Council OKs hike in EDA civil litigation fees to $250,000, ponders long-term change to Property Tax due date, among other business

The Front Royal Town Council opened its work session of Monday, June 5, with review of a number of  items either scheduled for upcoming public hearings — four out of six on short-term rental permitting requests — or inclusion on Consent Agendas for routine matters not requiring further council discussion. Council then delved into several matters of broader general interest to town citizens.

Among those were funding for needed repairs to the Prospect Street bridge over Happy Creek at South Commerce Avenue; officially changing by Town Code amendment the June due date on Personal Property taxes after five consecutive years of delayed mailing out of those tax bills and a consequent pushing back the June 5 due date; and finally prior to adjourning to closed session, authorization of an increase in the amount of legal fees to be paid to the Alexandria-based Damiani & Damiani law firm for its representation of the town government in the dueling civil law suits launched by council in November 2019 over liabilities and damages related to the Front Royal-Warren County Economic Development Authority financial scandal.

That increased cap on EDA civil legal fees is $250,000, according to the staff summary up $50,000 from a level of $200,000 set by a previous council on November 25, 2019. There was some confusion as the staff summary also noted that council had previously “allocated” an additional $158,139 to the original cap “for potential legal fees” but had not yet “authorized payment” of that amount, leaving the $158,139 “budgeted and unspent.”

Town citizens, whose General Fund tax revenue is being used to pay the EDA civil litigation bills, may recall that the council decision to sue the joint Town-County EDA and the County as opposed to accepting an offer of “good-faith negotiations” to determine exactly who was owed what or liable for what in the estimated $26-million financial scandal was made over the objection of then-recently installed Mayor Eugene Tewalt as Interim Mayor Matt Tederick (May-Nov. 2019) was transitioning into his run as interim town manager (Nov. 2019-Dec. 2020). Tederick, who has office space in proximity to Damiani & Damiani’s in Alexandria, made council aware of the potential availability of the law firm to handle the hostile civil litigation if council chose that path.

Then Mayor Eugene Tewalt, right, at a FR-WC EDA Board meeting in late 2019 as he attempted to act as mediator to steer the Town and EDA away from hostile civil litigation. While the EDA was on board with an offer of ‘good-faith negotiations’, unfortunately a majority of the town council was not. Below, Matt Tederick not long after transitioning from the interim mayor to interim town manager role in late 2019.

After some discussion (beginning at 58:14 mark of linked Town video) and Mayor Cockrell’s explanation that council could take action at the regularly scheduled work session, on Amber Morris’s motion, seconded by Vice-Mayor Wayne Sealock, council approved the $50,000 increase to a cap of $250,000 by a 6-0 vote.

Council then convened into Closed/Executive Session to discuss personnel matters, including the “Town Attorney and appointments to the Planning Commission and Board of Zoning Appeals.” There was no action or announcement out of closed session.

Other Business

On the matter of when, not only the Town, but also the County, has been able to get their Personal Property Tax billings out, town staff has recommended council consider a code amendment officially moving the initial payment due date without penalty to June 20 from June 5. Council member Morris noted the link between County and Town taxes — “We can’t do ours without the County part,” she observed.

With that link it was recommended that council take the matter to the Town-County Liaison Committee for discussion on a joint move in that direction to accommodate both municipalities tax billing schedules to what they are able to accomplish as the new fiscal year looms every July 1.

The staff summary noted that: “The mailing of first installment Town personal property tax bills have been delayed for 2019, 2020, 2021, 2022, and 2023; the first installment for Town real estate tax bills have been delayed for 2019, 2020, 2021, and 2023.”

Finance Director B.J. Wilson at podium discusses dynamics of a Town Code change to facilitate a long-term push back of the personal property tax due date from June 5 to June 20. Amber Morris, seated far right of table, pointed out that the Town can’t finalize its tax assessments without a final version of the County’s rates for the coming year. A joint municipal approach to a changed tax due date will be taken to the Town-County Liaison Committee.

On the Prospect Street Bridge repair front, staff notes a recent total cost estimate of nearly $1.5 million. Were the Town to be approved for the V-DOT Revenue Sharing Program, the Town “could receive 50% of matching funds from the revenue sharing program in FY27-28”. However, such approval remains an unknown variable, and the time frame seems counter-productive to the relative immediacy of the need of repair to the largely wooden structure. Flat tires were reported by some after driving over the bridge, and termites in sections of the wood were noted. That led to questions of liability for the town or state were the bridge to collapse with a vehicle on it.

The staff summary observed: “Effective with the FY24 Budget, the Town will have allocated a total of $630,000 to the Prospect Bridge Rehabilitation Project ($300,000 in current FY23 and coming FY24) and will need an additional $925,137 to fund the project.”

Of options in providing the additional funding, it was added: “The Town could delay secondary paving in the amount of $262,000 and delay the transportation plan in the amount of $150,000 to allocate an additional $412,000 toward the Prospect Bridge Rehabilitation Project; but the additional $412,000 will not provide enough funds to complete the project immediately. An additional $513,127 would be needed if both paving and the transportation plan funding were delayed. Additional funds could be allocated when preparing the FY25 budget for next year and by that time the Town may have a better idea of additional funds that could be reallocated toward the Prospect Bridge Rehabilitation Project.”

Town Manager Joe Waltz, left, suggested council take the self-funding approach to the Prospect St. Bridge repair to facilitate a perhaps three to four-years quicker start on those much-needed repairs.

With the potential VDOT revenue sharing not available until Fiscal Year 2027/28, Town Manager Joe Waltz said that a self-funded rehabilitation of the bridge project could conceivably begin in July of 2024 at the beginning of Fiscal Year 2024/25.

Noting it as a Town Public Works priority and the potential of moving from limited use to being closed to all traffic, a consensus appeared to be to move toward repair as soon as possible, with the additional needed funds being earmarked to facilitate that FY-2025 target date of July 2024 to begin repairs.

The short-term rentals discussion that kicked off the meeting focused largely (4:15 mark of the video) on The Trellis multi-unit project on the 1100 block of John Marshall Highway, which encompassed three of the four short-term rental Special Use Permit applications poised for public hearings. While some questions were raised about the multi-uses tied to a main structure, “Events Center” tied to the smaller short-term rentals, council’s overall reaction was positive. It was noted the applicant has lengthy ties to the community and a vested interest in improving the ambiance of the town to both visitors and residents.

A front-page graphic on the Trellis events and short-term rental project earmarked for the south side of the 1100 block of John Marshall Hwy. Below, council and staff ponder the variables involved in the multi-use Trellis project. Overall the reaction was positive as the project approaches a public hearing.

However, a future work session to discuss mixed-use issues and the range of variables tied to short-term rental permitting was promised to Councilmen Rappaport and Rogers, who raised the bulk of those issues. Though, as noted above, even with their general permitting issues raised, both Rappaport and Rogers expressed support for the Trellis project overall.

Two other coming public hearing items discussed were a short-term rental permitting application at 211 South Royal Avenue and a special exception to parking regulations at 15 Chester Street for commercial use, both of which got positive receptions. In another action item, Planning Director Kopishke was appointed to the Town’s non-elected member role with the Northern Shenandoah Valley Regional Commission (NSVRC). It was pointed out that Vice-Mayor Sealock is the elected representative to NSVRC.

Click here to see all or part of these and other discussions in the  Town video.