Town Council consensus is to move forward with FREDA after staff irons out missing procedural details

On Monday night, October 17, the Front Royal Town Council and its newly created, and meeting as of this January, Front Royal Economic Development Authority (FREDA) Board of Directors sat down together at a Special Meeting in Town Hall to determine exactly where they are and where they want to be in the present and future of economic development in this community. Where they are, as council discussed at its October 11th work session, is at an indeterminate stage of conflicting or absent guidelines concerning staffing, the ability of FREDA to conduct any business 10 months into its existence, budget and costs, and even the very nature of its existence as and independent quasi-governmental agency created by and working in the interest of the town government. (LINK-Council schedules joint meeting… with its EDA as it ponders the costs of FREDA’s continued existence)

“The biggest hurdle I see we just got over tonight, because I wasn’t sure coming in here tonight to be frank with you, is that it sounds like everybody wants to move forward with FREDA,” Vice-Mayor Lori Cockrell observed just under 46 minutes (45:50 mark of linked Town video) into what would be over an hour’s discussion.

The view from the mayor’s side of table, and below, from the FREDA board chairman’s side.

Following the vice-mayor’s comment on the apparent unanimous consensus to move toward correcting the missing links that will allow FREDA to function as envisioned, attending his first meeting newly appointed Councilman Skip Rogers sought clarity on the degree of FREDA’s autonomy once the operational hurdles were cleared.

Rogers pointed to the role of a lack of oversight by the involved municipalities that factored into the FR-WC EDA financial scandal uncovered in 2018 that eventually led to the circa-2020 council and town administrative staff to break ranks with the county government and re-constructed half-century old Front Royal-Warren County Economic Development Authority (FR-WC EDA) still functioning under county government oversight. Referencing earlier discussion, Rogers asked, “Is there a legal reason why we need to get an EIN (Employee Identification Number) to form a separate corporation when probably one of the main issues with the previous EDA was it almost worked in the dark as a separate entity, and there was no oversight. So, is there a rationale to develop an authority within the confines of the Town, with Town oversight?”

“By state law it’s a separate political subdivision of the state – that’s what you’re sitting across from. It’s its own political subdivision right now,” Assistant and Interim Town Attorney George Sonnett explained, pointing to the FREDA Board members present. “So, we’re just setting it up and supporting it to work together. But if they don’t want to work with the Town once they’re up and running, it is it’s own entity,” Councilwoman Amber Morris added. However, the option for the Town to withdraw funding if FREDA elected to follow a different path than one recommended by council, was noted as a point of some Town control of FREDA operations.

David Gedney, right-center, makes a point during Monday’s Special Joint Meeting of the town council and FREDA.

FREDA Board member David Gedney told council that during its early stages the FREDA board had discussed some of the operational and staffing issues. “We did talk about some of this in formulation. We talked about whether we were going to employ staff, (have) a separate attorney, all of that,” Gedney said. Noting phone conversations with former Interim Town Attorney James Cornwell Jr. Gedney said the issue of potential conflict of interest of FREDA using the town attorney, as well as the issue of compensation for legal work on the FREDA side, came up during those discussions. Of compensation, Gedney observed, “And that isn’t something that we could discuss with no money in the bank account, as a budget item – tho it could be a budget item moving forward.” No decision was made on whether FREDA would move toward the hiring of an executive director once its bylaws were adjusted to match town codes and address creation of that role.

Earlier (23:42 video mark), Vice-Mayor Cockrell addressed the creation of a budget for FREDA, which began its existence with no property or financial assets. “I think really, the biggest elephant in the room, or it certainly is for me and I’ve worried about it for several days now coming up to this meeting, is a budget. Because that’s the other thing, as Amber said, we’ve created it, but without any money what can you do?”

Morris pointed out that with no Federal Tax ID yet set up for FREDA, any funding council would want to do is on hold, as would be FREDA’s ability to conduct business if it had financial assets. “We all support it, we all still support it, but it’s imperative that it’s initially launched legally and efficiently and effectively,” Morris said. She pointed to an ongoing need for FREDA, stating that the town has a different economic development profile than the county property-wise.

Responding to a financing question from Mayor Chris Holloway, Town Finance Director B.J. Wilson said that $100,000 had been set aside in the Fiscal Year 2022 Town budget of which $89,750 remained, with an additional $18,070 added in the FY-2023 budget for “salaries”. Wilson also acknowledged an estimated $70,000 cost to situate FREDA legally tax-wise.

Of FREDA’s creation, Sonnett pointed out that, “It required special legislation to go through the General Assembly because normally towns located in counties that have an EDA cannot form their own … and that was a spin off from what was happening at the Warren County EDA – that’s why that went through,” Sonnett said deleting the still legally included town name at the head of long-time dual municipal FR-WC EDA, now perhaps more generally referenced as the Warren County EDA due to the Town’s withdrawal from involvement in favor of hostile litigation over disputed lost asset claims connected to the $26-million financial scandal brought to light in 2018/19.

Assistant and Interim Town Attorney George Sonnett responds to question. Below, Assistant and Interim Town Manager Kathleen Leidich addresses staff concerns about FREDA’s operational and legal status.

Just under an hour into the meeting a consensus was reached to have staff research the outstanding issues, costs, and processes to permit FREDA operations on economic development inside the town limits to proceed. FREDA Board Chairman Rick Novak said he was hoping for a turnaround to a fully operational state “within weeks” as opposed to months. Mayor Holloway agreed and staff was tasked with finding the hard answers to putting things in line legally and operationally.

It was acknowledged that the bulk of current staff, including Assistant and now Interim Town Manager Katherine Leidich at the point, were not directly involved proceduraly at the outset when the inconsistencies and gaps, like creation of a federal tax ID to allow finances and business to be conducted, occurred.

The open meeting was adjourned at 8:06 p.m. and council went into closed session after which no action or announcements were anticipated.

See the full discussion of the myriad variables involved in the Town video.