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Mayor, council debate rationale for lower water-sewer tap fees to developers

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As noted in our lead story on the Front Royal Town Council’s Tuesday, May 26 meeting, public hearings on two ordinance amendment proposals drew some discussion prior to a vote.

The first of those two was an altered motion on water and sewer rates and lowering tap fees for new development into the Town’s central water-sewer utilities. Mayor Eugene Tewalt temporarily gave up the meeting’s presiding officer role to Vice-Mayor William Sealock so that he could add comments into the public hearing record.

The mayor then explained his understanding of development of the tap fee and water-sewer rate discussion in recent months leading up to the night’s vote.

Vice-Mayor Sealock took over the meeting gavel, so Mayor Tewalt could express his concerns during the public hearing on the evolution of the recommendation on new water-sewer rates and tap fees. Royal Examiner File Photos

“Six months ago or thereabouts, we decided that the Town would install the water and sewer taps at the Town’s expense, which when we found out in talking to the person who had been doing that, it was about an $8,000 cost that the contractor or developer was paying to that individual that was doing that,” Tewalt recounted, observing, “So when we took this over, that’s $4,000 dollars for water and $4,000 for sewer to that developer,” that the Town would appear to be absorbing facing the proposed tap fee decreases on the table.

Tewalt continued to cite numbers indicating that lost revenue it appeared to him Town citizens would eventually be absorbing in higher water-sewer rates to meet an apparent revenue shortfall.

“That would equal to $12,127 that the town taxpayers are going to have to absorb somewhere … in order to cover these costs,” Tewalt told council.

A check of the 34 pages of related ordinance material in the agenda indicated large, across the board reductions to the “system development fees” (formerly known as connection or “tap” fees) ranging from $21,938 down to $12,217 to connect a sewer line to a 1-inch water meter; and from $1,464,450 down to $1,294,967 to connect a sewer line to 12-inch water meter.

Also indicated was a slight monthly increase in the base residential sewer rate for under 3,000 gallons usage per month from $16.17 to $16.74 and above 3,000 gallons usage from $13.91 to $14.40 monthly. That increase apparently holds to the water-sewer rate study consultant Stantec’s recommendation of a 3.5% sewer rate hike to cover system costs. Tewalt also noted that council had decided to defer the recommended 2% water rate increase to the next fiscal year cycle (FY-2022).

That led the mayor to predict a likely 4% increase for citizen water rates next year, or more if the “tap fee” reductions were included with the Town’s continued responsibility to make those connections for developers.

Over six months of evolving discussion of the water-sewer rate study, initially face to face in Town Hall and eventually largely by remote hook up, some confusion has developed about how recommended new water-sewer rates and connection fees were arrived upon.

“And this just doesn’t make a whole lot of sense to me at this point,” the mayor concluded of having the Town perform the connections for developers at reduced rates to be absorbed by taxpayers. However, it would take a while to determine exactly what was on the table and how it was arrived at.

As Tewalt concluded, Vice-Mayor Sealock asked Acting Council Clerk Tina Pressley if any public comments had been submitted for the public hearing. There were none, Pressley responded. So, Sealock then closed the public hearing and handed the presiding officer’s gavel back to the mayor.

Tewalt then asked for a motion. Meza responded by reading the motion originally printed for the agenda. “I move that Council affirm on its first readying an ordinance amendment to Town Code Chapter 134 pertaining to the increase of sewer service rates and the decrease of water service rates and system development charges for both sanitary sewer service and water service, as presented.” It would later be necessary to re-read the motion, deleting the reference to a reduction in “the water service rates”.

Following Chris Holloway’s second and the mayor’s call for any further discussion, Meza said, “I have a couple clarifying comments that I’d like to try to understand.” He then referenced the several months of conversation about the tap fee rates, observing that eventually, “council started moving in a rapid direction, a rapid pace to reducing those fees …”

Meza indicated it was his understanding council was moving in the direction of consultant Stantec’s recommendations.

“So Mr. Tederick, did Stantec take into account the fact that we would be doing our own installation on the tap fees?” Meza queried the interim town manager.

