EDA in Focus
EDA Finance Committee scrutinizes FY-22 Budget proposal, dynamics
Friday morning, July 9, the Finance Committee of the Warren County Economic Development Authority met to discuss the EDA’s Fiscal Year-2022 Budget proposal. In addition to Committee Chairman Jim Wolfe and members Jorie Martin and Tom Patteson, present for the in-person meeting at the EDA’s Kendrick Lane Office were EDA Board Chairman Jeff Browne, Executive Director Doug Parsons, Administrative Assistant Gretchen Henderson, and County Board of Supervisors Chair Cheryl Cullers.
From left, Tom Patteson, Jim Wolfe, Jeff Browne, Doug Parsons, Jorie Martin, and Cheryl Cullers were back in the EDA in-person meeting format Friday morning. Royal Examiner Photos by Roger Bianchini
The County Board of Supervisors holds the purse strings for the EDA, as the new EDA board and staff continue to navigate the financial and legal aftermath of the $26-million-dollar-plus financial scandal uncovered during the administrative leadership of former EDA Executive Director Jennifer McDonald and a previous EDA Board of Directors.
How the financial consequences of that yet-to-be resolved civilly or criminally alleged misuse, embezzlement or fraudulent acquisition of EDA resources continues to impact the retooled EDA was a topic of interest during the committee meeting. As annual debt service revenues from property rentals and loan paybacks versus loan debt service expenses were discussed in a second phase of the budget review, that point was made quite pointedly after a debt service revenue deficit of $704,700 was noted.
“Let’s make this clear for the public,” Committee Chairman Wolfe injected with a glance the media’s way, continuing, “So, there are three (primary) figures on the page … there is the $220,000 General Fund Operating Allocation. And the way to think about it is as a matter of public policy the County says, ‘economic development is a good idea, let’s put some money toward that kind of development’.
“There’s another operating supplement of … $39,200.
“And because of all the debts of prior activities, there’s another roughly $700,000 in unfunded debt payments because of past transactions. Those don’t have anything to do with current economic development or moving forward. That’s trying to clean up after the other ones. – Did I misstate that in any way?” Wolfe concluded with a question for his EDA colleagues.
EDA Finance Committee Chairman Jim Wolfe wanted to make it perfectly clear where the EDA’s debt service-revenue deficit originates – in the past under different leadership.
Rather than a correction, Executive Director Doug Parsons elaborated on Wolfe’s observation with added detail on how the deficit numbers broke down between inherited debt versus that acquired by the new EDA – the short answer being all six of current EDA loans with a total annual debt service of about $1.5 million were inherited and none acquired by the retooled EDA board and staff.
During the committee meeting Parson also pointed to a $658,000 General Fund Cap number plugged in by the county administrator that could be adjusted upwards to help cover that $704,700 debt service shortfall. The shortfall was created by the difference in the $1,556,700 annual debt service of the six inherited EDA loans and the $852,000 of Offsetting annual revenue from the Baugh Drive Warehouse rent ($345,600) and the ITFederal Loan payback ($506,400).
The ITFederal loan Albatross – while it generates $506,400 of annual payback revenue, the EDA operates at an annual deficit of $90,900 as it pays a higher interest rate and $597,300 annually on its bank loan to finance the project. And did anyone ever figure out why a previous EDA board okayed a $10-million loan to ITFederal of which only about $2 million had to be spent on its ‘free’ 30-acre Avtex site project? OH, the other $8 million to the Criminal Justice Academy project – you got that in writing, right?
Operations and the Future
In the first phase of discussion it was the Operational Budget under scrutiny as the new EDA board and staff continues to move forward with economic development in the community, while still traversing the legal and civil liability minefield of the financial scandal referenced above. A 28-line-item FY-22 Operational Budget totaling $367,100 was brought to the table.
Major areas of concern discussed included “Marketing” of the community to potential businesses seeking a favorable geographic and social environment; “Maintenance” of EDA properties – variables and potential HVAC costs at Baugh Drive and the EDA office complex were put on the table; “Legal” and “Auditing” fees; “Insurance” including, not only “Property Insurance”, but also “Professional Liability” insurance; the impact of a 2.5% Cost Of Living Act (COLA) increase on staff salaries; and continued efforts on community education to limit and reverse the spread of the Spotted Lanternfly in the county.
Wolfe observed from his experience that marketing was often a first budget line item to be reduced during tight economic times, but added that “it should be the last”. A $10,000 “Marketing” request was reduced to $4,300 by the County Administration. While the importance of advertising was agreed upon, its type and context to achieve maximum positive exposure and result remains an issue the EDA Board has devoted some discussion to recently. How that may translate into a final number submission remains to be seen.
A $10,000 “Maintenance” request was unaltered by the County. However, with looming HVAC maintenance or replacement issues at several locations, the potential need of more than the originally submitted amount was noted.
