COVID-19 has brought on financial challenges to all public entities in one form or another. Who would have thought on New Year’s Day 2020 that we would be thrown into such twists and turns a few months later?

The need to make quick decisions around those you serve, and those who work for you, spiraled in just a few days into a “new normal.” The strains on your organization began by having to work remotely. They continued as you had to wrestle with unforeseen financial demands and questions of potential revenue gaps, all resulting from major disruptions in your community, state, and nationwide.

As you looked around, it was clear that it was not just your entity facing financial un-certainty. Neighboring counties, towns, villages, school districts, community colleges, etc. were all in the same boat.

As the COVID-19 effect continues, public entities are having to plan around current budget gaps due to lower sales taxes, disruption in tax payments, and other various revenue streams that stretched reserve funds and put contingency dollars in jeopardy.

Coupling these challenges with lower interest rates and cuts in revenue, many public entities are being forced to address revenue shortfalls. The desire to borrow on anticipated revenue is leading to the issuance of Revenue Anticipation Notes (RANs) or Tax Anticipation Notes (TANs).

With today’s lower interest rates, the ability to borrow at these rates makes RANs and TANs extremely attractive in addressing potential cash flow concerns.

On the other hand, those entities with cash are finding it very challenging to find investment alternatives for this cash, given lower deposit and CD rates, decreasing state pool rates, and Treasuries near zero. However, based on your Investment Policy Statement, you may be able to buy RANs and TANs being issued by other public entities around you. Doing so, you’d be supporting your neighbors while earning higher rates on your cash; it could be at or above 1.0%. This has become so appealing, even the Federal Reserve is partaking in this practice.

At three+one^®, our innovative cashvest^® platform allows a public entity to determine (a) the levels of liquidity needed to meet day-to-day needs; (b) whether it needs to borrow a certain amount of money; and (c) if there are dollars available to be invested.

Supporting local communities and providing a platform to make that happen are core values at three+one®. Our proprietary liquidity modeling, forecasting, and data services are designed specifically to help public entities and higher-Ed institutions address all their liquidity challenges.

Together, we can take a challenge and turn it into an opportunity to become stronger in the future. And better able to serve those who depend on us.