Treasurer Matheson presents FY26 estimates, recommends $5.5 million interest revenue

Kootenai County Treasurer Steve Matheson told the Board of County Commissioners on May 29 that he is proposing $5,500,000 in budgeted interest income for FY26 and is reducing department expenses by about $94,000 to lessen the county’s reliance on property tax.

Matheson, who said he would speak briefly to both the board and community, framed the recommendation around three statutory duties of the treasurer’s office: custody of county cash and investments (currently $156,629,264.91), tax collection (billing and collection of more than $200 million annually from about 96,000 taxable parties/parcel accounts on behalf of 46 levying authorities, 13 special assessments and 11 urban renewal districts) and public-administrator duties (managing estates of deceased residents with no personal representative). Matheson said the office is currently managing 16 open estates and that in calendar year 2024 it closed six estates and expects to close 11 more “shortly,” with about $900,000 currently under management.

Matheson described the basis for his $5.5 million estimate as a set of assumptions about county fiscal discipline and the broader interest-rate environment. “The treasurer’s investment policy…describes how my office focuses on safety first, liquidity and lastly, returns,” he said, adding that the county’s strong balance sheet and lack of debt give the office latitude to be “more aggressive” in capturing interest revenue. He noted the county’s portfolio is currently earning roughly 3.7%–4% and referenced the two‑year Treasury yield at the prior close (about 3.994%) as a sensitivity benchmark.

Matheson also flagged several operational items in his FY26 request: $50,000 for a business-process analysis related to ongoing projects, career-progression increases for staff to retain continuity, and a $40,000 public‑administration budget to cover estate expenses that are generally reimbursed when estates close. He said some expenses budgeted this year for the business‑process analysis will likely remain unspent and flow to fund balance, which could then be used to pay for the work in a subsequent year.

Commissioners asked clarification questions about the balance underpinning the interest estimate and how much of the interest income should be treated as ongoing operational revenue versus reserved for one‑time or capital needs. Matheson said a conservative operational estimate might be “a couple million dollars” as a safe run rate, and emphasized variability in future interest rates and cash balances. He also reminded the board that some balances reflected ARPA funds that he expects will be largely exhausted by the end of the fiscal year.

The treasurer said he will update the board if market developments prompt revisions to the $5.5 million estimate.

Matheson concluded by noting the treasurer’s office continues work on estates and staffing transitions; he said there are five new estates opened so far in the year and reiterated the office’s three statutory duties.

No formal vote or budget adoption occurred during the session; the presentation was part of the commissioners’ FY26 review process.