As reported in a related story about the loss of a high percentage of experienced public school teachers locally, the Warren County Board of Supervisors has authorized a compensation study designed to bring county government employee salaries into competitive line with surrounding Northern Valley communities. See Related Story
The county decision came on the heels of the Town of Front Royal’s own compensation study, the result of which was received earlier this year and resulted in adjustments to the Town’s FY2018-19 budget to begin implementation of recommended salary adjustments.
The county government hired the same Maryland-based company, PayPointHR, as the Town used to conduct its study. The Town paid $25,750 for its Compensation and Classification Study. With a considerably larger employee base including public schools, emergency services and a countywide law enforcement apparatus, Warren County Human Resources Manager Jodi Saffelle notes that the County and School Board are splitting the cost of their survey, each paying $34,000 for a total study cost of $68,000.
Stay with me here, the math portion of this story is going to get worse – BUT I am doing the dirty work for you.
The result of the PayPointHR recommendation to the town government was town council adoption of a shorter-term three-year implementation plan (there was a five-year option as well). The three-year implementation is estimated to cost Front Royal a total of $367,707 over three years. The break-down given by Town Manager Joe Waltz was $123,815 in the first year (FY2018-19) and $121,946 in each of the following years.
That implementation package was estimated by the town manager to impact 90 of the Town’s total of 175 employees (164 fulltime and 11 part-time), or just over half.
Numbers from County Human Resources Manager Saffelle indicate a total of 337 County employees (212 fulltime, 85 part-time and 40 seasonal); as well as a total of 936 public school employees (791 fulltime and 145 part-time). As noted in our related story there are 432 teachers within those school system numbers. Saffelle elaborated that there are 93 sheriff’s office employees within that 212 county employee total.
Now not setting out to scare anybody over at the Warren County Government Center, but by this reporter’s best calculating – yep, that smell is my shoes and socks coming off again – including the public school system the County has a little over 7 times as many employees as the Town – 1,273 to 175.
Were the Town number of about 50% of employees qualifying for an increased compensation recommendation to hold true on the County side, that number – rounded down to precisely 50% – would be 636 impacted employees, or about 7 times the 90 impacted town employees.
As stated above, it is estimated to cost the Town of Front Royal a total of $367,707 to implement its compensation and classification study recommendations for those 90 employees: 90 goes into 636 just over 7 times – again we’ll round down to the County’s benefit (and mine, I hate fractions); so: 7 x $367,707 = $2,573,949 for a comparable salary adjustment to what the Town agreed to enact for its qualifying employees.
AGAIN, there is no guarantee the Town and County impacted numbers will equate percentage-wise – after all, this is an exercise in theoretical mathematics for two municipal entities of differing characters.
Field of Dreams?
However, in addition to dealing with its own administrative staff, larger law enforcement apparatus and fire and rescue departments staff turnovers, it appears the County is now at a crossroads on a long-term operational commitment for those impressive state-of-the-art new and renovated public school facilities funded through Warren County Capital Improvement Projects (CIP) over the last decade-plus.
With a nod to the classic baseball film “Field of Dreams” (I know you were wondering how I was going to wrap this up) the question is, “Now that you have built them (new school facilities), how do you get them (teachers) to come” – AND stay past their rookie and learning-curve seasons?
The writing appears to be on the “outfield wall” – I think I can just make that writing out: It says, “You must at least match offers with the Royals (Winchester), Rebels (New Market) and Express (Strasburg) in the Valley League, if not MLB’s Yankees and Dodgers (let’s say Loudoun and Fairfax Counties), to get them to come – and stay.”