That led to Tederick’s introduction by remote connection of Stantec representative Andrew Burnham. In introducing Burnham to the virtually-conducted meeting conversation, Tederick noted, “I would be very delicate in how I address your question,” perhaps addressing Meza, “because it might be best to have the answer in a closed session due to potential legal matters.”

However, the conversation and Burnham’s input continued in open session.

Tederick prefaced Burnham’s entrance to the conversation with some topic history: “In 2010 when the study was last done and the rates were set … the Town was conducting the connections. Since that time the Town stopped conducting the connections but continued to keep the rate at that higher rate. The rate that is being assessed today does not include the cost of material or labor, or the fact that the developer or the builder will have the ability to go out and put the connection in himself. So, in our opinion it’s very as Stantec presented it; it was just a very fair and transparent way of conducting business.”

Did it seem to be easier for council to communicate when they were all in a room together?

Meza said he respected the mayor’s concerns, but remained confused as to how council developed varying opinions on where the new rates should be set, adding, “And now it seems there’s concerns that its actually fallen short and we won’t be able to cover (our costs) and that will fall on our taxpayers. So, I guess my question to Stantec would be did we evaluate this appropriately to take into consideration all the additional costs, so that two years out we’re not going to have to artificially inflate our rates in order to be able to sustain the program?”

Enter the consultant

“The short and the quick answer to that is, it was taken into account,” Stantec’s Burnham said to enter the conversation. He then elaborated.

“Specifically, when we went through a presentation … it was a summary of our analysis that was done using the history of accepted methodologies in allocating costs. So, we wanted to make sure that your rates or the base charges and amounts of water used would cover your ongoing costs of operations and maintenance, renewal and replacement expenses.

“And that the system development charges (formerly known as connection/tap fees) would cover the initial cost of system capacity proportionally from all new connections; and that the cost of actually making the connection, the installation and the taps – those would be done separately based on actual costs for labor, materials to make the connection.”

Following some additional input by council, Tederick told Mayor Tewalt, “The Town under the new ordinance, will not be paying for the actual labor or materials. So, the labor and materials are being passed on to the builder, or the builder could decide to go out and provide his own connections. So, in no way is the town taxpayer paying for that.”

Tewalt responded that if that was the case, “I have no problems with this,” adding he thought Stantec had “done a great job”. However, the mayor re-expressed his concern that at some point in the evolution of the ordinance amendment discussion council had agreed that Town crews would be involved in future new development connections.

“My understanding was that council said we’d be doing the installation free of charge, without any cost to the contractor. If I’m wrong, then accept my apologies,” the mayor said after nearly 15 minutes of discussion with several expressions of confusion over how what was on the table had been arrived at.

Is it just me, or were meetings and work sessions more fun prior to the pandemic restrictions on social distancing? – Perhaps again soon, to some extent.

Vice-Mayor Sealock observed that he believed that a past failure by council to adjust the utility rates as costs to provide the service increased had created ongoing issues the Town as now trying to catch up with as the tap fee discussion continued.

“The rates not being changed over an extended period of time had a definite effect on the sewer charges. So, I want to bring that up – they’ve been running in a deficit for a long period of time,” Sealock noted.

After the clerk pointed out the motion wording change regarding removal of a reference to “decreased water service rates” Meza read the corrected motion, again seconded by Holloway. The motion then passed by a unanimous roll call vote.

The second and binding reading will occur at council’s next meeting in two weeks.

Hear the whole discussion, along with council’s other business conducted, in the linked Royal Examiner recording of Tuesday’s remotely conducted meeting:

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EDA in Focus

Update: County responds to Town announcement of FRPD financing

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This story has been updated. Here is the complete release. Page 2 of the release was missed and left out of the original post.

