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Op-Ed: County, EDA officials cited for failed oversight – why not the Town?

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The status of the ITFederal project and the $10 million loan that facilitated it is likely to be under increasing scrutiny by EDA civil attorneys contending that loan was acquired under false pretenses. Royal Examiner File Photos/Roger Bianchini

 

Many have wondered when or even if prosecutors and state investigators guiding the Warren County Special Grand Jury’s look into criminality tied to the Economic Development Authority financial fraud investigation would expand its focus beyond a tightly knit circle surrounding former EDA Executive Director Jennifer McDonald.

On Tuesday, September 24, they got an answer, if not precisely the one many citizens critical of the political and economic status quo here were hoping for.

That answer was a total of 42 indictments, three each against 14 new players, including the entire elected Warren County Board of Supervisors, the top county administrative official and recently departed County and EDA attorney, as well as a mix of former and sitting EDA Board of Director members.


The disappointment for some was that those indictments were all misdemeanor charges related to an absence of due diligent oversight of EDA affairs, specifically over the last four months of 2018 regarding the continued administrative authority of Jennifer McDonald. (See linked story below)

The bookings at the Magistrate’s Office of the Rappahannock-Shenandoah-Warren County Regional Jail (RSW Jail) didn’t even generate the orange jail jumpsuit mug shots many social media denizens would have likely framed for posterity.

No mug shots today – County and EDA officials charged with misdemeanor failures of due diligence in the conduct of their office were not booked into the jail, as any defendant in similar circumstances released on their own recognizance would not be RSW Superintendent Gilkison has explained.

 

But while County officials rightfully face scrutiny for their failed due diligence, the Town of Front Royal governmental apparatus has thus far escaped unscathed, at least regarding criminal liability and even the level of public criticism aimed its way.

No Front Royal Town official has yet been indicted for criminal negligence regarding financial oversight of EDA operations; and to our knowledge there is no “recall them all” petition being circulated against the Town Council.

Why?

Three years ago, it was an overwhelming majority of Council that threw a defensive and protective shield around both McDonald and two of the more implausible projects she was instrumental in bringing forward.

This mid-2016 photo perhaps shows varying levels of disinterest expressed by all of Bébhinn Egger’s Town Council colleagues over her claims about ITFederal at the time.

 

In fact, those two projects, ITFederal and Workforce Housing, account for nearly $11 million, $10 million and $650,000 respectively, of the $21 million in EDA assets alleged to have been either misdirected by McDonald or moved under false pretenses during her executive oversight.

But some Town officials have claimed Front Royal has nothing to do with EDA operations since the County took over the Town’s portion of the EDA’s annual operational funding in 2012.

But as Royal Examiner has reported previously, that notion is questionable at best with much of the EDA’s work being done on behalf of the Town on projects inside the town limits. ITFederal, Workforce Housing, the Afton Inn and new police headquarters construction project come to mind.

If that wasn’t the case how do Town officials explain filing suit against the EDA to recover as much as $15 million in Town assets they contend were misdirected, lost or acquired under false pretenses? Do they think McDonald snuck into a secret town vault to pick the lock or hacked into Town bank accounts and sent their $15 million to a secret offshore location?

No, if experience tells us anything chances are that if McDonald had asked the Town Council for $15 million they would have just given it to her with a pat on the back.

In fact, that’s exactly what Council did in 2015 when McDonald came and asked for a $10 million “bridge” loan to help prop up the EDA’s case with First Bank & Trust to finance a $10 million loan to ITFederal through the EDA. Council was even kind enough to extend that initial one-month loan taken out of an investment account generating nearly $4,000 of monthly interest for two additional months without fee compensation for lost interest revenue beyond the first month.

It seems very possible that without that three-month Town handover of the desired ITFederal loan amount the bank loan for ITFederal would never have been achieved, reducing the EDA’s claimed losses by almost half.

But when Councilwoman Bébhinn Egger warned her colleagues that ITFederal did not appear to be what it was purported to be financially or from a business standpoint by McDonald, Congressman Robert Goodlatte and the company’s CEO Truc “Curt” Tran the reaction was not one of cautious due diligent verification.