A failure to heed this advice means those more experienced teachers, not to mention sheriff’s deputies, professional emergency services personnel and administrative employees will continue to fade like ballplayers’ ghosts into that cornfield past the outfield wall, never to be seen in our Field of Dreams again …
‘As the Audit Turns’ – local EDA soap opera plot thickens
While the big news to develop out of the Front Royal-Warren County Economic Development Authority’s second hour-plus closed session of Friday, March 22, was the resignation of board members Greg Drescher and Ron Llewellyn, an interesting side plot to the escalating EDA soap opera developed upon the arrival of Shenandoah District County Supervisor Tom Sayre.
Prior to Sayre’s arrival, as previously reported by Royal Examiner, the blockbuster out of closed session number one Friday morning was the authorization of litigation to be filed on the EDA’s behalf by the law firm contracted to handle EDA interests related to the six-month, quarter-million-dollar-plus audit and investigation of EDA finances. See Related Story:
Those finances under scrutiny are believed to stretch past the last fiscal year audit conducted annually at a cost of about $17,000 by Yount-Hyde-Barbour, across much of the decade-long tenure of former EDA Executive Director Jennifer McDonald. McDonald resigned by email on December 20 prior to the EDA board’s second scheduled closed session discussion of her job performance held within a week.
Sayre, who is engaged in dueling defamation civil lawsuits with McDonald surrounding alleged circumstances surrounding a reported May 18, 2017 break-in at the EDA office that showed no signs of forced entry and a reported June 15, 2017 vandalism at McDonald’s residence, arrived at the EDA office in the old American Viscose Admin building at 12:20 p.m., 45 minutes after the EDA Board of Directors convened that closed session. The first topic of discussion announced behind those doors closed at 11:35 a.m. were issues related to the audit and investigation of EDA finances. A second topic was the process of selecting a new executive director to succeed Jennifer McDonald on a permanent basis.
In addition to a suspected audit consultant representative, the EDA board and legal representatives, present behind those closed meeting doors were Warren County Administrator Doug Stanley and Happy Creek Supervisor Tony Carter.
In the wake of EDA Administrative Assistant Missy Henry’s resignation earlier in the week, other than two reporters the only person present in the front office was former County Finance Director Carolyn Stimmel. Stimmel, who has retired from her county position, has been assisting Interim EDA Executive Director John Anzivino on a part-time basis recently.
Upon discovery of Stanley and his board colleague Carter’s presence in the closed session, Sayre began lobbying Stimmel to see if he could join the closed session as a county supervisor. In fact as board vice chairman, upon his arrival Sayre was the highest-ranking elected county official present. Stimmel’s inquiry resulted in an apparent “no” with the added information that Carter and Stanley would be exiting the closed meeting “in a minute”.
Unsatisfied with that answer, an additional inquiry forwarded by Stimmel for Sayre led EDA and County attorney Dan Whitten to exit the closed session to engage in a lengthy discussion with Sayre outside the closed meeting room. A second person, Sands-Anderson attorney Cullen Seltzer, eventually joined Whitten in conversation with Sayre outside the closed meeting.
As promised, Carter and Stanley soon left the closed session, as did Sands-Anderson attorneys Seltzer and Dan Siegel. Siegel was present to present the same capital improvements bond issue options to the EDA in open session that he had presented to the county supervisors on Tuesday. Closed session number two finally adjourned at 12:45 p.m.
Immediately upon re-adjournment to open session, Drescher read his statement on his resignation; followed by Llewellyn’s. Both indicated their resignations were not related to any information presented in closed session (see related story). However both alluded to troubling revelations that may be forthcoming from the audit report, as did Chairman Gray Blanton in thanking Drescher and Llewellyn for their service to the EDA. See Related Story:
Upon adjournment of the regular meeting Sayre approached EDA Board Chairman Gray Blanton about Carter and Stanley’s closed session presence and his exclusion. Blanton explained that Carter and Stanley had requested to be allowed in prior to the meeting, and were consequently invited to participate. Blanton suggested Sayre make a similar pre-meeting request if he desired to be included in any future EDA closed sessions.
Nodding to the two reporters present, Sayre made it clear he was making such a verbal request to the EDA Board chairman.
