There was a clog in the sewer line near a cleanout valve.

This sounds like the cleanout is on the sewer customer's property.

  The City has full access to our property at all times to 
  test the sewer line. At any time, officials could have 
  entered our property to find the source of the overflow.

Not in Texas, they don't. The city water/sewer department or sewage treatment company (or district) does not have right of entry into a property unless invited by the subscriber. The subscriber has the duty to ensure that the equipment on his or her property is functioning as designed. That is why laws requiring water sprinkler backflow valves are enforced at the junction between the city's water pipe and the customer's water pipe. The city or supply company shut off the valve on their side of the pipe. Property demarcation is a huge thing in Texas.

  The city of Dallas apparently knew 
  there was a problem on December 9th, but allowed it to 
  continue and did not notify us until 41 days later when 
  government agencies served search warrants.

This I can believe (I mean, lolcityofdallas amirite?) but it does not absolve the property owner of liability for failure to maintain the sanitary sewer connection on his property.

  The city maintains a box on our sewer line that has for 
  years monitored the amount of waste water going through 
  the line and the substances contained in the waste 
  water.  The city monitors this locked box on its own 
  schedule.

And when your sewer bill was half of what it should be, this didn't raise any eyebrows? If there's one thing Dallas Water Utilities does shockingly well, it's collect money from ratepayers.

I think that sending in the mod squad and filing charges was overkill. The Trinity has been used and abused for decades and people are just now trying to clean it up, so it doesn't shock me that TCEQ and Dallas dropped the hammer on this fellow.