Following a Tuesday evening (October 15) closed session to discuss personnel matters and the Town lawsuit against the EDA, in a surprise move a 4-1 town council majority, Tewalt dissenting and Meza absent, approved appointment of Interim Mayor Matt Tederick as Interim Town Manager to succeed Joe Waltz. Waltz’s last day is November 8. Tederick’s appointment will take effect November 9. He will have to resign as interim mayor prior to that.
Exactly when the winner of the two-man race to finish the final year of Hollis Tharpe’s resigned term will be sworn in following the November 5 Mayoral Special Election remains to be seen. The electoral result will have to be certified by a Circuit Court judge.
That mayor’s race is between Tharpe, the man Tederick succeeded upon Tharpe’s resignation effective May 2 while facing a criminal charge of solicitation of prostitution at a local massage parlor, and Eugene Tewalt, who as noted above cast the lone dissenting vote Tuesday night against Tederick’s interim town manager appointment. So Tederick is facing an undetermined tenure as interim town manager under the mayoral leadership of one of two people who do not appear to be big supporters.
To add to the soap opera flavor of the situation, Tederick was foreman of the grand jury that indicted Tharpe on the solicitation charge on April 15, four days before Tharpe announced his pending resignation to fight the legal charge and keep the Town government out of that legal crosshair. That solicitation charge was later dropped by Special Prosecutor Heather Hovermale due to the massage parlor’s proprietor’s invocation of her Fifth Amendment right not to self incriminate due to related charges against her.
The motion to appoint Tederick Interim Town Manager was made by Vice-Mayor Bill Sealock. However the vote was called by Tederick, leaving some concern that he should have recused himself from direct participation at even that level on appointment to a six-figure salaried Town job. Other legal concerns were later expressed due to a Town Charter prohibiting “council members” from appointments while serving in their elected office. Tederick was appointed interim mayor by a 4-2 council majority, Tewalt and Thompson dissenting, on May 28.
Attempts to reach Town Attorney Doug Napier for comment on the legal dynamics at play in the appointment prior to publication were unsuccessful. However the fact the appointment won’t take effect until Tederick has resigned the interim mayor’s position to assume the interim town manager’s post may accommodate any Town Charter issues.
As for his chairing the open meeting and vote following the closed session, reached Wednesday afternoon Tederick promised he would not have broken an unlikely tie vote – only five council members were present in Jacob Meza’s absence – in his favor.
“I wouldn’t have done that,” Tederick laughed over the phone.
Tederick said the idea of his again filling an interim role in a key Town position, this time a high-paying administrative staff position, was first broached to him on Saturday by a councilman he declined to identify.
Tederick also revealed that at a meeting the day following Waltz’s October 9 resignation notification, the town manager had informed him and Vice-Mayor Sealock that the in-house staffer he thought most suited to serve in an interim town manager’s role indicated he was not interested in the job.
“We went into Executive Session last night under personnel matters and the issue was broached – it was, what do we do? The same councilman threw out my name. And I said I’m not comfortable being in this room,” Tederick said of his reaction to closed session discussion of his appointment.
The interim mayor said he has expressed a belief that whoever was a candidate for the interim job should begin “shadowing Joe Waltz as soon as possible. We have a $47-million dollar corporation to run – we can’t have no CEO,” Tederick observed, adding, “I can’t imagine ever in my life being interim in either of these positions. The Town is in a challenging position. I am just trying to do my part to fill gaps and stabilize the ship.”
Asked if unlike the mayor’s position, he might seek the slightly better paying town manager’s job on a permanent basis, Tederick quickly replied, “No! No! No!”
Asked if that was three “no’s” with three exclamation points, Tederick said, “Yes, you can write it that way.” He added that he has personal business interests he wants to get back to and would make a primary priority the search for and hiring of a permanent town manager. It is a process he said from discussion with one Town staffer in a position to know, a process that could take three months on a fast track and up to six months if that fast track fails.
Tederick credited Administrative Assistant Tina Pressley in the Town Manager’s Office for that estimate, noting that Pressley has served with eight town managers here and seen the process and timeframe between each hire.
After that first priority of finding a permanent replacement for Waltz, Tederick said his second priority as town manager would be to help guide the Town into its next fiscal year budget process; followed by an already begun initiative to improve the Town’s communications network and public information dissemination to its citizens – “I think everyone recognizes the need for that,” Front Royal’s own “Interim Man” observed.
We asked Tederick about the coincidence of the vote on his appointment as interim town manager coming the same night that across town at the Warren County Government Center, County
Board of Supervisors Chairman Dan Murray was re-raising the idea of consolidation of the two governments.
