Federal Transit Administration says Williamsport must pay back $1.4 million

The Federal Transit Administration has notified Williamsport officials that the city must return more than $1.4 million to the federal agency within the next 25 days, according to correspondence city officials received on Wednesday.
If the city is unable to pay that sum by that deadline, the FTA warns, the total owed will grow.
“The basis for the indebtedness stems from actions taken by the city under its former general manager, William Nichols,” the letter, which has been shared with council members and with officials within both the city government and the River Valley Transit Authority, said. “As you are aware, various investigations into the former general manager began in 2020, ultimately leading to his indictment in 2024.”
Nichols was charged with felony counts of theft and tampering with records for misuse of state and federal funding in September of 2024.
Nichols, 71, oversaw funding for River Valley Transit and in the criminal complaint is accused of misusing more than $500,000 in city, state and federal funds. A hearing on the charges is scheduled in early February in Dauphin County.
The affidavit from the ongoing criminal case described Nichols as becoming “pushy and blustery” and “ultimately threatening” whenever his practices with city finances came under scrutiny. The affidavit also alleges Nichols used multiple ledgers and resistance to independent oversight of the city’s and River Valley Transit’s finances to “further obscure its true expenditures.”
After Nichols’ termination, River Valley Transit was transitioned into the River Valley Transit Authority in part to better define its accounting and safeguard against the inappropriate comingling of revenue.
The letter, signed by Theresa Kohler, chief financial officer for the FTA, goes on to detail that the FTA conducted a review with a third-party legal firm under its financial management oversight program to identify how the city, during Nichols’ tenure, misallocated federal grants. The FTA claims the city is unable to account for how some expenses were calculated and also spent the money on construction that was ineligible under the grants’ conditions.
“If the debt is not paid within 30 days of the date of this letter, the debt will become delinquent,” the letter states. “FTA will charge interest on the delinquent portion of the debt … If the debt becomes delinquent, FTA may report this claim to commercial credit bureaus and consumer reporting agencies. FTA may forward this claim to a collection agency, the United States Department of Justice, the United States Department of the Treasury, or a private contractor for collection of the debt. FTA is required to refer any debt more than 120 days delinquent to the U.S. Department of the Treasury for collection.”
The FTA’s letter, which sets a deadline for repayment 30 days after it is received by the city, continues on to outline how the city can contest the debt, while noting that if the city contests a portion of the debt the undisputed portion will still be due by the deadline.
The Sun-Gazette was unable to reach anyone at the Federal Transit Authority for further comment. Mayor Derek Slaughter, whose administration fired Nichols in the first month of Slaughter’s tenure, said he would defer commenting at this time to the agency and to city attorneys.