EDA ponders the ups and downs of its Kendrick Lane solar investment

The roof of the westernmost EDA office complex building housing the EDA and the Northern Shenandoah Valley Regional Commission and one currently vacant office space – Solar Array Photos Courtesy FR-WC EDA

As of its July 26 monthly meeting the Front Royal-Warren County Economic Development Authority continues to grapple with installation issues on solar panels on the roofs of its Kendrick Lane office complex. Among those issues is a lack of metering to allow the EDA to determine how much electricity various office complex tenants are using; and the fact the old American Viscose-FMC-Avtex Admin building roof was apparently in need of repair at the time the solar panels were installed between July and September of last year.

Consequently the EDA has not been billing its tenants for their electric usage since going to the in-house, off-the-Town electrical grid for primary provision of power; and is left to ponder whether the roof-top solar array will have to be removed in total or part and then reinstalled to allow the roof repairs to be accomplished.

And as the EDA ponders that potential cost redundancy – “the roof should have been repaired before the solar panels were installed” it was observed during the July 26 board meeting – new EDA Executive Director Doug Parsons told the media following that meeting that an inspection of the Kendrick Lane solar roof installation by Staunton-based solar company Secure Futures resulted in a mixed message.

That message was high-quality equipment and work, but a high-end pricing estimate for the job of $250,000. As readers may recall from last week’s EDA fraud investigation coverage, public accounting firm Cherry Bekaert cited three EDA payments to Earth Right Energy (ERE) between August 14 and September 19, 2018, totaling $437,984.21 for solar installation and related work at the EDA’s Kendrick Lane office complex. The final of those payments was made September 19 in a wire transfer of $409,812.48.

And as reported last week new sealed indictments against former EDA Executive Director Jennifer R. McDonald and ERE controlling partner Donald F. Poe handed down July 22 and 23, respectively by the Special Grand Jury investigating potential criminality tied to the EDA fraud investigation, both cited financial transfers occurring “on or between September 18, 2018 through September 20, 2018” as indicators of either the “fraudulent use” (McDonald) or “obtain by false pretense” (Poe) of EDA assets.

Poe, new McDonald indictments are a near perfect wording match

Thus far the inability to accurately access tenant usage and the Town’s non-acceptance of power production overages into its grid has presented a double-edged sword cutting into the EDA’s full ability to realize projected savings from its Kendrick Lane solar power investment. It is an investment both the Cherry Bekaert EDA fraud investigation and EDA civil suit hearing testimony from a former EDA board member indicates was propelled forward by former Executive Director McDonald as an effort to attract a major corporate investor to expand its operations into this community. It is an effort that seems to have failed.

Nevertheless, Parsons is optimistic about the Kendrick Lane solar power system long term.

The view eastward shows the solar panel installation on both Kendrick Lane buildings in the old American Viscose/FMC/Avtex Administration complex

“Looking at the assessment we received, I believe we are enjoying the benefit of the solar power. The analyst said it’s producing $14,000 of power each year, so there is certainly a value/cost savings there. As I understand it, the system is functioning properly, so it’s supplementing the power we get from the Town. The percentage of solar versus Town power we use on any given day obviously varies depending on the time of day and the weather.

“I’m not sure about billing retroactively for power,” Parsons said in response to our question about the lost months of tenant billing so far. “I think it’s most important to be accurate and fair.

“The square footage concept is something to consider,” Parsons said of an idea broached by newest EDA board member Jorie Martin at the July 26 meeting, “But I agree that usage could be different per square foot based on, for instance, at what temperature the AC is set, number of computers operating, lights, etc. I’m going to explore the cost of sub-metering and getting a system in place to bill for solar accurately by unit.”

Back to the beginning
A series of text exchanges between September 21, 2018 and January 29, 2019, included in the Cherry Bekaert report indicate, not only some confusion over metering and billing the solar power into the EDA office complex, but also an undisclosed LLC business partnership between McDonald and Donald Poe as the solar project progressed.

“Do you still have a partner in your llc,” Gail Addison (believed to be McDonald’s sister) opens a 12-text exchange with McDonald at 10:52 a.m. September 21, 2018.

“I do now,” McDonald replies.

“Ok, who’d you put,” Addison continues.

“Donnie, why?” McDonald asks.

“I was gonna offer if you didn’t,” and “Don’t know him,” Addison tells McDonald.

“U don’t know donnie poe?” McDonald asks, to which Addison first responds, “Oh. Duh brain fart,” followed by, “Guess I would have not imagined that,” as the text conversation winds down.

Neither, one would imagine, would McDonald’s EDA Board of Directors “have imagined” as it continued through the bulk of 2018 to offer their executive director unquestioning loyalty and support despite the Town’s discovery of a history of debt service overpayments to the EDA and what it considered fraudulent actions by McDonald to achieve those overpayments.

While this photo was not taken at the Aug. 23, 2018 meeting with Town officials and auditors, the expressions worn by Drescher and McDonald at a June 5, 2017 joint work session with County officials may be similar.

Tensions between the Town, McDonald and the EDA began in May 2018 with the Town finance director’s discovery of the debt service anomalies and culminated in a volatile August 23, 2018 meeting between Town finance, legal staff and auditors and McDonald, then EDA Board Chairman Greg Drescher and EDA Attorney Dan Whitten. Drescher resigned his EDA board chairmanship the following day.

In filing suit to regain assets it believes were misdirected to the EDA under fraudulent circumstances, the Town was highly critical of a lack of action by the EDA board to exert additional oversight and scrutiny of its executive director for an additional three months after that August Town-EDA staff meeting.

Town files suit against EDA, McDonald to recover $3 million of Town assets

At the time McDonald was also facing an October 31 trial date on a misdemeanor charge of filing a false police report regarding an alleged June 15, 2017 vandalism at her home. The Virginia State Police, who inherited the investigation from Front Royal Town Police, served the misdemeanor warrant on McDonald June 13, 2018.

While McDonald was acquitted at trial, circumstances surrounding the incident lie at the center of dueling defamation civil suits filed by Shenandoah District Supervisor Tom Sayre and McDonald against each other. Sayre’s $25,000 suit will go to trial this Friday, August 2 at 1 p.m. in Warren County General District Court.

That the metering issue was a point of concern from the time of the Kendrick Lane solar installation is reflected in several text exchanges McDonald’s former Administrative Assistant Michelle “Missy” Henry had beginning on September 21, 2018 with Poe, continuing to January 4 with ERE partner Justin Appleton and concluding on January 29 between Henry and McDonald five weeks after McDonald’s December 20 resignation.

In that latter exchange opening with McDonald asking, “Is solar working at the eda?” the former executive director describes a heated exchange between ERE partners Poe and Appleton regarding the metering and billing issues at the EDA complex.

“Oh Justin finally said u were waiting on something and Donnie lost it there were so many f-bombs being dropped,” McDonald texted Henry.

And now as the EDA continues to wrestle with those metering issues, three of the four players in that January 29 text exchange will be in court tomorrow morning, July 31, on motions hearings on criminal charges they face related to the EDA financial fraud investigation.

McDonald (14 indictments), Henry (2) and Poe (3) are the only people thus far charged criminally by the Warren County Special Grand Jury empanelled March 26 to investigate potential criminality tied to the Cherry Bekaert exploration of EDA finances.

Sheriff, ITFed principal Tran, Donnie Poe named with McDonald in EDA civil suit