FRONT ROYAL – The town could spend $245,000 in legal fees and auditing services for its $15 million civil lawsuit against the Front Royal-Warren County Economic Development Authority.
The Town Council at its Monday meeting approved an $11.1 million budget amendment to carry forward outstanding purchase orders that “need to be carried forward...to the budget to complete unfinished projects.” One of the myriad line items carried forward to this year’s budget included $90,000 for the town’s lawsuit against the EDA.
The lawsuit claims that the town suffered monetary losses during alleged embezzlement that occurred within the authority during the decade-long tenure of former EDA Executive Director Jennifer McDonald, who has been charged on 32 felony counts related to alleged financial improprieties. Town Attorney Doug Napier has said the amount of money the town seeks in damages could likely increase. Meanwhile, the EDA has filed its own $21.3 million civil lawsuit against McDonald and 14 people and companies.
In November, the Town Council approved payments up to $200,000 for the Damiani & Damiani law firm representing the town in its civil case. Town Finance Director B.J. Wilson explained the $90,000 carried forward to this year’s budget is part of that $200,000 and not an additional allocation. He added that another $45,000 has been allocated for the Mitchell and Company accounting firm for EDA-related auditing services.
So far, Wilson said Mitchell and Company has received $32,616 and Damiani & Damiani has received a $50,000 retainer. He added that it is hard to say what the final cost of the lawsuit will be at this point, and it could be more or less than $245,000.
The council previously approved a motion mandating that any money used for the lawsuit comes from debt service payments the town was supposed to pay the EDA for a variety of projects.
According to online court records, the next hearing in the town’s civil case is at 8:45 a.m. Jan. 24.
The Town Council also:
• Hired Rummel, Klepper & Kahl, LLP for $68,587 as consultants for preliminary engineering improvements to Happy Creek Road and to help submit an application to receive funding from the Virginia Department of Transportation for the project.
• Approved a $70,000 contract with EPR, P.C. for a conceptual parking, streetscape and property acquisition plan for downtown. Money for the contract was allocated from the town’s Community Development Block Grant funds.
• Approved a $101,000 budget amendment to allocate $21,000 for a health insurance consultant, $15,000 for the potential winterization of the Afton Inn, $25,000 for an executive search firm and $40,000 for possible property acquisition related to Happy Creek Road improvements.
• Approved a resolution recognizing David Means for his service on the Urban Forestry Advisory Commission.