Following this month's regular Town Council Meeting on September 14, Mayor Betsy Davis confirmed that she, the council and town staff were still sorting through a tangle of misfiled, misplaced, ambiguous or missing minutes, contracts and financial records discovered in the wake of Council's unanimous decision to dismiss Town Administrator Mike Casey on July 23.

Asked on September 14, some six weeks after Casey's dismissal, when a full report would be forthcoming, Davis noted that Acting Town Administrator Claudia Dornin and town staff were making progress.

Both Mayor Davis and Council Member Bundles Murdock promised they'd do their best to have full report ready "before the end of the year."

In August, Mayor Davis, supported by Council Members Darlene Kirk and Murdock, promised a full report on what procedures had not been followed, why, and what steps would be taken to ensure more effective Council oversight of both town finances and those entrusted with their management.

At the same August meeting, Town Attorney Liz Whiting assured the public that "... those discussions that should take place in public, will.... even when different things may reflect on the performance of individual officers and employees."

In the meantime, the Council has decided to remove "Council Response to Public Comments" from its regular monthly meeting agenda. No reasons were given for elimination of agenda item that was designed to allow Council to "... discuss how they would like to respond to public comment at regular meetings."

$96,000 Requested
Documentation for $26,000 Incomplete

According to Acting Town Administrator Claudia Dornin, her staff and the Council "...are instituting controls to ensure the financial policies of the town are adhered to."

The completion of the Town's regular annual audit will provide additional information on operations through end of June 2006, she noted, and, "Council will use that information to make adjustments, if any are required."

One of the key problems facing the Davis Council appears to be a lack of basic procedures for document signing, filing and record retrieval.

In a September 11 memorandum, for example, Dornin requested review and approval of invoices totaling nearly $96,000.

"For reasons that are unclear to me," she noted, "proposals and contract amendments on file" supporting invoices totaling nearly $26,000 "... were not signed by a town representative."

She also noted that, despite the missing or incomplete paperwork, the work for which payment was requested could be "verified as completed" and "consistent" with the unsigned proposals and amendments on file in the Town offices.

Faced with a dilemma, Dornin requested and received council approval to pay Whitman Requardt and Associates and Vollmer Associates on the basis of "previously approved payments" which, from her perspective, implied that approval "was assumed or obtained verbally" from Mike Casey.

The town owed WRA $2,238 for work related to the Town's existing wastewater utilities and planning for the new Salamander Inn treatment system. The Vollmer invoice, for consulting and work on a number of engineering projects, totaled $17,119.25.

Missing documentation compelled Dornin to ask Hydro-Tech to search their own files for a copy of a signed proposal to justify payment their invoice for $6,380 for installing a much-needed sprinkler system.

Missing, Unclear, Ambiguous

Dornin and her staff not only faced missing signatures and documentation. Other records were difficult, if not impossible, to interpret or existed in multiples, each different from the other.

For some Council meetings, the town minute books do not contain signed copies of the final version of revised minutes. Hand annotated copies were consulted. In other cases old tapes were reviewed, in order to make sure minutes accurately reflect proceedings.

Some members of the Council, and other observers, blame these problems on high turnover in positions on the town staff during Casey's tenure as Town Administrator.

In March, 2006, for example, Council found itself compelled to appoint Casey himself to no less than three temporary positions: Town Planner, Zoning Administrator, and Town Clerk because of high staff turnover.

The Hyre Example

Even after Casey's dismissal, however, ambiguity remained a problem.

On September 14, for example, the council unanimously approved minutes of their August 10 session.

The record stated clearly that, "Council member [Darlene] Kirk stated that Council member [Helen] Hyre will be with the Council until the end of the year. She said that she found that her schedule will allow her to continue on the Council until that time."

Asked directly if the minutes she had just voted to approve indicated that she would be leaving the council "...at the end of the year," Hyre made herself perfectly clear. Her on-again-off-again "resignation" is definitely "off", she said, and there is no set date for her resignation, if, indeed, she decides to resign at all.

Procedures and Precedents: The $1,000 "Trigger"

What's the Process?

What is supposed to happen to ensure effective control and oversight of payments to vendors from town funds?

Interviews with current and former staff yield widely varying interpretations of Council policy, and equally differing points of view about just where the oversight buck stops, if, indeed, it stops at all.