Contacted later, Carter said that in November while still board of supervisors chairman, he and Stanley met with a representative of the audit consultant. More recently following a meeting with Sands-Anderson staff, Carter said that in light of his and Stanley’s earlier consultant meeting it might be wise to include them in Friday’s closed session reports.
Stay tuned for future episodes of “As the Audit Turns” on your favorite Royal Examiner news and soap opera channel:
Drescher, Llewellyn explain EDA departure decisions
Both Greg Drescher and Ron Llewellyn announced their resignations, effective Saturday, March 23, following a second EDA Board of Directors closed session of Friday, March 22. For Drescher it was his second resignation in the past seven months.
On August 24, one day after he and former Executive Director Jennifer McDonald met with town officials over debt service payment irregularities discovered by the Town Finance Department, Drescher resigned his chairmanship of the EDA board.
Under increasing scrutiny from her own board, McDonald resigned her position four months later on December 20.
Noting completion of his third term on the board at the end of February, Drescher said, “During this last year there were several areas of concern raised and several investigations were started. I sincerely hoped all this would be done prior to the end of February. When it became evident it would not be finished at the end of February I asked the board of supervisors to continue allowing me to stay on so I could support whatever needed to be done to keep the EDA moving forward despite these issues. And they graciously agreed.
“I believe they understood that it would be helpful to have someone with a longer history to be part of the process. With the conclusion of the audit investigation imminent the board is on a path of reworking many of its practices and policies and hiring a new executive director. This is a good time for me to step aside from this voluntary role.
“It’s unfortunate I was unaware of any of the specifics of the investigation, as was the rest of the EDA board.
“But I remain committed to making this community a wonderful placed to live, work and play. The future of Warren County, the Town of Front Royal and the region depends on a strong, aligned and supported economic development authority to lure jobs, talent and investment in our community. And I stand ready to assist in any way possible as we begin a new chapter for the EDA.”
“It’s been a pleasure working on the board – I’ve been on for 12 years and a lot of good things have happened,” Drescher said, adding that without the unresolved investigation his plan was to step down at the February 28 end of his third term.
Llewellyn then offered the board his statement of departure.
“Mr. Chairman I share Mr. Drescher’s comments on his term on the board. I have enjoyed working with this board for almost 10 years. I’ve experienced an awful lot of good things. I think we have set a pretty high bar to continue out as far as creating opportunities and jobs in Warren County.
However, it comes with much thought and consideration I think it’s in the best interest of the EDA and the Warren County population that I tender my resignation – and I’m making it effective tomorrow, March 23, 2009 (lost a decade there, Ron), from the Warren County Economic Development Authority.
“This has been an extremely difficult decision to make. I have very much enjoyed my time on the board, and it is a decision that one, I think is in the best interest of all concerned. Our county needs to move forward, they need to understand there are a lot of positive things going on in the county; and hopefully we’ll get past this chapter that’s been very difficult for all of us who have been on here.
“And I stand ready to assist the board in any way I can in the future. I’ve made that known to the board of supervisors and I’m also now making it known to you,” Llewellyn said to his EDA colleagues, adding, “I wish you all the best.”
Gray Blanton, who volunteered to accept the chairmanship in the wake of Drescher’s August 2018 departure from that role, thanked Drescher and Llewellyn for their service to the EDA.
“We certainly appreciate all your time and efforts, and all the good things that have happened – it’s unfortunate that we’ve gone into such a snag here,” Blanton said of the audit and anticipated consultant report on EDA finances.
Ed Daley then offered a motion to allow Llewellyn in the absence of a replacement to continue as liaison to one of the executive director candidates as the application and interview schedule suggested by Interim Executive Director John Anzivino has been underway. That motion passed by a unanimous voice vote.