Rather, the unanimous consensus of Egger’s colleagues was to either ignore or berate her, not to mention your then newly created online news source, for telling them things they didn’t want to hear – even if as it turned out, they were verifiably true at the time – as in no $140 million government contract basis upon which to create 600 high paying tech industry jobs as part of a $40 million ITFederal investment in this community.

From left on Nov. 28, 2016, Councilmen John Connolly, Hollis Tharpe, Bébhinn Egger, Gene Tewalt, Bret Hrbek, Mayor Tim Darr, and Jacob Meza at far right, bid farewell to Town Manager Steve Burke, second from right. Only one of this group, you know who she is, performed due diligent oversight of EDA affairs. It was a majority state of affairs that lasted on council for another year and a half.

Revisionist History?

The day after the County and EDA misfeasance and nonfeasance misdemeanor bookings the Town of Front Royal issued a pat-us-on-the-back press release in which Interim Mayor Matt Tederick lauded the town government’s role in launching the Virginia State Police investigation into EDA finances.

“Due to the watchful eyes of the Town Government, potential financial irregularities involving the EDA were discovered in the late spring and early summer of 2018. The Town Council swiftly turned their findings and suspicions over to the Virginia State Police, who in turn immediately commenced an investigation,” Tederick states, adding, “The citizens need to rest assured that the Front Royal Town Council will continue to pursue its lawsuit against the EDA and any others in order to hold those responsible for the Town’s losses accountable. The public’s continuing confidence in Town government is greatly appreciated and I might add, warranted.”

Pals – then EDA Executive Director Jennifer McDonald and private citizen Matt Tederick pose before start of Sept. 25, 2017 Town Council meeting. It was a meeting at which Council voted against a Board of Architectural Review recommendation to deny the EDA request to allow demolition of the Afton Inn to facilitate redevelopment at the site.

As far as ascertaining responsibility for any Town losses, both current and past councilmen and mayors over the past five years might begin by looking in the mirror.

As for “continued confidence”, as mentioned near the end of our story on a Council initiative to explore creation of its own EDA, if Tederick is referencing the work of town staff, as opposed to all but one of its elected officials (Egger) in recent years, he may be on to something.

After all, in June 2017 Town Police investigators began to develop suspicions that some reported criminal actions targeting the EDA offices and its then executive director had been staged from the inside.

And about a year later Town Finance Director B. J. Wilson did discover an eight-year history of over $291,000 in Town debt service overpayments to the EDA that finally set the process of EDA financial scrutiny in motion.

But that scrutiny was a long time coming, about 2-1/2 years after council was warned by one of its own that things appeared horribly amiss in some EDA projects. And the scrutiny of 2018 did not generate from any Town Council initiative targeting the EDA, but as noted above from staff discoveries while exploring Town finances that landed a “smoking gun” of precise evidence on Council’s lap.

It was Wilson, Town-contracted auditors and the Town Attorney who took the point in confronting McDonald, EDA Board Chairman Greg Drescher and EDA Attorney Dan Whitten over those debt service overpayments of nearly $300,000 on August 23, 2018. It was at that meeting during which the term “fraud” may have been first broached regarding EDA finances.

Greg Drescher and Jennifer McDonald appeared grumpy at times under questioning by Tom Sayre and Archie Fox at June 2017 joint work session on the EDA’s Workforce Housing Project.

 

That mid-2018 meeting between Town and EDA officials led to Drescher’s resignation as EDA board chairman the following day. It was also likely a driving factor in the County’s hiring, on behalf of the EDA, an investigative public accounting firm, Cherry Bekaert, to begin a probe into irregularities within EDA finances.

It was also a meeting that, as Tederick observed, led to the launching of a State Police investigation. But by that point, not to forward staff’s information on EDA financial irregularities to law enforcement for scrutiny might have eventually been seen as indictable as a more serious felony charge of complicity in a cover up of financial fraud.

As for that State Police investigation, one might contend it was begun a year earlier by the Front Royal Town Police. But that investigation was allowed to be shut down in 2017 at the request of EDA Board Chairman Drescher to allow, first the EDA board, then its executive director to control the investigation of alleged crimes targeting the EDA and its chief executive through a hired private investigator.