Warren County released the following press release on Friday, September 25, 2020:

The press conference held on September 23, 2020, announcing that the Town of Front Royal has secured permanent financing for the Front Royal Police Department building is great news for the citizens of our community! It closes a chapter on one aspect of the lawsuit the Town of Front Royal filed against the Front Royal-Warren County Economic Development Authority (EDA) and ends months of dispute between the EDA, the Town, and the County. It should be viewed as a path forward to a working relationship between the Town of Front Royal, Warren County, and the EDA.

As Warren County citizens, we were brokenhearted by the EDA scandal. The breach by those who were entrusted with our tax dollars and economic development is one that will take years to restore. Efforts taken by the Warren County Board of Supervisors to restore faith and oversight of the new EDA Board of Directors are well documented. Both the Board of Supervisors and the EDA Board of Directors have worked diligently to clean up the mess and recover the stolen assets for taxpayers.

The portrayal by some Town leadership that the County was unwilling to work with the Town to resolve the EDA issues could not be farther from the truth. The County has had every incentive to work with the Town to resolve the Police Station debt owed by the Town and has repeatedly approached the Town to work together on economic development issues critical to the success of our community.

Town and County residents expect us to resolve our differences and focus on big issues affecting our community. Rampant drug overdoses and deaths in our community, families on the margins suffering from the economic effects of the COVID-19 pandemic, teachers struggling to educate our children remotely, first responders working double overtimes…these are the type of issues we should be working together to resolve.

Our government needs to DO BETTER. We need to stop blaming one another and start focusing on what will better the lives of our citizens. The residents of our community deserve leaders who spend their tax dollars wisely. That includes streamlining our efforts to reduce duplication of the same services and waste of resources. THE CITIZENS of the Town/County are footing the bill for these lawsuits that are equivalent to suing ourselves. And in the case of Town residents, they are paying for lawyers and court costs on both sides.

The citizens of this community want their leaders to find ways to work together. They deserve it. We encourage the Town leadership to work with the County and the EDA to secure a better community!

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With revenues up, expenses down RSW superintendent pursues bonuses for staff

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After a positive Finance Manager’s report on contracted bed rentals to non-member jurisdictions through the first two months of Fiscal Year-2021, Rappahannock-Shenandoah-Warren County (RSW) Regional Jail Superintendent Russ Gilkison recommended a bonus plan for remaining staff at the jail. Pointing to the loss of 16 people due to the Coronavirus pandemic and the jail and its staff fighting its way through a COVID-19 outbreak impacting inmates and staff, the RSW superintendent told the governing RSW Jail Authority on Thursday, September 24, “I’d like to reward those for sticking with us through the good and the bad.”

Gilkison estimated a $126,000 cost to implement the bonus plan. New Authority member Ed Daley, Warren County’s Interim County Administrator, suggested establishing bonus program guidelines based on length of employment at RSW through the recent pandemic situation.

As RSW Finance Manager Stephanie Smith listens to his right, Jail Superintendent Russ Gilkison, center, explains how the jail is operationally surviving a jump in staffing vacancies. Royal Examiner Photos by Roger Bianchini – Royal Examiner Video by Mark Williams

On the bright side of that situation, Gilkison reported “no active cases or symptomatic staff/inmates since June 15, 2020.” He also called a remote visitation system implemented on July 13, allowing family and friends of inmates to visit them virtually “a huge success – We went from no visits to more than ever,” Gilkison said of the IWeb Visit system that is averaging 45 remote visits per day.

On the not so positive side, Gilkison noted losses that have left jail 42 staff down, the largest number ever one authority member pointed out. Asked about safety concerns from the staff shortage, Superintendent Gilkison noted procedural adjustments in the COVID-19 pandemic environment that have reduced some oversight needs.

“It looks worse on paper because that number is going up. But we’re really sitting about the same as we always have because we just operate a little differently … overall we’re operating just like we normally do. We’re still maintaining our staffing standards that we did pre-COVID. I don’t feel like we’re at risk,” Gilkison assured the authority members. He added that were it to get to a point of overstretching remaining staff he would have to begin telling outside jurisdictions the jail could not accept additional inmate bed rentals from them.

Gilkison proposed a $126,000 allotment toward a bonus program for remaining staff who have performed admirably through personnel losses and a COVID-19 outbreak.

