Q&A on New Federal Stimulus Dollars

Q&A on New Federal Stimulus Dollars

We would like to share our answers to the top FIVE questions we’ve received regarding the Coronavirus State and Local Fiscal Recovery Funds to be administered directly to counties, cities, and tribal governments by the U.S. Treasury. If you have additional questions, please contact us here, and we will do our best to answer them.

1. How much money is my entity going to get, and when will it arrive?

Direct Aid to Local Government Once Congress passes the bill, the U.S. Treasury will create a list of potential recipients. Our federal government partners tell us
the funds could be released by mid-March. Local governments would receive approximately $130 billion, split evenly between cities and counties, resulting in a direct allocation, based on a population, of $65.1 billion. If you are a county government and would like to see an estimate of your its share, please click here.

2. Will there be restrictions on how the funds are held, managed, or spent?

Expect four main options for spending the money:

(a) to pay for present or future expenditures to respond to the COVID pandemic or to mitigate its spread;

(b) to reimburse the city or county for past COVID-related expenses;

(c) to replace lost or reduced revenues; or,

(d) to compensate for the broad economic impacts of COVID to the community.

3. Since we won’t know how and when my Board will allocate or spend the funds, should I just play it safe and leave the money liquid?

Definitely no. There are tools available to increase the value of these funds for your taxpayers. In keeping with your entity’s liquidity data, forward cash forecast, the net change in cash data, and written investment policy, now is the time to maximize the benefit these funds will provide. Every entity should be incorporating proactive cash-management procedures such as those recommended by three+one and your state’s fiscal accountability office. You should allow liquidity data to provide the transparency and framework you need to practice a sound and comprehensive cash-management strategy.

If your Board has plans to spend these potential monies, the funds will not be spent at once, so increasing the value on them is imperative. It could be possible, depending on your state, that your state may pass additional costs on to your entity, so having a strategy on maximizing the funds’ benefit for the long term for your entity is vital.

4. Can I make the reasonable assumption that I can put at least some of the money to work in a series of laddered fixed-income investments? If so, how much, and for how long? And where can I find the best available options?

Covid-19,Economic, Stimulus, CheckYes. Let three+one® provide you with up-to-date peer-benchmark comparisons offered across various investment options. Our cashvest® reports and MC Forecast® model provide data on how much liquidity you will have available and how long those funds will be available. This is not just based on historical data, but also applies forward forecasting using many statistical methodologies that have been proven accurate throughout the pandemic. As three+one® continues to aggregate data, our forward forecasting becomes even more accurate, so planning for borrowing, budgeting, or investment purposes is much easier and more reliable.

5. What about these cash-management audits that I have heard about from my state’s fiscal accountability office? How do I keep my entity from being criticized for our liquidity procedures on managing this new cash 12 months or 18 months from now?

That’s true. Some states are conducting a series of cash-management audits of local governments. Their auditors are investigating whether municipalities regularly performed a monthly cash-flow analysis to determine how much cash they had available, whether they actively pursued the highest available competitive interest-rate quotes, and whether they had maximized the value of that cash. Using the cashvest® services of three+one® and implementing the continuously provided data, you will never have to worry about the negative impact of a cash-management audit.

Corrective Action on Cash Management Audits

Corrective Action on Cash Management Audits

Recently, we’ve served as a resource for several partners in NYS who have undergone a wave of cash management audits by the state comptroller. And just like them, public sector & local education entities across the nation are under increased pressure due to today’s market environment.

Our team at three+one® has identified certain trends in corrective actions centered around liquidity management being cited by oversight bodies not just in NYS, but in counties, towns, and education authorities just like yours. Know that we’re available to help you navigate these challenges too.

A Conversation with Comptroller John Kennedy

A Conversation with Comptroller John Kennedy

This informative webinar with Suffolk County, New York Comptroller John Kennedy provides tips and opportunities on how to use liquidity forecasting to complement cash flow management, outperform rate benchmarks, use liquidity data to improve credit ratings and review bank ROI across all banking relationships to always earn and save the most possible. 

Download the information deck from the webinar:

Leveraging Data to Maximize Public Value three+one cashvest

NCACC Webinar – Liquidity Management in 2021 – 1_12_21

Follow the Data, Find $1Million

Follow the Data, Find $1Million

Follow the Data, Find $1Million

Pathway to Recovery® Series

If information is power, data is the key to unlocking that power. Having access to accurate tools that can gather precise data together all in one place is vitally important. Equally important is having the ability to translate that data into reliable action plans. In uncertain times like these, having those tools at your disposal is critical as you chart a pathway to recovery.

cashvest® by three+one® is a financial compass for your public entityIt’s sort of like having a compass, a map, and a GPS locator in your backpack. Should you ever find yourself lost in the woods, those are the critical tools you will need. For municipalities and other public institutions who are trying to navigate today’s financial uncertainty, three+one® has the critical and valuable tools you need. You can never be “lost” if you know precisely where you are and in which direction you should be heading.

three+one® provides public entities just what they need to make sound, information-based financial decisions about their current, as well as their future, liquidity.  Questions that CFOs often ask themselves, such as “How much cash will I need to have available, 6 months or even 12 months from now?” and “Should I be leaving all my municipality’s cash in money-market accounts, or can I put it to work earning higher interest in CDs?” are answered with confidence and conviction when you have three+one®’s tools and team of dedicated professionals at your side.

cashvest® by three+one® is a fin-tech tool on the Pathway to Recovery®One of our clients recently saved over $1 million by trusting our data.  As the pandemic struck and revenue streams became fragile and uncertain, they were considering the option of moving all of their cash into low- or no-interest accounts in order to meet future spending needs. But having access to our cashvest® technology and our highly accurate MC Forecast® projections gave them the confidence they needed to follow their existing investment policy and to preserve and maintain their fixed-income portfolio. As a result, they earned $1 million more in 2020 than they would have, had they not relied on three+one®’s data.

We all seek certainty and predictability. When uncertainty and apprehension strikes—as it has over the past 12 months—we look for a clear roadmap to help us chart the best course moving forward. One sure way to do that is to trust inand follow—the data.  Because just like having GPS, a map, and a compass, three+one® can help you see precisely where you are, and exactly which direction you need to head in order to come out safely on the other side.

Why not give us a call and see why the National Association of Counties (NACo) as well as numerous statewide municipal associations all across the U.S. have endorsed three+one®?  It’s risk-free, too, because if we can’t help your municipality or public institution develop increased earnings and/or find cost-savings that equal or exceed our modest annual fee, you will not be billed for our services.

You won’t find a better roadmap than that.

Financial tools from three+one include cashvest®, MC Forecast®, rfpPrep®, and direct client access to our team of liquidity and cash-management professionals. When combined, these powerful tools provide public entities and higher Ed institutions with the kind of accurate and reliable cash-management data that they need in order to make the best financial decisions for the funds in their care.

The author served for a total of 38 years in local government at the village, town, and county levels, including 24 years as a County Treasurer/CFO responsible for investing public funds. He can be reached by phone at 585-484-0311.