It was a request and decision that allowed the alleged EDA financial subterfuge, whatever its source, to go unchecked for an additional year and a half.

Accountability – where?

But beyond an honest self appraisal of its past complicity in throwing a protective shield up against scrutiny of EDA projects and its executive director’s assertions about them, should town officials be vigilant about past EDA activities that may have targeted more of its assets versus those of the County? – Certainly.

But why not continue the joint reform process the interim mayor and council propelled forward, rather than just withdraw from it? After all, new EDA Executive Director Doug Parsons has promised full cooperation in determining an accurate appraisal of the Town’s losses within those EDA losses financial fraud investigators have reported being misdirected through EDA operations over a number of years.

And we would suggest the interim mayor and council not continue a course of self-delusional praise and finger-pointing that tries to minimize the Town Council’s own long-term lapsed due diligence regarding EDA affairs it was directly involved in facilitating.

In mid-2016 Bret Hrbek, left, was Jennifer McDonald’s staunchest defender among many, when Bébhinn Egger, right, raised concerns about assertions about EDA projects, particularly ITFederal.

 

And speaking of that involvement, the media asked former EDA/County Attorney Whitten why the $10 million ITFederal loan the Town was so instrumental in helping achieve was included in the EDA civil litigation for recovery even though it is current on its rather lax terms.

“Because it was acquired under false pretenses,” Whitten replied following an EDA board meeting three months ago.

Whitten’s response echoed the above-referenced, ignored and even vilified warnings three years earlier that something appeared amiss in the EDA’s representations about ITFederal.

So “warranted continued confidence” may be a stretch, at least as it applies to elected Town officials over the past three to five years.

Nonetheless it appears Town officials may avoid the embarrassment of criminal charges, not to mention a high degree of public anger, for their long pattern of failed due diligence regarding oversight in their dealings with the EDA.

Why?

The answer we believe is two pronged legally: first, a statue of limitations on misdemeanor offenses; and second what we would contend was an unnecessary relinquishment of the Town’s authority to appoint two of the seven EDA board members based on the EDA’s fair funding formula split on Town-County investment in EDA operations.

As for a potential third prong in the Town’s escaping the extreme level of public scrutiny and recall petitioning aimed the County’s way, a primary social media purveyor of that public anger has not threatened to sue the Town for millions of dollars, so a public shaming there may have less interest.

But back on the legal side, note that the three indictments filed on the 14 County and EDA officials on September 20 for which they were booked on September 24 and 25, all involved EDA transactions between September and December 2018. Those charges involve only $309,000 of the allegedly misdirected or embezzled $21.3 million being sought for recovery by the EDA in civil litigation.

What about liability for a lack of due diligent oversight during the movement of the other $20.99 million, particularly that $10 million ITFederal loan the EDA now claims was acquired under false pretenses?

There is likely to be none – because misfeasance, nonfeasance and even malfeasance in the conduct of public office are misdemeanor criminal offenses. And there is a one-year statute of limitations on misdemeanor offenses. Also in the September to December 2018 timeframe, the Front Royal Town Council did not have appointment authority of EDA board members.

That is because when the County assumed responsibility for the Town’s 34% portion of the EDA’s annual operating budget in 2012, the Town Council allowed its appointment authority of two of the seven EDA board members to be withdrawn.

Was it a necessary condition? – We would contend not.

Because that County assumption of full annual operational funding from the previous 66%-34% County-Town split was made as part of the long and ongoing negotiations on two fronts: double taxation of Town citizens on certain services provided countywide; and compensation to the Town for its extension of central water-sewer utilities into the North Commercial-Industrial Corridor outside the town limits without annexation.

North Corridor commercial development was enabled by the Town’s extension of central water sewer outside the town limits without annexation. Many believe the Town continues to suffer from lost commercial tax revenue after a judicial striking down of agreed upon PILOT fees tied to utility bills as the Town’s major compensation for that lost tax revenue. Photo Roger Bianchini/Courtesy CassAviation

So if the County is essentially saying either, “We are going to stop the double taxation of Town citizens for countywide services” or “We owe you more compensation for your lost commercial tax revenue due in large part to a Town-County North Corridor compensation arrangement struck down by a Circuit Court judge, and this is part of how we’ll do it,” why would the Town Council agree to withdraw or reduce its past oversight of EDA operations it remained deeply involved in?

Whatever the reason, in 2012 the Town Council did agree to relinquish its EDA board appointment authority, and thus direct supervisory authority over EDA operations. In fact, that relinquishment is referenced in motions filings surrounding the EDA’s claim of sovereign immunity in response to the Town’s $15 million civil action against it.

“That the Town of Front Royal voluntarily waived its right to control the EDA, contrary to the statutory mandate, does not create an actionable fiduciary duty to (the Town’s) benefit,” EDA attorneys wrote in reply to the Town’s opposition filing on the EDA claim of institutional sovereign immunity.

However those arguments play out at a November 8 motions hearing and whether that “voluntary” waiver of its EDA oversight right was a bad decision or not, it has paid off for Town officials in an unexpected way.

Because by allowing the County to assume full EDA board appointment authority, that 2012 Council may have saved its 2015 to 2018 successors from legal liability for the absence of Council’s own due diligence in its oversight of its EDA affairs. And while like the County and EDA officials who were indicted, that misdemeanor liability would have only extended back a year and involve an estimated $309,000, it was a long-term failing the Town itself alleges led to the misdirection of up to $15 million in Town assets.

Regardless, unlike County and EDA officials, in the absence of direct authority to limit the EDA executive director’s conduct of her office over those last four months of 2018, the Front Royal Town Council appears poised to skate home free of any legal liability for its own lapses of judgment regarding its business dealings with the EDA in recent years.

And without “smoking gun” evidence of payoffs to look the other way or shared profiteering from the alleged EDA financial fraud under legal and civil scrutiny, it would appear the worst offense those not indicted for illegally moving or receiving EDA assets can be charged with is failed due diligent oversight, and that within that one-year misdemeanor statute of limitations. And for the above cited reasons it would appear that such charges could only come on the County and EDA sides of the equation, as it did on September 24.

So more than any proactive due diligence by elected Town officials generating “continued confidence”, legally on the failed municipal oversight front you might say it just pays to be lucky timing wise; not to mention have a voluntary withdrawal of EDA board appointment authority in your pocket. I guess you could also say that County generated initiative to acquire additional control of EDA board appointments for its added operational financial contribution kind of backfired long term – because misery loves company, right?

Criminal and non-criminal dereliction of public duty: Where might they apply in the EDA financial scandal?

Grand Jury indicts 14 County and EDA officials for lack of EDA oversight

Council divided on move toward second, Town-controlled EDA

 

Defense attorneys move to quash grand jury misdemeanor indictments

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EDA completes audits for 2018 and 2019; 2020 audit is next

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The Board of Directors of the Front Royal and Warren County Economic Development Authority accepted its audited financial statements for fiscal years 2018 and 2019, today, October 5, 2021. The audit of the financial statements was conducted by the firm of Brown Edwards, CPAs of Harrisonburg, VA.

“We have received the final outside audits conducted for 2018 and 2019,” said EDA Board Chairman Jeff Browne.  “This was a huge effort on the part of Brown Edwards, and they have done very good work in challenging circumstances. Getting these two financial audits completed is a major step forward in putting the EDA’s past difficulties behind us. Now we can better focus on economic development issues to benefit the community.”

“The auditors’ letter points to three areas for improvement of internal controls,” Browne said. “It was important to make each improvement recommended by the CPAs, and we have done just that. The Warren County staff now administer the check-writing duties, collection of rents, and have layers of approvals for expenses within EDA and the County administration that were not there three years ago.”

The audited financial statements show that, at the end of the fiscal year 2019, the EDA’s total net assets were $38,036,737, and its net liabilities were $44,575,435, resulting in a deficit net position of $6,538,698. The EDA will work with Warren County’s auditors starting with the fiscal year 2020, which audit can now be undertaken.


Final Financial Statement 10-5-21

Final Letter to governance

 The EDA Board of Directors will have their next regular monthly board meeting via Zoom on Friday, October 29, 2021, at 9 a.m.

