Money, money, money, EDAs and ongoing weekend downtown walking mall

At a Monday night, June 1^st work session the Front Royal Town Council wrestled with the legal and financial dynamics of a number of matters, several related to COVID-19 federal and local relief packages, as well as a Chamber of Commerce request that the Town partner with the County in keeping the Chamber financially solvent through the end of the calendar year. That request for $5,000 per month from both the Town and County ($10,000 total) beginning “immediately” is also COVID-19 pandemic-related, as the Chamber noted cancellation of its biggest annual fundraiser, the Wine & Crafts Festival among others, as well as a drop in membership renewals believed related to pandemic restrictions on business operations.

The Town Gazebo and Village Commons area has become an increasing weekend destination as local businesses begin reopening from pandemic closures – but it wasn’t in time for the Chamber’s BIG fundraising Wine & Crafts Festival. Royal Examiner File Photos/Roger Bianchini

Also, on a busy agenda, the council discussed having its own Economic Development Authority created and a board and staff in place by the July 1 start or close to it, of Fiscal Year 2021. That should answer any county board questions about the status of the Town’s request to become the first Virginia municipality to be authorized to be part of two EDA’s simultaneously, as it was noted the governor had finally signed the request approved earlier by the General Assembly, into law.

The belligerent town elected official stance toward the re-tooled and recovering from financial scandal EDA noted by the Warren County Board of Supervisors on May 4 (see related story: ‘Cancer’ gone from EDA, will Town belligerence follow suit in November?) was on full display Monday night, beginning just over an hour into the work session.

“The Front Royal-Warren County EDA brand is hugely damaged right now – beyond repair. They’ll have a really hard time going forward attracting businesses to our area,” Councilman Gary Gillespie said in support of the rapid movement to creation of the Town’s own, unilateral EDA.

Gillespie said he has championed the distancing of the Town from the EDA, if not it’s total withdrawal apparently hoping for some property to fall the Town’s way along with virtually all the money the EDA is seeking to recover from alleged co-conspirators with former EDA Executive Director Jennifer McDonald.

“The EDA mostly works for the County – and it’s been that way for the last 15 years or better,” Gillespie asserted despite the Town’s current civil legal claim of over $20 million in allegedly lost Town assets from the EDA financial scandal centered on the past four to five years of Town business with the EDA. The EDA’s civil action against multiple defendants stands at $21.3 million in allegedly misdirected assets.

The town council remains committed to its train, or car, wreck theory of EDA indebtedness to it – to the tune of over $20 million of the EDA’s cited misdirected assets of $21.3 million; despite council assertions the EDA mostly worked on behalf of the County the past decade-plus.

“We need this for the Town of Front Royal for economic development; and more so now with this COVID-19, just for redevelopment. Nobody knows where the chips are going to fall after all this is said and done,” Gillespie said of the chaotic pandemic economy. “And this (new) EDA would go a long way in helping us. You know, I’ve been told by several people, you know, that if the Town wants a say-so in the EDA that we need to pony up. And it makes it really difficult to do that now, because the EDA possibly owes the Town of Front Royal $20-million dollars, you know. So, we need to bring this in house to bring economic development to our town in a major way and in a hurry.”

Jacob Meza concurred with Gillespie’s assessment, saying “the pros far outweigh the cons” in the Town going solo on economic development in the future.

COVID-19 relief impasse

Monday’s work session began with council complaining about a County proposal brought to them by Mayor Gene Tewalt and Vice-Mayor Bill Sealock concerning the distribution of COVID-19 federal grant funds distributed through the state government to counties and cities based on population sizes.

The staff summary noted the Town anticipated a mandated distribution of between $1 million and $1.5 million – approximately $1.3 million was settled on in estimating the Town’s approximate 14,000 (around 38%) of the County’s total population of 40,000 – of the total of $3.5 million the County would receive in CARES (Coronavirus Aid Relief & Economic Security) funding.

Mayor Tewalt explained the County wanted Town agreement on the distribution of approximately $1.7 million for a jointly administered relief program targeting all county businesses, in and outside the town limits.

“They want to take the $3.5 million and use half of it for economic recovery and then take the population and split it whatever that ratio would be with the other $1.7 million, and then they propose that (unintelligible) we want to utilize that amount of money, whether you pay the water bill, the electric bill, whatever. But they just want to know if we’d be agreeable tonight to just split the money and use half of it for recovery and half of it to do the other as far as the government’s concerned. So, we can pay whatever we have to pay, and they can pay what they want to pay,” Mayor Tewalt told the council.

However, a lack of detail or a county official to explain such detail and the lack of a 50/50 split of the funding allowing the Town to manage its half without County involvement seemed to annoy several council members.

“They’re going to get the big chunk of it, and we’re going to get the crumbs,” Gillespie complained.

The mayor reiterated the population-based nature of the general distribution to try and re-explain why it would not be a straight 50/50 split.

I can’t explain anything to them, Mayor Tewalt may have been thinking as he tried to head off Town-EDA litigation last December.

Meza noted the Town had a local relief plan in place and suggested the County just hand the Town its share and let town officials work unilaterally to distribute their portion as they saw fit. However, when Interim Town Manager Tederick referenced page 18 of the agenda packet summary of how the CARES money could be utilized, it appeared a big chunk of the Town’s local relief plan – to allow businesses or citizens to pay back town taxes and utility bills – ran afoul of the CARES program guidelines.

Those limitations noted that “Fund payments may not be used for government revenue replacement, including the provision of assistance to meet tax obligations.”

As for utility bill payments, there was a mixed message.

“Fund payments may not be used for government revenue replacement, including the replacement of unpaid utility fees,” the second graph on page 18 of the agenda item summary began, adding however that, “Fund payments may be used for subsidy payments to electricity account holders to the extent that the subsidy payments are deemed by the recipient to be necessary expenditures incurred due to the COVID-19 public health emergency … For example, if determined to be a necessary expenditure, a government could provide grants to individuals facing economic hardship to allow them to pay their utility fees and thereby continue to receive essential services.

In the end, council agreed to table a decision pending further elaboration and documentation of the County proposal.

Weekend downtown street closure thru fall

Prior to adjourning to what ended up being a five-minute closed session “to discuss or consider a bond repayment resolution regarding recent large scale construction the Town has been involved in,” council instructed Interim Town Manager Tederick to make the necessary moves to implement the continued closing of portions of East Main and Chester Streets from 4:30 p.m. Friday to 7 a.m. Monday to vehicular traffic to continue the walking mall COVID-19 business reopening initiative likely through the fall.

A portion of Front Royal’s Historic Downtown will remain closed to vehicular traffic from Friday’s at 4:30 p.m. to Mondays at 7 a.m. thru the fall.

As part of that initiative, the council agreed to close Town Hall’s drive-thru Finance Department window on Saturdays.

There was no post-closed session announcement, so which “large scale construction” bond repayment was discussed remains a mystery.

Listen to council’s far-ranging work session discussion in this Royal Examiner recording: