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County Supervisors removal petition filed with 941 signatures

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On Friday, October 18, the attorney for the organizers of a citizens group seeking removal of all five Warren County Supervisors filed the Petition for that removal with a total of 941 signatures attached, broken down by County Voting Districts.

The filing required a minimum of 10% of the number of registered county voters who voted in the last election. That number is cited as 6,958, requiring a total of 696 countywide. However self-identified “primary organizer” of the petition drive, Bonnie Gabbert, noted in an affidavit filed with the petition that she had rounded each voting district’s total up, raising that minimum required signature total to 699.

So while the petition total of about one-seventh of the county’s most recent voting population does not indicate majority support for the recall, it does meet the State requirement for such a matter to be brought before a Circuit Court judge. And it appears on information from petition attorney Timothy Johnson that for the same reasons of personal or professional familiarity with defendants leading to recusals in EDA cases, that Warren Circuit Court Judge William Sharp will recuse himself from the recall hearing as well.

Maureen Schofield of Front Royal greeted Warren County BOS members at their Tuesday meeting on October 15. Photo by Kim Riley


 

Johnson told Royal Examiner he believes Chief 26th Judicial District Judge Bruce D. Albertson, who has been presiding at EDA civil and criminal case hearings will preside at the scheduled October 28 Show Cause removal petition hearing. Albertson was already scheduled to be here that day to hear a number of defense motions to quash the very charges the main thrust of the removal is based on.

The removal petition cites the board members’ September 20th misdemeanor criminal indictments related to an absence of due diligent oversight of the actions of former Warren County Economic Development Executive Director Jennifer McDonald in the final four months of 2018 as a primary legal basis of the removal.

“Pursuant to Va. Code § 24.2-233(1), a Circuit Court may remove from office any elected officer residing within the jurisdiction of the Court for neglect of duty, misuse of office, or incompetence in the performance of duties when that neglect of duty, misuse of office, or incompetence in the performance of duties has a material adverse effect upon the conduct of the office.

“On September 20, 2019, Supervisors Daniel J. Murray of the North River District, Thomas H. Sayre of the Shenandoah District, Tony F. Carter of the Happy Creek District, Archie A. Fox of the Fork District, and Linda Glavis of the South River District were indicted for violating the English Common Law, and specifically, each were charged on three misdemeanor counts …” of misfeasance and nonfeasance in the conduct of their office as previously reported (see below linked story).

The petition acknowledges the coming November 5 election in which two supervisors, Chairman and North River Supervisor Dan Murray and South River Supervisor Linda Glavis are not seeking reelection; and Shenandoah District Supervisor Tom Sayre is in a race with Walter Mabe. It also notes that Fork District Supervisor Archie Fox and Happy Creek Supervisor Tony Carter are not up for reelection until November 2021.

Regardless of those electoral variables, the petition asks the court “to suspend the Respondent-Supervisors from performing their duties in office until the Show Cause hearing is held”. There are no Board of Supervisors meetings scheduled prior to that October 28 Show Cause hearing that will revolve around the defendants’ arguments as to why they should not be removed.

And one might make an educated legal guess that at least part of those defense arguments will revolve around the same Sovereign Immunity issue the EDA has raised in the Town of Front Royal’s civil action against it.

Vexatious litigation?

“Sovereign Immunity is ‘a rule of social policy, which protects the state from burdensome interference with the performance of its governmental functions … Most importantly, the doctrine of Sovereign Immunity provides for ‘smooth operations of government’ and prevents ‘citizens from improperly influencing the conduct of governmental affairs through the threat or use of vexatious litigation,’ ” a motions filing in the Front Royal vs. EDA civil suit reads.

In addition to its primary Show Cause allegations regarding the misdemeanor indictments cited lack of due diligent oversight of the former EDA executive director late in 2018 the recall petition also alleges a number of other board failings since that time.

Those include failing to take corrective action to prevent a recurrence of the past absence of economic development oversight and use of public money; failing to “review critical financial information” related to a recent bond consultant initiative to refinance some existing capital improvement bonds that could save the County several million dollars; and allowing the EDA purchase of what is described as the “Westrock LLC warehouse purchase” (aka 426 Baugh Drive warehouse) at a price of $5.3 million.

While the removal petition allegations surrounding the misdemeanor indictments and other past absences of EDA oversight appear to have a solid footing for legal arguments, some of the peripheral allegations may have a less substantial foundation.

Unlike some other EDA owned properties, the Braugh Drive warehouse has been cited by current EDA officials as “just the type of property” an EDA should purchase for marketing/sale to a job creating company.

The alleged failure to launch corrective measures and lack of bond refinancing scrutiny seem to ignore several board initiatives and consultant processes. Those include the supervisors’ participation in an EDA Reform Committee and joint County-Town-EDA meetings held to discuss just such corrective measures, many already in the process of being implemented by the EDA and County, including the County’s assumption of the role of the EDA’s financial agent with check-writing authority.

The alleged lapse of due diligence regarding bond refinancing seems to ignore the County’s long-time use of bond consultant Davenport & Associates to perform that very bond reissue due diligence in recommending actions to the supervisors.

And the allegation of wrong doing in the tabling a decision on whether the County will fund the legal defense of the supervisors on their misdemeanor charges to December ignores the explanation that a decision be deferred until the motions to quash the indictments have been heard. That could be a factor in a decision as a compromise solution of the County using taxpayer money for the supervisors defense counsel only if the charges are dropped or the supervisors are acquitted at trial was broached during October 1 meeting discussion.