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EDA reminds rental tenants, Small Business Loan Program clients to now send payments to WCGC

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Starting October 1, 2021, the Warren County Finance Department will take over and manage payments made to the EDA for rents and the Small Business Loan Program (RBEL and IRP). The EDA will no longer be accepting payments at their office or office address.

Please continue to make your check or money order to the EDA. You must hand-carry or send your payments to:

Warren County Government
ATTN: Finance Department
220 N. Commerce Ave.
Front Royal, VA 22630

Any payments sent to the EDA will be returned. As a result, you may incur fees for late payment. We appreciate your cooperation. Thank you for your attention to this matter.


(Press Release)

 

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EDA briefed on structural and legal options in closed session; gets open session updates on committee work during transition phases

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The EDA Board of Directors met Friday, September 24, for their regular monthly meeting. The Board went into closed session for approximately 90 minutes to discuss transition, personnel, 2018- 2019 draft audits, loan restructuring, and disposition of property. The Board returned to open session at approximately 10:20 a.m. Jeff Browne, EDA Chair, opened the session with an overview of the transition. Browne asked each board member to report on their assigned transition project.

EDA Board Chair Jeff Browne, red shirt at the head of the EDA ‘roundtable’, prepares to get committee chair reports on their work as the EDA transitions toward new staff and possibly a new administrative structure under consideration by the County Supervisors. Supervisors Chair Cheryl Cullers and Walt Mabe were present for the briefings. Royal Examiner Photos by Roger Bianchini

Search Committee-Transition: Dr. Tom Patteson, reported the committee met and reviewed applications. Three applications were submitted to the county administrator. The county and EDA will work together in selecting replacements for the Administrative Assistant and Executive Director.

Finance Committee-Transition: Jim Wolfe reported the “numbers” on the 2108 and 2019 audits are final. Jim Wolfe stated the management letter will be revised and recommended a special meeting for next week to finalize and accept the audits for 2018 and 2019. The Board agreed and the date of the meeting will be announced. Mr. Wolfe will also be meeting with the finance personnel at the county in the next several weeks.


Marketing Committee-Transition: Scott Jenkins, Chair reported the 38-page PowerPoint presentation is complete. The marketing material can be tailored to specific clients. The marketing is targeted on the Core Industries: Advance Manufacturing, Transportation and Logistics, Information Technologies, and Food Processing. Scott reviewed documents and key data. The marketing material is organized and stored on the EDA network. The September Marketing Committee report included other updates and visions including Small Business opportunities, focus on the Strategic Plan, and marketing opportunities with VEDP, Site Selector Guild, and Trade shows in 2022.

Administration Committee-Transition: Jorie Martin reported Gretchen Henderson prepared an Operation Manual for future reference. The manual is detailed in all the operations of the office including resources to use. The new administrative assistant as well as the EDA Board are well prepared to transition smoothly. Mrs. Martin reported The EDA now has the capability to update portions of the website in-house. This week a meeting section was added so the public can go to the site and see upcoming meetings.

Jorie Martin launches into her Administration Committee report, noting that departed Administrative Assistant Gretchen Henderson had prepared what she termed ‘a bible’ for EDA administrative operations for her successor, wherever they are located, to work from. Below, Asset Committee Chair Greg Harold reported the development of ‘The Stage Gate’, a comprehensive document standardizing the process for disposition of EDA-held property.

Asset Committee: Greg Harold reported the transition and updates on the assets of the EDA were complete. Doug Parsons worked closely to make sure all projects are up to date.

Greg Harold presented the Project Management – Stage-Gate: The Stage-Gate is a comprehensive document standardizing the process for disposition of property. The document will be reviewed and discussed at length at the October board meeting.

Motions coming out of Closed Session: The Board approved the technical revisions to the EDA By-Laws adopted at the August meeting. The Board approved the Board Chair, and Secretary to sign documents for the restructuring of the EDA debt with First Bank and Trust. All documents will be reviewed by legal counsel.

Other items that the Board of Directors addressed included an expression of gratitude for all the work done by Executive Director, Doug Parsons. Jeff Browne expressed and the boards’ appreciation for all the hard work and effort to bring the EDA where it is today. Through Doug’s efforts, the EDA has sold property, expanded business, and brought new business to the town and county.

