Lackawanna County’s efforts to improve its cash management and increase interest revenue are working, with officials projecting a potential revenue boost of almost $1 million over the next year as a result of a financial reform commissioners approved in July 2024.
That’s when Commissioners Bill Gaughan and Chris Chermak and then-Commissioner Matt McGloin approved the county’s participation in cashVest, a program offered to public-sector entities by the firm three+one. The program provides “data analytics to simplify cash, banking and investment management decisions,” better enabling the county treasurer to maximize the value of cash maintained by the county government, Chief Financial Officer David Bulzoni said in a contemporaneous memo.
CashVest is “designed to increase interest income, achieve savings on bank related costs and assure the overall effective use of taxpayer funds,” Bulzoni’s 2024 memo notes.
Providing an update last week, a year after the cashVest vote, Gaughan said the county’s participation in the program “has begun to produce really unbelievable results.”
“A big part of the problem was that there was no comprehensive system in place to monitor the county’s accounts: more than 90 accounts in seven different financial institutions,” he said. “The cashVest program changed that by creating a comprehensive system and the results have been really dramatic. For example, several accounts at Fidelity Bank earned an average 2.36% interest for the county in the last quarter. Now, due to the changes that we’ve made, those accounts will earn roughly 3½%, creating an additional $400,000 in interest earnings for the county over the next 12 months.”
“That’s by basically doing nothing except actually being aggressive with these banks and going back and forth with them,” Gaughan said.
Bulzoni said Monday that three+one, the firm behind cashVest, helped negotiate more favorable interest rates with the financial institutions.
Gaughan gave other examples, too, noting the county should receive an estimated $190,000 and $220,000 in additional interest over the next year generated from its accounts at PNC and Peoples Security banks, respectively.
“It’s one of those things where when you’re in a position like we are and cash is really tight, you need to think outside the box,” Gaughan said Monday. “In this case we thought outside the box (and) we implemented this program. Last year we were really confident it was going to work. This year we’re starting to see the results.”
The revenue estimates Gaughan listed are based on interest rates going forward and could shrink if rates fall.
Efforts to reach Chermak were not immediately successful.
Gaughan’s cashVest update at last week’s commissioners meeting came after he and Chermak approved a memorandum of understanding between the county and RxBenefits Inc., the county’s third-party prescription benefits manager. The move extends the RxBenefits contract by a year, through 2026, and is expected to generate considerable savings for the county still facing financial headwinds.
“This contract does have a slight increase with our admin fee, but it also does have higher, better rebate rates for savings of $1.1 million for 2026,” county Human Resources Director JoAnn Decker told the commissioners.
Gaughan referenced that anticipated $1.1 million in savings last week at the close of his cashVest remarks.
“We are still in a very tight financial situation, but I assure you that we’re going to continue to look for ways to reduce costs and find creative ways to increase revenue,” he said. “We are slowly but surely moving in the right direction.”