April 13, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
The eye doctor received an earful during the New Castle Area School Board’s work session last night.
Board President J. Allan Joseph chastised Dr. Marilyn Berkely as Superintendent George Gabriel attempted to discuss policy revisions.
Joseph viewed Berkely’s inquiries as one example of a perceived lack of faith in his leadership. Berkely said her questions were just that — questions.
The first policy reviewed last night involved allowing administrators to coach district sports teams.
A few questions were brought up before Gabriel moved to family and medical leave guidelines. Berkely returned to the initial topic.
“It’s kind of hard when I’m not involved in any of this,” she said. “You just have to go a little slower.”
Joseph responded.
“Dr. Berkely, if you don’t mind, you’ve thrown a few comments like that. I just want to explain to you why you are not on the (athletic) committee.”
“I just want you to go a little slower because I am not keeping up with you. That’s all,” she said.
“You’re making comments that ‘I’m not on this committee so I’m not up (on this),’” Joseph replied. “You and Mrs. (Barbara) Razzano did not vote for me, did not have confidence in me (as board president).
“Therefore, I kind of feel the same way.”
The disagreement can be traced to December when Joseph handed out assignments. Out of 10 committees, Berkely and Razzano were each selected to three.
The Neshannock-based optometrist serves on budget and finance. She is the lone board member on the legislative and cafeteria committees. She also is on the subcommittee for feasibility study. Razzano services on the policy, safety and sick bank committees.
“Three of 10 committees, that’s the position they put me in,” Berkely said prior to the board’s executive session. “I feel powerless.
“I will do the best job I can do.”
Razzano, who did not attend last night’s session, said she wasn’t surprised by Joseph’s comments.
“This is the mentality of our current board president,” she said in an e-mail last night. “This type of leadership has no place around the education of our children.
“(Either) you are with Allan Joseph or you are against him. If you are with him, you are rewarded, and, if you are against him, you are punished."
Joseph said Berkely and Razzano have been invited to attend the district’s other committee meetings. For example, Razzano attended last week’s gathering on schoolwide consolidation.
“That has never been a problem,” he said.
During the work session, Berkely renewed an offer she made to Joseph.
“I asked you if you wanted to take (the committees) away,” she said. “You could still do that.
“You can take them all away if you want to.”
Joseph declined to accept that offer.
Gabriel worked to guide the board back to the agenda.
“With all due respect to the board members, I don’t think this conversation is productive at all.”
Tuesday, April 13, 2010
Monday, April 12, 2010
School closures to fund project
April 12, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Closing three primary centers will provide the funds needed to pay for the New Castle Area School District’s consolidation project.
Business manager Joseph Ambrosini highlighted the potential $800,000 in annual savings. His assessment came last week during a school board subcommittee meeting assigned to review a districtwide facilities study.
“If we don’t do anything, we’re still going to pay out $800,000 yearly on old buildings,” Ambrosini said.
“It’s like running a furnace with a hole in the roof and the windows broken,” board member Dr. Marilyn Berkely said.
Superintendent George Gabriel along with Ambrosini and fellow administrators Stan Magusiak and Terance P. Meehan offered their recommendations: Renovate Harry W. Lockley Kindergarten Center into a kindergarten-through-second-grade learning center at a price of approximately $21.3 million.
Dave Esposito of Eckles Architecture and Engineering noted the district might have to acquire 18 to 19 acres as part of the Lockley renovation. The state would reimburse the district 80 percent of the acquisition costs.
The district’s third-graders would move to George Washington Intermediate Elementary and join the fourth- through sixth-graders. Improvements to the site would total $8 million, which are eligible for 100 percent reimbursement from the state. Updates would include a new heating system, security improvements and additional enhancements.
“That building is in very good shape,” Esposito said. “(The improvements) should give that building a new lease on life for 20 years.”
Ambrosini said the savings from closing Thaddeus Stevens, John F. Kennedy and West Side primary centers had to be economically significant before committing to the project.
The annual cost to operate these centers with state reimbursement included is $700,000 to $900,000. Savings would come in the elimination or reduction of utilities, transportation, capital improvements and staffing (cafeteria, maintenance, custodians, personal care assistants).
During the next 10 years, 22 teachers are expected to leave the district through retirement or furloughs. That will create about $2.2 million in savings. Those numbers do not include reductions in administrative staff.