Those defense motions to quash the misdemeanor misfeasance and nonfeasance indictments against County and EDA officials, as well as Discovery motions if necessary, are slated for hearing on October 28, the same day as the Show Cause hearing on the recall is on the court docket.

Photo accompanying Royal Examiner’s early February 2018 story where Jennifer McDonald alleged about $2 million in Hollywood Casino slot machine winnings over a three-year period with no more than $18,000 of her or house money being invested to achieve those winnings. State Police have estimated McDonald lost $750,000 including her winnings; some contend those losses could be even higher.

 

Among other EDA McDonald-related oversight lapses cited in the recall petition are the “red flag” of McDonald’s public story of “substantial gambling winnings” to account for her use of cash in her real estate businesses; as well as the sale of the 30-acre ITFederal parcel at the Royal Phoenix/Avtex site “for substantially below fair market value”.

One might say “substantially below” in that the publicly discussed $2 million 30-acre parcel was gifted to ITFederal LLC for one dollar in an effort to “jump start” further development at the 147-acre planned Royal Phoenix Business Park site. Four years later that plan is floundering and ITFederal and its CEO Truc “Curt” Tran are defendants in the EDA’s $21.3 million civil suit. In its first month of existence Royal Examiner broke the story of that one dollar sale being the reason for a one-year delay in U.S. Justice Department approval of the sale (see below linked story).

The EDA is seeking recovery of the balance of its $10 million First Bank & Trust loan to ITFederal on the grounds it was obtained “under false pretenses”. Despite that EDA civil suit contention, Tran and his Congressional sponsor Robert Goodlatte, who helped and/or stood silently by as McDonald pushed those alleged “false pretenses” into the municipal and public consciousness, have thus far remained off the EDA Special Grand Jury criminal indictment radar.

Above, the initially-submitted plan for an approximate 26,000 s.f. ITFederal building number one, of three promised; below the reality, a 10,000 s.f. building meeting minimum EDA loan and EB-5 Visa requirements.

 

 

Indicted in addition to the five supervisors  on September 20 by the EDA Special Grand Jury were County Administrator Doug Stanley, former EDA/County Attorney Dan Whitten, former EDA Board members Ron Llewellyn, Bruce Drummond, Greg Drescher, William “Billy” Biggs and current EDA Board members Mark Baker, Tom Patteson, Gray Blanton. Each faced three identical charges, two counts of Misfeasance and one count of Nonfeasance in the conduct of their public offices.

October 28 should be a long and interesting day in Warren County Circuit Court.

Interested in reading the petition? See below.

 

Grand Jury indicts 14 County and EDA officials for lack of EDA oversight

Feds OK ‘Dollar Special’ on first Avtex property sale

Op-Ed: County, EDA officials cited for failed oversight – why not the Town?

 

CIRCUIT COURT OF THE COMMONWEALTH OF VIRGINIA,

COUNTY OF WARREN

In re Joint Petition for Removal of Daniel J. Murray, Thomas H. Sayre, Tony F. Carter, Archie A. Fox, and Linda Glavis

 

BONNIE GABBERT, as representative petitioner for North River District, KRISTINA C. NELSON, as representative Petitioner for Shenandoah District, MAUREEN SCHOFIELD, as representative petitioner for Happy Creek District, MARK HAJDUK, as representative petitioner for Fork District, JEAN M. STANLEY as representative petitioner for South River District, and all other signatories to this Joint Petition from their respective magisterial districts,                                                                      Petitioners,

v.

 

DANIEL J. MURRAY, THOMAS H. SAYRE, TONY F. CARTER, ARCHIE A. FOX, and LINDA GLAVIS,

Respondents.

 

 

 

 

Case No.:

 

PETITION FOR REMOVAL OF ELECTED OFFICIALS

          Named Petitioners as representatives for Warren County’s magisterial districts, and the attached signatories to this Petition for Removal of Elected Officials who are registered voters who reside within the jurisdiction of the respective officer being petitioned for removal and who have signed this petition under penalty of perjury seek the removal from elected office of Respondent-Supervisors DANIEL J. MURRAY, THOMAS H. SAYRE, TONY F. CARTER, ARCHIE A. FOX, and LINDA GLAVIS, state as follows:

  1. Pursuant to Va. Code § 24.2-233(1), a Circuit Court may remove from office any elected officer residing within the jurisdiction of the Court for neglect of duty, misuse of office, or incompetence in the performance of duties when that neglect of duty, misuse of office, or incompetence in the performance of duties has a material adverse effect upon the conduct of the office.
  2. On September 20, 2019, Supervisors Daniel J. Murray of the North River District, Thomas H. Sayre of the Shenandoah District, Tony F. Carter of the Happy Creek District, Archie A. Fox of the Fork District, and Linda Glavis of the South River District were indicted for violating the English Common Law, and specifically, each were charged on three misdemeanor counts as stated as follows:

(a) On or about September 1, 2018 through December 31, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully commit nonfeasance by failing to act to limit or restrict the powers, responsibility, and access to the public financial resources of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in financial loss to Warren County, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.

(b) On or about September 1, 2018 through September 25, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully and negligently commit misfeasance by not properly exercising his/her powers of appointment, oversight, and removal, of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in the unlawful diversion of more than $300,000 in public funds, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.