The next monthly EDA Board Meeting is scheduled for October 22, 2021.

 

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County moves toward restructured EDA staffing in hopes of restored municipal cooperation – 6 CUPs approved, 5 for short-term tourist rentals

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At its meeting of Tuesday evening, September 21st, the Warren County Board of Supervisors made the first official move toward an altered structure of its, and the Town’s, Economic Development Authority futures. That move was unanimous 5-0 approval, on a motion by Delores Oates, seconded by Walt Mabe, of County Administrator Ed Daley’s presentation of a “Request to Create a Warren County Office of Economic Development”. As reported in our recent story, County work session takes unexpected turn on EDA front – ‘Reunited’ operational option broached, the supervisors elected to have Daley forwarded an idea originally slated for Closed Session discussion at a September 14 work session, in open session that day. That idea is to have an Economic Development Director’s staff position under the municipal government umbrella, rather than as a staff position hired by the board of an independent Economic Development Authority (EDA), albeit an EDA board appointed by the municipal government or governments that created it.

In response to Tony Carter’s question about involving the existing EDA Board in this restructuring process, County Administrator Ed Daley, below, said they were alerted to the potential of it prior to Doug Parsons announced resignation. Royal Examiner Photos by Roger Bianchini

As we understand it from subsequent conversations with Daley following last week’s supervisors’ work session, that in-house EDA director’s position would work in the best interest of both the county’s municipal governments, networking what it appears at this point will continue to evolve into two unilateral Town and County EDAs. Now theoretically, both the existing WC EDA and FREDA – the Front Royal EDA that is in the interview stage of establishing a board of directors – could create their own independent Offices of Economic Development with their own executive directors. But the impetus after last Thursday’s resurrected Town-County Liaison Committee meeting appears to be to work together to select an executive director who will work to the mutual benefit of both municipalities while networking with two EDA Boards of Directors.

Confusing? Perhaps – but it would cut payment of the six-figure salary range position in half if both municipalities could agree on the concept and a person to fill that conceptual central administrative position. For with a statewide trend toward regional EDA cooperation in a highly competitive economic development environment, what future would this community’s economic development have with dueling EDAs competing, not only with other regional governments’ economic development structures but with each other’s, particularly when the WC EDA has control of significant portions of economic development properties inside the town limits?


The answer to that question has, perhaps, already been given in the pending October 1st departure of WC EDA Executive Director Doug Parsons, to a county directly to our east where as one local observed upon hearing the news, “Warrenton isn’t suing Fauquier County” (or perhaps more accurately, its EDA).

And a move toward “us and us” from “us versus them” in County-Town relations was a reoccurring theme for several supervisors involved in last week’s first Liaison Committee meeting since January. Both Board Chair Cheryl Cullers and Delores Oates commented on the positive feeling they carried out of that meeting that the deteriorated relationship featuring hostile litigation involving the Town and existing WC EDA, and canceled face-to-face meetings of elected officials on matters of mutual interest, might be turning a corner. Of course, as the third county board member at that Liaison Committee meeting, Walt Mabe, wondered during it: Why can’t we return to one, re-tooled EDA working to both the County’s and Town’s benefit, with one executive director not alleged to have had their hands in both municipalities’ economic development pockets?

And in a loosely related item, as part of the September 24th WC EDA monthly board meeting, departing Executive Director Doug Parsons’ last, the agenda includes the information that the long-awaited 2018 and 2019 EDA audits have been completed by the contracted auditing company and are awaiting EDA Board approval. Stay tuned for more developments on the auditing front. – Maybe the completed audits could even establish exactly how much of whose money went where and is owed to who by whom, negating the necessity for the continued dueling Town-WC EDA civil litigations. As previously reported, the sitting council ignored then-Mayor Gene Tewalt’s 2019 advice to accept the offer of the WC EDA to sit down with accountants rather than attorneys to follow the money to establish exactly who was owed what on the back end of the EDA’s now $62-million-dollar financial scandal.

