryland Department of the Environment (MDE). While it is unclear if any laws were broken, state officials now say they are looking into the matter. And while the recession has temporarily shelved the development, questions over the legality and propriety of what happened remain unresolved.

The documents obtained by the Center, including e-mails, letters, and memos, show that as early as 2004 MDE officials knew that Trappe did not have the required Talbot County approval to build a wastewater treatment plant for the proposed Trappe East development. And yet, on May 30, 2006, MDE issued the town a construction permit for a sewer plant large enough to handle the waste from the entire proposed development: 2,000 homes and 400 units of commercial space on more than 900 acres along Route 50. The development, according to documents, has the potential to increase the population of Trappe from its current 1,100 residents to more than 7,000 and is expected to take 15 to 20 years to complete, if it ever gets underway.

A surprise to county officials

Talbot County officials said they did not know Trappe had received the MDE permit to construct a 540,000-gallon-a-day sewer plant until earlier this year when the town sought — and later withdrew its application for — a $21 million federal stimulus grant to build the plant and a water tower.

Talbot County Council President Philip Carey Foster said in August that the council has asked MDE Secretary Shari Wilson why the state granted the construction permit – but as of mid-November hadn’t received an answer. “Hopefully the permits can be rescinded as improperly granted,” said Foster. Foster said the council, was “troubled” that Trappe was able to get the permits without county approval. “If the project would go forward,” he said, “it would change the community forever.”

MDE spokesman Jay Apperson would only say that his department has received questions about whether the construction permit and others granted for the Trappe East project in 2006 and 2007 were “validly issued.” He added that the department is still “reviewing the matter.”

David Thompson, whose law firm represents Trappe, said the town had the right to ask MDE to issue the permits because Talbot County was delinquent in not updating its water and sewer plan to take into account Trappe’s current priorities — the proposed housing development among them. “The issue was recognized as a political issue. The county was against the development and the town was for it,” he said.

Trappe East developer Robert Rauch of Easton, asked about the status of development and the state review of the permits, said he was “not aware of MDE taking a look at it. We have our permits, and that is all I know.”

Trappe Town Council President Robert Croswell, who took office in June, confirmed that under the former town council leadership applications were made “to MDE for the discharge and construction permits before the issue was resolved between the county and the town. … Somewhere along the line, MDE issued the permits, but the county has not changed the classifications.” Former Trappe Councilwoman Cheryl Lewis, who was council president and vice president during the period, declined to comment on action taken on her watch.

According to the documents, obtained through the Maryland Public Information Act, the town of Trappe and the developer, Trappe East LLC, acting through the town commissioners and attorneys, repeatedly urged MDE to issue the permits, claiming that the state had the right to grant them, even over county opposition. In a November 2005 letter Trappe attorney Thompson argued, “MDE is the ultimate approving authority.” He pointed to state law that allows the state to intervene to protect the public health and welfare when the county has not done so. In January 2006, however, then-MDE Secretary Kendl P. Philbrick replied to Thompson noting the unusual nature of the request: “As the Town may be aware, this is the first separate municipal plan submitted directly to MDE.”

It wasn’t the first time that the anomaly was noted. Earlier, in May 2005, a Maryland Department of Planning official wrote an e-mail to an MDE official expressing similar concerns about the town’s efforts to bypass the county’s process for approving changes, referred to as “amendments,” to its comprehensive development plan: “How can you (and we) act on an amendment that has not been locally adopted? What’s up with that?”

After conferring with legal authorities, the MDE official replied that: “We … got word that we cannot act on an inactionable amendment … we can’t formally act on an amendment that has not received local approval.”

Nevertheless, Ta-Shon Yu, MDE’s director of technical service, and Robert M. Summers, director of MDE’s Water Management Administration, signed the MDE permits for the sewer plant and water tower in mid-2006. MDE spokesman Apperson said no specific questions about why the permits were signed would be answered until the department completed its review of the process.