(c) On or about October 20, 2018 through November 30, 2018, in the County of Warren, [respective supervisor’s name], did unlawfully and negligently commit misfeasance by not properly exercising his/her powers of appointment, oversight, and removal, of Jennifer Rae McDonald in her position as Executive Director of Front Royal Warren County Virginia Economic Development Authority resulting in the unlawful diversion of more than $9,000 in public funds, in violation of Section 1-200 and 19.2-8 of the Code of Virginia, 1950, as amended.

  1. These criminal charges stem from the Respondents’ failures to perform their duly elected duties, and ensure proper use of and safekeeping of Warren County’s taxpayers’ monies. Aside from the criminal charges as stated, the Petitioners further allege that the Respondent-Supervisors neglected their duties or otherwise were incompetent to perform their duties by:

(a)        Failing to establish policies and procedures that would have ensured a proper accounting oversight of the Warren County Economic Development Authority, including its Executive Director, in contravention of its duty to establish appropriate oversight policies pursuant to Va. Code § 15.2-403(A);

(b)        Failing to require and actually review regular, sufficiently descriptive financial and other activity reporting from the Warren County Economic Development Authority, including its Executive Director, and any other financial monitoring department such as the from the Commissioner of Revenues, and/or the Warren County Treasurer, and/or the Finance & Purchasing Department pursuant to Va. Code § 15.2-403(B);

(c)        Failing to inquire into official conduct of the Warren County Economic Development Authority’s Executive Director when ‘red flags’ were presented such as her alleged substantial “gambling winnings,” the ‘data center project’ land being sold for substantially below fair market value, and when the Executive Director acknowledged falsifying invoices pursuant to Va. Code § 15.2-403(C);

(d)       Failing to account for the “Westrock LLC” warehouse purchase for more than $5.3 million, which served no apparent benefit to the citizens of Warren County and no apparent plan for said warehouse;

(e)        Failing to take appropriate corrective actions to ensure that such gross errors in accountability cannot happen again as no proposed solutions have been presented to the public or to the Board of Supervisors to establish proper policies and procedures, or otherwise improve financial oversight; and

(f)        As recently as October 1, 2019 at the most recent Board of Supervisors meeting, admittedly failing to review critical financial information concerning revenues and County bond information that would be used to fund Warren County services, and for refusing to decide an agenda item concerning whether the taxpayers of Warren County were to pay for the criminal defense costs associated with the Supervisors’ criminal indictments stemming from the charges related to their misfeasance and nonfeasance in office and postponed such a decision until December 2019.

  1. The above-stated actions have caused irreparable injury to the interests of the Warren County Government and the citizens whom it is supposed to serve. Millions of dollars of taxpayer monies have been embezzled or otherwise misplaced; trust in local government officials and the departments they work for has been broken; and the reputation of Warren County is forever tarnished. The Respondent-Supervisors have allowed these injuries to occur, and have taken inadequate actions to remedy the errors.
  2. Two Supervisors (Mr. Murray and Ms. Glavis) are not seeking re-election, and one Supervisor (Mr. Sayre) is running for re-election next month. The other two Supervisors (Mr. Carter and Mr. Fox) are not subject to an election until November 2021.
  3. As the criminal charges are pending, the citizens of Warren County believe that the Respondent-Supervisors are not in a position where they can capably perform their duties while also addressing such criminal allegations. Aside from the criminal charges, the Respondent-Supervisors have failed to present any cognizable plan of addressing the lack of accountability and oversight, and have demonstrated that they cannot perform their duties competently.
  4. The Petitioners request that the Court suspend the Respondent-Supervisors from performing their duties in office until the Rule to Show Cause hearing is held pursuant to Va. Code § 24.2-236.
  5. This Petition has been signed by the requisite number of registered voters who seek to remove their respective Supervisor from office. From the last election for that respective Supervisor’s election, the following number of registered voters voted in the respectively stated districts were as follows:
Magisterial District Number of Voters in Last Election Cycle
North River District 1,084
Shenandoah District 1,415
Happy Creek District 1,811
Fork District 1,541
South River District 1,107

Pursuant to Va. Code § 24.2-233, this Petition is accompanied by signatures of registered voters who reside within the jurisdiction of the respective Supervisor totaling at least ten percent (10%) of total number of votes cast at the last election for the office that the officer holds.

WHEREFORE, Petitioners respectfully request that this honorable Court award the following relief:

  1. Issue a Rule to Show Cause to the Respondent-Supervisors requiring that the Respondents appear before this Court and show cause why they should not be removed from office, and that such hearing be held no less than five but not more than ten days from the filing of this Petition;
  2. As part of issuing the Rule to Show Cause, issue an Order suspending the Respondents from their elected official positions on the Warren County Board of Supervisors until such Rule to Show Cause Hearing is heard;
  3. Upon hearing sufficient evidence proven by a preponderance of the evidence, remove the Respondents from their positions in office; and
  4. Grant other and further relief as the Court deems just, proper, and equitable.

