- Last Updated on Wednesday, 25 March 2009 18:32
- Published on Wednesday, 25 March 2009 18:32
- Hits: 279
- Last Updated on Wednesday, 18 March 2009 16:52
- Published on Wednesday, 18 March 2009 16:52
- Hits: 322
Federal economic recovery act fills the void
The Westmoreland County School Board met Monday and approved the upcoming school year’s $17.7 million budget. The dire set of cost reduction measures envisioned earlier to offset major reductions in state support became unnecessary when a million in federal economic recovery funding was allocated to support Westmoreland schools.
During the first weeks of 2008 it was understood that Virginia’s contribution to the Westmoreland school division would be reduced as much as $420,000. Revenue associated with sales tax collections in Westmoreland County had plummeted and reductions in teacher salaries became a serious consideration. An across the board pay reduction of 1 percent would have generated $400,000.
There were other cost saving measures that were seriously contemplated, including incentives for older teachers to retire, virtual elimination of pre-school programs, field trips and after school activities and major reductions in administrative staff that would have included the division’s assistant principal positions.
“These will be some of the toughest decisions we ever had to make,” Division Superintendent Elaine Fogliani said of the austere measures that were being entertained earlier this year.
By February 23 it had become apparent that a one-time infusion of a million dollars from the federal government would allow teacher salaries to be funded at current levels and crucial programs to be continued through the 2009-12010 academic year.
Earlier projections of the county school division’s share of the federal government’s economic recovery contribution were sharply lower than the level of federal relief reported on March 16.
On February 23 Superintendent Fogliani struggled to balance a budget that had an identified $78,000 shortfall. At that time the federal economic recovery package was expected to cut the previously identified division deficit by $535,432. Westmoreland’s contribution to county schools would rise as much as $193,084, bringing the county’s share of support to a high of $7,457,758.
This Monday the final draft of the budget adopted by the Westmoreland School Board required a local funding increase in the amount of $129,219.
New in 2009-2010 is a half million dollars from the federal government to increase support for special education and the division’s Title 1 programs that address students with special needs and children from low income families.
In addition to consolidating bus routes, as many as two of the school division’s central office positions have been eliminated from the budget the 2009-2010 school budget. More cuts could follow when the budget goes to the Westmoreland Supervisors for that Board’s consideration.
On Monday Dr. Fogliani reiterated what she had stated previously concerning the difficulty of preparing a budget during such an economically challenged period. She delivered a warning that things may be more difficult next year.
The federal government’s economic recovery allocation to support Westmoreland schools was a one-time occurrence, an emergency action that was taken by Congress as part of the national effort to prevent a massive economic catastrophe.
Aware that sales tax revenues have already dropped in Westmoreland County by a reported $403,065, Fogliani shared concerns that next year’s school division budget may be even more difficult to prepare.
“We don’t know what will happen next year,” Dr. Fogliani told the people who gathered for the March 16 Westmoreland School Board meeting.
- Last Updated on Wednesday, 11 March 2009 05:00
- Published on Wednesday, 11 March 2009 05:00
- Hits: 447
The Westmoreland County Board of Zoning Appeals will hold a specially scheduled meeting at 9:00 a.m. on Monday, March 30 in the George D. English meeting in order to entertain and act on a challenge brought by Joseph W. Thompson that concerns the county government’s January 12, 2009 contract with The O’Gara Group.
According to the contract, the local government would sell its unoccupied industrial shell building and a surrounding 25-acre tract to O’Gara Group for development as a security training facility.
Thompson’s appeal challenges the local government’s assertion that the O’Gara establishment is in fact a school as defined in the Westmoreland County zoning ordinance.
If the county government’s determination stands, O’Gara Group can build its security training establishment on the referenced 25 acres and an adjacent 325-acre tract the Group also intends to buy without ever having to solicit input from county residents.
At 7:15 p.m. this Tuesday an O’Gara Group representative will meet at Carmel United Methodist Church with interested county residents.
Public sentiment ranges from acceptance or apathy to publicly stated displeasure with the local government’s lack of transparency during a previous negotiating period and, in some instances, staunch opposition to O’Gara’s plans to establish its facility in Westmoreland County.
Thompson’s appeal includes an assertion that the O’Gara project’s land disturbance footprint would cover more than one hundred acres of the 350-acre tract. The appeal is expected to include arguments that the footprint associated with the O’Gara facility does not equate with the footprint of a typical school.
Members of the public will not be allowed to address the BZA during the March 30 proceeding but the public will be permitted to attend.