New 4-H Education Center director seeks to resurrect July 4th fireworks
On the job for just a couple of months, new Northern Virginia 4-H Education Center Director Jeremy Stanford approached the Front Royal Town Council on Monday, March 18, about resurrecting the Center’s July 4th fireworks display. Due to organizational issues the event was cancelled last year.
In a proposal letter to Town Manager Joe Waltz dated March 7, Stanford explained he is approaching both the Town and County governments for contributions of $1500 to help fund the $10,000 event.
The request met with a mixed and less than enthusiastic reaction from council – “I think it’s become more of a county event – I haven’t made my mind up,” Councilman Eugene Tewalt said reflecting the divide.
Mayor Tharpe told staff to move a vote on the request to the next meeting agenda for a vote – “We’ll see what happens.”
“Many assumed the Town or County dropped the ball last year; they think the Town and County help put it on,” Stanford told council, adding, “Let’s make that true and have the fireworks be a joint venture from here,” Stanford suggested of future Independence Day events at the Harmony Hollow facility on the county’s near southside.
View Stanford’s case and council’s reaction in this Royal Examiner video:
Janice Shanks announces for Clerk of the Warren County Circuit Court
Janice Butler Shanks of Front Royal, Virginia has announced her candidacy for the Republican nomination for Clerk of the Warren County Circuit Court upon the election of Daryl L. Funk, Clerk, to the Juvenile and Domestic Relations District Court Bench. Mrs. Shanks is the Chief Deputy Clerk of the Court.
In announcing her intention to run for the unexpired portion of Funk’s term, Mrs. Shanks said “I have reached that point in my life where I can truly use my training and experience for the benefit of my community. I feel I am uniquely qualified to take over the position of Clerk and provide the people of Warren County and the legal community with a seamless transition in the leadership of this constitutional office. Daryl Funk and Jennifer Sims, his predecessor, have put together a team of dedicated staff and I believe my 20 years as a manager in the restaurant business and another two decades in the legal profession have prepared me for this challenge”.
Mrs. Shanks began her career in the legal community as a court reporter, working with the seven Circuit Court Clerks throughout the Northern Shenandoah Valley. Prior to that time, she and her late husband, James “Jimbo” Butler, owned and operated a local restaurant and catering business on North Shenandoah Avenue. At age 15, she worked for the Front Royal-Warren County Chamber of Commerce as a receptionist and greeter, followed by clerical work at Warren Memorial Hospital and in the medical community.
Mrs. Shanks and her late husband had three daughters. She is married to George Shanks, an attorney with the firm of Miller, Earle & Shanks, PLLC. Between them, they have nine children, thirteen grandchildren and four great-grandchildren. They reside in Belmont Subdivision. She is the daughter of the late Bill and Marie Dodson, is a graduate of Warren County High School and a life-long resident of this area.
No ITFederal at Royal Phoenix, no need for infrastructure either?
How the Town of Front Royal should react to the news of an abrupt change of plans at the Royal Phoenix Business Park site – news town officials apparently learned about from media reports published March 14, including Royal Examiner Editor Norma Jean Shaw’s “Update: Tran says ITFederal is not opening and is an EB-5 Visa Project” and Josh Gully’s (Northern Virginia Daily) “$500,000-plus spent on dead police academy” – were a heated topic of discussion at the Monday, March 18 Front Royal Town Council work session.
Citing “newspaper articles” about ITFederal principal Truc “Curt” Tran’s decision not to relocate his Northern Virginia-based tech solutions company to the 30-acre Royal Phoenix Business Park property gifted to him in 2015 by the Front Royal-Warren County Economic Development Authority for one dollar, Councilman Jacob Meza questioned the Town’s financial commitment to infrastructure development at the Royal Phoenix site.
That commitment is currently two-fold: 1/ to build a wastewater treatment pumping station designed to serve an estimated seven commercial pads and as many as 4,200 people on site at a cost estimated at $400,000 in 2017; and 2/ phase one of the West Main Street connector road designed to eventually serve as the main access through the 147-acre business park property. Phase One of the western connector road project through the 30-acre ITFederal parcel from Kendrick Lane has been estimated at a cost of $1.3 million, with a $650,000 VDOT match and a $150,000 commitment from Tran in exchange for not having to build an individual wastewater pumping system for his project.