The Interim Front Royal Mayor said that while he supports the idea of public consideration of consolidation of the two municipal governments into one elected countywide governmental apparatus, he has stayed on the sidelines of the debate.
During Tuesday’s Town Council meeting at the Villa Avenue Community Center Tederick had caught criticism for his attempted fast tracking of votes on a slashing of water-sewer utility tap fees.
In fact Tederick caught some friendly, if pointed criticism from former Front Royal Mayor and Councilman Stan Brooks during public comments for referring to Town reserves as a “slush fund”. Brooks noted the term implied hidden money used for illegal purposes.
Tederick apologized, replying that he did not realize the criminal implication of the term.
Contacted about Tuesday’s end of meeting development regarding Tederick’s pending appointment as interim town manager, Brooks quipped, “I guess now Matt will be managing the Town’s ‘slush fund’.”
As noted in our related tap fee story, Councilman Tewalt declined to elaborate on the reason for his vote against Tederick’s second interim Town appointment.
Hollis Tharpe, Tewalt’s opponent in the upcoming mayoral special election, was also initially hesitant to go on the record when contacted about it. However, Tharpe quickly turned his focus toward the process leading up to the council vote approving the appointment.
“I don’t think any citizen knew this was coming – again in closed session council has chosen to hide from the public. They have shunned the public in making a decision without public input or involvement. Just like they did with the interim mayor’s appointment they have put their own self-serving interest over the wishes of our 14,000 citizens,” Tharpe said.
Asked about his mayoral opponent’s vote against the appointment, Tharpe replied, “Gene and I agree on quite a few things, and have over the last 14 years I think the record will show.”
We also asked Tharpe about the mention of Town-County governmental consolidation across town at Tuesday night’s Warren County Board of Supervisors meeting.
“It is good material for a conspiracy theorist – things were running along good under Hollis; then you go back to the grand jury he (Tederick) volunteered to be foreman of; then Matt is mayor; and next town manager; and suddenly there is consolidation talk again,” Tharpe replied.
But as one conspiracy theorist once lamented, “What’s the point of having a conspiracy theory if everyone is going to conspire against it?”
Local resident warns School Board; extra special ed teacher approved
FRONT ROYAL — Local resident James Harper asked Warren County School Board members during their December 4 meeting to reconsider policy that prohibits them from responding to citizens who make public comments at regular meetings.
“Miss Bower,” said Harper, referring to School Board Chairwoman Catherine Bower, “it is my hope that you’ll change your opening statement and have a dialogue or discussion with folks who take the time to appear instead of saying, ‘Members will not comment.’”
Prior to each community participation portion of every School Board meeting, the chair reads a statement that says: “Community Participation is a time intended for the public to give input on relevant school issues and not intended to be a question and answer period as this may be the first time the Board has heard this information. Please do not expect individual responses or any comment by the Board at this time but be assured that any concerns will be reviewed. Please print your name on the sheet at the podium, state your name and address, and limit your comments to three minutes.”
Following that longstanding criteria, the School Board members did not respond to Harper’s request.
Nevertheless, the Rockland Road resident continued with a few more comments.
For example, Harper said he plans to ask the Warren County Board of Supervisors to take control of spending for Warren County Public Schools (WCPS) or to, at the least, sign off on it.
“In my opinion, your spending needs oversight,” Harper told School Board members. “I’m still flabbergasted that this board paid someone a $12,000 cost-of-living raise and paid this person for another six months when he resigns.”
Harper was referring to outgoing WCPS Superintendent Greg Drescher, who resigned in September citing his wife’s illness as part of the reason for deciding to leave early.
In October, the School Board placed Drescher, who pulls down a six-figure salary at WCPS, on paid administrative leave following a now-rescinded indictment related to the Front Royal-Warren County Economic Development Authority (EDA) financial scandal. Drescher had served on the EDA Board of Directors for 12 years — five while also serving as superintendent of schools — and resigned in August 2018 as the EDA board’s chairman.
Since the School Board’s October decision, the paid-administrative-leave designation has allowed Drescher to collect his regular paychecks until year’s end despite not having to conduct WCPS superintendent duties.
“I challenge you to find one other person in Warren County who got that deal,” Harper said.
Also in October, the School Board approved additional funds totaling $3,250 a month in extra stipends to cover the superintendent position Drescher vacated. The stipends will be paid to three WCPS employees until a new superintendent is hired next year.
Harper, who is not a stranger to School Board members and regularly comments during community participation segments of their meetings, also questioned Drescher’s compensation, which is set by the School Board.