According to a February, 2002, unanimously adopted procurement policy, "Any expenditure request made by a departmental supervisor or staff member for use of town funds of $1,000 or more, that has NOT been identified as within the approved town budget NOR is of an emergency nature, must be presented to the council for their approval before purchase."

All sources contacted by the Eccentric agree that, with rare exception "standard" financial procedure now requires that the Town Treasurer submit incoming invoices first to the town staff member who incurred the expense. That staff member must verify and provide first approval for payment.

Once that happens, the Treasurer makes a list of checks needed and flags those requiring further approval.

The Treasurer then passes the check-request list to the Town Administrator, who reviews it, and, then and there, approves all listed payments within his or her authority.

The Town Administrator next informs the Mayor of any un-approved items on the list, namely, those covered by the "$1,000 trigger" noted above, or those not included in a budget line item or as part of a previously approved contract. (Paychecks, for example, do not require re-approval each month by Council.)

At the same time, the Town Administrator gives the Mayor any checks already signed by the Treasurer for the Mayor's final review.

If certain that a check bearing the Treasurer's signature is appropriately drawn, then and only then, the Mayor appends his or her own, required, "second signature."

Only checks bearing two authorized signatures may be cashed, and, by all accounts, the Mayor is the last person to sign with rare exceptions when the Mayor is not available.

After signing checks that have been appropriately drawn, the Mayor, working closely with the Town Administrator and Treasurer, then seeks council review of any remaining invoices.

In Question: Policy, Procedure, and Practicality

Opinions vary about how the procedures outlined above were supposed to work, who was ultimately responsible for their enforcement, and what, if anything, should be the consequences of failure to follow them.

Neither Mayor Davis nor Acting Town Administrator Dornin will express an opinion or issue a statement until they have completed their formal review.

Sources familiar with the workings of the town staff and council under former Mayor Tim Dimos, contend that the policy adopted in 2002 was directed more at the Town's department heads than at the Town Administrator.

According to these sources, the "$1,000 trigger" for invoices identified as unbudgeted or questionable begs the question, "Identified by whom?" The Town Treasurer, The Town Administrator? The Mayor? Sources close to Dimos argue that the Treasurer and Town Administrator are in the best position to "identify" problems.

These sources also note that the Town budget speaks only to categories of expenditures, not to individual invoices and expense items.

According to new "streamlined" financial management policies adopted by Council in January, they insist, budget control is maintained at the activity level, not at the individual invoice level.

The $1,000 "trigger," moreover, is not mentioned at all in these new policies. Whether or not the January 2006 rules were meant to complement or supplant the older policies continues to be debated.

Davis and Dornin clearly appear to believe the $1,000 "trigger" is still in effect, and have, they say, done their best to enforce it.

Sources close to the Dimos Council argue that successful oversight must really begin when services are ordered, not at the point at which invoices begin to arrive. At that point, they say, the question for "first approvers" is simply, "Did we get what we ordered." If, despite those controls, an invoice slipped through the oversight process and drove an account over budget, it should show up in the Treasurer's very next monthly report, at which Council could take whatever corrective or disciplinary steps it believes are required.

Given the current interpretation of the $1,000 "trigger," Council must ask itself whether a $1,000 per year, part-time Mayor can actually be expected to remember what's been approved, and what hasn't, when presented with a stack of checks to sign, all of which have been already approved by the Town Administrator and Town Treasurer.

What's the Damage?

Debate also continues about the real impact of recent events on the town and its citizens.

No one, at this point, has suggested that anyone involved in the affair has profited personally, either directly or indirectly, from whatever procedural problems and oversights finally emerge in the Mayor's report.

Embarrassment, concern about the quality of oversight in other, as yet unknown areas; and the cost of borrowing money to cover the town's cash requirements are the most often mentioned consequences, along with whatever role these matters played, if any, in the Sunday Night Surprise firing of Mike Casey.

Council has already found it necessary to authorize its Acting Town Manager Dornin to seek $500,000 in short-term financing from Middleburg Bank. A $300,000 "immediate" draw was authorized, with any successive tapping of the credit line requiring two signatures: the Mayor's and that of either the Acting Town Administrator or Town Treasurer.

This month Dornin was also authorized to work with Mitchell & Company, PC, to complete arrangements to perform the annual audit of "town financial, governmental and business activities" for fiscal year 2006. Mitchell's fees will not exceed $14,150.

