City manager previews cash‑management and investment policy aiming to boost returns on $40M in reserves
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Summary
City Manager Sarvey presented a proposed cash‑management and investment policy based on GFOA guidance and Wyoming statute; the plan would pool most city accounts into a sweep/repurchase structure and move long‑term reserves into state local investment pools to increase interest earnings, with a formal council vote scheduled for a future meeting.
City Manager Sarvey presented a detailed draft cash‑management and investment policy to the Rawlins City Council on July 1 and said the measure will appear on a future agenda for formal adoption.
Sarvey said the policy uses the Government Finance Officers Association (GFOA) sample as a model and adheres to Wyoming statutes; it is intended to balance safety, liquidity and yield and to move the city from many separate bank accounts into a consolidated sweep/repurchase structure with three cleared operating accounts (accounts payable, payroll, deposit) and an interest‑bearing repurchase or pooled account.
Sarvey told the council that, with the exception of about $4 million, most cash reserves are sitting in bank accounts earning minimal interest. He said current budgeted interest is roughly $400,000–$500,000 per year and that moving funds into the proposed mix of local investment pools (WildStar, WildClass and the Wyoming governmental investment funds) could increase interest earnings materially—his illustrative scenario produced about $1.9 million in annual interest versus the current roughly $776,000 budgeted.
Key components Sarvey described: • Purpose: prudent management, liquidity classification (short, intermediate, long), competitive returns and legal compliance with Wyoming statutes (he cited Wyoming Statutes chapter 9‑4‑820 through 9‑4‑831). • Account structure: three zero‑balance operating accounts to sweep daily into a repurchase pool; a “peg” compensating balance to cover bank fees. • Investment vehicles: initially using state‑sanctioned local investment pools (WildStar, WildClass, Wyoming governmental investment funds) and repurchase agreements; U.S. Treasuries, CDs and other instruments were listed as permitted under state law with a broker relationship as a later step. • Reserves and classifications: Sarvey proposed emergency reserves (50% of budget in the example), funded depreciation accounts and breaking funds into short/intermediate/long classifications to match liquidity needs.
Council members asked for clarifications on bank participation, collateralization, how many accounts would remain and reporting cadence. Sarvey proposed monthly reporting to council on holdings, maturities and interest earned (he said the council could ask for quarterly reporting instead).
No formal vote was taken; Sarvey said the policy and implementing documents will be on a subsequent agenda for council action. He said the plan will require decisions about how much cash remains at local banks versus moved into the investment pools and that the change could affect local banks’ collateral and balance sheets.