Four of the five board members — Karen Humphrey, Anna Pascarella, Maryann Tofel and Berkely — were prepared to accept the administration’s recommendation and pass it to the full board for a vote. Bradley G. Olson Jr. asked for more time to review the proposal.
Olson questioned Ambrosini about the implications of a declining student enrollment on the education subsidy received through the state.
The business manager said he does not foresee a reduction in the money New Castle receives.
“What is the bottom dollar to the citizen of New Castle?” Olson asked. “Are we going to now come out of pocket even more to pay for these upgrades in schools or is it going to maintain the same amount of taxes that I’m paying right now?”
Gabriel responded: “I don’t see any new taxes (taking place) as a result of this consolidation … based on these projections. I’m not saying there’s never going to be a millage increase in this district.”
The next meeting is scheduled for 6 p.m. April 26.
As the meeting ended, one board member used the term “construction” to describe to project. Berkely corrected the statement.
“I think if we were to build new, we should all get run out of town,” she said.
“I agree with you doctor, but you didn’t hear me say that,” Gabriel said. “It’s never been an option.”
***
April 13, 2010
Clarification: The annual cost of the New Castle Area School District’s proposed consolidation project is 700,000 to $900,000 during a 20-year period. That amount includes state reimbursement. The information was unclear in Monday’s edition.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Closing three primary centers will provide the funds needed to pay for the New Castle Area School District’s consolidation project.
Business manager Joseph Ambrosini highlighted the potential $800,000 in annual savings. His assessment came last week during a school board subcommittee meeting assigned to review a districtwide facilities study.
“If we don’t do anything, we’re still going to pay out $800,000 yearly on old buildings,” Ambrosini said.
“It’s like running a furnace with a hole in the roof and the windows broken,” board member Dr. Marilyn Berkely said.
Superintendent George Gabriel along with Ambrosini and fellow administrators Stan Magusiak and Terance P. Meehan offered their recommendations: Renovate Harry W. Lockley Kindergarten Center into a kindergarten-through-second-grade learning center at a price of approximately $21.3 million.
Dave Esposito of Eckles Architecture and Engineering noted the district might have to acquire 18 to 19 acres as part of the Lockley renovation. The state would reimburse the district 80 percent of the acquisition costs.
The district’s third-graders would move to George Washington Intermediate Elementary and join the fourth- through sixth-graders. Improvements to the site would total $8 million, which are eligible for 100 percent reimbursement from the state. Updates would include a new heating system, security improvements and additional enhancements.
“That building is in very good shape,” Esposito said. “(The improvements) should give that building a new lease on life for 20 years.”
Ambrosini said the savings from closing Thaddeus Stevens, John F. Kennedy and West Side primary centers had to be economically significant before committing to the project.
The annual cost to operate these centers with state reimbursement included is $700,000 to $900,000. Savings would come in the elimination or reduction of utilities, transportation, capital improvements and staffing (cafeteria, maintenance, custodians, personal care assistants).
During the next 10 years, 22 teachers are expected to leave the district through retirement or furloughs. That will create about $2.2 million in savings. Those numbers do not include reductions in administrative staff.
Four of the five board members — Karen Humphrey, Anna Pascarella, Maryann Tofel and Berkely — were prepared to accept the administration’s recommendation and pass it to the full board for a vote. Bradley G. Olson Jr. asked for more time to review the proposal.
Olson questioned Ambrosini about the implications of a declining student enrollment on the education subsidy received through the state.
The business manager said he does not foresee a reduction in the money New Castle receives.
“What is the bottom dollar to the citizen of New Castle?” Olson asked. “Are we going to now come out of pocket even more to pay for these upgrades in schools or is it going to maintain the same amount of taxes that I’m paying right now?”
Gabriel responded: “I don’t see any new taxes (taking place) as a result of this consolidation … based on these projections. I’m not saying there’s never going to be a millage increase in this district.”
The next meeting is scheduled for 6 p.m. April 26.
As the meeting ended, one board member used the term “construction” to describe to project. Berkely corrected the statement.
“I think if we were to build new, we should all get run out of town,” she said.
“I agree with you doctor, but you didn’t hear me say that,” Gabriel said. “It’s never been an option.”
***
April 13, 2010
Clarification: The annual cost of the New Castle Area School District’s proposed consolidation project is 700,000 to $900,000 during a 20-year period. That amount includes state reimbursement. The information was unclear in Monday’s edition.
Friday, April 9, 2010
School board to review consolidation options
April 6, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Dollars will dictate how New Castle Area School District classes are reorganized.
