EDA continues work to clean up and proceed with financial obligations

At a specially-called meeting of January 23rd the Front Royal-Warren County Economic Development Authority cleaned up some accounting issues that have arisen in the wake of the resignation of Executive Director Jennifer McDonald on December 20.

First on the agenda of the 2 p.m. meeting was approval of a Resolution authorizing recently-appointed Interim Executive Director John Anzivino and Board Treasurer Tom Patteson to negotiate and execute draws on loans with United Bank for six capital improvement projects at a maximum total collective cost of $27.9 million. Anzivino was not present at the Wednesday afternoon meeting due to a family emergency.

Those projects financed through the EDA include construction of the new Town Police headquarters (maximum of $12 million, though now expected to come in around $10.5 million according to town staff); refinancing of the Leach Run Parkway connector road (max of $933,417); refinancing of the Ressie Jeffries Elementary School renovation (max of $5,651,653); Construction of Phase Two of the Happy Creek Road improvements (max of $3.5 million); construction of the West Main Street connector road through the Royal Phoenix Business Park site to Kendrick Lane (max of $2.5 million); and refinancing of the Avtex/Royal Phoenix infrastructure project (max of $3,302,908).

Approval of the resolution came by a 3-0 vote (Blanton, Llewellyn, Drescher) with Patteson abstaining. Vice-Chairman Bruce Drummond and board members Mark Baker and Ed Daley were absent. Patteson’s abstention from the vote in which he was authorized to negotiate and draw on the loans raised the question of whether the 3-0 vote represented a legal quorum. EDA and County Attorney Dan Whitten replied that only a majority vote of the quorum present to convene the meeting was necessary to approve the resolution.

Shortly after that financial housekeeping item was taken care of Town Vice-Mayor William Sealock, himself a former EDA board member, presented a file on the FRPD headquarters construction project. Sealock explained that the project contractor had indicated a lapse in some payments over the past month, as well as some claimed underpayments.

Sealock, who was accompanied by Town Manager Joe Waltz, asked the EDA board to verify and authorize the payment of as much as $1.2 million in claimed under or non-payments on the project. He also asked that in the future the EDA provide Town Finance Director B. J. Wilson with invoices and copies of payments made on the project. The EDA board and its attorney agreed to the town request.

Front Royal Vice-Mayor William Sealock explains some payment issues that have arisen in last month regarding work on the new police headquarters.

And finally on the financing and audit side of the meeting, the EDA Board agreed to accept and eventually pay back the $90,000 the Warren County Board of Supervisors authorized to front the EDA out of County contingency funds to pay for three months of work by an outside consultant involved in the ongoing audit of EDA finances.

Warren County will pay $90,000 to ‘outside consultant’ in audit of EDA finances

Following a one-hour closed meeting on December 21, the day after McDonald submitted her resignation by email to the EDA board that was meeting that day to discuss her job performance, the county supervisors voted unanimously to authorize the $90,000 expenditure for the consultant whose identity remains unknown due to attorney-client privilege.

At the time the board of supervisors released a brief statement regarding the expenditure which read in part, “Due to the uncertainty still of the various EDA accounts and loans, the Board of Supervisors is stepping up to provide $90,000 at this time. We are hopeful that the consultant can wrap up the audit process in the next month which will include specifically what is owed to the Town and County.”

Following the December 21 meeting at which the $90,000 expenditure was authorized, County Attorney Whitten who also serves as EDA attorney, gave media present an overview of the type of work the consultant, which is a separate entity from the auditor, was doing: “Basically it’s an outside eye coming in outside of your normal accountant and normal auditor … They do fact-finding, intrinsic review – that type of thing. It’s just basically they’re looking for indicia of any improper activities.”

The EDA board is hoping to get a report on the audit at its January meeting, which has been rescheduled to Wednesday, January 30, from its original date of Friday, January 25.

Also on the January 23 special meeting agenda was approval of maintenance expenses for the former Stokes Mart building on East Main Street in downtown Front Royal. The building currently houses The Main Street Market and formerly housed the B & G Goods business. The discussion of authorizing new maintenance expenditures led some board members to question the EDA’s ongoing ownership of the building

EDA Board Chairman Gray Blanton has his homework assignment from the Town under his arm.