Well, only the occupied parts will need HVAC work in the immediate future – at the EDA Office complex or other properties.
Legal, Auditing & Insurance variables
Legal fees were listed at $84,000 – pared back from a $96,000 request – and auditor fees at $17,500. It was explained the $17,500 was for one fiscal year’s audit. But the advantage of seeking both the FY-2020 and FY-2021 audits in the coming budget year was broached to catch the EDA up with the County in the auditing process. This past year the EDA went through a lengthy, soon-to-be finalized by the firm of Brown-Edwards, audit of the FY-2018 and FY-2019 budget years when alleged embezzlements and other financial misappropriations were occurring.
Of the coming-year audits beginning with FY-2020, Parsons commented: “They will be drastically more simple than 2018 and 2019 because we were all here” throughout those years’ budget and operational processes.
It was noted that while the EDA must put the FY-2020-and-21 audit services out to bid, due to their experience here through more trying budget cycles it seemed a longshot that Browne-Edwards would not get the call back.
On the insurance front, $10,000 was listed for “Property Insurance” and $400 for “Professionally Liability Insurance”. With the EDA having received a $500,000 “Liability” payoff from current carrier Cincinnati Insurance, the potential of a bidding war to pick up the Warren County EDA’s liability coverage seems slim.
“I’ve been working on this for nine months and nobody will touch us,” Martin told her colleagues of interest from other companies. The advisability of sticking with Cincinnati if possible, but changing local agent Stoneburner-Carter due to proprietor Tony Carter’s current and past seat on the Warren County Board of Supervisors, was broached.
Community Events
Front Royal-Warren County EDA gears up for its Open-Door Business Session: An opportunity to shape Warren County’s future
In an effort to foster regional economic growth, the Front Royal-Warren County Economic Development Authority (EDA) has announced its next Open-Door Business Session. The event is scheduled for Thursday, June 1, from 10:00 am to 12:00 pm at the Warren County Community Center, located at 538 Villa Ave, Front Royal, VA 22630. This event is a part of the EDA’s continuous initiative to strengthen Warren County’s workforce development and enhance the economic prosperity of the region.
The two-hour session will be packed with presentations, open discussions, and plenty of networking opportunities. The main focus of the event will be the exploration of Warren County’s workforce development prospects, overcoming related challenges, and celebrating its successes in economic development. Participants will have a chance to engage in meaningful discussions and network with key players influencing Warren County’s economic landscape.
While pre-registration for the session is not compulsory, the organizers have encouraged interested parties to RSVP by Tuesday, May 30, ensuring they don’t miss out on this influential meeting. Those interested can register via the provided link.
The Front Royal-Warren County EDA is known for its commitment to fostering an environment conducive to economic growth. Hosting these Open-Door Business Sessions, they provide a platform where individuals, businesses, and community members can discuss and strategize on various economic development issues, paving the way for a more prosperous Warren County.
Don’t miss this opportunity to engage with the local community, network with important stakeholders, and directly contribute to the future of Warren County’s economy.
For more information on the event and registration details, visit the REGISTRATION LINK.
EDA in Focus
Front Royal-Warren County EDA holds productive monthly meeting with updates on financial statements and new business
The Front Royal Warren County Economic Development Authority held its monthly meeting on Friday, April 28, 2023, and all seven board members, legal counsel, and the County Director of Economic Development were present. Board Member Bruce Townshend participated remotely. The meeting started with committee reports, and Board Chair Scott Jenkins provided updates on recent meetings and the Avtex Conservancy Property progress.
The Treasurer, Jim Wolfe, and the Director of Economic Development, Joe Petty, gave an update on the EDA financial statements, and Mr. Wolfe provided a review of the recent kick-off meeting for the Small Business Loan Committee and proposed next steps for the committee. The next Open-Door Business Session, which is rescheduled to June 1, will focus on the workforce, with more details to come.
Under new business, Mr. Petty provided an update on the draft EDA & County MOU, which updates the existing fiscal agent agreement to include current and future operational support between the two organizations. The board then held a closed session to discuss the potential disposition of real property to business prospects and legal consultation on active litigation.
Following the closed session, the board approved two motions. The first granted permission for Laurel Ridge Community College to temporarily utilize the parking lot on Kendrick Lane for their CDL class from May 15 to June 30. The second motion asked the County to perform appraisals on EDA-owned properties at 1321 Happy Creek Road and Stephens Industrial Park.
The next regular monthly board meeting will be held on Friday, May 19, 2023, at 8:30 am, at the Warren County Government Center. The meeting was a productive one with important updates on committee reports, financial statements, and new business. The board’s approval of motions to grant permission for Laurel Ridge Community College and perform appraisals on EDA-owned properties demonstrate the board’s commitment to improving economic development in the area. The upcoming Open-Door Business Session in June will also provide opportunities for members of the community to learn about the board’s efforts to improve workforce development.