A school board subcommittee begins reviewing the district’s options at 6 p.m. tomorrow in the administration offices, located at 620 Fern St. The group is made up of Dr. Marilyn Berkely, Karen Humphrey, Bradley G. Olson Jr., Anna Pascarella and Maryann Tofel.
“A decision has to be made,” Superintendent George Gabriel said. “We’re looking at buildings that are substandard.”
Former board member Donna Donati formed an ad hoc committee during her tenure as president in 2008. Her goal was to evaluate the district’s building needs with input from the community, administration and board members.
Enrollment numbers bolstered the need for a review. During the 2008-09 school year, New Castle reported 3,433 students. The Pennsylvania Department of Education, based on a 2008 report, projected a loss of approximately 800 students by the start of the 2018-19 session.
A report prepared by Eckles Architecture and Engineering in June 2009 presented eight options. The choices were trimmed and revised. However, when Donati met with the board in late February to discuss the committee’s work, she did not offer a final decision.
“There are too many variables,” she said. “We did not select options. All we did was review the predominant ideas.”
Donati said the group’s concern focused on the finances of the district and its taxpayers. She noted a wave of increasing expenses, such as pension contributions, teaching and administrative salaries, health insurance premiums and potential tax increases.
Declining enrollment and property values mean fewer dollars funneled into the school system.
“We have taken multiple measured steps in the last six years to cut costs, through attrition and cutting support staff,” Gabriel said. “We look at ways of making the budget more lean.”
Business manager Joseph Ambrosini said the district could apply between $3 million and $5 million from its fund balance to pay for a potential project. Federal stimulus dollars would permit funding through zero or low-interest bonds.
He said every effort will be made to avoid a property tax increase, something that hasn’t taken place in the last seven years.
The boards members are not required to adhere to ad hoc committee’s input.
The latest report from Eckles featured five proposals. Gabriel said he favors the creation of a kindergarten through second-grade learning center on the site of the Harry W. Lockley Kindergarten Center.
Third-graders would join the fourth through sixth grades at George Washington Intermediate Elementary School.
The addition to Lockley would increase its size from 38,000 square feet to 100,000 square feet at a cost of $21 million. Renovations to George Washington are estimated at $8.3 million and would be phased in.
State reimbursement to New Castle is estimated at $14.8 million.
Gabriel said the district may purchase property surrounding the school. However, eminent domain would not be used to acquire the land.
The plan also calls for the closure of Thaddeus Stevens, John F. Kennedy and West Side primary centers.
“I get the feeling we’re all for a new primary center if we have the money,” Donati said.
If the current economic climate remains in place, she said, then the district should make do with what it has.
“It’s not the building that educates the children; it’s the personnel that educate children.”
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Dollars will dictate how New Castle Area School District classes are reorganized.
A school board subcommittee begins reviewing the district’s options at 6 p.m. tomorrow in the administration offices, located at 620 Fern St. The group is made up of Dr. Marilyn Berkely, Karen Humphrey, Bradley G. Olson Jr., Anna Pascarella and Maryann Tofel.
“A decision has to be made,” Superintendent George Gabriel said. “We’re looking at buildings that are substandard.”
Former board member Donna Donati formed an ad hoc committee during her tenure as president in 2008. Her goal was to evaluate the district’s building needs with input from the community, administration and board members.
Enrollment numbers bolstered the need for a review. During the 2008-09 school year, New Castle reported 3,433 students. The Pennsylvania Department of Education, based on a 2008 report, projected a loss of approximately 800 students by the start of the 2018-19 session.
A report prepared by Eckles Architecture and Engineering in June 2009 presented eight options. The choices were trimmed and revised. However, when Donati met with the board in late February to discuss the committee’s work, she did not offer a final decision.
“There are too many variables,” she said. “We did not select options. All we did was review the predominant ideas.”
Donati said the group’s concern focused on the finances of the district and its taxpayers. She noted a wave of increasing expenses, such as pension contributions, teaching and administrative salaries, health insurance premiums and potential tax increases.
Declining enrollment and property values mean fewer dollars funneled into the school system.
“We have taken multiple measured steps in the last six years to cut costs, through attrition and cutting support staff,” Gabriel said. “We look at ways of making the budget more lean.”
Business manager Joseph Ambrosini said the district could apply between $3 million and $5 million from its fund balance to pay for a potential project. Federal stimulus dollars would permit funding through zero or low-interest bonds.
