Warren County Receives Financial Update on Investment Accounts and Interest Earnings

The Warren County Board of Supervisors received a financial presentation from Atlantic Union Bank’s wealth management team. The presentation provided an overview of the county’s investment accounts, interest earnings, and cash flow management. The update aimed to clarify the county’s financial position and address past concerns over reported earnings.

County Investments and Interest Earnings

Mitch York, Chief Investment Officer for Atlantic Union Bank, and John Ockerman, a senior investment manager, provided details on the county’s three investment accounts, which together hold just under $16 million as of December 31, 2024. These funds are managed in compliance with the Investment of Public Funds Act of Virginia, ensuring secure and legal investment practices.

For calendar year 2024, the county’s investment accounts earned an average 4.90% return, consisting of:

• 4.0% in interest income from bonds and other securities
• 0.9% in market value appreciation of the bonds

Total interest collected in 2024 across the three accounts amounted to $607,443, with monthly fluctuations due to bond maturities and reinvestment timing.

Ockerman explained that the county’s funds are invested in U.S. Treasury bonds, U.S. agency bonds (such as Federal Home Loan Bank securities), highly rated commercial paper, and bank certificates of deposit. The portfolio is structured with laddered maturities, ensuring regular liquidity while maximizing earnings.

Addressing Interest Reporting Concerns

During the discussion, board members raised concerns about prior reports suggesting the county earned little or no interest on its funds in past years. Treasurer Janice Butler Shanks clarified that while the county did collect interest, the general ledger did not reflect these earnings due to accounting practices that categorized them as adjustments rather than recorded revenue.

Shanks emphasized that moving forward, interest income will be properly recorded as revenue in the county’s financial system to ensure greater transparency.

“This is a remarkably different picture than what was presented before,” one board member noted. “Previously, we were told the county earned nothing. Now, we see over $730,000 in interest income. That’s a big difference.”

Cash Flow and Account Transfers

The board also discussed a $2 million withdrawal from the investment account in October 2024, which was moved to the county’s money market account to ensure adequate cash flow for payroll and other expenses.

Shanks explained that November is a low cash flow period before tax revenue collections increase in December. The transfer was made to maintain a comfortable reserve in the county’s working accounts.

As of December 2024, the county’s money market account balance stood at $24.2 million, earning 2.43% interest throughout the year for $330,024 in interest income.

Future Investment Strategy

Board members discussed the possibility of moving additional funds into higher-yield investments, such as the Virginia Local Government Investment Pool (LGIP), which currently earns around 4.9% interest.

Shanks agreed that while some additional funds could be transferred into longer-term investments, it was important to maintain liquidity for operating expenses, emergency needs, and compliance with the county’s 15% reserve policy.

“There’s room for improvement,” Shanks said. “After monitoring cash flow cycles this year, I plan to move an additional $5 million into VIP investment accounts to maximize earnings.”

Next Steps

To improve financial transparency, the board requested that the treasurer provide monthly investment reports, including account balances and interest earnings, to the Finance Committee and the Board of Supervisors.

The county will continue refining its investment strategy, ensuring that funds are accessible and earning competitive returns while maintaining fiscal stability.

“This update provides much-needed clarity,” a board member noted. “Now we have a much better understanding of where the county’s money is and how it’s working for taxpayers.”