FRONT ROYAL – The county has allocated up to an additional $160,000 toward examining the potential missteps of the Front Royal-Warren County Economic Development Authority and associated legal fees.
The Board of Supervisors approved the transfer Tuesday of $60,000 to the EDA to pay for the services of an unidentified financial consultant. The board also increased the cap on legal fees it will provide to the Sands Anderson law firm for its work with the EDA from $50,000 to $100,000.
County and EDA Attorney Dan Whitten noted that the law firm has not yet been paid, but said the increased cap likely means it will receive more than originally planned.
The EDA contracted the financial consultant Sept. 11 with a $10,000 down payment. That firm's identity has remained unrevealed under the veil of attorney-client privilege. The county on Dec. 21 approved a $90,000 expenditure to pay for work the consultant performed over those three months.
That brings the total this firm has received to about $160,000 for about five months of work, amounting to about $32,000 per month.
The exact nature of the financial consultant’s work has not been revealed, but the town discovered last year that it is owed an estimated $291,000 stemming from overpayments relating to debt service. A county news release previously stated that the consultant would work on the EDA’s audit and hopefully determine how much is owed to both the town and county.
The county approved the $90,000 payment the day after former EDA Executive Director Jennifer McDonald’s resignation. Although no reason was given for that resignation, EDA Chairman Gray Blanton said that she was inclined to do so after auditors uncovered certain evidence.
If the county ends up paying Sands Anderson $100,000, the county will have spent $260,000 for the consultant and legal fees. This is compared to the $54,117 the county contributed this year to the EDA's operating budget and $106,489 in debt service payments.
While the contracts are between the EDA and the two firms, the county has agreed to loan the authority the money. Blanton previously said the authority would make its best effort to pay the county back.
The supervisors announced the new payment after adjourning early from its regular meeting to go into a closed session. After exiting the closed session and announcing the expenses, the board finished the rest of its regular meeting.
Chairman Dan Murray explained this is because the financial consultant arrived at the meeting and gets paid by the hour.
According to a redacted contract between the EDA and the financial consultant, that hourly rate could range from $60 to $450 depending on their position within the firm that employs them.
Murray said that the consultant “has been very busy” and that he could not comment any further on discussions in the closed session.
“You gotta pay bills. If you needed gas for your car, you gotta pay for it,” he said.