How Tran’s decision not to relocate his company here, but rather attempt to sublet the 10,000 square-foot building under construction on site, will impact his financial commitments to the property remains to be seen.
But with the first commercial development project at the Royal Phoenix site in flux, Councilman Meza asked if the Town’s planned infrastructure investment at Royal Phoenix might not be put to better use elsewhere, most specifically in funding the growing debt service projections on construction of the new $10-million Front Royal Police headquarters across Kendrick Lane from the Royal Phoenix site.
As one of council’s strongest proponents last year of rejecting a locked-in 2.65% bank-secured 30-year interest rate bond issue in favor of a promised nine-year period of interest-free paybacks on a long-term loan through the New Market Tax Credit program to fund the police station, Meza has been somewhat defensive about those climbing police headquarters debt service projections during recent work sessions – “No one ever said it was going to be built for free,” Meza volunteered at a March 4 work session.
Following the revelation the EDA had not secured a $24-million capital improvement projects loan through the NMTC program as council believed had been accomplished, construction costs are currently being met through an EDA line of credit. However, those costs on the $10-million project will eventually have to be paid back at what have been steadily-climbing interest rates that are currently in the 4.5% range over a 30-year payback – numbers Meza cited on Monday resulting in the need to cover an annual debt service in the $600,000 range. When council thought the NMTC option was available initial annual debt service payments of $240,000 were cited, compared to the fixed 2.65% rate’s 30-year term annual debt service of about $342,000.
Meza suggested council move the Royal Phoenix infrastructure funding into the police station debt service payback as a means of avoiding raising taxes to cover at least a portion of that rising annual debt service number.
However, Mayor Hollis Tharpe countered that the infrastructure is not being constructed solely for ITFederal, but to facilitate the recruitment of additional commercial clients to the site. The mayor pointed out that the Royal Phoenix property was the town’s primary hope for expanded commercial development and increased commercial tax revenue for the future. And the plan at this point is still to attract a commercial client into the first Tran-constructed building on site.
Tharpe also pointed out that the West Main Street connector road was planned to, not only service the entire Royal Phoenix site, but serve as a long-sought western bypass to take north-south thru traffic off residential streets in mid-town Front Royal.
See council’s debate over the importance of a continued financial commitment to commercial redevelopment at the former Avtex Superfund site versus preventing tax hikes to cover rising debt service costs on this linked Royal Examiner video.
Follow the money: EDA-ITFederal financial roadmap tricky to navigate
FRONT ROYAL – Nearly four years ago, on June 12, 2015 former Congressman Bob Goodlatte (R-VA) announced an economic development agreement that would bring ITFederal, LLC to Front Royal. In a press release from the Sixth District congressman’s office, Goodlatte said, “I am happy to have supported the efforts leading up to this announcement and commend Front Royal and Warren County officials for their hard work to ensure it came to fruition.”
Goodlatte’s release further stated that details of the land purchase agreement were being “worked out between the EDA and ITFederal” and indicated that details were likely to be finalized the following week.
What Goodlatte’s office never released—what no office ever released—was details of the sweetheart deal in which ITFederal owner Truc “Curt” Tran payed just one dollar for a 30.11-acre tract of land. In fact, no one knew just how great a deal Tran had scored on the property until Royal Examiner broke the story Nov. 1, 2016. See Related Story:
On Oct. 26, 2015, Goodlatte showed up to join local dignitaries and shovel some dirt at the official groundbreaking for ITFederal at the former Superfund site where Tran’s company was slated to begin building shortly thereafter. Little did the community realize no other shovels would touch the soil on the project until over two years had passed.
