‘Catastrophic Failure’ of processes, oversight addressed by EDA

The ‘Knights’ of the not-so Round Table gathered for the second joint meeting on the future direction of the EDA, this time allowing the EDA a seat at that table. Seating allowed a somewhat random intermingling of board members. Royal Examiner Photos/Roger Bianchini. Video by Mark Williams, Royal Examiner.

It was not as observers in the gallery seats with interested citizens, but rather in the “front row” of the meeting table with the full Front Royal Town Council and Warren County Board of Supervisors and staffs that the Economic Development Authority sat at Tuesday’s joint meeting of the three entities.

And it was a welcome addition of clarity of purpose, examination of past mistakes, and pointed responses to both municipal and citizen questions that the EDA Board of Directors and Executive Director Doug Parsons brought to that not-quite round table discussion.

Notably absent from the 6 p.m., August 27, meeting at the Villa Avenue Community Center were County Administrator Doug Stanley and Front Royal Town Councilman Jacob Meza, both members of the newly-formed EDA Reform Committee.

After County Board Chair Dan Murray’s convening the meeting with his now familiar request for silent prayer for community healing in citizens’ relationship with its elected officials responsible for oversight of EDA operations, the meeting was handed over to EDA officials.

First, newly-elected EDA Board Vice Chairman Jeff Browne made an opening statement on behalf of the EDA. With Greg Harold and Jorie Martin, Browne is one of three new EDA board members seated within the past two months.

“We’re here tonight because there was a catastrophic failure that allowed criminal embezzlement and rampant mismanagement to flourish. None of us ever want to see that happen again,” Browne told those present, adding pointedly, “The failures can be grouped into two categories – failed procedures and failed oversight.”

Newly-elected EDA Board Vice-Chairman Jeff Browne, right, delivers his opening remarks on behalf of the EDA as fellow board members Tom Patteson, re-elected Treasurer on Aug. 23, and former chairman Gray Blanton listen.

It is that second failure, of oversight, that has been at the forefront of public criticism of not only the EDA board of directors, but of incumbent elected and appointed municipal officials as well.

“How did this happen under so many elected official, professional legal and administrative noses?” is a yet to be answered question for many in this community.

Browne pointed to opportunity born out of the “catastrophic failure” he cited at the root of the EDA financial scandal. From the EDA side that opportunity will be addressed by a board with three very new, post-scandal members as noted above, along with four other members the longest tenured of whom it was pointed out dates back about two years.

“Whatever form the EDA takes in the future, there has to be effective oversight by the County Board, (Town) Council, and our citizens. Right now the EDA Board is the first line of oversight but not the only one. We welcome and encourage involvement by the Town, County, and citizens. Attend meetings, ask probing questions, and make sure they’re answered fully. Trust, but verify,” Browne said of the crucial role of due diligence in municipal and economic development oversight.

“Reforming the EDA shouldn’t be the only goal of this Committee. In chaos there is great opportunity. The Town and County have the opportunity to bury old disagreements that hinder economic development, and work together. We have the opportunity to speak with one voice and present an irresistible opportunity for businesses looking for what’s already here – and it’s a lot,” Browne said of the potential for future commercial or industrial recruitment.

As for the first systemic failure he cited, Browne pointed to past procedures ripe for trouble that have already been changed to prevent recurrences.

“The EDA did its own accounting and wrote its own checks that involved multiple bank accounts worth millions – NEVER again,” Browne promised, noting that Executive Director Parsons’ presentation would detail those changes, then adding, “But already, the County Board has moved all check writing into county government. That’s a start, but it’s not enough.

“On its own since the scandal broke in March, the EDA has passed procedural reforms that increase transparency and accountability. We look forward to working with this committee and the reform committee to review what we’ve done and adopt additional procedures that will prevent future embezzlement and mismanagement,” Brown said of unilateral efforts the EDA board has initiated.

“This is a new EDA Board. It’s active and is looking to turn the EDA around. We understand the importance of working with the Town and County for the same goals – making our community better and stronger and safeguarding taxpayer monies. We’re here to work,” Browne said of those who have volunteered to help steer the EDA out of the turbulent waters it finds itself in.

Included in those waters are about $40 million in debt that the EDA is positioned to continue making its debt service payments on, Parsons said in response to Committee Chairman Murray’s question about the solvency of the EDA. The EDA executive director said the EDA plans to sell some of its properties to lessen that debt strain.

With new EDA Board Chairman Ed Daley to his left, EDA Executive Director Doug Parsons summarizes EDA moves to clean up the mess he and the new board have inherited and measures being implemented to prevent a recurrence.

Parsons also told the joint committee the EDA plans a redirection away from things like workforce housing development that the executive director and his board agreed are best left to other agencies more suited to such things.

Also presented by Parsons was a list assembled by EDA Administrative Assistant Gretchen Henderson of those EDA-owned properties; a list of the outstanding micro/USDA loans, balances and payment schedules; an accounting of the Front Royal Police Station loan, payments, interest and all work performed at what cost; and EDA Bank Account balances totaling $1.87 million in cash assets.

Browne’s final comment, “At the end of the day we all want a strong economic development effort and procedures that protect citizen resources. We ask this joint committee to appoint a member of the EDA Board to the EDA Reform Committee. We have a lot to offer,” led to EDA Board member Greg Harold’s nomination of newly-elected Chairman Ed Daley to that position.

However an ensuing discussion of whether both the new EDA appointee and existing Reform Committee member Parsons should both have votes led to a rambling 20-minute discussion resulting in an apparent decision to let the EDA board recommend that additional committee appointment in the near future at which time a decision on EDA voting privileges will be addressed.

A tentative date of Wednesday, October 16, was set for the next joint committee meeting.

And movement toward a requested meeting of Town Attorney Doug Napier with EDA/County Attorney Dan Whitten prior to his September 13 departure for perhaps less stressful horizons, as well as whichever other EDA attorneys related to the two EDA civil suits, its $20-million civil action against eight surviving defendants and the Town’s against the EDA, was set in motion.

See the above-referenced discussions and the one public outburst that punctuated the meeting in this Royal Examiner video: