Uninvested prison canteen money to start earning interest for Pa. county
Prison Board voted to invest the money with the Pennsylvania Local Government Investment Trust for four months at an annual rate of 3.03%.
By Borys Krawczeniuk
The Times-Tribune, Scranton, Pa.
LACKAWANNA COUNTY, Pa. — Lackawanna County will invest $600,000 in prison canteen funds to start earning interest on the money.
Following county Controller Gary DiBileo's recommendation, the county Prison Board voted 4-0 last week with three members absent to invest the money with the Pennsylvania Local Government Investment Trust for four months at an annual rate of 3.03%.
The canteen fund contains money that inmates pay to buy snacks, clothing, toiletries and other goods from the prison commissary. The prison uses that money to benefit inmates — paying for a company to manage the commissary, a barber to cut inmates' hair, GED classes, postage and copying services for inmates and a host of other expenses. The state runs the trust as an investment tool to aid local municipalities, which are restricted in the way they can invest money.
The $600,000 represents only a portion of the $851,432.40 in the canteen fund at the end of July, according to DiBileo's latest report.
"(Having) $250,000 in the checking account provides total liquidity and more than enough money to handle day-to-day operations of the canteen account," DiBileo told the board.
DiBileo joined board members District Attorney Mark Powell, Commissioner Jerry Notarianni and Sheriff Mark McAndrew in voting for the investment. Commissioners Debi Domenick and Chris Chermak and Judge James Gibbons were absent.
DiBileo said putting the money in the state trust will earn the canteen fund about $6,000 in interest by the end of the year.
The canteen fund also has two certificates of deposit — one of $15,000 and one of $132,371 — purchased annually from FNCB Bank for years. Interest from the smaller CD goes back into the canteen fund. Interest from the larger CD is added to it and invested in a new CD annually.
The larger CD matures on Sept. 15, meaning the CD term expires and money is free to be invested again. DiBileo said investing that money for three months at a 2.83% annual rate could earn another $1,000 in interest by the end of the year.
That's another $7,000 for the canteen fund to spend next year.
Combined the two CDs will earn only $887 this year with the county earning nothing on the $851,000 because it isn't invested, DiBileo said.
The smaller CD matures on Dec. 3. Combining the money from both CDs and the $600,000 in a single investment in December could yield $28,000 in interest income next year, DiBileo said.
"Makes sense," Powell said.
Powell expressed concern about locking the money into one investment for too long. That would limit access in case the money is needed.
DiBileo said the investment is only for four months and the board can re-evaluate in December. He said his office will coordinate the trust investment.
Eileen Occhipinti, an inmate advocate who regularly speaks at Prison Board meetings, said she's pleased the board voted to invest the money.
"I still have to go back to, does anyone else think that's an astonishing amount of money?" she said. "(The prison) made ... a profit on the inmates, and more so on the families of the inmates, which are the ones giving them money to purchase ... That's a whole lot of money that's sitting there."
- Finance and Budgets