Dated: October 3, 2019                                  Respectfully submitted,

Berryville, Virginia

 

                                                                       

Timothy R. Johnson (VSB No. 87673)

The Law Offices of Timothy R. Johnson, PLC

20-B East Main Street

Berryville, Virginia 22611

P: (540) 352-4672

F: (540) 595-3500

E: trjohnson@trjlegal.com

Counsel for Petitioners

  

VERIFICATION BY REPRESENTATIVE PETITIONERS

  1. I, Bonnie Gabbert, a resident of the North River District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
  2. I, Kristina C. Nelson, a resident of the Shenandoah District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
  3. I, Mark Hajduk, a resident of the Fork District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
  4. I, Maureen Schofield, a resident of the Happy Creek District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge.
  5. I, Jean M. Stanley, a resident of the South River District within Warren County, have reviewed the allegations in the Petition for Removal of Elected Officials, and affirm under penalty of perjury that such allegations are true and accurate to the best of my knowledge. 
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‘Ghosts of EDA Loans Past’ come back to haunt county supervisors

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The most interesting part of Tuesday evening’s Warren County Board of Supervisors meeting was likely behind closed doors after the board adjourned to Closed/Executive Session for a legal-based answer to North River Supervisor Delores Oates question as to what benefit to the County and its taxpayers there was in approval of a Resolution admitting a “moral obligation” to continue to pay the debt service on bank loans made by the EDA during its developing financial scandal, circa 2016 or so. There was one of three loans at issue of particular interest – the $10-million-dollar loan to Truc “Curt” Tran’s ITFederal company poised to jumpstart commercial redevelopment at the 149-acre portion of the former Avtex Superfund site known as the Royal Phoenix Business Park.

North River Supervisor Delores Oates particularly wondered why it remains in the County’s interest to continue covering debt service on the Town/EDA-sponsored ITFederal loan. Anxious to see commercial redevelopment begin on a portion of the former Avtex Superfund site in town, the Front Royal Town Council made a one-month, which grew to three-months, ‘bridge loan’ of $10-million to the ITFederal project to illustrate Town support of that project to a skeptical bank targeted to finance the project. Below, five-plus years later an unoccupied, un-permitted building constructed at an estimated cost of $2 million or less memorializes the entire debacle. Further below, I guess the building looks kind of like what ITFederal presented back in 2016 – at least the first floor. Royal Examiner Photos by Roger Bianchini

Of particular interest, because the “moral obligation” for that loan was initially believed covered by the Town of Front Royal, whose elected officials agreed to provide a $10-million-dollar “bridge loan” requested by then EDA Executive Director Jennifer McDonald to indicate to First Bank and Trust that “the community” stood behind the loan and proposed project it supported. That request for and Town show of financial support for the ITFed project came despite the fact the company showed virtually no assets other than the three acres at the Royal Phoenix/Avtex site valued at slightly over $2-million-dollars that was “gifted” to the company by the EDA behind closed doors for one dollar.

A clue to what the county supervisors heard over about 15 minutes in Closed Session may have been offered by the board’s action out of it. After some hesitancy in response to the Chair’s call for a motion on the Resolution, Oates’ motion for approval of the “EDA First Bank and Trust Support Agreement”, seconded by Walt Mabe, passed by a unanimous roll call vote. The vote commits the County to continue to absorb those “moral obligation” payments through the Fiscal Year 2021-22 at an estimated cost of $214,000.



In open session, responding to questions about the Resolution in support of the “EDA First Bank and Trust Support Agreement”, County Administrator Ed Daley mentioned consolidation of three loans, including the above-mentioned ITFederal loan (at $9,551,500), as well as a First Bank and Trust Line of Credit ($8,691,600), and a First Bank of Strasburg loan ($3,450,000). Contacted later, Daley cited one condition that would bring the EDA’s payments to the bank on the ITFederal loan in line with what ITFederal pays the EDA monthly at about $42,000. Before the EDA payments fluctuated to more or less than the ITFed payments, sometimes as much as $7,000 a month more.

After County Administrator Ed Daley, left, summarized the proposed ‘First Bank and Trust Support Agreement’ and Supervisor Oates asked ‘Why?’ the County should continue to assume moral obligation payments it may not be responsible for, Interim County Attorney Jason Ham, right, suggested a Closed Session might be most appropriate to answer that question.

Despite the commitment to an estimated $214,000 in payments through this fiscal year, the board’s unanimous vote in support of its moral obligation payments likely reflects negative consequences were the County to bail on covering an EDA debt mid-fiscal year. But again, the agreement is only to the end of the current fiscal year, June 30, 2022. What might the future of “moral obligations” related to the “Ghost of EDA Loans Past” bring in FY-2022-23? – Stay tuned for another seasonal episode of “A Front Royal-Warren County EDA Carol”.

Thermal Shelter bathrooms

County Administrator Daley was also prominent in responding to another matter raised by three speakers during Public Comments about things, not on the meeting agenda. That was the elimination of two bathrooms in the Health and Human Services Complex at the old 15th Street middle school utilized by the County and involved churches and civic organizations to house the community’s homeless indoors at night during the winter. Opening that discussion was First Baptist Church Pastor Christy McMillin-Goodwin, followed by Aneita Bryant and Jim Bunce.

First Baptist Church Pastor Christy McMillin-Goodwin opened Public Comments discussion of how communications broke down between involved Thermal Shelter parties on the removal and delayed replacement of indoor bathrooms nearest the winter homeless shelter.

That trio said an alternate plan for mobile outdoor restrooms was unadvisable due to security and additional personnel to monitor out-of-building night trips, as well as potential severe weather issues. Noting a replacement plan that would not have new indoor facilities in place in time for this winter’s thermal shelter setup, these speakers wondered how the removal plan had been initiated without notice to those involved in helping the County operate the thermal shelter. Bryant suggested allowing access to the next closest indoor facilities.