It’s a question that Harper also asked earlier this year of Bower when he wondered why Drescher’s salary wasn’t comparable with those of other superintendents in the area. Bower had responded that the School Board didn’t collect such data.
“I was shocked and wondered how you decide how much to pay someone,” Harper recalled on Wednesday.
“Just so you know,” he added, “Warren County paid Greg Drescher $45,000 more than the superintendent of Shenandoah County schools,” which Harper said has more schools, a larger student population, and where the superintendent has a PhD.
The School Board must have thought it was a good idea to give Drescher a $12,000 cost-of-living raise coupled with approval for paid administrative leave “at taxpayers’ expense” after he resigned, said Harper, noting that the board “must think this County has unlimited money to spend.”
Harper also suggested that if the School Board instead had used both the $12,000 and the $45,000, it could have given $1,000 raises to some 40 WCPS teachers. “That’s just a thought off the top of my head,” he said.
Another community participant who spoke at the School Board’s December 4 meeting was Phillip Hong, the sexual assault prevention specialist for the Winchester, Va.-based Laurel Center, who presented an opportunity to work cooperatively with WCPS on prevention programming to reduce violence and empower youth resilience.
Hong cited a report showing an uptick in Warren County sexual assault reporting during this year. “Any number, regardless of what it is, is something we hope to reduce,” he said.
The Laurel Center provides numerous free workshops and classes, including Teenage Prevention Programming that is school- and group-based, said Hong.
Likewise, the center’s Sexual Violence Prevention Program is free and confidential for residents in Warren County, Frederick County, Winchester City, and Clarke County, and includes multiple school-based prevention programs designed for middle and high school students.
In other presentations — including resolutions recognizing the service of retiring School Board members Donna McEathron and C. Douglas Rosen, as well as Drescher — the board also heard from Warren County Administrator Doug Stanley, who as president of the Warren County Educational Endowment announced the group’s award of 10 grants totaling $44,411.74 to several local projects throughout the WCPS system.
Additionally, the School Board voted on several items during its action agenda portion of the meeting.
For instance, board members unanimously approved an additional Early Childhood Special Education (ECSE) teacher for the current school year at an estimated cost of $65,423 in salary and benefits.
“As our preschool programs … increase in numbers, the need for an additional ECSE is evident,” WCPS Director of Special Services Michael Hirsch told School Board members. “This additional resource will also allow our Family Engagement coordinator to lighten her caseload and expand family engagement activities.”
According to a report that Hirsch also submitted to the board, the additional teacher will be utilized as a resource teacher to students with disabilities in both classroom and community settings throughout the ECSE programs during morning hours and will provide classroom-based services to newly eligible students in the afternoon in the preschool classroom at Skyline High School.
The high school’s classroom does not currently have students there in the afternoon, so utilizing that space will alleviate the addition of a new physical classroom, according to Hirsch’s report.
Warren County School Board members present and voting at the December 4 meeting included Chairwoman Catherine Bower; Vice Chairman C. Douglas Rosen; and members Donna McEathron, James Wells, and Arnold Williams Jr.
Watch the entire Warren County School Board meeting in the exclusive Royal Examiner video:
Tederick addresses Financial Disclosure submission and tie to law firm hired in Town’s EDA lawsuit
In a December 2nd telephone interview Interim Front Royal Town Manager Matt Tederick dismissed questions about seeming gaps in his State-required “Virginia Conflict of Interest and Ethics Advisory Council STATE AND LOCAL STATEMENT OF ECONOMIC INTERESTS” form submitted to the Town for his Interim Mayor’s appointment as the work of political enemies.
“I’m a political figure and politics is what it is … and political enemies will get their pound of flesh. I’m used to it,” Tederick said of increased public scrutiny of his business interests during his tenure as, first Interim Mayor and now Interim Town Manager. Much of that scrutiny has come in two Letters to the Editor of Royal Examiner by Simon Mays.
The former Warren County supervisor and long-time county Republican Committee chairman said his perception of those letters published under the titles “Words Do Matter” and “Matthew Tederick’s Peyton Places”, the latter a reference to the 100 Peyton Street Front Royal address of some businesses with apparent Tederick ties, as an attempt to drag him or those businesses entities “into the EDA thing”. Tederick explained some of those business ties as simply being the landlord and picking up mail for absent tenants, leading to some “Registered Agent” designations.
We told Tederick we didn’t read Mays’ letters as an attempt to tie anyone, including him, to the EDA financial scandal, but rather as a call for an over-abundance of care in both public statements and due diligence regarding such financial disclosure filings by any municipal official at this point in time while public mistrust of municipal leadership is at such a peak due to the EDA financial scandal.