- Last Updated on Wednesday, 18 February 2009 21:30
- Published on Wednesday, 18 February 2009 21:30
- Hits: 332
April 27 is the Westmoreland County Board of Zoning Appeals hearing date given to property owner Joseph W. Thompson, whose February 11 application questions county government’s ability to classify the security training facility O’Gara Group expects to develop in Westmoreland County as a school.
On January 12 the county government agreed to sell its unoccupied industrial shell building and the 25 surrounding acres to O’Gara if the buyer additionally purchases Bryan Chandler’s 325-acre tract.
The property developed as an industrial park by the county government is an upper remnant of the larger Chandler tract. The agriculturally zoned is largely wooded and is situated between the industrial park and the upper reaches of a Nomini tributary.
Joe Thompson’s land is on the creek and he was one of many unhappy residents who spoke against creation of the O’Gara Group’s training facility when the Westmoreland Supervisors met last Monday night.
Thompson is a natural resources consultant and land management specialist. He is a state certified nutrient management planner and the name of the business he operates is Smart Creek Enterprises, LLC.
Services offered by Smart Creek Enterprises include land use analysis, farm planning, wildlife habitat management, soil evaluation, erosion and sediment control and pasture and grassland management.
On February 9 Joe Thompson told the Westmoreland Supervisors that he shares the concerns of all the Westmoreland residents who preceded him to the podium in order to express displeasure with the local government’s intentions to accommodate the wishes of the O’Gara Group.
Thompson warned the Supervisors that the O’Gara’s plans call for development of as much as one-third of the approximately 350-acre tract.
“A land disturbance footprint of over 100 acres doesn’t equate with [the footprint of] a typical school,” said Thompson.
Thompson additionally noted the history of a similar training facility’s effort to establish a location in Stafford County. The courts, he noted, have been asked to deliver a ruling on the proposed establishment’s conformity to that jurisdiction’s adopted definition of a school.
Thompson urged the Westmoreland Supervisors to delay closing the local government’s deal with the O’Gara Group. The judicial ruling on the Stafford County question would have clear relevance.
Thompson told the Supervisors that he lives downstream of the property where O’Gara expects to locate.
“My wife’s family has been here for over a century,” he explained. “I am here because I love the rural lifestyle.”
Thompson said he had no clear information about the composition of the prospective O’Gara trainees other than the certainty that those individuals would be transient, with no vested interest in preservation of the immediate area’s quality of life.
“I know these are dire economic times and I can well understand that having someone walk up with cash in hand would be enough to turn anybody’s head,” Thompson told the Supervisors.
“I also believe that if this county can continue to maintain its quality of life, more appropriate industries
- Last Updated on Wednesday, 04 February 2009 18:49
- Published on Wednesday, 04 February 2009 18:49
- Hits: 568
The Tapppahannock-based Bank of Essex acquired its second failed financial institution last Friday, according to the press release issued by FDIC on January 30. Its first acquisition of a failed financial institution occurred on November 21, 2008.
“Suburban Federal Savings Bank, Crofton, Maryland, was closed today by the Office of Swift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named receiver,” the January 30 press release begins.
“To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Essex, Tappahannock, Virginia, to assume all of the deposits of Suburban Federal.
“The failed bank’s seven offices will reopen on Saturday as branches of Bank of Essex. Depositors of Suburban Federal will automatically become depositors of Bank of Essex. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of both banks should continue to use their existing branches until Bank of Essex can fully integrate the deposit records of Suburban Federal.
“Over the weekend, depositors of Suburban Federal can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
“As of September 30, 2008, Suburban Federal had total assets of approximately $360 million and total deposits of $302 million. In addition to assuming all of the failed bank’s deposits, Bank of Essex agreed to purchase approximately $348 million in assets at a discount of $45 million. The FDIC will retain the remaining assets for later disposition.
“The FDIC and the Bank of Essex entered into a loss-share transaction. Bank of Essex will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is expected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers as they will maintain a banking relationship.”
“The FDIC estimates that the cost to the Deposit Insurance Fund will be $126 million. Bank of Essex’s acquisition of all deposits was the ‘least costly’ resolution for the FDIC’s Deposit Insurance Fund compared to alternatives.
“Suburban Federal is the fifth bank to fail in the nation this year. The last bank to be closed in Maryland was Second National Federal Savings Bank, Salisbury, on December 4, 1992.
“Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 8,384 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.”
An Interned web search of Bank of Essex and FDIC uncovered a similarly styled FDIC press release with the November 21, 2008 date addressing a Bank of Essex acquisition of a failed financial institution on the outskirts of Atlanta, Georgia that had failed.