He said every effort will be made to avoid a property tax increase, something that hasn’t taken place in the last seven years.
The boards members are not required to adhere to ad hoc committee’s input.
The latest report from Eckles featured five proposals. Gabriel said he favors the creation of a kindergarten through second-grade learning center on the site of the Harry W. Lockley Kindergarten Center.
Third-graders would join the fourth through sixth grades at George Washington Intermediate Elementary School.
The addition to Lockley would increase its size from 38,000 square feet to 100,000 square feet at a cost of $21 million. Renovations to George Washington are estimated at $8.3 million and would be phased in.
State reimbursement to New Castle is estimated at $14.8 million.
Gabriel said the district may purchase property surrounding the school. However, eminent domain would not be used to acquire the land.
The plan also calls for the closure of Thaddeus Stevens, John F. Kennedy and West Side primary centers.
“I get the feeling we’re all for a new primary center if we have the money,” Donati said.
If the current economic climate remains in place, she said, then the district should make do with what it has.
“It’s not the building that educates the children; it’s the personnel that educate children.”
Thursday, March 25, 2010
Affordable Housing defendants pursue dismissal
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Two defendants in a mortgage fraud scandal are seeking dismissal of charges in their federal court case.
Attorneys for Anthony J. Staph Jr. and Nicholas DeRosa filed motions Monday with U.S. District Judge Gustave Diamond in Pittsburgh.
To date, federal prosecutors have charged five Lawrence County residents in the government’s investigation of a defunct nonprofit housing agency. The alleged conspiracy involved Affordable Housing of Lawrence County, which was formed in 2003 as a spin-off agency of the Lawrence County Housing Authority.
The U.S. Attorney’s Office accused DeRosa, of 221 N. Cascade St., and Robert Ratkovich, of 512 Norwood Ave., with defrauding First Commonwealth Bank of $250,000. The alleged plot involved the purchase of seven properties at inflated prices on behalf of Affordable Housing.
DeRosa faces one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy. He is a retired New Castle Area School District administrator and former city councilman.
Ratkovich pleaded guilty in July to one count of bank and mail fraud conspiracy and one count of money laundering conspiracy. The former housing authority supervisor and city councilman is scheduled to be sentenced April 28.
Staph, a real estate appraiser, was indicted on one count of bank fraud.
Thomas J. Farrell, who represents the Neshannock Township resident, asked the court to dismiss the charge involving his client.
“(First Commonwealth Bank) selected and paid Mr. Staph to do the appraisals, after the sales agreements were signed and after the sales prices set,” Farrell stated in court documents. “There will be no evidence that Mr. Staph received any benefit from Mr. DeRosa or Mr. Ratkovich for appraising the properties at any particular value.”
He added the government never indicated Staph played a role in selecting the properties Affordable Housing bought.
“There is no suggestion that either DeRosa or Ratkovich had any communications whatsoever with Mr. Staph about their scheme or the appraisals.”
Farrell said Staph’s work was limited to evaluating the properties during a two-week period in November 2005.
The government alleged Staph overvalued the appraisals.
If Staph’s dismissal is denied, Farrell wants the court to separate his client’s case from that of DeRosa’s. The government is trying the pair as part of one case.
Efrem M. Grail, DeRosa’s legal counsel, is requesting the dismissal of the money laundering conspiracy charge.
In his motion, Grail said the conspiracy allegation has no bearing on the bank and mail fraud charges. The latter counts involve Affordable Housing and funds from First Commonwealth, while the money laundering charge involves an alleged kickback scheme with money obtained from another source.
The counts, Grail says, were improperly joined — known as duplicity — and could damage DeRosa’s defense.
“Such a duplicitous count in an indictment charging multiple crimes must be dismissed,” Grail wrote.
If his argument is rejected, he asked that the bank and mail fraud charges be tried separately from the money laundering count.
Diamond told the government to respond to the defendants’ motions by April 9.
The mortgage fraud investigation has produced charges separate but related to the Affordable Housing case.
Former county treasurer, Gary F. Felasco, pleaded guilty in September to one count of failure to file a 2005 federal tax return.
According to government documents, Felasco underreported his income by $10,000. He earned $44,568 as county treasurer in 2005 and also collected $35,000 as the result of illegal activity related to Affordable Housing.
Felasco was sentenced to three years probation and ordered to pay back taxes, penalties and interest to the Internal Revenue Service.