Of the appearance of David Damiani of the Damiani & Damiani law firm as the Registered Agent of not only the Alexandria law firm bearing his family name, but for 1839 Capital LLC which lists Tederick as “President”, Tederick said that if not in his financial disclosure and conflict of interest statement where 1839 Capital is not listed, the connection – in addition to Damiani’s Registered Agent designation the two companies share the same 604 Cameron Street address in Alexandria – was extensively discussed with the Town Attorney and Council as the law firm was considered to help represent the Town in its civil suit against the EDA.
On November 25, Damiani & Damiani PC was approved by Council for up to $200,000 in legal fees related to the Town’s civil suit against the EDA. In fact, Tederick said that while still serving as Interim Mayor in October, he recalled handing the mayor’s gavel over to Vice Mayor Bill Sealock when the hiring of Damiani & Damiani was discussed.
As for 1839 Capital’s exclusion from his financial disclosure form, Tederick explained that as a new start-up company – its website indicates an “active” SEC filing process stretching from May 17 to August 9 while Tederick was emerging as a candidate for, and then serving as Interim Front Royal Mayor – the company has yet to generate any income. That lack of income precluded the company needing to be added to Tederick’s State financial disclosure and conflict of interest form, he said in the December 2 phone interview.
In fact, Tederick said he contacted the State’s Ethics and Advisory Council to help in his preparation of the financial disclosure and conflict of interest form. He cited Ethics Committee staffer Stuart Petoe as the person who helped “walk me through” that preparation – “I’ve disclosed everything I get income from,” Tederick said.
And Tederick added that he had conversations with Town Attorney Doug Napier regarding the potential hiring of Damiani & Damiani to assist in the Town civil action against the EDA. In fact, Tederick said he had asked David Damiani, whom he had recently met, if he could recommend a law firm that was experienced in handling civil municipal litigation as the Town was looking for such a company regarding its EDA civil suit.
“You don’t know what we do,” was Damiani’s reply Tederick said. Damiani then informed Tederick of the company’s background in “class action lawsuits for and against municipal entities”.
Tederick took that information to Town Attorney Napier, who participated in the vetting process and agreed that Damiani & Damiani “was absolutely the right law firm” to assist in the Town’s civil case against the EDA seeking recovery of an as-yet-to-be-determined amount of Town financial assets.
Tederick said he was able to negotiate a favorable rate with Damiani & Damiani related to travel expenses because one of its members had moved out this way.
As reported in our story “Town skirts EDA request for FRPD construction back payments”, up to $200,000 in legal expenses was authorized for payment to Damiani & Damiani in one of three November 25th motions related to the Town litigation against the EDA. In addition to the $200,000 in legal expenses, council authorized $45,000 to Mitchell & Company PC for “auditing services to support litigation in the Town’s civil lawsuit against …the EDA”.
In a third motion council authorized a budget amendment transferring $282,000 in scheduled debt service payments to the EDA to cover legal and auditing expenses in its EDA civil action. Contacted later in the week, Town Finance Director B. J. Wilson confirmed that those transfers do relate to the Town debt service overpayments he discovered in the spring of 2018. It was that discovery and a subsequent August 23 confrontation between Town staff and auditors and then EDA Executive Director Jennifer McDonald and then EDA Board Chairman Greg Drescher that began the dominoes of the EDA financial scandal tumbling into motion.
All motions were approved by 5-0 votes with now Mayor Tewalt’s council seat vacant.
Front Royal poised to lobby for State Code change to allow 2nd EDA
Despite unresolved legal complications the Front Royal Town Council plans to move forward with approval of a Resolution seeking State General Assembly authority to create its own Economic Development Authority (EDA) despite the continued existence of the EDA it co-created with Warren County in the mid-1960’s.
“I’m all for it,” Gary Gillespie exuded after a five-minute work session briefing by Town Attorney Doug Napier Monday night, December 2.
“I agree with you,” Gillespie’s council colleague Letasha Thompson added, with no opposition opinion being expressed.
Mayor Gene Tewalt then instructed staff to include a vote on the Resolution at the next scheduled meeting agenda, Monday, December 9. That is council’s only meeting of December’s holiday season.
However, what appears to be council’s preferred path of distance from the existing EDA and creation of its own alternate Economic Development Authority may not be such an easy task, with or without the legislative sponsorship Interim Town Manager Matt Tederick says he has been promised, without citing a name.