EDA in Focus
Front Royal-Warren County Economic Development Authority launches USDA Rural Development Loan Program to boost small business growth
On Tuesday, April 25, 2023, the Front Royal-Warren County Economic Development Authority’s Small Business Loan Committee held an informational work session at the Warren County Government Center Caucus Room. The meeting aimed to introduce committee members to each other and to provide an overview of the USDA Rural Development Loan Programs. These programs offer low-interest (1 percent) loans to local lenders who then re-lend to businesses in rural communities in order to improve economic conditions and create jobs. The Loan Committee discussed the next steps during the meeting, including applications, outreach, and review processes.
To qualify for the program, intermediary lenders can be nonprofit corporations, public agencies, cooperatives, and federally-recognized tribes, while individuals, public or private organizations, or other legal entities can apply for intermediary loans as “ultimate recipients” provided they meet certain criteria, such as being U.S. citizens or permanent residents, not owing a delinquent debt to the U.S. Government, and not being able to obtain affordable commercial financing elsewhere. The project must also be located in an eligible rural area, and the applicant must have no influence, legal or financial interest in the work of the intermediary lender.
The Front Royal-Warren County EDA will administer a Revolving Loan Fund (RLF) to provide financial incentives for the expansion of existing local industries or commercial business ventures and for the attraction of new industries or commercial business ventures to Warren County. The RLF will be utilized to ensure that a maximum number of jobs will be created and retained, the local and regional industrial base is broadened, and the Warren County property tax base is broadened. In reviewing the employment impact of the proposed loan, priority will be given to those projects which create (and in some cases retain) jobs that pay a minimum of 1.5 times the federal minimum wage.
Eligible activities include site purchases of industrial land, relocation costs incurred in construction and occupancy of the facility, new construction or rehabilitation of existing buildings, machinery and equipment acquisitions, start-up operating costs, and working capital (capped at 25 percent of total project cost). Eligible applicants are industrial or manufacturing firms where goods are assembled, re-assembled, modified, manufactured, or produced at the job site, wholesale and distribution enterprises, and commercial enterprises that establish new businesses, expand existing businesses, create new jobs or save existing jobs.
Local businesses can benefit from this program as it offers low-interest loans to intermediary lenders who then re-lend to businesses in rural communities. This can help to improve economic conditions and create jobs, while the RLF provides financial incentives for the expansion of existing local industries or commercial business ventures and for the attraction of new industries or commercial business ventures to Warren County.
Watch the meeting on the exclusive Royal Examiner video.
EDA in Focus
Newly aligned County EDA Asset Committee views a path forward at Avtex site among other business recruitment options
The newly aligned County-overseen Front Royal-Warren County Economic Development Authority Asset Committee sat down to establish an overview of the work ahead at a committee meeting officially convened at 3:10 p.m. Thursday afternoon, April 20. Present were the full committee lineup of Jori Martin and new board and committee members Hayden Ashworth and Rob McDougall, along with Warren County Director of Economic Development Joe Petty. Martin chaired the meeting.
The full WC EDA Asset Committee, with new member Hayden Ashworth to acting Chairman Jori Martin’s left. The committee’s other new member Rob McDougall is at near right, with County Director of Economic Development Joe Petty to McDougall’s right. Royal Examiner Photos Roger Bianchini
Following a 20-minute open meeting during which jump-starting the long-dormant development of the 148-acre Avtex/Royal Phoenix business park site, along with development of the larger Conservancy Park area between the business park and Shenandoah River, was a primary topic of conversation, the board adjourned to Closed/Executive Session. The motion into closed session indicated behind-closed-door: “Discussion of disposition of publicly held real property … at Stephens Industrial Park, 1321 Happy Creek Rd., and 400 Kendrick Lane … and legal advice related thereto …”
As it was a committee meeting without the full board, no action or announcements out of closed session were anticipated. However, with concerns expressed by former EDA board Chairman Jeff Browne and former Asset Committee Chairman Greg Harold concerning possible pressure from the board of supervisors in an election year to unload EDA properties to what might not be the best long-term prospects in order to show some immediate EDA revenue recovery, it will be interesting to see how this topic proceeds toward full EDA board consideration and potential action. Browne and Harold’s terms, which expired February 28, were not renewed by the supervisors despite both applying for reappointment.
Dynamics of the two-pronged Avtex properties redevelopment included the possible transfer of ownership of the Conservancy Park property inside the town limits to the County to enable Parks & Recreation Department maintenance and oversight. Having the Town on board with plans for the Conservancy Park area which will connect various in-town locations to foot and non-motorized transportation trails was cited. Also how that transfer of ownership would impact the County financially, and its Parks & Rec Department work and personnel-wise, was broached.