Michael Trover, of 609 E. Long Ave., was indicted in November on one count of lying to a federal grand jury. Pretrial motions in his case are due by April 20.
plitowitz@ncnewsonline.com
Two defendants in a mortgage fraud scandal are seeking dismissal of charges in their federal court case.
Attorneys for Anthony J. Staph Jr. and Nicholas DeRosa filed motions Monday with U.S. District Judge Gustave Diamond in Pittsburgh.
To date, federal prosecutors have charged five Lawrence County residents in the government’s investigation of a defunct nonprofit housing agency. The alleged conspiracy involved Affordable Housing of Lawrence County, which was formed in 2003 as a spin-off agency of the Lawrence County Housing Authority.
The U.S. Attorney’s Office accused DeRosa, of 221 N. Cascade St., and Robert Ratkovich, of 512 Norwood Ave., with defrauding First Commonwealth Bank of $250,000. The alleged plot involved the purchase of seven properties at inflated prices on behalf of Affordable Housing.
DeRosa faces one count of bank fraud, two counts of mail fraud and one count of money laundering conspiracy. He is a retired New Castle Area School District administrator and former city councilman.
Ratkovich pleaded guilty in July to one count of bank and mail fraud conspiracy and one count of money laundering conspiracy. The former housing authority supervisor and city councilman is scheduled to be sentenced April 28.
Staph, a real estate appraiser, was indicted on one count of bank fraud.
Thomas J. Farrell, who represents the Neshannock Township resident, asked the court to dismiss the charge involving his client.
“(First Commonwealth Bank) selected and paid Mr. Staph to do the appraisals, after the sales agreements were signed and after the sales prices set,” Farrell stated in court documents. “There will be no evidence that Mr. Staph received any benefit from Mr. DeRosa or Mr. Ratkovich for appraising the properties at any particular value.”
He added the government never indicated Staph played a role in selecting the properties Affordable Housing bought.
“There is no suggestion that either DeRosa or Ratkovich had any communications whatsoever with Mr. Staph about their scheme or the appraisals.”
Farrell said Staph’s work was limited to evaluating the properties during a two-week period in November 2005.
The government alleged Staph overvalued the appraisals.
If Staph’s dismissal is denied, Farrell wants the court to separate his client’s case from that of DeRosa’s. The government is trying the pair as part of one case.
Efrem M. Grail, DeRosa’s legal counsel, is requesting the dismissal of the money laundering conspiracy charge.
In his motion, Grail said the conspiracy allegation has no bearing on the bank and mail fraud charges. The latter counts involve Affordable Housing and funds from First Commonwealth, while the money laundering charge involves an alleged kickback scheme with money obtained from another source.
The counts, Grail says, were improperly joined — known as duplicity — and could damage DeRosa’s defense.
“Such a duplicitous count in an indictment charging multiple crimes must be dismissed,” Grail wrote.
If his argument is rejected, he asked that the bank and mail fraud charges be tried separately from the money laundering count.
Diamond told the government to respond to the defendants’ motions by April 9.
The mortgage fraud investigation has produced charges separate but related to the Affordable Housing case.
Former county treasurer, Gary F. Felasco, pleaded guilty in September to one count of failure to file a 2005 federal tax return.
According to government documents, Felasco underreported his income by $10,000. He earned $44,568 as county treasurer in 2005 and also collected $35,000 as the result of illegal activity related to Affordable Housing.
Felasco was sentenced to three years probation and ordered to pay back taxes, penalties and interest to the Internal Revenue Service.
Michael Trover, of 609 E. Long Ave., was indicted in November on one count of lying to a federal grand jury. Pretrial motions in his case are due by April 20.
Friday, March 5, 2010
Agency liquidates city-based credit union
March 6, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Federal regulators closed a local credit union and cited its deteriorating financial condition as the reason.
The Lawrence County School Employees Federal Credit Union ceased operations at 1 p.m. yesterday.
The National Credit Union Administration reached an agreement with First Choice Federal Credit Union to purchase the credit union and assume a small percentage of its loans. Members of the defunct credit union can access their accounts beginning Monday at one of two First Choice locations: 2209 W. State St., Union Township, and 1400 Wilmington Road, Neshannock Township.
The NCUA’s action marks the fourth federally insured credit union to be liquidated this year. The National Credit Union Share Insurance Fund insures accounts to $250,000.
“The most important thing is that no member lost any money,” said Marilyn Wehr, First Choice’s chief executive officer. “We want everyone to feel safe and secure.