Existing State Code 15.2-4905 forbids the creation of a second EDA or IDA (Industrial Development Authority) in a locality without the concurrence of “the governing body of such locality” to the “inducement resolution” of the second EDA or IDA. The fact that the Town and County co-created the existing EDA could present a legal hurdle to the Town’s planned move away from the now largely retooled EDA Board and totally revamped Executive staff.
The work session agenda summary prepared by the Town Attorney notes that, “The Town no longer appoints any of the members of the Board of Directors of the existing EDA (an apparent voluntary abdication of appointment authority), nor does it fund the existing EDA” (an operational funding consequence of County compensation to the Town for its 1998 agreement to extend Town central water-sewer into the County North Corridor without annexation).
The legal staff summary continues, “However, under current State Code, even if the Town rescinds its EDA creation ordinance, because the existing EDA was jointly created by the Town with the County, the Town will be unable to create a separate Town EDA which can finance facilities outside the Town, unless the County concurs with this financing by a Board of Supervisors’ resolution.”
But that isn’t all, as Town Attorney Napier points out in his agenda summary of the Town’s options.
“In fact, as the next paragraph will show, there may well be an argument that as long as there are outstanding EDA bonds whether the Town can even rescind its ordinance co-creating the existing EDA at all, in which case the Town would not even be able to create a separate Town EDA which could fund Town EDA facilities in Town,” Napier wrote.
The referenced legislative code paragraph cites the potential of an EDA Board of Directors stating its mission accomplished, with all debts paid, leading to its own initiative to dissolve itself. At that point, “the title to all funds and properties owned by the authority at the time of such dissolution shall vest in the locality creating the authority and possession of such funds and properties shall forthwith be delivered to such locality.” (bold in agenda text context)
Of this language Napier writes, “A strong argument can be made that until all the debts and bonds of the existing EDA are paid, the existing EDA must remain in existence. Additionally, even if the Town could rescind its ordinance which created its part of the existing EDA, would the Town wish to give up its rights to its legal one-half of the EDA property and other assets? … That potentially could be a lot for the Town to consider walking away from.”
Prior to the mayor’s polling of council on a preferred course of action, Jacob Meza asked Town Attorney Napier if proceeding with his suggested effort to alter State law to allow the Town of Front Royal alone to create a second, functioning EDA within the community wouldn’t produce the same complication in giving up the Town’s claim on half of the existing EDA’s assets.
When Napier responded that it would not, Meza began the expression of support for the town attorney’s recommended option on a path forward if council’s desire is to create its own EDA while its civil litigation against the existing co-created EDA proceeds. As Napier confirmed to us the following day, that recommended path is toward a legislative exception for the Town of Front Royal to create a second EDA independent of the County without withdrawing from its legal interest in the existing, co-created EDA.
Interim Town Manager Matt Tederick told council that it must move quickly to get its request for a State Code change on the floor during the next session of the General Assembly or face waiting another year for the opportunity. Tederick also said he had made contact with a member of the state legislature who would be willing to sponsor the Town legislative exemption request, though he did not publicly name that state representative. Warren County and the Town have three State House representatives, the 15th (Todd Gilbert), 29th (Chris Collins) and 18th (Mike Webert), as well as 26th District State Senator Mark Obenshain, in the Virginia General Assembly. The smart money is on one of those four.
However, it remains to be seen how such a legislative move toward a singular exception for the Town to create a second EDA while suing the existing one it co-created with the County over a half century ago will play in Richmond, or for that matter across town at the Warren County Government Center.
Napier’s independent, Town-created EDA situation agenda summary observes that there may be times that it would be advantageous for the Town to consider economic development financing of “facilities outside its boundaries”. Such times could relate to the expansion of “water or waste disposal facilities … the addition of facilities of higher education … the expansion of additional medical facilities” or if the Town “wanted to expand its tax base” Napier observed.
However, these are things the Town could only accomplish in a joint Town-County EDA or with a Resolution of Support from the County Supervisors related to actions of an independent Town-controlled EDA. And the latter is contingent on a General Assembly majority granting the Town its desired exemption to the existing State Code.
Is this writer the only one who sees irony in the Town’s coming initiative to seek a one-of-a-kind State legislative exemption to facilitate creation of an independent EDA? After all, wasn’t it a first-of-its-kind State exemption, though judicially approved in 1999, that allowed Warren County to receive the economic development benefit of Town of Front Royal water-sewer utilities in its North Corridor without the established process of annexation by the municipality controlling those utilities preceding that extension?