In responding, Daley said he had been at point for the County in initiating the bathroom removal due to failing pipes that caused toilet backup issues. He said he had envisioned a much quicker turnaround in replacing the removed indoor facilities in that section of the building than ended up being the case. He promised to work proactively with those involved to see that an adequate alternate overnight option was available when the thermal shelter opens as winter arrives.

Public Hearings

Also Tuesday following public hearings, the board unanimously approved three Conditional Use Permit applications, two for short-term tourist rentals and one for a private use campground. Following application summaries by Planning Department Deputy Director Matt Wendling the first two CUP applications, Charles and Lou Ann Dotson’s for the Private Use Campground on their property on Burma Road in the Man-Da-Lay Subdivision; and Jacob W. Lott Jr. and Sandra J. Kiepfer for a short-term tourist rental on their 1.6-acre lot on Little Indian Road in the Blue Mountain Subdivision in Linden went to a vote with no public hearing speakers. Wendling did note that a letter from the chairman of the Blue Mountain Property Owners Association had been received, expressing “no problem” with Lott and Kiepfer’s short-term tourist rental application.

Up last were Nicole and Sean McMinn with a short-term tourist rental permit application for their 2.42-acre property on Sagar Drive in the Highland Estates Subdivision in the Fork District. Again, there were no public speakers after the applicants responded to the board chair’s offer to summarize their request. The D.C.-based couple told the board they had run into little opposition from neighbors, and what opposition there had been from neighbors was not from those closest, but with property over a thousand feet from theirs.

Nicole McMinn and her husband Sean marshaled neighbor and tourism-related business support for their short-term tourist rental permit application.

And while there were no public speakers, the McMinns noted a number of letters to the board from supporters of their short-term tourist rental CUP application, which they asked to be read into the meeting record. Board Clerk Emily Ciarrocchi then read nine letters of support, including one with “25 to 30” signatures. Several of the letters, including one from the owner of the Downriver Canoe Company, noted positive impacts on tourism-related businesses from short-term renters. One letter noted, “They come; they spend; they leave”.

The board then made its final unanimous vote of approval on a motion by Archie Fox in whose district the applicant’s property lies, seconded by Walt Mabe.

Following that vote, Happy Creek Supervisor Tony Carter noted a “Bless you” included in one of the letters read by the clerk that was well-timed to a sneeze by someone present in the government center meeting room.

Approaching an election he chose not to be a part of two days after Halloween this year, Tony Carter was on a comic roll Tuesday evening suggesting politician as perhaps the scariest costume for the Oct. 31 to Nov. 2 window.

In fact, facing a future out of the public eye politically – Carter did not file to be on the ballot for reelection to his Happy Creek seat in November – Carter appeared at times Tuesday to be auditioning for Comedy Club spots during his member report and at various other times during the meeting. In fact, his coming local election, Halloween costume advice during his member report led three of his four colleagues to decline to try and “follow that act”.

See all the fun, business, and other public perspectives, including opening Public Comments speaker Michael Williams question as to whether a recent church-sponsored candidates forum in which the moderator was shown prior to the forum to have contributed to one church-associated candidate’s campaign could threaten that church’s tax-exempt status on U.S. Constitutional separation of church and state guidelines, in the County video:

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EDA gets McDonald company property as part of settlement agreement

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On Wednesday, October 20, Warren County Economic Development Authority Board of Directors Chairman Jeff Browne verified the EDA’s acquisition of the 41-acre “Happy Creek Road” parcel owned by former EDA Executive Director Jennifer McDonald’s Moveon8 real estate LLC. Acquisition of the undeveloped property assessed at just over a million dollars according to county court records is part of the $9-million-dollar no-fault settlement agreement reached between the EDA, McDonald, and the Harrisonburg Bankruptcy Court handling McDonald’s 2020 bankruptcy filing. The EDA will now be able to market the property as a developable EDA asset. It is located near the intersection of Happy Creek Road and Leach Run Parkway.

Browne said that in addition to receiving full value on the Happy Creek parcel, the EDA was in line to receive a percentage of the sale price of other McDonald assets distributed through the bankruptcy court proceeding. Exactly how close those percentages might get the EDA to the $9-million-dollar settlement figure remains to be seen. It was not immediately clear as to whether the EDA will have an outright full value claim to any other McDonald-held properties or assets.

The FBI and VSP were both involved in the April 2019 search of McDonald’s former office; below, being locked down after her resignation under mounting investigatory pressure by her board on Dec. 20, 2018. Royal Examiner File Photos by Roger Bianchini

McDonald is the central figure in the EDA financial scandal that began unravelling in mid-to-late 2018. She resigned in December 2018 under mounting pressure from her board of directors. She has been accused in civil and criminal court of utilizing her EDA position to misdirect EDA assets to her and others personal benefit. Western District of Virginia federal authorities have taken over the criminal side of the EDA case after a state special prosecutor’s office in Harrisonburg dropped criminal charges against McDonald and as many as 23 co-defendants due to speedy trial concerns as it wrestled with the volume of evidentiary material – estimated at 800,000 to over a million pages at the time. With charges against some defendants originating with the county commonwealth attorney’s office that initially handled the criminal investigation during Brian Madden’s tenure heading the department, failure to meet speedy trial timelines could have led to defense motions for dismissal of criminal charges against the defendants.


