FRONT ROYAL – Representatives from the town, county and Front Royal-Warren County Economic Development Authority held the first EDA Reform Committee meeting last week to explore the authority’s future.

The committee was formed during a joint meeting between the Town Council and Board of Supervisors to determine the EDA’s path forward after the authority has alleged former Executive Director Jennifer McDonald perpetuated a multi-million dollar embezzlement.

So far, McDonald, her husband Samuel North, former EDA administrative assistant Michelle “Missy” Henry, businessman Donald Poe and former B&G Goods store owner William Lambert have been arrested stemming from alleged financial crimes related to the embezzlement scheme.

To determine a path forward, Councilman Jake Meza said the Reform Committee must understand the EDA’s current state to determine its future. He said the committee’s recommendations would otherwise be incomplete.

While the county provides the EDA operating funds and appoints board members, the town in 2008 voted to stop providing operating expenses and forego its ability to appoint board members. Still, the EDA has worked with the council to bring projects to town.

The town recently filed a $15 million lawsuit against the EDA for a series of alleged loses stemming from the purported embezzlement.

Town Manager Joe Waltz said that the town and county need to consider potential “restructuring” of the EDA that would give the town a seat at the table.

Stanley said that since the Reform Committee is exploring all possible options, one possibility is the town and county going separate ways regarding economic development but that he would rather see the two work together.

He added that the EDA’s arrangement has already changed, as the county in July became the fiscal agent overseeing the authority’s financial transactions. He added that he has “seen more activity” from the current EDA board over the last few months than he saw over the last two to three years.

EDA Executive Director Douglas Parsons said that the EDA will need to work with the town as two potential locations for businesses — the Happy Creek Technology Park and Avtex — are in town limits.

He noted that the controversy surrounding the EDA has seemingly not affected the authority’s “brand” and that prospective businesses remain interested.

Parsons said the part of the EDA’s mission moving forward should be to bring new businesses to the town and county, allowing the local governments to avoid tax increases.

Regarding the EDA’s potential dissolution, Stanley noted that is not possible until the authority’s bonds are paid and the authority has “a lot of money out there.” It was reported at the meeting that the EDA has $40 million worth of debt, which should be decreased to about $32 million when the town takes over the financing of the Front Royal Police Department’s headquarters.

While dissolving the EDA is not possible, Stanley said that perhaps EDA employees could become town or county staff and that EDAs are arranged differently throughout Virginia.

– Contact Josh Gully at jgully@nvdaily.com