Supervisors explore budget carryover process and new software prior to light meeting agenda – THEN there was the closed session

A Tuesday evening, October 18, work session of the Warren County Board of Supervisors began with Finance Director Matt Robertson’s explanation of his recommendation for a change in how annual budget carryover funds can be handled. The recommendation comes on the heels of some confusion expressed by supervisors in how carryover funds are handled by various departments, particularly in the county public schools budget. However, it did seem that once a Supervisors-School Board Liaison Committee was established to run thru the school system’s budget proposals or requests prior to supervisor meetings, things went smoother in the last weeks of the FY-2022/23 budget process.

But from whichever angle you approach the issue, Robertson hopes the recommended adjustments will answer any questions and pin down a process this board has approved for future carryover funding transfers between fiscal year budgets for departmental and outside agency operational uses. Robertson’s October 18th work session presentation relates directly to the necessity of a public hearing and subsequent board approval of a pending transfer of $2.05 million from the County’s Fiscal Year-2021/22 budget to its current FY-2022/23 budget. Robertson explained those funds were part of a $3.3-million surplus of revenues over expenditures in the FY-2021/22 County budget year.

County Finance Director Matt Robertson explains the proposed budget carryover and use proposal authorization to be put into play next week.

As Robertson told the board, state codes require that budget amendments exceeding 1% of the total projected expenditures in the currently approved budget year require a public hearing allowing citizen input prior to final board action. That public hearing is targeted for October 25.

The balance of the work session was a briefing on use of the County’s new software and the laptop computers supervisors and staff have to access that software.

Other than board and staff reports, the regular meeting convened at 7 p.m. consisted of a seven-item Consent Agenda and an Executive/Closed Session. The Consent Agenda, which included authorization to advertise the above-cited October 25th public hearing on the $2.05-million budget-year transfer, was approved as presented by a unanimous vote. That Special Meeting is slated to begin at 6 p.m. at the Warren County Government Center (WCGC) main meeting room.

“New and exciting information”

When Board Chair Cheryl Cullers asked if the scheduled Closed Session remained necessary, County Administrator Ed Daley responded, “Yes, we (staff) have new and exciting information to present to you.”

‘New and exciting information’ on FR-WC EDA legal affairs was promised by County Administrator Ed Daley, below, when Board Chair Cheryl Cullers, above center, asked if the scheduled Executive/Closed Session was still necessary. But the rest of us will just have to wait to find out exactly HOW ‘new and exciting’ it really was.

The Closed Session topics were: “… the provision of legal advice” regarding the FR-WC EDA and all its various litigations, including its civil suits “vs. Jennifer McDonald et al.” and the dueling civil litigations between “the Town of Front Royal vs. the EDA, et al.” and “the EDA vs. the Town of Front Royal, and other potential claims and litigation relating to other possible liabilities of the EDA, the recovery of EDA funds and assets, and the outstanding indebtedness of the EDA.”

As has been reported by Royal Examiner, in four civil asset-recovery cases tried in July, juries awarded the FR-WC EDA a total of about $14 million. July civil case defendants included Truc “Curt” Tran and ITFederal, Donald Poe and Earth Right Energy, William Lambert, and April Petty. Coupled with an out-of-court civil “no-fault” settlement with former FR-WC EDA Executive Director Jennifer McDonald in which the EDA was awarded an estimated $9 million in real estate assets, among other settlements, the now unilaterally County-directed FR-WC EDA has been awarded, on paper thus far, approximately $23 million of the estimated $26-million allegedly misdirected to personal gain by McDonald and co-conspirators named in the EDA civil litigations related to the 2014/15 to 2018 FR-WC EDA financial scandal. There are several more civil trials looming. Attorneys for the six above-named civil case defendants (including the companies) have all filed motions to overturn the civil case jury verdicts as unsubstantiated by technicalities within civil code law.

On the “outstanding indebtedness” side, as mentioned during the joint Front Royal Town Council/Front Royal EDA (FREDA) meeting on Monday, United Bank has a $10-million claim against the FR-WC EDA. However, questioned about that claim on Wednesday, FR-WC EDA Board of Directors Chairman Jeff Browne explained that there has been no litigation between the FR-WC EDA and any of the three banks it has dealt with in recent years. So, any bank claim has been a mutually agreed upon one involving bank financing of EDA-overseen projects undertaken on behalf of the Town and County governments in recent years.

Among those bank-financed projects was the ITFederal one in town, for which the Town Council authorized provision of a four-month, $10-million “bridge” loan at the request of then EDA Executive Director McDonald. McDonald explained to the then mayor and council, circa 2017/18, that the bank wanted such a gesture to assure that “the community was behind the project” before it agreed to the loan. From information Royal Examiner later obtained by Freedom of Information Act (FOIA) request, concerns about a lack of ITFederal assets to accomplish what it presented may have created the bank’s hesitancy to authorize a $10-million loan for the project. As this reporter recalls, Tran and ITFederal listed assets of about $2,130,000 in its loan application. However, $2.1 million of that number was the publicly estimated value of the 30-acre Royal Phoenix parcel the EDA Board had “sold” to ITFederal for one dollar, ostensibly to “jump start” development at the federally overseen “brownfield” and former Superfund environmental reclamation site.

Another EDA-bank financed project was the $7-million-plus construction loan for the new Front Royal Police Headquarters, across Kendrick Lane from the FR-WC EDA office complex and the Royal Phoenix Business Park, where a lonely, unoccupied building marks the site of the aborted ITFederal project.

Artists rendering of the proposed initial ITFederal bldg. on its 30-acre Avtex lot parcel. Below the finished product with no Town occupancy permit, alone and abandoned as a final resolution of the July civil liability case verdict, and a defense motion to overturn that verdict is awaited.

But as to any “new and exciting information” regarding any of these situations, it is known only to those supervisors and staff behind the closed doors of Tuesday evening’s Executive Session. And they, not even that fly on the WCGC wall I’ve been trying to catch, are talking.

So, while we can’t offer video of that Executive/Closed Session discussion of new developments on the FR-WC EDA legal front, see the two-pronged work session and subsequent regular meeting open session discussions in the County video.