“It is important for the public to understand that this was an isolated incident limited to the Lawrence County School Employees Federal Credit Union and should not reflect on any other bank or credit union.”
First Choice employees have provided operational assistance to the former credit union since October.
The school employees credit union, chartered in 1937, reported a net loss of $3.4 million in the fourth quarter of 2009. Its cash assets dropped from $2.6 million to $151,000 from September to December. Total assets during the same period fell from $6.4 million to $2.6 million.
The credit union reported approximately 1,900 clients last year. Its membership was made up of the employees and families of the county school districts, the Midwestern Intermediate Unit IV and Westminster College. At closing, the customer base dropped to approximately 1,100.
The NCUA has contacted the U.S. Department of Treasury’s financial crimes unit to review the financial losses.
Wehr said First Choice opted not to hire the former credit union’s lone employee nor keep the North Mill Street site open. The liquidation also dissolved the volunteer board of trustees: President Kenneth Cotton, Joseph Croach, Brian Glass and Donna Pezzuolo.
Cotton said First Choice offered the best option for its members.
“That was the best way we could have gone,” he said. “I am personally relieved that all funds were insured and nobody lost any money.”
First Choice has assets of $22.3 million and serves approximately 4,400 customers. Membership is open to anyone who lives, works, worships or attends a county school.
Wehr said she will meet with school district business managers to outline the services First Choice offers. She also wants to reach out to those who left the credit union prior to its closing.
“I gave my word I would treat everyone as family as I do at First Choice,” she said.
The NCUA will administer a majority of the loans made through the school employees credit union.
“Due to the limited time available for review, First Choice was only able to acquire a small percentage of LCSE member loans,” Wehr said, “but we are committed to reconsidering refinance of any loan we did not acquire.”
For questions regarding school employee accounts, call First Choice at (724) 652-8393.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
Federal regulators closed a local credit union and cited its deteriorating financial condition as the reason.
The Lawrence County School Employees Federal Credit Union ceased operations at 1 p.m. yesterday.
The National Credit Union Administration reached an agreement with First Choice Federal Credit Union to purchase the credit union and assume a small percentage of its loans. Members of the defunct credit union can access their accounts beginning Monday at one of two First Choice locations: 2209 W. State St., Union Township, and 1400 Wilmington Road, Neshannock Township.
The NCUA’s action marks the fourth federally insured credit union to be liquidated this year. The National Credit Union Share Insurance Fund insures accounts to $250,000.
“The most important thing is that no member lost any money,” said Marilyn Wehr, First Choice’s chief executive officer. “We want everyone to feel safe and secure.
“It is important for the public to understand that this was an isolated incident limited to the Lawrence County School Employees Federal Credit Union and should not reflect on any other bank or credit union.”
First Choice employees have provided operational assistance to the former credit union since October.
The school employees credit union, chartered in 1937, reported a net loss of $3.4 million in the fourth quarter of 2009. Its cash assets dropped from $2.6 million to $151,000 from September to December. Total assets during the same period fell from $6.4 million to $2.6 million.
The credit union reported approximately 1,900 clients last year. Its membership was made up of the employees and families of the county school districts, the Midwestern Intermediate Unit IV and Westminster College. At closing, the customer base dropped to approximately 1,100.
The NCUA has contacted the U.S. Department of Treasury’s financial crimes unit to review the financial losses.
Wehr said First Choice opted not to hire the former credit union’s lone employee nor keep the North Mill Street site open. The liquidation also dissolved the volunteer board of trustees: President Kenneth Cotton, Joseph Croach, Brian Glass and Donna Pezzuolo.
Cotton said First Choice offered the best option for its members.
“That was the best way we could have gone,” he said. “I am personally relieved that all funds were insured and nobody lost any money.”
First Choice has assets of $22.3 million and serves approximately 4,400 customers. Membership is open to anyone who lives, works, worships or attends a county school.
Wehr said she will meet with school district business managers to outline the services First Choice offers. She also wants to reach out to those who left the credit union prior to its closing.
“I gave my word I would treat everyone as family as I do at First Choice,” she said.
The NCUA will administer a majority of the loans made through the school employees credit union.
“Due to the limited time available for review, First Choice was only able to acquire a small percentage of LCSE member loans,” Wehr said, “but we are committed to reconsidering refinance of any loan we did not acquire.”
For questions regarding school employee accounts, call First Choice at (724) 652-8393.