Perhaps in a clue of things to come, toward the work session’s end Councilman Chris Holloway suggested Town staff explore the pros and cons of revisiting Town annexation of the North Corridor “out to Rockland Road”. Mayor Tewalt observed that a Memorandum of Understanding between the Town and County that may be attached to the Town’s water policy, prohibits Town annexation in the North Corridor for as much as 20 years from its inception.
Wonder if the Town could get a one-of-a-kind exception, perhaps from the State Executive branch this time, to rescind that MOU while they’re at it?
Following work session Town poised to move on several key initiatives
It was a varied and potentially far-reaching Front Royal Town Council work session that followed Monday evening’s dedication of the Town Hall foyer placement of a Memorial Plaque to Dr. Joseph Warren, the Revolutionary War figure for whom Warren County is named. Period-costumed re-enactors Larry Johnson and Ned Farenholtz keynoted the dedication, citing the Massachusetts physician’s pivotal role in galvanizing support for American independence and his early death as a martyr to that cause.
Following a closed session to interview candidates for the Board of Architectural Review and Mayor Tewalt’s now-vacated council seat, Town officials, minus Vice-Mayor Sealock reportedly cited out west in Oklahoma, launched into several key topics surrounding the Town’s future on several fronts.
Primary among those (not in chronological order) were:
A/ what will be necessary to facilitate an apparently growing majority consensus to create an independent Town Economic Development Authority (EDA) – hint, it won’t be easy and will require a change in State Codes and the cooperation of the County;
B/ facilitation of the long-brewing “Blighted Building” aspect of a Town Property Maintenance Code, as well as developing a report from the Subdivision Committee anticipated by the end of January;
C/ hiring of a professional facilitator at a cost of $2,000 dollars to try and reach a consensus among downtown business owners on how best to proceed on parking, street closings and other issues revolving around special events in the Gazebo/Downtown Commons area at the intersection of East Main and Chester Streets;
D/ funding at a cost of $45,000 dollars, a council-requested “detailed review” of Town water-sewer rates, connection and other service fees.
On that latter front there appeared to be a council consensus to re-enact Town staff handling of utility Tap and Connection hook ups. Discussion indicated that an administrative decision was made in 2008 “somehow, somewhere” as Town Attorney Doug Napier put it, to withdraw the Town from providing that service.
See these discussions, as well as other “Open Discussion” and related topics touching on items ranging from providing volunteers to help financially-strapped people perform major property cleanups to improve the overall appearance of the town; exploring the Town-County Memorandum of Understanding regarding possible Town annexation of the North Commercial Corridor; and writing off the uncollected bad debt owed the Town for over five years.
As Interim Town Manager Matt Tederick pointed out, that $11,141.46 number representing 34 unpaid utility accounts being written off the books represents .3% (point-3 percent) of the Town’s public accounts – and a 99.7% collection rate isn’t bad, as Tederick told council. In fact, later discussion indicated an initiative, at least on the commercial side, to prevent Town utility clients from being hit with unreasonable deposits due to minor delinquent accounts.
Tederick cited the example of one customer with a $42 delinquent commercial rental bill that resulted in a $500 deposit being tacked on to that $42 back bill payment – okay guys, let’s add residential utility customers who may have had a day or two late utility payment on their records into that equation and we might be on to something.
See all these discussions impacting the Town and its citizens’ futures in this exclusive Royal Examiner video:
Town skirts EDA request for FRPD construction back payments
The Front Royal Town Council passed a series of four motions Monday, November 25, authorizing expenditures totaling $1.02 million dollars related to its civil litigation against the Economic Development Authority, as well as payments to contractors regarding construction of the new Front Royal Police headquarters across Kendrick Lane from the EDA office complex.
Of that million dollars plus total, $527,800 approved in a series of three motions is for legal and auditing fees related to the Town’s civil suit against the EDA. The $492,284.34 approved in the last of the four motions is for vendor (contractor) payments recently come due on the FRPD construction project.
The motions were all approved by 5-0 votes, with Mayor-Elect Gene Tewalt not voting as Mayor Pro Tempore as he was declared at the meeting’s outset. As noted above, over half of the authorized payments are for attorney and auditing fees for services related to the Town’s attempt to recover “as much as $15 million” from the EDA. The $492,284 was approved to cover direct payments to contractors on the Front Royal Police Headquarters construction project.
However with its litigation still pending as the EDA struggles to right its financial situation, the Town did not make good on an EDA request for back payments totaling over $8 million dollars for vendor/contractor payments it has made on the FRPD headquarters project on behalf of the Town.
