Mountain Park's lawsuit expenses mount

By Ralph Ellis

The Atlanta Journal-Constitution

Mountain Park exudes the atmosphere of a serene state park, with narrow roads winding through lush hills and waterfowl nesting beside two scenic lakes.

But those calming lakes carry a steep price for this north Fulton town of 550 people.

For five years, Mountain Park has been tied up in a federal lawsuit against upstream developers in Roswell. The town alleges the developers allowed about 40,000 cubic yards of silt to run off construction sites and clog the town’s lakes and wetlands. The town has already raised taxes and drained the reserve fund to pay lawyers.

Legal fees will top $2 million — a massive amount for a town with only one full-time employee and an annual budget around $500,000.

On Tuesday, the case goes to trial in U.S. District Court in Atlanta. The defendants have argued Mountain Park has had a silt problem for decades and is blaming them unfairly. They said they either didn’t contribute to the sediment or that the city cannot prove who deposited what.

Silt is a constant problem for cities built around lakes, such as Pine Lake and Peachtree City. Some Mountain Park citizens wonder if their town took the right course.

“I guess they’ve been outspent by these developers,” said Mark Hildebrand, who served on the Mountain Park City Council in the late 1990s. “Two million [dollars] alone would have fixed the lake. Why spend it and get nothing?”

This may be a bad time to take builders to court, too. Steve Rochlin, owner of Crabapple Development and Investment, said the lawsuit and the construction industry collapse ruined his business. He’s given up contesting the lawsuit.

“You’re not going to get anything out of me,” he said. “I don’t have anything left.”

The lakes are central to life in Mountain Park, which started as a summer resort for Atlanta’s elite and became a municipality in 1927. The town is a wildlife refuge and home to blue herons, red-tailed hawks and many kinds of ducks. The lawsuits are necessary to protect the essence of Mountain Park, said Kevin Ward, one of the city’s lawyers.

“This is a little Xanadu in the middle of a metropolitan area,” Ward said.

Teresa Hildebrand and her husband, Mark, moved back recently after a decade in Florida. She was shocked to see little plants growing up in the middle of the now-shallow lake. Bird life had decreased, she said, and their canoe got stuck in the muck.

“Being away for that period, it was like, ‘Whoa!’ ” she said.

In October 2005, the city sued nine business entities that built three upscale subdivisions in Roswell and renovated the Brookfield West Country Club course. Several firms settled a few years ago for an undisclosed amount.

Larry Merrill, secretary-treasurer for the National Association of Towns and Townships, said when small towns get locked into a costly lawsuit, it usually involves a land use conflict, such as a developer who fights for a rezoning.

“These lawsuits can really turn into a quagmire for a small system of government,” Merrill said.

Financial records show Mountain Park paid $1,764,935 in legal fees from 2005 to the end of 2009, mostly to Schulten Ward and Turner in Atlanta, and expects to spend another $457,000 through 2010.

Cissy Cannon, a resident for more than two decades, said the City Council has been misled.

“The attorney is obviously milking the community,” she said. “We can’t pay $2 million in attorney fees.”

Ward said the legal fees are high because the defendants have filed so many motions trying to derail the case. Martin Shelton, the lead attorney in the case, said he knows residents are upset, but he’s done as town officials asked.

“I was hired to represent the city in litigation,” he said. “That’s what I’ve done. It’s been a long case and harder than expected.”

To help pay the legal fees, the town raised the tax millage rate from 6.95 mills in 2004 to 11.78 mills for 2007-09. The owner of a $200,000 home in Mountain Park pays $942.40 in town taxes before exemptions. All property taxes come from residents, because Mountain Park doesn’t have any businesses to tax.

In comparison, neighboring Roswell has a millage rate of 5.455 and provides a full range of services to citizens, including public safety and parks.

Mountain Park is used to working with a small budget.

The town clerk is the only full-timer on the payroll, and three part-timers handle code enforcement and maintenance and help with administrative tasks. The town buys water from nearby Cobb County and contracts with Roswell for police and 911 services, and Cherokee County to put on its elections. At a recent meeting, the City Council talked about making a few bucks at an upcoming festival by purchasing whole pizzas and selling individual slices.

Jim Wright, mayor when the lawsuit was filed, said he didn’t expect it to cost so much. He hoped for an out-of-court settlement.

That became difficult because the council turned over in the up-close-and-personal city politics. Wright quit in August 2006 after fighting off four ethics complaints, and Deborah Upham took over. Jim Still was elected mayor in 2007.

Still said most residents favored going to trial.

“The general consensus is we want to see this through to the end,” Still said.

Shelton said the city would have taken a settlement offer that paid to clean the lake and covered attorney fees. He wouldn’t talk about specific offers, but Rochlin said the city turned down $1 million about five years ago, saying it wanted $3.7 million.

“The original offers given to them would have cleaned up the lake,” Rochlin said.

A firm told him the lake could be dredged and the silt hauled away for about $800,000, he said. Shelton said that would pay only for dredging, not the hauling or land on which to dump the spoilage. He estimated the total cost would be between $2.3 million and $2.8 million.

Two weeks have been allotted for the trial. The defendants actively participating in the trial are Lakeside at Ansley, Chatham Holdings Corp., Day Investments II and Peachtree Residential Properties Inc. Their lawyers declined comment, didn’t return calls seeking comment or said their clients are not responsible for the problem.

Patrick Moore, a lawyer for Peachtree Residential Properties, said the company’s subdivision “had nothing to do with the situation with Mountain Park lakes, which has been a problem since at least 1950.”

What happens if Mountain Park doesn’t prevail in court?

Cannon said she thinks it could bankrupt the town. Wright, who moved away, said the city might be stuck for a long time with a high tax rate and have to put off maintenance and dredging.

Said Still: “It will have a detrimental impact, but I don’t know if it’s anything we’re not prepared to deal with.”

The mayor knows one thing for sure: After five years, Mountain Park needs to put the lawsuit behind it.

“We’re just ready to get to the end of it,” he said.

Silt issues elsewhere

Other metro Atlanta cities built around lakes have to deal with silt.

● Berkeley Lake: A few years ago, a developer dumped a mountain of dirt behind a resident’s property. During heavy rains, silt runs into the homeowner’s creek, which empties into the city’s 88-acre lake. The city was unhappy with the way Gwinnett County responded; the Georgia Environmental Protection Division took over the case last August, but the silt still runs.

● Peachtree City: The city owns Lake Peachtree, but dredging is a Fayette County project under a city-county contract. In 1985, it cost about 
$1 million to dredge 100,000 cubic yards of silt; in 2002, $632,236 to dredge 22,000 cubic yards. The county budgets $1 million every eight years for the project.

● Pine Lake: This DeKalb County city wanted to slow siltation, so it created a storm water utility, obtained grant money and created wetlands upstream and downstream from the 11-acre lake. It hopes to obtain federal stimulus money that will pay for dredging and deepening the lake to handle more species of fish.