Thursday, February 25, 2010
Struggling credit union now limiting withdrawals
Feb. 25, 2010
By PATRICK E. LITOWITZ
New Castle News
The board of directors overseeing a struggling credit union have voted to limit the amount of money members may withdraw.
The move is in response to public disclosure that the Lawrence County School Employees’ Credit Union reported a net loss of $3.4 million in the fourth quarter of 2009.
In another development, the U.S. Department of Treasury’s financial crimes unit has been alerted to the credit union’s troubles.
The board resolution allows members to remove up to $5,000 in a week. Withdrawals exceeding $5,000 require members to provide notice 10 business days in advance.
The National Credit Union Share Insurance Fund insures member accounts up to $250,000.
Board President Kenneth W. Cotton said Monday that federal auditors discovered irregularities with credit union accounting in late September.
Cotton said the board is waiting on a National Credit Union Administration report. The credit union’s future is tied to its recommendations. Options include selling off assets or merging with another credit union. The report will not be made public.
“We are sorry for any inconvenience this may cause you,” the board said in a statement.
“We hope you will continue to support the credit union as we work through this process without our manager.”
Holly Cowan, a Slippery Rock Township resident, served as chief executive officer and board member. She reportedly left her job five months ago. Cotton declined to discuss the reason for her departure.
In the interim, a national administration representative and First Choice Federal Credit Union staffers are working with the credit union’s only employee.
First Choice, located in Union Township, is providing management assistance.
The Financial Crimes Enforcement Network, a division of the U.S. Department of Treasury, and the credit union’s bonding company have been notified of developments.
The national representative, who asked not to be identified, said a “suspicious activities report” is forwarded to the financial crimes unit if losses exceed a certain amount.
The credit union, chartered in 1937, had approximately 1,900 clients last year. Its members consist of county school district employees and their relatives.
Serving on the volunteer board are Cotton, Joseph Croach, Brian Glass and Donna Pezzuolo.
By PATRICK E. LITOWITZ
New Castle News
The board of directors overseeing a struggling credit union have voted to limit the amount of money members may withdraw.
The move is in response to public disclosure that the Lawrence County School Employees’ Credit Union reported a net loss of $3.4 million in the fourth quarter of 2009.
In another development, the U.S. Department of Treasury’s financial crimes unit has been alerted to the credit union’s troubles.
The board resolution allows members to remove up to $5,000 in a week. Withdrawals exceeding $5,000 require members to provide notice 10 business days in advance.
The National Credit Union Share Insurance Fund insures member accounts up to $250,000.
Board President Kenneth W. Cotton said Monday that federal auditors discovered irregularities with credit union accounting in late September.
Cotton said the board is waiting on a National Credit Union Administration report. The credit union’s future is tied to its recommendations. Options include selling off assets or merging with another credit union. The report will not be made public.
“We are sorry for any inconvenience this may cause you,” the board said in a statement.
“We hope you will continue to support the credit union as we work through this process without our manager.”
Holly Cowan, a Slippery Rock Township resident, served as chief executive officer and board member. She reportedly left her job five months ago. Cotton declined to discuss the reason for her departure.
In the interim, a national administration representative and First Choice Federal Credit Union staffers are working with the credit union’s only employee.
First Choice, located in Union Township, is providing management assistance.
The Financial Crimes Enforcement Network, a division of the U.S. Department of Treasury, and the credit union’s bonding company have been notified of developments.
The national representative, who asked not to be identified, said a “suspicious activities report” is forwarded to the financial crimes unit if losses exceed a certain amount.
The credit union, chartered in 1937, had approximately 1,900 clients last year. Its members consist of county school district employees and their relatives.
Serving on the volunteer board are Cotton, Joseph Croach, Brian Glass and Donna Pezzuolo.
Wednesday, February 24, 2010
Credit union’s future uncertain
Feb. 23, 2010
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A New Castle-based credit union lost $3.4 million during the last three months of 2009.
“We have endured some losses. I can’t confirm the total amount,” said Kenneth W. Cotton, president of the credit union’s board of directors. “The entire situation is really a complete shock to the whole board.”
Federal auditors uncovered irregularities with Lawrence County School Employees’ Credit Union finances in late September.
The credit union, chartered in 1937, serves approximately 1,900 clients. Its members consist of county school district employees and their relatives.
“As of right now, we’re still in business,” Cotton said. “I want to reinforce that (members’) accounts are insured to $250,000. We’re trying to avoid panic at any cost.