So, what are we working with on this end of town? – Two perspectives of the former federal Superfund/Avtex redevelopment site with the 240-acre Conservancy Park parcel to left between river and railroad tracks in above aerial photo, with planned 148-acre business park in upper right-center. The WC EDA is moving aggressively toward positive movement on both portions of the site. Below, graphic with color portion illustrating low-impact Conservancy Park development. Above that section is b&w rendering of potential development at the business park. Aerial Photos by Roger Bianchini Courtesy of CassAviation and Reggie Cassagnol
Martin also pointed out to her new colleagues that for the most part, related infrastructure at the Avtex site to support development was in place. “So, it would be being able to support these trade sectors that are listed, which is kind of right following the goals that we were looking at as we review the RFI (Request For Information),” Martin said regarding EDA marketing strategies moving forward. “I would suggest that we make it an agenda item for the main (EDA board) meeting, that we put it as a formal item on the agenda and focus on what’s been sent as the draft RFI. It has been reviewed by our attorney. And it has been reviewed by the prior EDA board. And what I’d look for from our next committee meeting that we could come out of that meeting and get a full board vote on support to move this RFI forward.
“And the process of that before it went out would be to get on the agenda for the Town and the County as well, so that they would review the RFI — they would have input into it as well. And then at that point, once all parties weigh in, we would at that point hopefully by June or July, send that RFI out to prospective companies that may want to get a vision plan and development plan for the Avtex site. That’s kind of what I’ve been working on before, the committee had been working on before you came on the board. And that’s where we are,” Martin said in bringing her new colleagues up to date on development prospects, particularly at the long-floundering former federal Superfund and Avtex property redevelopment site.
Aerial photo, pre-ITFederal construction, of the Royal Phoenix Business Park section of the property.
In addition to the “Avtex Redevelopment Site Review”, topics broached in open Asset Committee meeting prior to the closed session included “GO Virginia Grant Opportunities” and a “FR-WC EDA Property Overview”. Martin cited the EDA’s eligibility for grant opportunities due to meeting certain criteria, calling it a “wonderful opportunity” for redevelopment funding assistance at the former Avtex property site, and the recruitment of new business to the community there or elsewhere.
The now fully-manned, seven-member EDA Board of Directors will have its regular monthly meeting this coming Friday morning, April 28, at 8 a.m. at the Warren County Government Center.
EDA in Focus
Warren County Economic Development Authority’s regular meeting agenda revealed for April 28, 2023
The Warren County Government Center’s Caucus Room will be hosting a regular meeting of the Warren County Economic Development Authority on April 28, 2023, at 8:00 am. The meeting is set to commence with a call to order, followed by the adoption of the agenda and approval of the minutes from the previous meeting held on March 25, 2023.
The meeting will then proceed with reports from various committees, including the Executive Committee, Asset Committee, Finance Committee/Budget Update, Board Members Updates, and Warren County Director of Economic Development Update.
The meeting will also feature new business items that include an open-door business session for June, a County Payment Memo, and an EDA & County MOU. The closed session that will follow at 9:00 am will focus on four matters and two matters, where discussions will involve the disposition of publicly held real property and consultation with legal counsel pertaining to actual or probable litigation.
Any additional new business will be discussed before the meeting concludes with an adjournment at 10:00 am. Stay tuned for updates on the outcomes of the Warren County Economic Development Authority’s meeting.
EDA in Focus
FR-WC Economic Development Authority Small Business Loan Committee to hold first meeting: Learn about USDA Rural Development Loan Programs
The Front Royal-Warren County Economic Development Authority (FR-WC EDA) has announced that its Small Business Loan Committee will be holding its first meeting on Tuesday, April 25th, at 2:00 pm in the Warren County Government Center’s Caucus Room. The meeting will provide an opportunity for the committee to get acquainted with each other and learn about the USDA Rural Development Loan Programs. The agenda for the meeting and reference materials from previous years are available for those interested in attending online, and a Teams link will be provided for this purpose.
Some of the FR-WC EDA Board of Directors will also be present at the meeting, and they will be available for discussion and to answer any questions that attendees may have. This meeting is an excellent opportunity for small business owners in the Front Royal-Warren County area to learn about the available loan programs and how they can benefit from them.
The agenda for the meeting includes a call to order at 2:00 pm, followed by welcome and introductions. The committee will receive an overview of the existing loan program and hear from the USDA Rural Development at 2:30 pm. The meeting will then move on to discuss the next steps, including applications, outreach, and the review process. The meeting will conclude at 4:00 pm with a discussion of upcoming meetings.
Small businesses in the Front Royal-Warren County area are encouraged to attend the meeting, as it presents a unique opportunity to learn about the loan programs available to them. The FR-WC EDA is committed to promoting economic development in the area, and this meeting is just one way they are fulfilling that commitment.
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