EDA oversight: The buck stops WHERE?

EDA Chairman Greg Drescher and Executive Director Jennifer McDonald at a June 6 meeting of the WCBOS, in which they discuss the workforce housing project and its problems.

FRONT ROYAL –Following the recent revelations surrounding the Warren County Economic Development Authority (EDA) workforce housing project, the Royal Examiner’s editorial staff decided to investigate further into how the entity works and who has oversight of the authority.

The EDA is made up of a board of seven appointed volunteer directors, one paid staff executive director, one paid staff marketing director, and one paid property administrator, according to the EDA website.

The Warren County Board of Supervisors, which funds a portion of EDA’s operating budget, appoints the directors.  Directors of the EDA server staggered four-year terms.

The Front Royal-Warren County EDA lists as its mission: to strengthen the industrial tax base of its community, to bring its commuting workforce home to work, to create living wage jobs for its residents, and to foster a healthy environment in which businesses may grow and prosper.

At a June 6 Warren County Board of Supervisors work session, EDA Vice Chairman Greg Drescher and Executive Director Jennifer McDonald appeared to explain why a lot that was presented to the town and county as gifted property for a workforce housing project would now have to be purchased for $445,000.  Their explanation:  “failure to meet a deadline” that was part of a confidential agreement; an agreement it turns out the EDA was not a party to.

Show me the money

In fact, the EDA board voted 6-0 on April 28 to proceed with a purchase at the $445,000 value placed on the deed of transfer on June 6, 2016.  Board Chairwoman Patty Wines and Executive Director Jennifer McDonald said after the meeting that $500,000 had already been spent in developing the project, and that was the major reason for deciding to purchase the 3-1/2 acre parcel assessed at a value of $304,800 in 2015.

In the 383-page information packet on the workforce housing project released May 19 in reaction to Councilwoman Bébhinn Egger and media’s mounting questions about costs and processes, that $500,000 figure was recalculated at $420,765.  However as Royal Examiner reported at the time, many of the financial documents included to reach that number were proposals or related to establishment of contingency funds or escrow accounts, and were NOT paid invoices.

It was only after the June 6 Warren County Board of Supervisors-EDA work session that McDonald, after being contacted by Royal Examiner’s Roger Bianchini, went on the record to say that all but $10,500 spent on a traffic study is recoverable money.

And during the June 6, 2017 joint county supervisors-EDA work session, then EDA Vice-Chair Greg Drescher and Executive Director McDonald reported that the EDA had no legal obligation to return or purchase the 3-1/2 acre workforce housing parcel, but rather felt a “moral obligation” to do so.  That moral obligation, according to the EDA spokespeople, was based on the fact the Campbells had lost a federal tax credit they had anticipated receiving from their “gift” of the property for a public purpose.  That lost tax credit we have estimated at $150,000 was a result of a missed start-of-construction deadline of March 1, 2017.  It was a deadline that it seems the EDA attorneys and at least some board members were not aware of until it was missed.

Our exploration into the above dynamics of what was originally estimated as a $3.2-million project led to further inquiries into EDA financial dynamics.

The buck stops where?

Virginia Code 2.2-3118 requires board members to file a financial disclosure form before assuming office and annually, thereafter, by Jan. 15, as long as the member serves on that entity.  The form is to be filed with the clerk of the governing body, which is the Warren County Board of Supervisors, in this instance.  Emily Mounce, who serves as the Deputy Clerk of the Board and the County’s Freedom of Information Act officer, is the person who maintains these records and handles requests to view them or to make copies of them.

The Royal Examiner, on June 7, requested copies of the current year’s financial disclosure statements for each board member of the EDA and the county supervisors.  That inquiry indicated that five of the seven EDA board members had complied with legal requirements on financial disclosures.

However, an email response from Ms. Mounce indicated that “Ron Llewellyn with the EDA has failed to file a Financial Disclosure Statement for 2017. He has been reported to the Commonwealth’s Attorney, Brian Madden.”

There was some confusion as to whether Brendan Arbuckle, who was appointed to replace William Sealock when he took his elected seat on the Front Royal Town Council at the beginning of this year, was required to fill out a financial disclosure form since he was seated after January 1.  However, after the issue of financial disclosures was raised Arbuckle filed his form in the clerk’s office on June 29.

Ron Llewellyn

The Royal Examiner reached out to Mr. Llewellyn by telephone and email, multiple times, but never got a response as to why he had not filed a 2017 Financial Disclosure Statement.  However, on June 8, one day after a request for copies of EDA board members’ financial disclosures was filed and he was reported to the Commonwealth’s Attorney for not filing, Llewellyn’s financial disclosure form was submitted to the county and a copy was faxed to the Royal Examiner.

Meanwhile, each member of the Warren County Board of Supervisors was emailed to inform them that Mr. Llewellyn, an EDA board member and a vendor whose company had been involved in doing business with the County, had not complied with the law in failing to submit the form.  Only two supervisors responded: Tony Carter, via email, to say that he would ask to have it discussed at the next Board of Supervisors meeting, and Archie Fox, who telephoned to say “no comment.”

Additionally, EDA Chairwoman Patty Wines, Vice Chair Greg Drescher, Executive Director Jennifer McDonald and EDA attorney Dan Whitten were all contacted for their input as to why Llewellyn was allowed to be an active, voting member of the board when he was in violation of the law.

McDonald did respond, later that day.  She wrote in an email, “Those issues are addressed by the Board of Supervisors.  Our bylaws only address the things that the EDA board has control over as far as dismissal from the (EDA) board, such as releasing confidential information; and then the board has to send that request to the supervisors and they have the ultimate decision to remove the board member.”

Whitten, the county attorney, who is also the EDA attorney, said in part, via email, “The Deputy Clerk notified Mr. Llewelyn several times that his financial disclosure statement had not been filed.  You would need to ask him why he did not file the financial disclosure statement on time or request an extension.”

It was several days later as our research continued that Llewellyn’s sporadic financial statement record came to light.  Deputy Clerk Mounce reported that he had filed only twice since becoming a member of the EDA board.  Both of those filings, including this year’s after Royal Examiner’s blanket request for the 2017 filings went out, were made late.  Llewellyn’s only other financial disclosure form was filed on February 4, 2014.

Records indicate that Llewellyn joined the EDA in 2011; his current term ends in February 2019.