In a letter from EDA Board of Directors Chairman Ed Daley to Town Finance Director B. J. Wilson dated November 15, 2019, included in the agenda packet on the final of the four EDA-related payment authorization requests, the EDA appears to attempt to force the Town’s hand on making up those back payments to the EDA.
After informing Wilson of the EDA’s receipt of FRPD project Requisition (invoice) “# 45” dated October 22, 2019, Daley wrote, “After speaking with our Board of Directors, I write to advise the Town that we will hold this pay requisition without paying until the Town of Front Royal pays the principal and interest due on this project.
“The principal, legal fees and draw fees paid by the EDA for the Town to date is $8,440,797.17,” Daley continues, adding, “The interest amount is $291,856.21 which covers interest on the previous 44 pay requisitions, up to October 31, 2019.” The recently-installed EDA Board Chairman closes by informing the Town, “Once we receive the past amount due on this project, we will process pay requisition # 45 accordingly.”
The Daley letter seeking reimbursement on the $8.44 million in police headquarter construction payments indicates an FRPD project payment and interest accrued history attached. But in the council motion on authorization of vendor payments there is no amount attached to Requisition # 45. However, in the “Revised Item # 15 motion made by Jacob Meza, seconded by Chris Holloway, an amount of $492,284.34 is cited to cover payments directly “to vendors Dustin Construction, Mosley Architects and JTS LLC for construction of the Police Department Project.”
The motion continues to cite the use of money “previously budgeted for the Police Department Project” and notes the Dustin Construction payment will be released “after signed waiver of lien is obtained.”
Contacted by phone on Tuesday, EDA Administrative Assistant Gretchen Henderson said that Dustin Construction ($243,843.48) and JTS LLC ($893.84) were included in payment Requisition # 45, but not the Mosley payment which may be from a separate invoice.
So it appears that the Front Royal Town Council has decided to respond to the EDA’s most recent request it make good on its $8.4-million FRPD project payment debt to the EDA by bypassing the EDA on that debt as the Town’s civil suit against the EDA moves forward; while simply making future invoice Requisition payments directly to the vendors.
The first EDA-related Council payment authorization of Monday’s meeting was $282,800 for “attorney fees and auditing services related to the Town’s civil suit against the Front Royal-Warren County Economic Development Authority (EDA)”.
The funds for that payment were requested to be transferred from scheduled FY 2019 and FY 2020 Town debt service payments to the EDA on a number of projects. Those projects and transferred amounts were cited as Success Farm ($10,370), Baugh Drive Extension ($6,535), Happy Creek ($6,845), Stephens Industrial Park ($11,725), Leach Run Parkway ($105,925), and “Appropriated Funds Forward ($141,400), totaling the $282,800 authorized for attorney and audit fees related to the Town lawsuit against the EDA.
The now $21.3-million EDA financial scandal revolving around former EDA Executive Director Jennifer McDonald began unraveling in late spring to early summer of 2018 when Town Finance Director Wilson discovered about eight years of Town debt service overpayments to the EDA. EDA officials told Royal Examiner they have not yet seen a number on those believed Town overpayments.
Might one take a guess based on that $282,800 transfer of future scheduled debt service payments to the EDA; or might one look at the fact that transfer comes within $9,056 of the disputed FRPD interest payments of $291,856.21?
Hey, guessing is always a gamble, isn’t it?
As those keeping a scorecard on the now multi-faceted EDA financial scandal and related civil and criminal litigation know, the Town Council authorized its legal department to file the aforementioned civil action against the EDA seeking recovery of “as much as $15 million dollars” of allegedly misdirected Town assets as a precaution against unknown variables, including possible statute of limitation issues. Included in the Town’s suit for recovered assets is exactly what interest rate the Town should be paying on the FRPD construction project.
The EDA is paying 3% interest on the FRPD construction project. However, the Town is holding out for a 1% rate that would coincide with what it contends was promised to it by the EDA, or at least by its then Executive Director McDonald, as part of the New Market Tax Credit Program for which the project did not qualify because it was not a job-creating economic development project.
In fact as Royal Examiner has previously reported, then Town Manager Joe Waltz and Finance Director Wilson, as well as People Inc. regional administrator of the NMTC Program Brian Phipps all advised Council against “gambling” on competing for the NMTC funding versus accepting a guaranteed, 30-year fixed 2.65% interest rate offered to the Town in late 2017 through a private sector bank.
Contacted Tuesday, Town Attorney Doug Napier said that after Phipps’ early January 2018 work session appearance before council, Town officials contacted McDonald, who assured them Phipps “didn’t know what he was talking about” and that the NMTC bond issue had been achieved to include the FRPD project.
