SUN-GAZETTE FILE PHOTO

The City of Williamsport and Federal Transit Administration (FTA) are working to resolve an agency debt of $1.48 million due to a prior general manager of River Valley Transit allegedly misappropriating federal transit grant funds.

City Council, following its Thursday night meeting, entered an executive session to specifically discuss the FTA matter on the eve of the FTA extended deadline granted to the city.

On Friday, Gerard Shields, a FTA spokesman, issued a statement: “FTA continues to work with the City of Williamsport on resolving the debt owed. FTA will ensure taxpayer dollars are used as intended to protect the Federal investment in transit in Williamsport.”

The city retained Eckert, Seamans, Cherin and Mellott as legal counsel in the matter.

The repayment letter notice came after investigation into alleged misappropriation of transit funds by William E. Nichols Jr., the former general manager of River Valley Transit and former city finance director.

The independent auditing firm investigation revealed for FTA that Nichols allegedly directed the misappropriation of more than $500,000 intended for the city’s bus system, River Valley Transit, which has since become a separate authority guided by a board of five, soon to become seven, with Lycoming County as incorporator for appointing two additional members to the authority board.

Nichols, who was charged last September with felony theft by failure to make required disposition of state transportation grants and tampering with public records, has scheduled a “motions hearing” with a Dauphin County judge on May 5. He has yet to enter a plea and remains released on his own recognizance.

Nichols is not accused of using any of the public funds for his personal benefit, however, the state attorney general office, which is prosecuting the case, noted these are felony charges alleged that came after a statewide grand jury issued its findings.

The comprehensive investigation included analysis of many years of records regarding River Valley Transit and the city.