“We currently have assets available to our members.”
Cotton said the credit union is working with the National Credit Union Administration and First Choice Federal Credit Union, located in Union Township, to assist with operations. The NCUA is a federal agency that regulates and charters credit unions.
“All we know is there are accounting irregularities,” Cotton said. “We had to write off some loans.”
Financial information obtained from the NCUA highlights problems in the fourth quarter of 2009.
Cash assets fell from $2.6 million in September to $152,000 at year’s end. During the same period, loan write-offs jumped from $6,600 to $770,000. Loss on investments reached $2.4 million in December. Conversely, no losses were reported between December 2008 through September 2009.
Cotton said the board is waiting for an auditor’s report, which will detail what took place and will recommend what actions the credit union should take.
Cherie Umbel, NCUA spokeswoman, said the report’s contents will not be made public.
A volunteer board oversees the credit union’s operations. Joining Cotton on the board are Joseph Croach, Brian Glass and Donna Pezzuolo.
“I’m just a figurehead,” Croach said. “We’re ignorant of what’s going on.”
Attempts to reach Glass and Pezzuolo for comments were unsuccessful.
Today the credit union’s staff consists of a teller, who declined to be identified. She said that the credit union’s chief executive officer, Holly Cowan, has not been in the office for the last five months. Cowan also served on the board.
“She no longer works for us,” Cotton said.
Stating that it was a personnel issue, he declined to discuss her departure.
Attempts to reach Cowan by phone and at her Slippery Rock Township home were unsuccessful.
There have been 185 bank failures since 2008, according to federal regulators. In comparison, credit unions have proved to be stable operations.
Just 15 were liquidated in 2009 in addition to one this year. Of those, 13 had their assets purchased by other credit unions.
The New Castle Area School District said the number of employees making deposits to the Lawrence County School Employees’ Credit Union dropped from 115 to 79.
By PATRICK E. LITOWITZ
plitowitz@ncnewsonline.com
A New Castle-based credit union lost $3.4 million during the last three months of 2009.
“We have endured some losses. I can’t confirm the total amount,” said Kenneth W. Cotton, president of the credit union’s board of directors. “The entire situation is really a complete shock to the whole board.”
Federal auditors uncovered irregularities with Lawrence County School Employees’ Credit Union finances in late September.
The credit union, chartered in 1937, serves approximately 1,900 clients. Its members consist of county school district employees and their relatives.
“As of right now, we’re still in business,” Cotton said. “I want to reinforce that (members’) accounts are insured to $250,000. We’re trying to avoid panic at any cost.
“We currently have assets available to our members.”
Cotton said the credit union is working with the National Credit Union Administration and First Choice Federal Credit Union, located in Union Township, to assist with operations. The NCUA is a federal agency that regulates and charters credit unions.
“All we know is there are accounting irregularities,” Cotton said. “We had to write off some loans.”
Financial information obtained from the NCUA highlights problems in the fourth quarter of 2009.
Cash assets fell from $2.6 million in September to $152,000 at year’s end. During the same period, loan write-offs jumped from $6,600 to $770,000. Loss on investments reached $2.4 million in December. Conversely, no losses were reported between December 2008 through September 2009.
Cotton said the board is waiting for an auditor’s report, which will detail what took place and will recommend what actions the credit union should take.
Cherie Umbel, NCUA spokeswoman, said the report’s contents will not be made public.
A volunteer board oversees the credit union’s operations. Joining Cotton on the board are Joseph Croach, Brian Glass and Donna Pezzuolo.
“I’m just a figurehead,” Croach said. “We’re ignorant of what’s going on.”
Attempts to reach Glass and Pezzuolo for comments were unsuccessful.
Today the credit union’s staff consists of a teller, who declined to be identified. She said that the credit union’s chief executive officer, Holly Cowan, has not been in the office for the last five months. Cowan also served on the board.
“She no longer works for us,” Cotton said.
Stating that it was a personnel issue, he declined to discuss her departure.
Attempts to reach Cowan by phone and at her Slippery Rock Township home were unsuccessful.
There have been 185 bank failures since 2008, according to federal regulators. In comparison, credit unions have proved to be stable operations.
Just 15 were liquidated in 2009 in addition to one this year. Of those, 13 had their assets purchased by other credit unions.
The New Castle Area School District said the number of employees making deposits to the Lawrence County School Employees’ Credit Union dropped from 115 to 79.
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