Consequently a council majority decided to take that gamble on the best case scenario of nine years of interest-free payments significantly reducing the total interest due on a project bond issue.
The other two EDA-related payment authorizations unanimously approved by council Monday evening were “up to $45,000 to Mitchell & Company PC for auditing services to support litigation in the Town’s civil suit against … (the EDA)” and “payment not to exceed $200,000 to Damiani & Damiani for legal services related to the Town’s civil suit against the …(EDA).”
Contacted Tuesday for a reaction to the Town Council’s response to the EDA board’s request the Town make good on its FRPD payment debt, current EDA Executive Director Doug Parsons said,
“What the Town does is their business, what they chose to pay, what they chose not to pay it’s entirely up to them. We feel confident in the figures we provided on the invoice for the Front Royal Police Department. We would love to work out this difference of opinion with them; and we’re always ready to work with them on other projects while we work out our differences.”
Watch the entire Front Royal Town Council meeting of November 25th here:
Town code changes needed for new Valley Health Hospital signs
The Front Royal Planning Commission Meeting on November 20th opened quietly with no citizen comments as Chairman Douglas Jones opened the floor.
Once the minutes of the September 4th and September 18th meetings had been unanimously approved, the Chairman opened a public hearing on a request by Valley Health and Warren Memorial Hospital to amend the town code covering Performance Standards for Medical Facility Signs.
Jeremy Camp, the Town Planning Director, explained the requested change to the code would not merely affect Valley Health or Warren Memorial, but all medical facilities. The commission’s output would be a recommendation to Town Council, as well as contingent approval of the Master Facility Signage plan. He explained further that by working with Valley Health the planning department was able to harmonize the draft code change with the new Hospital plan. It did result in a reduction in size of the main sign for the new facility to comply with the amended code. Some signs were able to be made larger for better visibility, such as markings for the Emergency room. Finally, Camp reiterated that the commission’s approval would be contingent on the town Council approval of the code change. He then gave the commissioners a draft motion to approve. He added that a sign permit would be required prior to final installation to give the town the opportunity to verify that the signage complied with the town code.
Following brief comments from Rhonda Neal of IdentityUSA, the signage designers for the project, who expressed her appreciation to the planning Department for their patience in working through the signage issues, Commissioner Lorraine Smelser asked whether previously identified concerns from the previous work sessions had been resolved in the amended plan. Camp indicated that all previously identified issues had been resolved.
Commissioner Connie Marshner asked Camp if there was a definition of a “Medical Facility” in the code. Camp explained that an entity wishing to erect signage and calling itself a medical facility would still have to come before the Commission with a signage plan. The code requires a medical facility to be sited on a minimum of 2 acres. Marshner expressed concern that “alternative” therapies may call themselves medical and take advantage of the benefits of this code change. “Are we establishing a precedent? What are we opening a door to?”
Vice Chairman McFadden responded by citing the process required for not only signage but facility usage and construction provided plenty of opportunity for approval or disapproval of a facility and signage. He expressed concern that “we would be opening a pandora’s box” by strictly defining a “Medical Facility” beyond what already exists.
Commissioner Cee Ann Davis closed out the discussion by reminding the commission that in the commonwealth of Virginia, the planning commission was below the policy making level related to allowable uses of property.
Upon a motion by Vice Chairman McFadden and second by Commissioner Smelser, the motion was unanimously passed. The chairman thanked the Hospital representatives for their work.
Camp reported on Planning Department activities including the Board of Zoning Appeals, which had considered two requests, one disapproved and one approved, and the Board of Architectural Review.
So far this year, 261 permits have been approved, which is on track to be the strongest number in the past several years. The number of homes is expected to be the highest since 2006. Also the Sheetz approval process is moving along. The improvements to West 17th Street that will go along with the Sheetz development are being finalized.
Upon completion of the Planning Director’s report, the Chairman asked for comments or reports from Commissioners. Commissioner Darryl Merchant addressed the issue of “Fake News”. He had been approached by a citizen regarding the water “tap fees” for new housing, and the citizen stated he had heard that only 5 new homes had been constructed and a lower tap fee was needed to stimulate housing construction. Merchant referred to the statistics provided by the Planning Director earlier and characterized the pace of construction as a “banner year” and asked the other commissioners to be aware of the facts when approached by citizens. Camp indicated the biggest limitation on new home construction in Front Royal was the lack of available lots.
No other commissioners had any comments so the Chairman adjourned the meeting.
Watch the meeting here on this exclusive Royal Examiner video: