FRONT ROYAL – The Front Royal-Warren County Economic Development Authority opted to hand over check and contract signing power from Executive Director Jennifer McDonald to board members.
The board at its Friday morning meeting approved a resolution removing McDonald as the EDA’s bank account administrator in favor of Thomas Patteson, who was appointed treasurer in October.
Another approved resolution states that two out of three of the following board members: Chairman Gray Blanton, Vice Chairman Bruce Drummond and Patteson should “sign all contracts and agreements after reviewed by legal counsel” and “sign all checks drawn from banking accounts.”
EDA Attorney Dan Whitten said: “Basically what we’re doing, is instead of just one person signing contracts, you have two officers of the EDA board.”
Whitten said the changes were “just a recommendation” of accountants and auditors.
McDonald noted that two people always signed the checks, of which she was one. She said she has no problem with the decision and “it’s time for some changes because the responsibility shouldn’t fall on one person.”
A third resolution authorized the EDA to retroactively “execute any and all documents relating to loan modifications with United Bank.” Those included: reducing the Leach Run Parkway debt from about $7.2 million to $933,417; increasing the Ressie Jeffries debt from about $5.4 million to about $5.7 million; increasing the Avtex restructure loan from about $1.2 to about $3.3 million.
McDonald explained that in June the EDA decided to separate each loan instead of having them grouped together. It was later realized that some of the refinanced amounts were wrong.
“Some amounts were wrong, and the decision today was to separate each and correct those mistakes, she said.
The resolutions came after an about a four-hour closed session for discussions regarding: a part-time public relations position; discussion of a prospective business or industry or expansion of an existing business or industry where no previous announcement had been made; and consultation with legal counsel regarding EDA loan programs, debt service, the new market tax credit program and accounting services.
In October, it was revealed that the EDA may owe the town about $291,000 due to overcharges related to debt service. Whitten said the resolutions were not directly related to that.
“Looking at the financial matters, it was just something that they recommended,” Whitten said. “I can’t say it was related to any specific item...Overall, it was a recommendation.”
Blanton agreed that the closed session “does not have to do with that town problem.” He added that it was related to “overall accounting, check writing” and “contract signing.”
“Now, I don’t know that we are authorized to talk about those specific problems. That’s why we were in closed session when we went over them,” he said.
He added that the resolutions were “just to tighten up the accounting and the contracting” because “we don’t like the way that some things have gone the past couple of years.”
“It’s problems similar to the town problem, where you’ve got things in the wrong column. They paid more than they were supposed to. So you’ve got to fix it, you’ve got to fix it. The town problem, but there were other problems, too,” he said.
McDonald exited the closed session shortly after it began because Whitten said: “we were discussing legal counsel matters that we just felt we needed to discuss it as a board, so that was just a decision we made as a board.”
Whitten said since McDonald has been the director for about 10 years, she may have become defensive because “things have been done a certain way for a long time.
“We just thought we could have a more productive discussion without her present,” he said.
The EDA called a special meeting at 4 p.m. later in the day for a closed session to discuss, according to an agenda item, “prospective candidates for employment; assignment; appointment; performance; demotion; salaries; disciplining; or resignation of specific public officers,” specifically McDonald. No decision was made after the meeting, which took about 1 hour and 20 minutes. She was in the room for portions of the closed session and out for others.
Whitten explained that the board would have liked to have held the discussion during its morning meeting. Four members, however, had other obligations and a quorum would have been lost. He added that McDonald could not have stayed either because she had to attend to a medical emergency.
Board members said issues that were discussed in the first closed session were discussed with McDonald during the second.