Shenandoah Shores Short-Term Tourist Rental applicants Jilian Greenfield and Richard Butcher brought the supporting ‘troops’ comprised largely of neighbors in support of their application to head off any continuation of a questionable Shores POA assertion the use was forbidden by neighborhood covenants. The Public Hearing count was 13-0 in support of their proposal, which passed unanimously.

But off that “movie script”, in other business the supervisors approved six Conditional Use Permit (CUP) requests Tuesday, five for Short-Term Tourist Rentals, and one for alterations to a Kennel Permit. See all these discussions, public comments, and votes in the County video; and see the meeting agenda cover page with the full list of CUP application public hearings linked here:

 

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County work session takes unexpected turn on EDA front – ‘Reunited’ operational option broached

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What had been an hour-plus work session update on Capital Improvement Projects (CIPs) by County Project Manager Jeff Hayes took an unexpected turn about an hour and a quarter into that work session at the conclusion of Hayes PowerPoint presentation. I say “unexpected” because the only open session agenda cover sheet item was Hayes’ CIP report. However, the board elected to take what was labeled “Closed Session” discussion of “Personnel re: Economic Development Authority” into open session discussion.

What followed was County Administrator Ed Daley’s presentation on organizational opportunities presented by the pending October 1st loss of the second and final member of the two-person EDA staff. As previously reported, following Administrative Assistant Gretchen Henderson’s August 27 departure to the Northern Shenandoah Valley Regional Commission, Executive Director Doug Parsons announced his resignation, effective October 1, to take the EDA executive director’s job in Fauquier County.

Warren County Administrator Ed Daley explains the operational dynamics of realigning the EDA staff within the County’s administrative structure inside the WCGC. Royal Examiner Photos by Roger Bianchini

And what Daley presented to the board in open session echoed what EDA Board Chairman Jeff Browne told Royal Examiner in the wake of the pending loss of the entire EDA staff – this can be an opportunity, rather than a derailing of the EDA’s recovery from the multi-million-dollar financial scandal uncovered in 2018-19 under previous executive and board leadership. And while Browne focused on replacement personnel selection as the opportunity, Daley used that as a jumping-off point to explore previous supervisors discussion dating to early 2020 about an organizational realignment of the EDA. The County has already taken on the role of Financial Agent of the EDA. Continuing the broached realignment would bring the EDA staff into the Warren County Government Center, functioning more like a County Department. That option was first considered by some supervisors in the wake of the Town of Front Royal’s decision to operationally withdraw from the half-century-plus old joint EDA, in favor of creating its own unilateral Front Royal EDA (FREDA).


In Dec. 2019 file photo, then-Mayor Gene Tewalt at an EDA Board meeting. Tewalt urged Town Council to accept EDA-offered negotiations to determine exactly what the Town’s losses in the EDA financial scandal were – but council wasn’t listening. Will they now? Then EDA Board Chairman Ed Daley is at far left, flanked by Greg Harold, Doug Parsons, Jeff Browne, standing, a partially obscured Gray Blanton, and Jorie Martin. Now Supervisors Chair Cheryl Cullers is seated behind Mayor Tewalt.

That decision was driven by the Town Council’s decision, against the advice of then-Mayor Gene Tewalt, to civilly sue the old EDA for a larger portion of the allegedly embezzled and misdirected EDA assets related to County and Town business dealing handled by the EDA. Rather than costly and divisive litigation, Mayor Tewalt urged council to accept the new EDA leadership’s offer to have staffs simply sit down and follow the money to determine who was owed what. However, a council majority wasn’t listening to its then mayor. Consequently, the Town and EDA are currently engaged in dueling civil litigations.

And while Daley’s presentation began as a logistical exploration of processes of incorporating the EDA into the county governmental apparatus, it took a turn when one supervisor posed a legal question. “I’m going to call the elephant out in the room,” North River Supervisor Delores Oates said in pointing out that the existing EDA was jointly founded by the county and town governments over a half-century ago, and legally remains a Town-County EDA. So, can the County legally bring the EDA into its sole administrative oversight, she wondered.

“If I were sitting where you sit, I would invite the town council to participate in a staffed economic development department that works for the EDA but can also work for us in the County and the Town on economic development projects,” the county administrator replied. And as Daley pointed out, neither EDA currently has a staff, though at least one, the old EDA, has an exceptionally competent and proactive re-tooled board of directors.

