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CLINTON, Utah (AP) -- The city manager in Clinton said he would have transferred funds from an account with Centennial Bank without the city council's authorization if he'd known it would be shut down.
"Had I known Centennial would be closed down, I would have gone on my own and then begged for forgiveness," Dennis Cluff said.
Ogden-based Centennial was closed by regulators March 5. Clinton could lose up to $83,000 because only $250,000 of its approximately $333,000 deposit at Centennial is insured by the Federal Deposit Insurance Corporation. Clinton's reimbursement from the FDIC has been deposited temporarily with the Utah Public Treasurers Investment Fund.
Cluff said he heard a few weeks ago that Centennial was having financial difficulties, so he started preparing a resolution for the city council to authorize the transfer of Clinton's cemetery perpetual care funds from the bank to other lending institutions. The council approved the measure on March 9, four days after the bank was closed.
FDIC ombudsman Richard Schmalzer blamed the bank's failure primarily on bad loans during the real estate market's downward slide. He said the bank incurred "significant losses" in acquisition, development and construction.
Cluff had recommended to the council in 2000 that they adopt a resolution authorizing the transfer of the perpetual care fund to Centennial. Centennial was chosen because it just opened a branch in Clinton and offered a higher interest rate for a certificate of deposit than other banks, Cluff said.
The city opened its Centennial account with $56,000 and regularly added fees derived from the sale of cemetery plots, he said.
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Information from: Standard-Examiner
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