The amount of money believed to be owed to the town by the Front Royal-Warren County Economic Development Authority is now on record.
The Town Council approved by a 4-2 vote, with councilmen Eugene Tewalt and William Sealock dissenting, at its regular Monday meeting the adoption of a four-page resolution stating how the town found out about the estimated $291,000 it overpaid the EDA for projects involving the New Market Tax Credit Program and debt service.
According to previous reports, EDA Executive Director Jennifer McDonald said the overpayments were the result of complicated funding formulas, that the EDA has the overpaid money and the situation will be remedied.
The resolution states that the EDA billed the town for projects “that were not included in the loan amounts that the EDA had financed for the town which was why the amounts being billed the town were higher than the amounts seen on the EDA’s financial statements relating to long-term debt and some of those items were paid for out of the EDA’s credit line.”
Councilman John Connolly brought the resolution to the table this month because, he said, it was an effort to be honest with the public. He said Monday that “this is essentially a record of the steps that we took.”
According to previous reports, the town knew about discrepancies between its finances and the EDA when Finance Director B.J. Wilson was asked to look into the standings of fund balances in May.
Connolly added that the resolution also compliments town staff and “the job that they have done kind of figuring out the discrepancies.”
“This resolution is commending our staff for a job well done and letting the public know that they can have trust in our abilities and our staff’s abilities to make sure that we are minding the public funds accurately,” he said.
Councilman Jacob Meza said he likes the resolution because the town wants accurate information available to the public.
“That’s far better than a FOIA request for this and that and information slowly coming out to the public,” he said.
Councilman William Sealock said he supports informing the public of the issue, but he has several issues with the “inadequate” resolution.
He noted that for a year-plus he and Tewalt expressed concern with debt service for old and new projects including the new Front Royal Police Department building, Leach Run Parkway and the West Main Street extension.
“These have not been funded yet. We are in desperate need of figuring out how we are going to pay for that. A year-and-a-half ago I held a spreadsheet up that said all these projects coming about, how are we going to pay for them? Now all of the sudden everybody has issue with payment. I have a lot of concern,” he said.
Sealock added that the resolution “says nothing” about how the town budget has been affected by future and present debt service payments. He said the town is on the hook for about $14 million, which should be included in the resolution.
“This inflated resolution does not address these issues,” he said.
He added the resolution does not make it clear why the town finances projects through the EDA and “all the facts.” He said it is not substantial enough “to convey to the public what we need to really convey.” He said a brief press release seems more suitable.
He added that the town should question dealings dating back for years and not just focused on those listed in the resolution dating back to 2009.
“It seems to me, somewhere along the line, our procedures failed our council and our community. And we need to get to the bottom of this. Somebody should have questioned the billing process long before it happened,” he said.
Tewalt said he opposed the resolution because the town is still not sure how much money is owed by the EDA.
“Until we get all the facts, we can’t give you all the information,” he said.
County Administrator Doug Stanley previously said that the county is aware of the situation and has asked the EDA for a “final accounting” of what is owed to the EDA.
The county, which also has projects financed through the EDA, has not announced whether it has been over-billed as well.