But with it not yet at that point, Finance Manager Stephanie Smith reported August contracted inmate bed rentals totaling $118,748.52, $74,723 from Culpeper County and $44,025.52 from Page County. That brought RSW’s two-month FY-21 bed rental revenue total, including medical, commissary, telephone and related housing expenses to $243,928.45.

Couple that number with reduced expenditures due to the smaller staff and Smith’s Finance Report noted that with 16% of the Fiscal Year gone, expenditures were at 12.4% and revenues at 18.5%.

Smith also reported RSW Jail’s receipt of a $49,963 grant from the Coronavirus Emergency Supplemental Funding (CESF) grant program made available through the Virginia Department of Criminal Justice Services. The grant was near the program’s ceiling amount of $50,000.

“To date, RSW has expensed $88,567.96 on materials, supplies, and services directly related to the COVID-19 pandemic, so the funding from this grant significantly helps,” Smith wrote in her finance report.

See the full Authority and RSW Finance Committee meetings of about 20 minutes each in this Royal Examiner video:


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EDA in Focus

McDonald bankruptcy filing removes her from EDA civil suit – July 2022 dates set for remaining civil defendants’ trial

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The Front Royal-Warren County Economic Development Authority civil litigation now seeking about $26 million in asset recovery against 24 defendants including its former executive director was dealt a harsh blow the day before scheduled motions hearings Friday morning, September 25. That blow was a notice of former EDA Executive Director Jennifer McDonald’s Chapter 7 bankruptcy filing Thursday afternoon, September 24.

As noted in the filing and as discussed in Warren County Circuit Courtroom “A” Friday, the bankruptcy filing essentially removes McDonald from the civil litigation process. McDonald’s bankruptcy filing included one of her two real estate companies, MoveOn8 LLC.

“As a result of the institution of the bankruptcy proceeding, all actions to collect a debt from Jennifer McDonald, or to recover property from the bankruptcy estate of Jennifer McDonald, have been stayed by reason of the applicability of Section 362(a) of the United States Bankruptcy Code (11 U.S.C. 362(A)),” McDonald attorney Peter Greenspun wrote in the filing received in the Warren County Circuit Court Clerk’s Office Thursday afternoon. The same holds true as to a stay on asset recovery in the MoveOn8 LLC filing.

Jennifer McDonald’s Thursday bankruptcy filing has essentially STOPPED her involvement in the $26-million EDA civil litigation swirling around her alleged embezzlements. Royal Examiner Photos by Roger Bianchini

With EDA lead attorney Cullen Seltzer acknowledging the stay on civil action against McDonald involving her now bankruptcy-trustee seized assets, a scheduled 9 a.m. motions hearing seeking financial sanctions against her for attempting to move a piece of property frozen by the court near the outset of the April 2019 EDA civil litigation filing was removed from the docket. Judge Bruce D. Albertson adjourned the 9 a.m. proceedings 10 minutes after they began.

Motions hearings on the remaining defendants’ cases commenced shortly after 10 a.m. as scheduled. Two defense attorneys connected by remote audio hookup told the court they were likely to file similar “interlocutory appeals” motions to the one April Petty and Jesse Poe attorney William Shmidheiser informed the court in person he would be filing. Those petitions will seek to have defendants removed from the single “mass trial” the plaintiff is seeking in alleging a wide-ranging conspiracy of McDonald and associates to profit from the alleged McDonald-directed embezzlements and misdirection of EDA assets.

Before making his case that his clients should be removed from the single trial of all defendants, as the 10 a.m. hearing began Shmidheiser called McDonald’s bankruptcy “the elephant in the room” that should be discussed with all involved defense attorneys linked in. That led EDA attorney Seltzer to repeat his acknowledgment that the case against primary defendant McDonald was stayed from further action due to the bankruptcy process.

Several times during subsequent discussion McDonald was referred to as “the hub” of the conspiracy “wheel” the plaintiff is alleging existed between the former EDA executive director and those believed to have benefitted financially one way or another from her alleged misdirection and embezzlement of EDA assets.

