EDA board removes executive director’s authority to sign checks, contracts

Flanked by Ron Llewellyn, left, and Chairman Gray Blanton, Executive Director Jennifer McDonald responds to a query during a regular meeting shortly before the EDA board adjourned to a 3-3/4 hour closed session during which past and future financial processes were under scrutiny. Photos/Roger Bianchini

FRONT ROYAL – After a nearly 3-3/4-hour closed session Friday morning (Dec. 14) the Front Royal-Warren County Economic Development Authority Board of Directors passed two resolutions removing EDA Executive Director Jennifer McDonald from contract and check-writing authority and from administrative authority over the EDA’s bank accounts.

The board shifted the bank account administrative function to board Treasurer Thomas Patteson and check and contract-writing authority to a pool of two of three board officers – Chairman Gray Blanton, Vice-Chairman Bruce Drummond or Treasurer Patteson – “after review by legal counsel”.

The closed session was convened during the board’s regular monthly meeting at 8:35 a.m. McDonald was excluded from the session at 9:50 a.m., about the point it reached discussion of “accounting services” related to discussion of “EDA loan programs, EDA debt service and new market tax credit program.”

Those programs and processes have come into question in the wake of the Town of Front Royal Finance Director’s discovery of years of overpayments by the town government to the EDA. Those overpayments were initially cited at about $291,000, though a final figure has yet to be determined.

Following that 3-3/4 hour closed session, what was left of the EDA board passed two resolutions reducing the executive director’s role in check and contract signing and administrative oversight of EDA bank accounts.

Following the closed session, EDA Attorney Dan Whitten downplayed the financial signatory and oversight changes as administrative suggestions made in the wake of the recent auditor and accounting reviews. Blanton agreed, calling the changes “a tightening up” of some processes to fix recently discovered mistakes.

Queried after the monthly morning meeting’s adjournment at 12:34 p.m. board Chairman Blanton said McDonald had been excluded during the discussion “because sometimes people become defensive” about altering processes they are used to.

However, asked about the changes during a special meeting called for 4 p.m. that afternoon to discuss her job performance, McDonald was not at all defensive about the earlier process changes approved by the board.

“It’s time for a change because the responsibility shouldn’t fall on one person,” she said of recently-discovered inaccuracies in the EDA’s accounting processes. She also noted that EDA checks have always been signed by two people and did not take issue that she would no longer be one of them.

Asked earlier about the accounting discrepancies uncovered by the Town, McDonald told Royal Examiner, “We have acknowledged the issue and are working on it and are committed to making it right.”

No action was taken following the 4 p.m. special meeting comprised entirely of a closed session that lasted one-hour-and-20-minutes and which McDonald was a participant in other than a portion toward the end, after which she was called back in.

The closed session adjourned shortly after that with a motion read into the record acknowledging that only matters cited in convening it had been discussed – those matters cited as performance-related discussion “limited to the executive director position.”

Blanton explained the necessity of the second, afternoon meeting due to McDonald’s absence to discuss the changes authorized following the conclusion of the morning closed session. Excluded from the closed meeting at the time, McDonald left hurriedly at 10:15 a.m. after receiving a call about a family medical emergency. However, she was able to return for the 4 p.m. session.

It’s just a little shift of authority and oversight toward the board side, Chairman Gray Blanton later explained of the resolutions regarding the executive director.

After the 5:20 p.m. adjournment of that afternoon session, Chairman Blanton said, “We did talk about her performance – yes. It was all the things the auditor brought up we didn’t have total explanations for. We’re getting those – we got half of them now and we’ll get the other half later. We’re going to find out what went wrong; get the Town their money as soon as we can come up with that figure.”

Related story: Resolution commends Town staff for uncovering overpayments to EDA

Blanton acknowledged that auditors are also exploring the EDA’s finances regarding County projects to see if there are mistakes on that side of the ledger as well.

The morning closed session went on so long that both board Chairman Blanton and Vice-Chairman Drummond left due to other commitments prior to its completion. In fact, Chairman Blanton returned about the time the board reconvened to regular session at 12:17 p.m. However, board members Greg Drescher and Mark Baker left for other commitments as the regular meeting moved toward adjournment at 12:34 p.m. after the four resolutions presented all passed without a dissenting vote.

A third resolution passed following the morning closed session included McDonald with Chairman Blanton and Vice-Chairman Drummond in a retroactive authorization to execute modifications to loans with United Bank related to three projects. Those modifications included: reduction of the Leach Run Parkway debt from about $7.165-million to $933,417; an increase in the Ressie Jeffries Elementary School capital improvement debt from $5.421 million to $5.651 million; and an increase in the Avtex Restructure from about $1.179 million to $3.302 million.

McDonald explained that while executing an early-summer board decision to alter a group loan into individual categories for refinancing that some totals had been incorrectly entered – “The decision today was to separate each and correct those mistakes,” she said.

A fourth resolution approved by the board authorized Chairman Blanton or Vice-Chairman Drummond to execute a contract to install a new entrance sign at the Kelley Industrial Park at a cost not to exceed $20,000.

Also discussed at the morning closed session was a part-time public relations position that came open with the recent retirement of Marla Jones who had stayed on in a part-time capacity after retiring from full-time work last year.