An agreement between Choctaw Town Square, LLC, the development firm hired by the city, and the oil well’s owner, Atchley Resources, Inc., placed the purchase price at $80,000. The agreement is dated May 5, 2011.

However, records show the development firm invoiced the city $92,000 for buying the oil well. According to the invoice submitted by Choctaw Town Square, LLC, the $92,000 was for the oil well’s removal and “associated encumbrances.” The invoice was dated May 27, 2011. The “associated encumbrances” were not listed on the invoice.

Former Choctaw City Manager Robert Floyd said the development firm began charging the city an extra 15 percent on all work performed even though the surcharge was not included in the original contract between the company and the city council. The contract was amended in September 2011 to include the 15 percent fee.

Floyd said he balked at paying the $92,000 invoice, but was instructed by the city council to proceed.

“If you do the math, 15 percent of $80,000 is $12,000, and that equals the amount on the invoice,” he said.

Telephone calls to Eldon Blackaby, principal developer for Choctaw Town Square, LLC, were not returned for comment.

The well needed to be removed so the city could begin developing the land for commercial business use. In December 2011, city and development firm officials announced a Walmart Supercenter would locate in Choctaw.

In March, the city council voted not to renew Floyd’s contract. He filed a tort claim with the city seeking $175,000 in damages. The council considered the claim in executive session last week, but took no action. Floyd said he intends to sue the city over his termination.

Choctaw Mayor Randy Ross and other city officials have declined comment on Floyd’s firing.

City’s comments

Ross defended the oil well purchase and the invoice submitted by the development firm.

“All transactions were completed in accordance with contracts approved by our city attorney. Contractual fees cover not only the actual cost of purchases, but all ancillary cost such as filings with various state agencies, filing of easements, plugging documents etc. Sensitive timelines and deadlines, workloads or other reasons that prevented city staff from performing many duties were transferred to our business partners. Since a tort claim has been filed, I cannot make any other comments at this time,” the mayor wrote in a statement to EastWord News.

Yet, Floyd, who served as city manager for 25 years, said Choctaw Town Square, LLC, had “no authority to do anything outside the scope” of the original contract when the oil well was purchased. He also said the council “basically ignored” his briefing on the 15 percent surcharge and ordered all invoices paid in full.

“I don’t care if it’s $1 or $12,000, those are public funds and it wasn’t in the contract,” Floyd said. “$12,000 may not sound like a lot to some people, but at that time, city employees were complaining about not getting pay raises. It was irresponsible of the council to do that. They are the ultimate stewards of taxpayer dollars. That money could have been used for employee raises or other purposes, but it wasn’t obviously.”

Floyd said his relationship with the council and the developer “went downhill very fast” when he brought the 15 percent surcharge to the council’s attention.

2008 beginning

The Town Square project was launched in 2008 as city officials began their economic development quest by purchasing the 38 acres along NE 23rd for $3.1 million.

At one point, city officials were negotiating with Lowe’s to locate on part of the property. However, that deal fell through when the company scaled back its building expansion program.

In September 2010, the city and BBT Investments, LLC, signed a joint development agreement. The development firm later created Choctaw Town Square, LLC.

According to the Feb. 27, 2012 invoice submitted by Choctaw Town Square, LLC, the city has been charged $491,288 for development work. The Feb. 27 invoice shows the company billed the city $68,435 for work completed from Jan. 30, 2012 through Feb. 27, 2012.

The work, according to the invoice, included engineering and surveys for Choctaw Town Square, attorney’s fees for ongoing negotiations with “Big Box attorneys, O’Reilly’s, Braum’s and misc. expenses as per agreement.”

All invoices have been submitted by Blackaby on behalf of Choctaw Town Square, LLC.

Floyd said the invoices he received from the developer were “very vague” and “not typical” of a development project.

The oil well invoice originally was submitted with no cost breakdown. A revised invoice dated May 27, 2011, was sent to the city with more specific project work and cost details.