While criminal charges related to the EDA civil suit have been dropped against McDonald and others due to speedy trial statute concerns, the threat of refiling remains, leading to possible invocation of 5th Amendment rights if called to testify or be deposed in other defendants’ cases.

Former EDA and McDonald Administrative Assistant Michelle Henry’s attorney John Cook told the court the McDonald bankruptcy filing made his client’s case problematic, in that Henry has filed to force McDonald to pay for her legal fees in the civil case.

Also on the table Friday was McDonald’s ability or willingness to testify as a witness as the civil cases proceed in the wake of her bankruptcy filing. That she could be deposed as a witness in other cases seemed agreed upon. But whether she would quickly choose to invoke her 5th Amendment right not to self-incriminate, with the refiling of criminal charges also still a possibility, remained at issue.

Judge Albertson took defense counsel concerns about the bankruptcy filing’s impact on the other defendant’s cases under advisement, observing, “I think we can proceed with (setting) dates in the event I rule the stay is not warranted.”

EDA attorney Seltzer noted the large number of witnesses to be deposed, over 50 he acknowledged; as well as the limited days per month, three, available for those depositions, depositions he predicted would at a minimum take a full day due to the number of defendants and their counsel involved. Due to those factors, coupled with lingering pandemic limitations on court processes, Seltzer raised an eyebrow or two predicting the civil trial wouldn’t happen before July of 2022.

That prediction led to an added sense of urgency by Petty and Jesse Poe’s attorney. Responding to a question, Shmidheiser told the court he probably would file his interlocutory appeal by the end of the week, as he sought a November date for a hearing on the appeal. Judge Albertson set November 23, at 3:30 p.m., for what is anticipated to be a 30 to 40 minute or so hearing.

Shmidheiser also told Judge Albertson that one of his primary hopes for the day’s hearing was that specific dates would be set for the lengthy deposition process of witnesses, as opposed to the vague “three days a month” tag currently on the table. Agreeing that pinning down dates for depositions was a preferred course of action, Albertson set about finding dates all attorneys could be available for.

Due to varying attorney’s schedules, preferences and other court variables, Tuesdays-Wednesdays-and-Thursdays were set between January and May 2021 to get the deposition ball rolling. Deposition dates agreed to were January 13-14-15; February 16-17-18; March 30, 31, April 1; and May 11-12-13.

Acknowledging the process would likely continue through the remainder of the year, Albertson set a pre-trial motions date of February 19, with a 24-day trial scheduled 4-1/2 months later from July 5 to 29, 2022.

Some of us may need an ambulance to get to the EDA civil trial now scheduled for 24 days in July of 2022.

Seltzer did acknowledge it was possible some defendants’ motions to be removed to individual trials could be successful, leading to earlier trials for those defendants.

As for the bankruptcy situation, one attorney present familiar with bankruptcy cases, later explained to the media that the EDA could file to have certain McDonald assets separated from the bankruptcy sale process to accommodate creditors, citing her alleged embezzlements. However, without a conviction in support of those allegations that filing might be hard to get approved by a bankruptcy trustee, Shmidheiser said. He added that the bankruptcy transfers McDonald’s liability from the EDA civil case now in Warren County Circuit Court to a judge-overseen trial in a Harrisonburg U.S. Western District of Virginia Bankruptcy Court.

According to the McDonald Bankruptcy Docket posted by the U.S. Western District of Virginia Court:

The First Meeting of Creditors is scheduled for 9 a.m. on Friday, November 13, 2020 (by telephone);

Deadline for filing Proofs of Claims has not yet been set, because McDonald filed her case as a “No Asset Case”;

Deadline for filing Complaints for Exception to Bankruptcy Discharge is Tuesday, January 12, 2021. The Warren EDA will have to file a Complaint for Exception to Discharge case by the deadline, or its claim will be discharged in bankruptcy, we were told;

McDonald ‘s Bankruptcy Schedules are due to be filed by October 8, 2020 – but if time extensions are requested, they are generally liberally granted.

