1. The Page County Board of Supervisors
(BoS) met in Closed Sessions from late 2007 until December, 2008. During this time they negotiated a purchase for a piece
of land for a business park, and obtained funds from the Governor of Virginia as a grant for a commercial business. (300K)
Doc A They additionally have requested funds from the USDA for water and sewer infrastructure improvements
(700K), Doc B and have a loan application in process – which they tell people they are getting –
from the USDA to take over the debt for the land bought for the business park.($4.5M) Doc C
2. In Jan 2008, the BoS put an Option to purchase contract on a tract of farmland to be used for a business
park.
Doc D The price was listed on the option at $9M. According to records posted on Realtor.com, farmland
in that area had a market value at the time of about $12K an acre. Their option price was greater than $42K an acre. The
signer of the contract was the Chair of the Economic Development Authority, Lowell Baughan. The seller was Rebecca Hudson.
No conflict of interest statement was filed regarding this transaction.
3. The
BoS submitted an application to the Governor of Virginia for a Governor's Opportunity Fund grant. As their matching
value for the grant, they offered 15 acres of land, adjacent to the land that had the Option on it, and declared its value
to be $900,000. In this grant application they described a company named Premier Technical Services as being an expanding
business that was looking for a place to build its Data Center, which it needed for “existing and future” customer
demands. They said they needed the grant to incentivize PTS to choose Virginia over Pennsylvania or North Carolina, to
make this investment of $15M that would bring 96 jobs. The Governor of Virginia made a $300K cash grant to Page County,
which Page County immediately turned over to PTS in mid-2008.Doc E
4.
With the promise of the coming Data Center as an anchor, the BoS proceeded with the purchase of the adjacent land for a
business park, for a final negotiated price of $7.5M ($35.7K an acre), at a time when real estate values were falling fast.
The county could not commit this level of taxpayer dollars to a commercial venture without a voter referendum, so, rather
than show the respect for the voters that Virginia law required, the BoS “transferred” $1M of taxpayer funds
to the Economic Development Authority. During the resolution for transfer, and the public hearing for the transfer, the
Board passed a resolution which specifically identified that this was not a commitment for future Boards to continue using
tax money to make these future payments. Doc F Future payments were to come from increased tax
revenues due to businesses using the land or buying it. The public was told this repeatedly in response to questioning.
5. Based on the promise of the coming Data Center, the BoS proceeded to sign
a Letter of Credit to the USDA for a $700K grant to build water and sewer infrastructure to the land being given to PTS.
Doc G Both the $300K state cash grant and the $700K federal infrastructure grant contain clauses that
the county must repay them if the business identified (PTS) does not build a facility and bring jobs within a specified time
period. The $700K grant includes exceptional costs for an 8” water main constructed over 4,000 feet, because the
PTS Data Center will need above-normal water access for cooling the equipment. The county paid for the engineering studies
to determine the water and sewer needs for the PTS facility. PTS is described in the grant application as a growing
business with 35 employees who needs to expand its operations and will be investing $15M in Page County. (No Docs attached for that claim of a growing business with 35 employees, because I don't
know anybody who can find any that support it. Information regarding this would be welcome. )
6. In the Spring of 2008, PTS presented to the Board a proposal to upgrade the county's telephone system.
PTS said it would cost $200K. PTS said it would save the county money on their phone bill every year. The Board agreed
and competed the bid. The county received 6 valid bids. The Economic Development Office evaluated the bids. PTS'
bid was $200K, just as their original proposal to the Board said, and as written into the budget. After receipt of the
bids, PTS' bid was “adjusted” so that it was the second highest bid. The lowest bid was $83K. Doc
H The bids were evaluated with “price” being considered as a trivial factor. PTS won the bid, based
on subjective qualifications, evaluated by a committee that included Tom Cardman. The phone system was installed. The
phones did not work in the courthouse or with the 911 system. Doc I The
2007 actual bills were lower than the 2009-2010 budgeted bills. Doc J PTS during this time was also awarded
a contract to consult with the data processing center, Doc K, a maintenance contract to back up the phone
system records, Doc L and in 2007, they were given access to operate the activities of the Shenandoah
Wireless Broadband Authority. Doc M, which they proceeded to bad-mouth
after it was a successful project, and pulled out of their management contract based on unspecified and vague “charges”.