“The Community Bank, Loganville, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver,” the November 2008 FDIC release began.
“To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Essex, to assume all of the deposits of The Community Bank.
“The Community Bank’s four branches will open on Monday, November 24, 2008 as Bank of Essex. Depositors of the failed bank will automatically become depositors of Bank of Essex.”
“As of October 17, 2008, The Community Bank had total assets of $681 million and total deposits of $611.4 million. Bank of Essex purchased approximately $8.4 million of The Community Bank’s assets, and did pay the FDIC a premium of $3.2 million for the right to assume the failed bank’s deposits. The FDIC will retain the remaining assets for later disposition.”
“The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be between $200 million and $240 million. The Community Bank is the twentieth FDIC-insured institution to be closed nationwide, and the third in Georgia, this year.”
Congress adopted the economic bailout legislation known as TARP on October 7, 2008. Additional Internet research resulted in more detailed information concerning the two failed Bank of Essex acquisitions.
For over fifty years Suburban Federal Savings Bank of Crofton, Maryland, specialized in residential lending but the financial institution became critically undercapitalized when the mortgage boom turned sour.
The result was a capital to risky assets ration of 3.09 percent on September 30, 2008. Adequate capitalization requires that ration to be 8 percent or higher.
Suburban Federal Savings Bank lost a reported $4.5 million in the third quarter of 2008. Over 11 percent of its loans were noncurrent and on September 30 the establishment had funds to cover only 14 percent of the noncurrent loans. The cited figures were five times the industry average for the third quarter of 2008.
The Federal Office of Thrift Supervision that closed Suburban Federal Savings Bank last Friday evening faulted that financial institution’s Board of Directors for its failure to appropriately oversee the “aggressive” lending practices that occurred between 2005 and September 2008.
Mortgage loans were issued without appropriate proof of a borrower’s financial resources and the lending program was extended to residential construction, development and land loans. During 2006 some of those mortgages were becoming toxic. During the third quarter of 2007 the troubled assets resulted in a loss of capital.
February 2007 OTS examined Suburban Federal Savings Bank and noted a spike in troubled assets. The thrift was subsequently banned from issuing additional loans for residential construction, acquisition and development or land.
An August 2007 examination of the establishment’s books revealed worsening conditions and in March 2008 a public order was issued for the establishment to cease its “unsafe and unsound” real estate lending practices.
prospective Dutch insurer reportedly considered acquiring Suburban in November 2008, exploring its qualifications for what is known as the TARP Capital Purchase Plan. According to the economic recovery measure adopted by Congress on October 7. 2008, the U.S. Treasury has the standing to purchase stock in banks.
When Bank of Essex acquired Suburban Federal Savings Bank, a loss-sharing agreement with FDIC requires Bank of Essex to cover only limited losses on the purchased assets. The FDIC will cover any losses suffered by Bank of Essex that exceed the limit whose value may never be released for public dissemination. According to the available information, Suburban Federal Savings Bank engaged in lending practices that will cost the FDIC $126 million and its acquisition by Bank of Essex was the most cost effective remedy.
The Community Bank in Loganville, Georgia had a similar history. Its seizure last November resulted from falling home prices and a rising incidence of foreclosures as ever more mortgages assumed a toxic character.
The Bank of Essex is headquartered on Prince Street in Tappahannock. Its Internet website relates the existence of “thirteen convenient locations” in Virginia, along with a statement that Bank of Essex is “building upon a foundation of community bank values.”
- Last Updated on Wednesday, 04 February 2009 18:35
- Published on Wednesday, 04 February 2009 18:35
- Hits: 541
The word on the street this Monday was that the O’Gara Group might be changing its plans to locate a security training facility in the Westmoreland County Industrial Park.
County officials approved a purchase contract on January 12 that would allow O’Gara Group to buy the publicly owned industrial shell building and the remaining 25 acres of industrial park property for development as a security training school.
The contract with the local government was contingent on the prospective buyer’s ability to purchase an adjacent 325-acre tract, but District 2 Westmoreland Supervisor Russ Culver advised The Journal this Monday afternoon that there may be problems with the purchaser’s ability to obtain the necessary financing.
O’Gara’s purchase contract with the local government names S. Bryan Chandler as the owner of the adjacent 325-acre tract. O’Gara would pay Westmoreland County $679,178 in certified funds at settlement. Five percent of the total purchase price was delivered to Westmoreland County as a non-refundable deposit when the purchase contract was approved.