“And I think that would be the best tactical advantage for the community, is if we would actually collaborate and not create independent organizations. Because otherwise we’re spending twice the money to do the same job,” Oates said in response to Daley’s suggestion.

Fork District Supervisor Archie Fox wondered how close to day-to-day EDA operations the county supervisors really wanted or needed to be. Below, North River Supervisor Delores Oates called ‘the elephant out in the room’ – the fact that legally the existing, co-founded EDA remains the ‘FR-WC EDA’. So, can the Board incorporate it into the county governmental apparatus were that path chosen?

The first face-to-face discussion of this latter option of reestablishing a jointly functioning Town-County EDA will apparently take place this Thursday, at the first Town-County Liaison Committee meeting since the Town Council decided to cut those quarterly meetings off in the wake of initiating the now dueling Town-EDA/County civil litigations. Daley noted that Liaison Committee opportunity was presented by the inclusion on Thursday’s Liaison agenda of a Town presentation on the status of development of its unilateral Town EDA.

Members of both council and the board of supervisors have recently suggested an altered, more collaborative Town-County path forward from the divisive and litigious one launched by council during the tenure of Interim Town Manager Matt Tederick. So, it will be interesting to see how Thursday’s Liaison Committee discussion develops with a new town manager involved; and how the full council will react to the idea of realigning into a jointly functioning EDA apparatus, possibly including collaboration in selecting the new FR-WC EDA staff were a speedy, positive reaction achieved.

The EDA discussion begins at the 1-hour-16-minute-30-second mark of the linked county video; Oates calls out the “elephant in the room” at the 1-hour-44-minute-45-second mark. The Capital Improvement Project PowerPoint and Q&A takes up the first hour-and-15-minutes of the video. And between the CIP and EDA portions of the work session, Board Chair Cullers gave an update on news of the birth of her newest grandchild Tuesday evening. – Welcome to the world on September 14, 2021, Ella Louise.

About those CIP projects

Prior to that turn toward the EDA and Town-County relations regarding cost-effective cooperation versus costly, counterproductive competition in future economic development initiatives, there were some interesting turns on the CIP front. Those included discussion of downtown Front Royal parking issues and the County’s ability to impact those issue with owned property in the Historic Downtown Business District vicinity. Also, under board scrutiny was the cost and effectiveness of air purification devices under consideration for other County facilities after being installed at the Warren County Courthouse to allow more normal judicial proceedings to be reinitiated during the COVID-19 Coronavirus pandemic. Discussion of the potential effectiveness against, not only the COVID-19 Coronavirus but other virally spread illnesses was broached in considering the purchase of as many as 60 of the machines at a cost of $2100 per unit.

County Project Manager Jeff Hayes had the floor with a power point review of Capital Improvement Projects for the first hour-and-15-minutes of work session.

See Hayes’ CIP power point on renovations to the Commonwealth Attorney’s Office; the Parks & Rec Department Splash Pad Pavilion; Rivermont Volunteer Fire Company 2 renovations; Shenandoah Farms Company 6 renovations; the Morgan’s Ford Boat Landing project; and Juvenile and Domestic Court renovations and related parking issue, including the observation that you “don’t build a court facility over or under a parking deck – BOOM!” (due to domestic terrorist concerns).

On the downtown parking deck front, Ed Daley noted that the Winchester City Council was scoffed at for proposing a downtown parking deck 20 years ago, adding that now the city has four.

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EDA in Focus

EDA develops transition plan through staffing losses

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The Front Royal/Warren County EDA’s Executive Committee met on September 10, 2021, at 9:00 a.m. to discuss personnel matters arising from the upcoming vacancy of its executive director, and a transition plan for continuity of EDA operations.

The Executive Committee is developing a detailed plan to handle all aspects of the EDA’s operations including business retention and attraction, finance, legal, personnel, and day-to-day office operations. Both the Board and the Executive Director are confident that this plan will ensure a seamless transition and ensure the EDA remains a competitive entity for investment and expansion of businesses in Warren County.

(From a Sept. 10 Press Release by the WC EDA)

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