Doc N
7. The president of PTS, Stanley David Tong, was appointed
to the Economic Development Authority and the Chamber of Commerce. No conflict of interest statements are on file for Stanley
David Tong. Doc O
8. Immediately after the BoS transferred the $1M to
the EDA in January, 2009, Lowell Baughan and Rebecca Hudson executed a “First Amendment to the Purchase Agreement”.
Doc P This First Amendment was not revealed in a public hearing. It references a Financing Agreement which
refers to the payments to Mrs. Hudson as “revenue notes of the EDA”, making the payments tax-free. The financing
arrangement allows Mrs. Hudson to be the holder of the mortgage, receiving interest payments for up to five years, and then
asking the county to refinance the debt within that time. No public hearing was held for the issuance of the “revenue
note”. The note is for a value of $6.5M at 5%. Lowell Baughan referred in his letter to the Page News and Courier
to this transaction not requiring a public hearing because it was a “governmental project.” He also
said it was not “tax-free initiated by the EDA”, because “she started it”. It was tax-free.
Doc P (And yet, it was transferred to the EDA from the county because it was a commercial project which would
use no tax money, and here's Mr. Baughan calling it a governmental project.) It refers to payments being made only from
the commercial venture itself and not a commitment by the taxpayers. Its first payment is due Jan 1, 2010. No bank was
involved in the agreement. Shortly after executing this agreement, members of the BoS began referring to the debt to Mrs.
Hudson as a debt which could not be rescinded by future Boards because it would “damage the county's Bond rating.”
Doc Q
9. Chairman LaFrance referred in public meetings to “appraisals”
of nearby property at $100K an acre Doc R and other explosive documents which I am holding close to the
chest.
10. The BoS tells us they are close to obtaining loans for the $6.5M which
will pay Mrs. Hudson off. A FOIA request for the loan applications revealed only the “request for federal assistance”
which was submitted to the USDA for $4.5M in January, 2009. A call to the USDA revealed that loan talks are in process.
Doc T However, the USDA said, the loan commitment, once made, would require the backing of the county's
Board, including public hearings. One can presume that means it is no longer a “moral obligation”, but an actual
one.
11. Although the documents say “this does not commit the taxpayers”,
there is no source of commercial funding for the EDA. Doc U As a HUB Zone company, Premier Technical
Services would have to have 1/3 of its employees working in Page County, Doc V. That means, if they have 35 employees,
12 of them would have to live in Page County. Questioning of individual Board members revealed that they had
not used their opportunity in all of those closed sessions to review the financial records of PTS, or to ascertain whether
or not this company had the ability to obtain $15M in financing, or to count the 12 employees. Doc W The
time for the Governor's Opportunity Fund expired on March 1, 2009. At that time, the EDA exercised its option to extend
the contract for 12 months. Doc Y No work has been done on the land that is committed to them. Doc
Z
12. By the time these new USDA loans are obtained, the taxpayers of Page County
could be obligated to repay: a) the $300K to the Governor's Opportunity Fund b) the $700K to the
USDA for an infrastructure grant c) the $4.5M to the USDA for a loan to pay Mrs. Hudson d)
the $2.0M to Mrs. Hudson or whomever the loan has been sold to, for the amount of her loan that was not covered by the
USDA loan. The taxpayers have already paid $1M to Mrs. Hudson as the down payment, Doc AA in
a year when Page County had unemployment over 11% and many foreclosures occurred. County employees were put on furlough
12 days a year because of budget problems. The Board handed over the $1M down payment less than 90 days before finding out
they didn't have the money to pay for the schools.
13. Page County taxpayers
began circulating a petition demanding that the Board put an end to this contract and cancel future payments, as the original
Board resolution said they could do. The Board has so far been unresponsive to these efforts. Doc BB
14. I have been operating the Page County Watch Blog for two years. During that time,
I have collected, under Freedom of Information, the documents related to these incidents.(shown here as DOC)