The Trustee is listed as Bob Stevens of Charlottesville, along with the Office of the U.S. Trustee, with a Roanoke address.

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Town announces bank deal on FRPD headquarters debt service payments

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In a Wednesday evening press conference the Front Royal Town Council and the Town’s mayor weighed in from varying perspectives in announcing a Town financing agreement with United Bank to assume the debt service on the principal and an undisclosed, but favorable, interest rate on payments for construction of the new Front Royal Police headquarters.

Statements indicated that the lower interest rate acquired, as opposed to the EDA’s 3% rate with United Bank on the FRPD debt service, would save the Town at least a million dollars. Town officials declined to discuss details such as the interest rate or amount of the loan at this point in the loan process.

While a summary of the loan agreement announcement read into the record by Interim Town Manager Matt Tederick and elaborated on by the town’s elected officials, was a welcome update on what has become an increasingly contentious finger-pointing exercise in municipal government dysfunction, the tone of that update maintained and perhaps up the ante on the accusatory finger-pointing.

Above, Matt Tederick reads the opening statement on the Town’s debt service agreement with United Bank into the press conference record; below, County Supervisors Delores Oates, left background, and Supervisor’s Chair Walt Mabe and EDA Board Chair Jeff Browne, listen as they are vilified for the past impasse on FRPD debt service negotiations. Royal Examiner Photos by Roger Bianchini – Royal Examiner Video by Mark Williams

In fact, following the full council comments Mayor Eugene Tewalt observed that he did not agree with a lot of what was said by council in lauding their bank financing deal. Since his November 2019 Special Election elevation to mayor, Tewalt has repeatedly butted heads with his former council colleagues over trying to negotiate, rather than litigate with the EDA.

When this reporter and other media present asked for details of the loan agreement and support for the accusatory nature of the announcement alleging belligerent intransience by both the county government and the re-tooled in the wake of financial scandal Economic Development Authority Board of Directors, there were few direct, substantive answers forthcoming. In fact, the interim town manager cautioned council on answers regarding support of its stated legal stance, noting the Town remained in civil litigation with the EDA.

One of three local reporters, yours truly, attempting to gain clarity on council’s allegations about County and EDA intransience in past FRPD debt service discussions.

The media was added to the negative stereotyping in past reporting on the Town’s year-and-a-half or so refusal to assume liability for undisputed principal and partial interest payments on the EDA-enabled financing for its new police headquarters. Councilman Holloway disputed what he termed “tabloid media” reports that have “beaten up” the Town in reporting the evolution of the Town-EDA financial impasse and what has evolved into dueling civil litigations. Wednesday’s announcement does not appear to impact the Town’s $20-million civil suit against the EDA.

Several county official present, including Board of Supervisors Chairman Walt Mabe, Vice-Chair Cheryl Cullers, and North River Supervisor Delores Oates, indicated possible future comments after having time to absorb what they heard Wednesday evening. However, EDA Board Chairman Jeff Browne did give Royal Examiner an on-the-record comment.

“Well, the main thing that I want to leave you with tonight is that we’re excited that the Town is finally paying the principal that they’ve owed on the police station. And that’s really what tonight’s about. We can get into some other details some other time,” Browne told us after the press conference, adding, “It’s a positive and I’m hopeful that we can start to work together. I hope that it’s a start of something good because we ought to be working together.”

United Bank is the same bank the EDA financed construction of the police headquarters through. The EDA, recently with County help, has been making monthly interest-only payments of about $21,000 on its FRPD debt service. However, the EDA announced last week that it and the County would stop covering those payments as of October. The EDA United Bank loan was slated to go to interest and principal payments of about $50,000 monthly on November 1. Thus far the EDA or County has paid about $500,000 on interest on the FRPD construction project, which appeared to cause some confusion on the EDA’s claim against the Town in its recently filed civil suit to hold the Town liable for FRPD construction costs.