Salamander

During discussions at a Special Session of Council on August 30, Salamander's Prem Devadas outlined plans for the development of the Salamander properties, noting that his organization would be filing the necessary legal requests for a "special exemption" for the resort to accommodate its final plan in "mid to late September."

Council member Mark Snyder expressed concern that Salamander's most current plan comprised a 120-room resort, 49 houses, ranging in size from 4,000 to 6,000 square feet, and "... what looks like 5 acres of commercial development, additional housing, and redistributing the housing in areas currently zoned R1 and R2.

Snyder asked Devadas if he was "prepared for the Council to come back to him" and "offer to do some horse trading" in exchange for what he saw as "millions of dollars of new development" not covered in the Town's current "Memorandum of Understanding" with Salamander.

Devadas reportedly pressed for getting such points on the table immediately, given the timetable for beginning construction on the Salamander property.

Snyder replied that, clearly, no resolution of matters of that scope could be reached on the spot at the August 30 meeting.

According to minutes of the meeting, Devadas replied pointedly, noting that if Snyder's goal was to exchange a grant of expanded commercial development for a reduction in the number of homes built on the site, "it was important to get it on the table tonight, because it may end this discussion real quickly." Salamander "would not consider a reduction of the 49 home sites," he said, "in exchange for this development," adding that current zoning was "not in anybody's interest."

When asked by Mayor Davis if Salamander would "be available for public workshops" to discuss his plans, Devadas replied that "... he would be available for anything that would help Council to get back to him in 45 days...."

At the September 14 Council session, Snyder remained adamant that Salamander was "not asking for tradeoffs" but for "additional development opportunities."

"They're asking us for a lot, and they're not offering anything," Snyder noted, and proposed that his 3-member Land Use Committee address the political implications of the Salamander proposals before referring them to the larger Planning Commission.

"I am not willing to seriously consider a development application that says, 'Give me more... and by the way, I'm not willing to give you anything.'" Snyder expressed concern that putting the issue in the hands of the Planning Commission before addressing his inherently political "horse trading" issues, would "... give it all away."

Bundles Murdock, who serves on the Land Use Committee, argued that the matter was too important for just three people to consider alone, suggesting that the entire council meet in special session on the matter before referring it to the Planning Commission. "We need everybody to really weigh in," she said.

After lengthy debate, the Council agreed to meet in special session to consider the Salamander proposals on Wednesday, September 27, at 6:00 PM.

New Waste Water Treatment Plant

Claudia Dornin announced on September 14 that both Mayor Davis and representatives of Salamander Development had signed an agreement to begin construction of the Town's new Water Treatment Facility.

In late July, Salamander had suggested that Middleburg could "save costs by considering lowered, but still acceptable, treatment levels." They also suggested consideration of a treatment technology other than the "Membrane Bioreactor System" (MBR) initially proposed by the Town, and currently being installed by the Loudoun County Sanitation Authority to serve Broad Run.

The newly signed agreement maintains the higher, MBR, standards. Reportedly some 13% more expensive to construct, and some 12% more costly to operate than some alternative approaches, the MBR system remained the town's choice, not only because of "superior effluent quality from the outset of operations," but because the system would position the Town to "respond to more stringent effluent guidelines should they be required in the future."

Consultant Hired to Help With Update of Comprehensive Town Plan

The Council approved hiring Herd Planning & Design to provide support to the Town's Planning Commission to complete its five-year review and update of the Middleburg Comprehensive Plan. With the help of Milton Herd the Planning Commission expects to complete a working draft by the end of 2006, and present an updated Comprehensive Plan for Council approval during the first quarter of 2007. An initial cap of $15,000 was put on the contract.

Trucks

After meeting with Jennifer Guinan of the Virginia Coalition for Safe Roads the Council unanimously adopted a resolution stating its continued opposition to increasing the size of trucks allowed on Virginia roads. The Council had passed a similar resolution in August, 2001.

CPAM Resolution

The Council unanimously passed a resolution on August 17 opposing proposed changes to the Loudoun County Revised General Plan that would allow the "potential construction of tens of thousands of new residential units and commercial businesses... primarily along the Route 50 corridor." The proposed changes would, according to Council, "... threaten the financial health and economic well-being of the Town of Middleburg, diminish the visual and spatial transition between Eastern and Western Loudoun, and erode the unique and distinct character of Western Loudoun."