Missoula County Makes The Most of Its Cash Flow
In a recent feature article, Charlie Ban, the County News Digital Editor and a Senior Writer at the National Association of Counties (NACo), took a closer look at Missoula County’s cash-management journey and what other counties could learn from its approach. This is a must-read for public finance leaders seeking to unlock new revenue from existing cash.
Tourism isn’t the only thing skyrocketing in Missoula County, MT.
Two years ago, when the county’s finance department started using three+one to manage its cash flow, it had a cashVest score of 71. Now, it’s 95.
The cashVest score synthesizes several measures: Liquidity, interest rates, cashflow optimization investment policy and the proportion of available funds providing value. A higher score means the county is making the most of its available cash to earn interest.
“We have a lot more confidence going forward, knowing what our cash availability will be and what our investments are doing,” said Missoula County CFO Andrew Czorny. “I wasn’t doing any of those things before, and we weren’t taking advantage of ebbs and flows of our cash flow.”
Missoula County is in a difficult position. The state Legislature has limited the amount of property tax counties can collect, and despite record high tourism numbers, the lack of a sales tax means counties are limited in how they can benefit from visitors. At the same time, demands increase on the county to maintain infrastructure and provide essential services.
“We’ve got literally millions of people coming to the state and using all our infrastructure and then leaving,” Czorny said. “The folks who live here are paying for the repair and the use of our rivers and our waterways and all our other amenities. It’s tough to figure out how we’re going to navigate those waters.”
That puts more pressure on Czorny and his staff to do more with increasingly less.
That’s where cashVest comes in, providing financial data that helps counties capitalize on cash management decisions.
“They’ve given me some real predictability in what my cash needs are going to be,” Czorny said. “I can look out in the future with a great deal of confidence knowing ‘These are going to be my peaks and valleys and here are my strategic balances and here’s my cushion.’ I’m able to draw down that cash in advance of a capital project and advance the bond insurance, and that gives me a lot of comfort.”
It wasn’t a hard sell with the Missoula County Board of Commissioners.
“They like the quarterly report that three+one puts together,” Czorny said. “We go through that as an investment committee on a quarterly basis. They enjoy knowing what the cash is doing and what our cash position is, and what the next three months hold.”
And it goes beyond optimizing investments. cashVest offers insight into what goes into different financial mechanisms counties use.
“I don’t know if you ever tried to understand your bank statement and what the charges are, but they are experts at going in and figuring out what the bank is charging you for, and changing them to upfront, hard charges that we can plan for. They’ve saved us so much money in just the bank statements alone. It’s been unbelievable.”
Article credit: Charlie Ban, National Association of Counties (NACo).