But as for working together in the wake of Wednesday’s press conference, several council comments critical of the past and existing EDA board justified the Town’s move toward creation of a second, unilateral EDA, pointing away, rather than toward cooperation with the existing, half-century-old joint Town-County EDA.

Above, County Board Chair Walt Mabe and Councilwoman Lori Cockrell chat following the adjournment of council press conference. Below, delays on the renovation of the Afton Inn to the left of Town Hall were laid directly on the EDA by Councilman Gillespie.

In fact, Councilman Gary Gillespie took direct aim at the current EDA staff and board of directors for delays in renovation of the dilapidated Afton Inn across Crescent Street from Town Hall.

Go to the below-linked Royal Examiner video to see exactly what was said, alleged, asked, and answered, or not, at the approximate 45-minute Wednesday evening Front Royal Town Council press conference:

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Town ponders its CARES Act reimbursement dilemma at end of brief Monday work session

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After discussion of a change to Town policy on the vacating of streets and alleyways to accommodate past adjustments and high costs associated with assessments by real estate assessors for the government-owned property; and a review of evolving Fiscal Year 2021 revenue streams from taxes and utility/enterprise and general funds, the Front Royal Town Council focused on a lingering sore point.

That point is the County’s reluctance to take the town governmental apparatus at its word on assuming financial liability for any distribution of Coronavirus Aid, Relief, and Economic Security (CARES) Act approved funding found to not meet federal and state standards for that distribution. As previously reported, as the recipient of that federal, state-distributed money received in two $3.5 million dollar phases, about $1.2 million of which was allotted to the Town for in-Town distribution, the County is liable to reimburse the state and federal sources of that money for any portions found to not have met the federally implemented standards for qualifying business, non-profits or individual recipients.

“I don’t know what their issue is – we justified it under the CARES Act; we laid it out very specifically where in the CARES Act it’s been spent,” Interim Town Manager Matt Tederick told council citing two specific areas the County is apparently concerned about qualifying. “So, we’ll just continue to play the game and see what happens.”

“I’m concerned about getting the $970,000,” Vice-Mayor Bill Sealock told his colleagues of the money the Town has fronted out of its own General Fund budget toward what it believes to be qualifying businesses in town. That thus-far Town-absorbed expenditure is what the Town is hoping for in first-round CARES distribution reimbursement from the County.

“I’m concerned about getting the $970,000,” Vice-Mayor Bill Sealock told his colleagues of the money the Town has fronted out of its own General Fund budget toward what it believes to be qualifying businesses in town.

“I can certainly appreciate that they want some checks and balances … but if we’re completely liable which we’ve signed agreements on, saying that if any of the CARES Act is spent inappropriately the Town will fund or refund,” Councilman Jacob Meza said when Tederick interrupted him.

“Let me correct you on that, Mr. Meza, we never, we haven’t signed that,” Tederick interjected, leading several councilmen including Meza to add, “But we’ve offered to do it.” Meza added, “I’d like to reoffer that and move on.”

“I can certainly appreciate that they want some checks and balances … but if we’re completely liable which we’ve signed agreements on, saying that if any of the CARES Act is spent inappropriately the Town will fund or refund,” Councilman Jacob Meza said when Tederick interrupted him.

“We’ve offered that, and they want us to take the liability, and they want to approve the spending plan, and they want us to spend the money out of our reserves, and they want us to submit the reports, and they’ll tell us whether they’re going to reimburse us. So, it’s just very convoluted. I’ve done everything I can do to get this through,” Tederick told council.

Absent from the discussion was the likely lack of County trust of Town financial “promises” in the wake of a year-and-a-half impasse on the Town accepting financial liability to pay for its $9-million dollar police station financed through what is now a solely-County supported Town-County Economic Development Authority.

However, further discussion indicated that several involved county officials had indicated a first reimbursement check from the County was anticipated early this week that had not yet been received as of Monday night.

“Well, it is Monday,” Councilwoman Lori Cockrell observed, acknowledging that Tuesday was also “early in the week”.

