We all love to time things perfectly, right? It’s great when our need or desire for goods or services coincides, intersecting seamlessly with municipal budget cycles, calendar schedules, and available funding.
The start of a new fiscal year may feel like the optimal time to add the latest financial tools or services to the operating budget of your finance office. But, even if you are in mid-year, does it really make sense to postpone becoming more efficient—and generating higher revenues—when that option is available to you right now?
When it comes to increasing non-tax revenues, surely “as soon as possible” is the perfect time to provide that additional resource to your municipality, public entity, or higher Ed institution. Especially in this rising-rate environment, waiting weeks or even months to take fiduciary action can mean hundreds of thousands of dollars in lost earnings on liquidity. Acting sooner rather than later can mean the difference between a tax cut, or a tax increase, during your next budget cycle.
Overstretched and understaffed public entities can still reap the benefits of higher revenues by partnering with experts who can regularly evaluate how much cash they have available to invest and then calculating precisely how long different sectors of that cash will remain on deposit before it will be needed. When combined with independent third-party evaluations of interest rates being offered by banks in your locality, your finance office can then easily choose the very best option for such things as CDs, T-bills, or other short- or long-term investments at any given point in time.
The results? Significantly greater revenues than any public entity can ever expect to earn if they are not using liquidity data. Even mid-year budget amendments are made easy when you can confidently predict higher revenues during the current budget cycle that will more than offset any fees for services. And when it comes to generating additional income to meet inflationary pressures on operating expenses—or to help reduce the burden on taxpayers—there’s no time like the present!
William Cherry served for 24 years as a county chief financial officer responsible for managing and investing public funds, and for 20 years as a county budget officer. He now serves as the Director of Public Partnerships for three+one, and can be reached by phone at 585-484-0311, ext. 709 or by email at firstname.lastname@example.org