March 20, 2023
Are PDA Taxpayer Funds Insured?
By: P.A.G.E. Co-founder Heather Disselkoen
We’ve all seen or read recently what happened with the Silicon Valley Bank (SVB) on March 10th–the Feds only guarantee and insure customer deposits up to $250,000. Anything over that can be LOST by customers when banks fail. Until the Feds intervened to bail out the depositors, it was estimated up to $175 BILLION in deposits had been lost by that bank’s customers. You can bet that everyday, hard-working people would not have been able to absorb their losses to the same degree as celebrities like Mark Cuban and Sharon Stone.
So, imagine the jolt to read in the FY23 Pocatello Development Authority’s (PDA) Audit dated 03/03/23 (within their 03/15/23 agenda packet) that they’ve had OVER $3.9M of UNINSURED deposits!
In light of the Silicon Valley Bank (SVB) collapse, this audit notation divulges a multi-layer breakdown of fiscal oversight that should generate swift action. Yet, at the PDA’s 03/15/23 meeting, during which the audit was presented and approved, not one mention of this “detail” was uttered.
One would think PDA Board members, entrusted with managing over $4M in taxpayer dollars, would acknowledge the “custodial risk” presented in this audit report and make assurances to the public that the “oversight” will be promptly addressed. Not so. In response to an emailed inquiry sent after the meeting, we were informed “there are not a lot of choices open to the PDA to eliminate the custodial risk completely, however there are a few decisions the board will need to discuss of possibly spreading the risk out to include other financial institutions.” The intent is to hold “future” discussions with the Board to address the risks.
Hypothetically, what if PDA’s deposits had been with SVB? Would the response have been any different back on 03/03/23 or upon earlier notification? Obviously, SVB’s depositors were lackadaisical to the tune of $175 billion. Given what we all know now, does this meet your expectations for a board tasked with overseeing $4M+ in taxpayer funds? Would we have seen a different response if each member were personally liable for any potential losses in uninsured funds? The public isn’t unreasonable or hyper-critical. We just expect better of those tasked with overseeing our taxpayer funds.