Three months after Tran closed the deal on the former Avtex Fibers site, the Front Royal-Warren County EDA went to extraordinary lengths to ensure that he would have plenty of cash to begin building what he pledged at the time would be a complex featuring 67,000 square feet of mixed-use office space, retail space and a cloud data center. The project, according to Goodlatte’s press release of June 12, 2015 would “create over 600 high paying jobs for the community.”
On Sept. 14, 2015, after being told by the EDA that Truc Tran needed a $10 million bridge loan “to start construction” on the $40 million project, the Town of Front Royal agreed to loan the money for one month. The loan was eventually extended to three months and paid back by the EDA after it obtained a loan from another entity. Though Tran had money in hand, construction did not begin until over two years later, in Dec. 2017. Disbursement Authorization
Just two days later, on Sept. 16, 2015, the EDA used the money loaned by the Town of Front Royal to structure a loan to Tran at 3% interest, amortized over 30 years, with a possible rate adjustment every seven years. The loan agreement required monthly payments of $42,160 and payment in full by Sept. 16, 2045. After the initial seven-year period, a total of approximately $8,440,000 will remain on the principal balance. Attachment to Note
In December of 2015, the EDA managed to secure a $10 million loan from First Bank & Trust of Lebanon, Va. through its Winchester commercial loan office (not to be confused with First Bank of Strasburg, Va.). The loan was secured to “provide funding for economic incentive for ITFederal, LLC,” according to loan documents.
The loan has an interest rate of 4.35%, with the balance due after seven years. The required monthly payment was $40,000. Moreover, the EDA secured the loan with a Deed of Trust on the remaining 117 acres of land at the former Avtex site.
Additionally, it was secured by a Promissory Note that was endorsed to First Bank & Trust by the EDA. After seven years, the Principal balance due will be approximately $9,672,000. Loan Agreement
It appears that the EDA is losing money each month on the loan to Tran:
|Principal Amount||$ 10,000,000.00||$ 10,000,000.00|
|Annual Interest if no repayment of principal||$ 300,000.00||$ 435,000.00|
|Interest for 7 Years (No repayment of principal)||$ 2,100,000.00||$ 3,045,000.00|
|Difference||$ (135,000.00)||$ (945,000.00)|
Now that Tran has admitted that ITFederal will not open, and the EDA is left paying back a substantial amount of money that opens the door for Warren County citizens to ask some tough and pointed questions of the Board of Supervisors, who are using taxpayer money to perform an outside, mostly secret audit into the finances of the EDA.
The audit began around the time that Royal Examiner broke the story last fall that the Town of Front Royal was owed nearly $300,000 related to debt servicing payments by the EDA. See Related Story:
Interim EDA Executive Director John Anzivino said in a telephone interview Tuesday morning that moving forward, he felt the EDA would “operate in transparency.” He said the office is short-staffed and that he is dealing with many Freedom of Information Act (FOIA)requests, as well as working with the board regarding the ongoing audit and going through the agency files, which he admitted were sometimes lacking in terms of detailed record-keeping.
Anzivino said that over the years, the EDA had been instrumental in some very positive developments for the community, citing the corridor development along Routes 340/522 and believed the agency would foster economic growth in the future. The EDA board, he stated in the conversation, was devoted to moving forward with transparency and was hopeful regarding the future and marketing the community to prospective businesses.
Anzivino said that while he worked in nearby Fauquier County over the years, he often noted how well development was moving along in Warren County.
View all EDA loan documents related to ITFederal and Truc Tran here:
- Attachment to Note
- Opinion of Counsel
- Settlement Statement
- Title Insurance
- Town of Front Royal Resolution
- Certificate of Borrower
- Checks Listed
- Collateral Receipt
- Credit Line – Deed of Trust Receipt
- Deed of Trust
- Disbursement Authorization
- Document Checklist
- IDA Resolution
- Loan Agreement
- No Oral Agreements Notice