Jennifer McDonald booked during state criminal prosecution process in 2019.

On August 31, 2021, federal prosecutors made their initial move, handing down a 34-count indictment against McDonald. Of those 34 counts, 16 were for money laundering, 10 for bank fraud, 7 for wire fraud, and 1 count of aggravated identity theft regarding someone identified as “T.T.” – ITFederal principal Truc Tran perhaps?

ITFederal principal Truc ‘Curt’ Tran on site at EDA parking lot, adjacent to his now floundering construction project, on Dec. 20, 2018, the day Jennifer McDonald resigned as executive director of EDA. Tran expressed distress at the potential of McDonald’s departure at the time. Could Tran, whose $10-million loan for the Royal Phoenix project was the largest single item listed in the initial EDA civil litigation, have now accused McDonald of ‘aggravated identity theft’ regarding EDA financial dealings with him and his company?

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EDA completes audits for 2018 and 2019; 2020 audit is next

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The Board of Directors of the Front Royal and Warren County Economic Development Authority accepted its audited financial statements for fiscal years 2018 and 2019, today, October 5, 2021. The audit of the financial statements was conducted by the firm of Brown Edwards, CPAs of Harrisonburg, VA.

“We have received the final outside audits conducted for 2018 and 2019,” said EDA Board Chairman Jeff Browne.  “This was a huge effort on the part of Brown Edwards, and they have done very good work in challenging circumstances. Getting these two financial audits completed is a major step forward in putting the EDA’s past difficulties behind us. Now we can better focus on economic development issues to benefit the community.”

“The auditors’ letter points to three areas for improvement of internal controls,” Browne said. “It was important to make each improvement recommended by the CPAs, and we have done just that. The Warren County staff now administer the check-writing duties, collection of rents, and have layers of approvals for expenses within EDA and the County administration that were not there three years ago.”

The audited financial statements show that, at the end of the fiscal year 2019, the EDA’s total net assets were $38,036,737, and its net liabilities were $44,575,435, resulting in a deficit net position of $6,538,698. The EDA will work with Warren County’s auditors starting with the fiscal year 2020, which audit can now be undertaken.


Final Financial Statement 10-5-21

Final Letter to governance

 The EDA Board of Directors will have their next regular monthly board meeting via Zoom on Friday, October 29, 2021, at 9 a.m.

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EDA reminds rental tenants, Small Business Loan Program clients to now send payments to WCGC

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Starting October 1, 2021, the Warren County Finance Department will take over and manage payments made to the EDA for rents and the Small Business Loan Program (RBEL and IRP). The EDA will no longer be accepting payments at their office or office address.

Please continue to make your check or money order to the EDA. You must hand-carry or send your payments to:

Warren County Government
ATTN: Finance Department
220 N. Commerce Ave.
Front Royal, VA 22630

Any payments sent to the EDA will be returned. As a result, you may incur fees for late payment. We appreciate your cooperation. Thank you for your attention to this matter.


(Press Release)

 

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EDA briefed on structural and legal options in closed session; gets open session updates on committee work during transition phases

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The EDA Board of Directors met Friday, September 24, for their regular monthly meeting. The Board went into closed session for approximately 90 minutes to discuss transition, personnel, 2018- 2019 draft audits, loan restructuring, and disposition of property. The Board returned to open session at approximately 10:20 a.m. Jeff Browne, EDA Chair, opened the session with an overview of the transition. Browne asked each board member to report on their assigned transition project.

EDA Board Chair Jeff Browne, red shirt at the head of the EDA ‘roundtable’, prepares to get committee chair reports on their work as the EDA transitions toward new staff and possibly a new administrative structure under consideration by the County Supervisors. Supervisors Chair Cheryl Cullers and Walt Mabe were present for the briefings. Royal Examiner Photos by Roger Bianchini

Search Committee-Transition: Dr. Tom Patteson, reported the committee met and reviewed applications. Three applications were submitted to the county administrator. The county and EDA will work together in selecting replacements for the Administrative Assistant and Executive Director.

Finance Committee-Transition: Jim Wolfe reported the “numbers” on the 2108 and 2019 audits are final. Jim Wolfe stated the management letter will be revised and recommended a special meeting for next week to finalize and accept the audits for 2018 and 2019. The Board agreed and the date of the meeting will be announced. Mr. Wolfe will also be meeting with the finance personnel at the county in the next several weeks.


Marketing Committee-Transition: Scott Jenkins, Chair reported the 38-page PowerPoint presentation is complete. The marketing material can be tailored to specific clients. The marketing is targeted on the Core Industries: Advance Manufacturing, Transportation and Logistics, Information Technologies, and Food Processing. Scott reviewed documents and key data. The marketing material is organized and stored on the EDA network. The September Marketing Committee report included other updates and visions including Small Business opportunities, focus on the Strategic Plan, and marketing opportunities with VEDP, Site Selector Guild, and Trade shows in 2022.

Administration Committee-Transition: Jorie Martin reported Gretchen Henderson prepared an Operation Manual for future reference. The manual is detailed in all the operations of the office including resources to use. The new administrative assistant as well as the EDA Board are well prepared to transition smoothly. Mrs. Martin reported The EDA now has the capability to update portions of the website in-house. This week a meeting section was added so the public can go to the site and see upcoming meetings.

Jorie Martin launches into her Administration Committee report, noting that departed Administrative Assistant Gretchen Henderson had prepared what she termed ‘a bible’ for EDA administrative operations for her successor, wherever they are located, to work from. Below, Asset Committee Chair Greg Harold reported the development of ‘The Stage Gate’, a comprehensive document standardizing the process for disposition of EDA-held property.

Asset Committee: Greg Harold reported the transition and updates on the assets of the EDA were complete. Doug Parsons worked closely to make sure all projects are up to date.

Greg Harold presented the Project Management – Stage-Gate: The Stage-Gate is a comprehensive document standardizing the process for disposition of property. The document will be reviewed and discussed at length at the October board meeting.

Motions coming out of Closed Session: The Board approved the technical revisions to the EDA By-Laws adopted at the August meeting. The Board approved the Board Chair, and Secretary to sign documents for the restructuring of the EDA debt with First Bank and Trust. All documents will be reviewed by legal counsel.

Other items that the Board of Directors addressed included an expression of gratitude for all the work done by Executive Director, Doug Parsons. Jeff Browne expressed and the boards’ appreciation for all the hard work and effort to bring the EDA where it is today. Through Doug’s efforts, the EDA has sold property, expanded business, and brought new business to the town and county.

The next monthly EDA Board Meeting is scheduled for October 22, 2021.

 

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EDA in Focus

County moves toward restructured EDA staffing in hopes of restored municipal cooperation – 6 CUPs approved, 5 for short-term tourist rentals

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At its meeting of Tuesday evening, September 21st, the Warren County Board of Supervisors made the first official move toward an altered structure of its, and the Town’s, Economic Development Authority futures. That move was unanimous 5-0 approval, on a motion by Delores Oates, seconded by Walt Mabe, of County Administrator Ed Daley’s presentation of a “Request to Create a Warren County Office of Economic Development”. As reported in our recent story, County work session takes unexpected turn on EDA front – ‘Reunited’ operational option broached, the supervisors elected to have Daley forwarded an idea originally slated for Closed Session discussion at a September 14 work session, in open session that day. That idea is to have an Economic Development Director’s staff position under the municipal government umbrella, rather than as a staff position hired by the board of an independent Economic Development Authority (EDA), albeit an EDA board appointed by the municipal government or governments that created it.

In response to Tony Carter’s question about involving the existing EDA Board in this restructuring process, County Administrator Ed Daley, below, said they were alerted to the potential of it prior to Doug Parsons announced resignation. Royal Examiner Photos by Roger Bianchini

As we understand it from subsequent conversations with Daley following last week’s supervisors’ work session, that in-house EDA director’s position would work in the best interest of both the county’s municipal governments, networking what it appears at this point will continue to evolve into two unilateral Town and County EDAs. Now theoretically, both the existing WC EDA and FREDA – the Front Royal EDA that is in the interview stage of establishing a board of directors – could create their own independent Offices of Economic Development with their own executive directors. But the impetus after last Thursday’s resurrected Town-County Liaison Committee meeting appears to be to work together to select an executive director who will work to the mutual benefit of both municipalities while networking with two EDA Boards of Directors.

Confusing? Perhaps – but it would cut payment of the six-figure salary range position in half if both municipalities could agree on the concept and a person to fill that conceptual central administrative position. For with a statewide trend toward regional EDA cooperation in a highly competitive economic development environment, what future would this community’s economic development have with dueling EDAs competing, not only with other regional governments’ economic development structures but with each other’s, particularly when the WC EDA has control of significant portions of economic development properties inside the town limits?



The answer to that question has, perhaps, already been given in the pending October 1st departure of WC EDA Executive Director Doug Parsons, to a county directly to our east where as one local observed upon hearing the news, “Warrenton isn’t suing Fauquier County” (or perhaps more accurately, its EDA).

And a move toward “us and us” from “us versus them” in County-Town relations was a reoccurring theme for several supervisors involved in last week’s first Liaison Committee meeting since January. Both Board Chair Cheryl Cullers and Delores Oates commented on the positive feeling they carried out of that meeting that the deteriorated relationship featuring hostile litigation involving the Town and existing WC EDA, and canceled face-to-face meetings of elected officials on matters of mutual interest, might be turning a corner. Of course, as the third county board member at that Liaison Committee meeting, Walt Mabe, wondered during it: Why can’t we return to one, re-tooled EDA working to both the County’s and Town’s benefit, with one executive director not alleged to have had their hands in both municipalities’ economic development pockets?

And in a loosely related item, as part of the September 24th WC EDA monthly board meeting, departing Executive Director Doug Parsons’ last, the agenda includes the information that the long-awaited 2018 and 2019 EDA audits have been completed by the contracted auditing company and are awaiting EDA Board approval. Stay tuned for more developments on the auditing front. – Maybe the completed audits could even establish exactly how much of whose money went where and is owed to who by whom, negating the necessity for the continued dueling Town-WC EDA civil litigations. As previously reported, the sitting council ignored then-Mayor Gene Tewalt’s 2019 advice to accept the offer of the WC EDA to sit down with accountants rather than attorneys to follow the money to establish exactly who was owed what on the back end of the EDA’s now $62-million-dollar financial scandal.

Shenandoah Shores Short-Term Tourist Rental applicants Jilian Greenfield and Richard Butcher brought the supporting ‘troops’ comprised largely of neighbors in support of their application to head off any continuation of a questionable Shores POA assertion the use was forbidden by neighborhood covenants. The Public Hearing count was 13-0 in support of their proposal, which passed unanimously.

But off that “movie script”, in other business the supervisors approved six Conditional Use Permit (CUP) requests Tuesday, five for Short-Term Tourist Rentals, and one for alterations to a Kennel Permit. See all these discussions, public comments, and votes in the County video; and see the meeting agenda cover page with the full list of CUP application public hearings linked here:

 

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Upcoming Events

Oct
28
Thu
10:00 am Senior Painting Class with Dottie @ Strokes of Creativity
Senior Painting Class with Dottie @ Strokes of Creativity
Oct 28 @ 10:00 am – 12:00 pm
Senior Painting Class with Dottie @ Strokes of Creativity
Senior Painting Class with Dottie at Strokes of Creativity. Tickets: CLICK HERE Cost: $80 for 6 weeks Dates: Thursdays – Oct 21, Oct 28, Nov 4, Nov 11, Nov 18, Dec 4 Time: 10 am[...]
1:00 pm Art Class for 4th & 5th @ Strokes of Creativity
Art Class for 4th & 5th @ Strokes of Creativity
Oct 28 @ 1:00 pm – 2:00 pm
Art Class for 4th & 5th @ Strokes of Creativity
This class is for Grades 4th and 5th. Perfect for home schoolers. Recommended ages: 9 and 10 years old Tickets: CLICK HERE Tickets are available through Square Up, or can be paid in person at[...]
7:00 pm Haunted Tunnel Auto Wash @ White Horse Auto Wash
Haunted Tunnel Auto Wash @ White Horse Auto Wash
Oct 28 @ 7:00 pm – 9:00 pm
Haunted Tunnel Auto Wash @ White Horse Auto Wash
White Horse Auto Wash is excited for the first Haunted Tunnel at their new Front Royal location this year! Located next to Lowe’s at 214 Country Club Road, Front Royal, VA. The event will be[...]
Oct
29
Fri
9:00 am Volunteer Tree Planting @ Sky Meadows State Park
Volunteer Tree Planting @ Sky Meadows State Park
Oct 29 @ 9:00 am – 3:00 pm
Volunteer Tree Planting @ Sky Meadows State Park
Edmonds Lane Field: Join The Piedmont Environmental Council, Friends of the Rappahannock, Goose Creek Association, John Marshall Soil & Water Conservation District and We Plant Trees, for volunteer tree planting at Sky Meadows State Park![...]
6:00 pm Trunk or Treat @ Family Dollar Parking Lot
Trunk or Treat @ Family Dollar Parking Lot
Oct 29 @ 6:00 pm – Oct 30 @ 9:00 pm
Trunk or Treat @ Family Dollar Parking Lot
Non-profit organization Crown Vic Kiings & Queens, of Winchester, Virginia, is hosting our annual car club TRUNK OR TREAT, in Front Royal, on October 29th. The event is free but donations are greatly appreciated, as[...]
7:00 pm Haunted Tunnel Auto Wash @ White Horse Auto Wash
Haunted Tunnel Auto Wash @ White Horse Auto Wash
Oct 29 @ 7:00 pm – 9:00 pm
Haunted Tunnel Auto Wash @ White Horse Auto Wash
White Horse Auto Wash is excited for the first Haunted Tunnel at their new Front Royal location this year! Located next to Lowe’s at 214 Country Club Road, Front Royal, VA. The event will be[...]
Oct
30
Sat
9:00 am Volunteer Tree Planting @ Sky Meadows State Park
Volunteer Tree Planting @ Sky Meadows State Park
Oct 30 @ 9:00 am – 3:00 pm
Volunteer Tree Planting @ Sky Meadows State Park
Edmonds Lane Field: Join The Piedmont Environmental Council, Friends of the Rappahannock, Goose Creek Association, John Marshall Soil & Water Conservation District and We Plant Trees, for volunteer tree planting at Sky Meadows State Park![...]
1:00 pm Fall Craft Festival @ Fort Valley Museum
Fall Craft Festival @ Fort Valley Museum
Oct 30 @ 1:00 pm – 4:00 pm
Fall Craft Festival @ Fort Valley Museum
Fort Valley Museum Fall Craft Festival – Annual Fundraiser October 30 & 31, 2021 | Saturday 1-4pm, Sunday 2-5pm Come by and support the Fort Valley Museum at our annual Fall Craft Festival (formerly “Christmas[...]
1:00 pm Feed the Homeless Trunk or Treat @ T-Bone's Bar & Grill
Feed the Homeless Trunk or Treat @ T-Bone's Bar & Grill
Oct 30 @ 1:00 pm – 8:00 pm
Feed the Homeless Trunk or Treat @ T-Bone's Bar & Grill
Non-profit organization Crown Vic Kiings & Queens, of Winchester, Virginia, is hosting our annual car club FEED THE HOMELESS/TRUNK OR TREAT on October 30th. The event is free but donations are greatly appreciated, as Crown[...]
7:00 pm Haunted Tunnel Auto Wash @ White Horse Auto Wash
Haunted Tunnel Auto Wash @ White Horse Auto Wash
Oct 30 @ 7:00 pm – 9:00 pm
Haunted Tunnel Auto Wash @ White Horse Auto Wash
White Horse Auto Wash is excited for the first Haunted Tunnel at their new Front Royal location this year! Located next to Lowe’s at 214 Country Club Road, Front Royal, VA. The event will be[...]