An article Monday about Lovettssville in Loudoun County misidentified a Town Council member. His name is Dennis Sawyer. (Published 12/5/90)

Many folks in Lovettsville figured their rural Loudoun County town, with its wide meadows and narrow roads 45 miles from Washington, would always maintain its steady country disposition.

But this fall, Lovettsville, population 750, is roiling like a big-time city.

State Police are investigating the fact that money is missing from town coffers. Six town officials have resigned amid complaints from townspeople that some were too close to local developers. And a new mayor has just taken office while helping to start a council probe of town affairs.

A State Police department accountant has been combing town records for a month, according to department spokeswoman Lucy Caldwell, who said the investigation centers on whether "a former town official of Lovettsville was committing financial wrongdoing."

"Lovettsville is never going to be the same," said Ingrid Sanford, leader of the Lovettsville Citizens Association, a group that opposes rapid development in the area. "The days of just sitting by are gone."

The turmoil started more than a year ago, after developers had proposed building 252 houses and town houses on a 46.5-acre piece of farmland in the town. Developers and some town officials said tax revenue from the project would help pay for a $6 million improvement to the town's sewer system. Some residents, fearing the development would dash the area's charm, prepared to fight the project. If completed as planned, it would double the town's population.

As the developers courted town officials for zoning approval, Lovettsville's residents started attending town meetings and public hearings in record numbers. In May, more than 200 voted in town elections, four times the normal turnout, and elected three slow-growth advocates to the council. Kenneth Harrington, the incumbent mayor and a pro-development veteran of town politics, won a narrow victory.

Despite appeals from residents, the lame-duck council approved the development just before leaving office July 1.

Private conversations between some town officials and the lead developer, Leesburg lawyer James P. Campbell, further stoked civic anger. Campbell said in an interview that he occasionally had visited officials at home. He said he did nothing wrong.

"If you can sit and talk with someone, you can share information," he said.

Campbell had also been the personal lawyer of P.F. Legard, chairman of the town's planning commission, while the request for a zoning change was awaiting action, Legard said.

"I don't think there's a conflict of interest at all," Legard said. "No one really knew he was my attorney."

In September, Legard and three other key officials who supported the developers -- Harrington and two council members -- resigned within days of one another. The town secretary and the clerk also left office.

The resignation letters gave few reasons. Harrington later said he resigned to run a hardware store with his son. Legard said he was frustrated by criticism of his support of the development.

Problems with the town's finances came to light a few weeks later, said council member David Sawyer. The council had begun looking closely at the billing system for town real estate taxes and water and sewer bills.

The council found discrepancies in utility bills and apparent tampering with computer files, said Elaine Walker, a council member who was named mayor by a vote of the remaining four council members in November. There were water and sewer bills listed as paid in records, for example, but there were no receipts of payment, Walker said. Money listed as received apparently was not deposited at the town's bank, Walker said. About $2,000 cannot be accounted for, town sources said.

The council is continuing its investigation, Walker said. "My goal is to make sure that the wrong is made right," she said. "I will not stay {in office} if nothing is done about those discrepancies."

Residents and officials blame the proposed development and the way the rezoning was handled for stirring up the trouble in town.

Many complained that the council ignored residents' complaints about the project. Harrington and others argued that the project would help pay the expense of improving the town's sewer system. Yet finally, instead of offering any payment toward the project -- made necessary in part by the new subdivision -- the developers promised to pay only hookup fees, a requirement in any case, Walker said.

With the zoning change approved, the project faces a routine subdivision approval process by the town, and it must wait for an expanded sewer system. Under Virginia law, towns have authority over zoning matters within their boundaries.

Walker, who opposed the change, said she hopes the developer will negotiate on the number of houses it plans to build. She said future development will receive more scrutiny. Lovettsville can't stop growth, she said, but it can plan growth.

"The zoning changes in this town are going to be very carefully scrutinized from now on," she said. "We are going to take things slow and easy."