A small-town feel

Trappe is a small town that is held together by its churches, volunteer fire department and community spirit. The heavy traffic on Route 50 bypasses its quiet, tree-lined streets. Most travelers, on their weekend dash to and from the beaches of Ocean City, know it only as a heavily marked “speed awareness zone.” During the boom years of the early 2000s, towns around the state began annexing adjoining land and encouraging development. Trappe officials had been looking at land on the east side of Route 50 as an area to annex for more than two decades. In 2003, Trappe East LLC announced it wanted to build a mixed-use development with four houses per acre and its own water tower and sewer plant. The plan ran into immediate opposition from county officials and local residents who believed it was too big. When fully built out, it could increase the county population by over 15 percent. A citizens group, Friends of Trappe, was formed to challenge the project.

In 2004, Trappe proposed an amendment to the Talbot County Water and Sewer Comprehensive Plan that would upgrade the classification of the land to permit construction of new sewer and water infrastructure to support Trappe East. The town attorney argued that the change should be made because development of Trappe East was in the county’s 2002 comprehensive plan, on land later annexed to the town in 2003.

Thomas Alspach, lawyer for Friends of Trappe, countered that the 2002 comprehensive plan had not contemplated such a large development and that the upgrade in classification was not automatically tied to annexation. He also pointed out that the amendment did not have a legally required financial management plan to show how the sewer plant would be paid for and financed.

On Dec. 21, 2004, the County Council voted 5-0 to deny the amendment, ruling that the proposal did not meet state regulations and was not consistent with the county’s sewer and water comprehensive plan.

In May of 2005, Trappe asked the county to approve a new town subsidiary sewer and water plan that included the proposed development. County Engineer Ray Clarke refused to accept it, citing a county regulation requiring a two-year waiting period for reapplication after the council denied an amendment. That set off a round of appeals by Trappe through the county Board of Appeals, Circuit Court and finally to Maryland’s Supreme Court. By the time the high court received the appeal, two years had passed and the court found the issue moot. Trappe was free to present the amendment to the county again. But it didn’t. Unbeknownst to county officials, Trappe had by then already received the MDE construction permit for the sewer plant.

A controversial hunt for federal stimulus money

The economic recession brought the housing boom on the Eastern Shore to a halt, and the development, now known as Trappe East/Lakeside, remains dormant. In February of this year, municipalities and counties across the state began submitting applications to MDE to get a piece of the $4.1 billion in federal American Recovery and Reinvestment Act money that was coming to Maryland. Trappe officials applied for $18 million to build the Trappe East sewer plant and $3 million for the Trappe East water tower. The application form says that to be considered, “projects must be included in the County Water and Sewer Plan and consistent with the local Land Use Plan.” Trappe’s application stated that the county plan designated the area for future growth.

When the list of Maryland grants came out in March, the Trappe East sewer plant was number one on the wait list. Trappe’s application, obtained by the Center, claimed that Trappe had received all of the permits it needed from MDE between 2005 and 2008. Trappe also claimed that the project was “shovel ready and can start immediately. The facilities have been designed and permitted.” State and local officials said that there is no current investigation into the accuracy of claims made on the application.

Stories about Trappe’s application appeared in The (Easton) Star-Democrat and The Washington Post, at which point county officials expressed their surprise.

At an April 15 state Board of Public Works meeting in Annapolis, state Comptroller Peter Franchot said that Trappe East was a “sprawl development” and should not be considered for stimulus funding. On April 30, the town sent a letter to MDE Secretary Wilson formally withdrawing its request for the stimulus funds. MDE spokeswoman Dawn Stoltzfus told the Center that the Trappe request would not have made it through the MDE vetting process. She said the application got as far as it did only because the department was overwhelmed by 650 applications.

Trappe council president Crosswell said he believes that regardless of what happens to the existing permits for Trappe East, the development will most likely go forward. “In the end, MDE will ultimately grant the permits,” he said. Crosswell said he believes the project will not have as much of an impact as people fear. He said the development will “take years, maybe decades,” to complete.

But Clarke, the county engineer, is among those who remain troubled by the process. “The scary thing about MDE and whatever actions were taken by MDE,” he said, “is that they were going outside the process that makes it a public process … where people can have input both for and against.”