See Council’s full discussion on its CARES Act reimbursement concerns, as well as the street and alley vacating adjustments and FY-21 revenue numbers in this Royal Examiner video of council’s 20-minute open session work session.

Council then adjourned to closed session to discuss its permanent town manager search, the now dueling civil litigations with the EDA, and the disposition of undisclosed public property. And the following day the Town announced a full town council press conference to address the EDA litigation to be held Wednesday at 7 p.m. at the Warren County Government Center.

That announcement stated that the press conference “will cover major developments regarding the Town of Front Royal\EDA lawsuit. Statements will be given by each Council member”.

Stay tuned for that exciting development as it unfolds Wednesday …

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Town press release says it was working on FRPD financing when EDA suit filed

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In a press release issued at 3:15 p.m., Friday afternoon, from the office of Town of Front Royal Information Technology and Communications Director Todd Jones, Interim Town Manager Matt Tederick responds with astonishment, and some astonishing news, in reaction to the EDA filing of a lawsuit Thursday to recover the nearly $9 million cost of the new FRPD headquarters.

That news is that the Town was in the process of acquiring bank financing to pay the principal amount, if not interest, on the new town police headquarters this week.

As previously reported, at Monday’s Front Royal Town Council meeting Councilman and mayoral candidate Chris Holloway read a three-page prepared statement into the record on the Town’s stance on its lack of obligation “legal, moral or otherwise … to repay these unlawful debts” to cover what was termed “a fraudulent, unauthorized loan” acquired by the EDA to finance the FRPD headquarters construction project for the Town.

Chris Holloway reading the Town’s stance on FRPD financing into the council meeting record Monday, September 14. Royal Examiner Photos by Roger Bianchini

Holloway confirmed that the statement was prepared by the Town’s contracted Damiani & Damiani law firm that is handling its $20-million-plus lawsuit against the EDA, in response to his inquiry on the matter.

The statement also states that the Town “has explored other means of resolving the issue” and “is willing to make payments to the EDA for the Police Department Headquarters that are equal to the payments that Town Council authorized, which include the entire principal debt at the authorized interest rate.”

It would seem somewhere along the negotiating lines between the Town, County, and EDA, there has been a failure to communicate essential information.

Here is the Town press release and Tederick’s statement in its entirety:

The EDA Sues the Town of Front Royal on the Verge of Obtaining a Loan

24 Hours After the Town Receiving Bank Term Sheet, EDA Sues. Coincidence?

The Town of Front Royal filed a $20,226,153 lawsuit against the Warren County Economic Development Authority (EDA) in an effort to recover money fraudulently obtained by the ex-Executive Director, Jennifer McDonald, and perhaps others under the failed oversight of the Economic Development Board of Directors.

Interim Town Manager Matt Tederick commented, “This lawsuit is really bizarre, less than twenty-four hours after I received a formal Term Sheet from a lending institution to pay the principle balance which the County, the EDA, and the Town do not dispute, the EDA calls a Special Meeting, one day before it’s normal meeting date, and decides to file a Complaint and Writ of Mandamus against the Town, effectively preventing the Town from obtaining the very financing being demanded. Coincidence?

Interim Town Manager Matt Tederick revealed some astonishing news late Friday afternoon, in reaction to the EDA civil suit over FRPD headquarters financing.

“Just yesterday I received a call from Ed Daley, Interim County Administrator, who asked me if the EDA’s Finance Director could meet with the Town’s Finance Director to reconcile Leach Run Parkway accounting. Of course, I eagerly and happily agreed. Then, 24 hours later, the EDA sues the Town. Coincidence?

“As much as I would personally like to litigate this matter in the court of public opinion, as the EDA has done, I will not. This much I will say, the EDA has caused great harm to the citizens of the Town of Front Royal, and yet, no one has been brought to justice and the EDA continually claims to be the victim. The EDA is responsible for the negative consequences flowing from the actions of its ex Executive Director. The Town is trying to assist in dealing with the economic fallout, but ultimate responsibility remains with the EDA. The Town intends to continue its efforts to finance the Police Department Headquarters.”

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