Settlement was to occur within thirty days of the end of what the contract described as a feasibility period. A closer look at the contract’s feasibility section discloses conditions that would reverse the so-called non-refundable character of the buyer’s $33,959 deposit to Westmoreland.
According to the contract, the purchaser was given a 60-day feasibility period “to determine, in [the purchaser’s] sole discretion, through engineering and feasibility studies, i[f] its location, intended use of, and financing of the property are practical.
“If within said period, Purchaser notifies Seller or an agent of Seller in writing by either facsimile or certified mail, that his plan, in his sole and absolute judgment, is not practical, this Contract is to be considered null and void [and] Purchaser shall be entitled to a return of its Deposit.”
According to this reporter’s understanding of Supervisor Russ Culver’s February 2 comments on the subject, O’Gara had an option contract on the adjacent 325-acre tract and had expected to raise the money to buy the land by engaging in a public offering during February 2009.
The plans went awry when the Securities Exchange Commission advised O’Gara Group that it cannot have a public contract while it is offering shares.
“So they put another contract in with Bryan Chandler,” Culver stated.
The Supervisor went on to relate that O’Gara’s plans “may stall because of a problem getting money from the bank. They needed $12 to $20 million, so they wanted to have a public offering.”
Monday afternoon Culver continued to encourage the Westmoreland Citizens Association to host a meeting in which O’Gara Group would meet with county residents to answer questions and make their intentions better understood.
Earlier on Monday the Association’s officers held a meeting and decided not to become involved as an intermediary between O’Gara and the public.
“People are unhappy that the county government kept this from the public,” Association President Kennon Morris related. “If there is a problem with the people, it’s the fault of the county government. Let them schedule a meeting with O’Gara and the people, if that is what they really want.”
Culver said he asked the Association to schedule a meeting with O’Gara because he said he felt the purchaser’s difficulty in obtaining financing can provide an opportunity for the local government to revisit the matter and give the public an opportunity to deliver input and have their questions answered.
According to Culver’s reading of the purchase contract, O’Gara “has 30 days to come in and make the contract valid.
“The problem,” said Culver, “is that right now everything is up in the air. It’s important to get a meeting with a lot of people in attendance. If O’Gara Group could have an opportunity to give us honest answers, I feel certain they could alleviate a lot of fears.”
Although Senator Richard Stuart represented O’Gara Group on January 12, the previously referenced contract lists M .R. Foley & Associates, LLC of Richmond as the agent of the purchaser.
The county government purchased its industrial park property at a cost of $361,844.25. The park’s shell building cost $461,995 to construct and $25,000 was expended for architectural and engineering fees.
It was Northern Neck Electric Cooperative that carried the cost of the industrial shell building’s construction. Over a period of 9.61 years Westmoreland County paid the Cooperative $4,000 each month and the final payment on the building’s debt service was made just prior to the county government’s January 12 approval of the purchase contract with O’Gara.
In addition to the $679,178 Westmoreland expected to receive from O’Gara Group, a portion of the industrial park property was previously sold to Carry-On Trailer for $445,128.46. A smaller section of the park’s property was conveyed to Scott Travers for $61,000. The O’Gara transaction would have completed the park’s development.
- Last Updated on Thursday, 29 January 2009 02:33
- Published on Thursday, 29 January 2009 02:33
- Hits: 416
Global economic patterns some have termed as the beginning of the Very Great Depression reached Westmoreland County when the jurisdiction’s School Board met this Monday.
Division Superintendent Elaine Fogliani had done the math that utilizes current school division budget numbers and an anticipated $420,000 reduction in the state’s basic aid contribution to Westmoreland.
The basic aid contribution from the state is used to calculate the minimum level of funding a locality must contribute to support its school division. Fogliani anticipated that the minimum contribution the county is required to contribute would be similarly reduced, resulting in the loss of more than $800,000.
It was understood that such a shortfall would have dire impacts on an already bare bones budget with a $19 million bottom line. Additional reductions in state and federal revenue must also be taken into account, the Division Superintendent advised the members of the Board.
“These will be some of the toughest decisions we ever had to make,” said Fogliani. The Superintendent has proposed a 1 percent cut in employee salaries that would generate $400,000 to help support the division’s most essential programs.
Administrative staff would be reduced and assistant principal and teacher’s assistant positions would be lost to accommodate the shrinking bottom line. Other cost saving measures would include elimination of some or all field trips, extra curricular activities and the pre-school programs at the elementary schools.
The School Board will tackle the problem of the division’s shrinking budget when it convenes its February 16 work session. At that time the General Assembly’s intentions may be better understood.