Use Interest on ARP Funds to Your Advantage

Use Interest on ARP Funds to Your Advantage

With the infusion of ARP money into your entity’s finances, it is key to know your municipality is allowed to earn interest on every dollar for every single day those funds remain on deposit. And better yet – your municipality gets to keep that revenue!

 

 

 

BREAKING NEWS UPDATE: Earning Compound Interest on ARP Money

BREAKING NEWS UPDATE: Earning Compound Interest on ARP Money

Receiving the federal ARP money in your public entity’s bank account is GOOD… earning compound interest on that money and then keeping every dollar is GREAT!

The U.S. Treasury has just confirmed on a national conference call that municipalities will be allowed to earn as much interest as they possibly can on the millions of dollars of ARP funds arriving in their bank accounts. What is even better news for our public entities is the Treasury will be putting NO RESTRICTIONS on how municipalities decide to use all their accrued interest income on their ARP funds!

This provides local leaders with a monumental, unprecedented opportunity to use federal dollars as a tool to increase their municipality’s bottom line and to boost revenues. That’s very good news for taxpayers.

three+one® is a national leader in using innovative technology to help public entities maximize the value of their cash using liquidity data. Give us the opportunity and we can help your local government or school district get the most out of its ARP funds.

American Rescue Plan: Funding for Public School Systems

American Rescue Plan: Funding for Public School Systems

Pathway to Recovery® Series

American Rescue Plan – Funding for Public School Systems

In order for our country to get fully back on track, we must provide safe, secure schools where students and educators alike feel at ease and protected from the effects of Covid-19. Our school-age children and grandchildren are the future of this nation and we cannot allow this pandemic to derail their education, nor their potential. Congress and President Biden understood that, which is why $122 billion is included in the ARP to be distributed to K-12 public schools as an important and absolutely vital component of our country’s recovery from the Covid-19 pandemic.

Under the provisions of the ARP, the U.S. Treasury and the U.S. Department of Education are required to send states their proportionate shares within 60 days of the law being enacted. However, in an effort to speed along the recovery while schools are still in session, the DOE sent a letter to State Education Commissioners on March 17th initiating the payments more quickly: (view letter here). This means that many state governments are already seeing the funds in their accounts. Receipt of those funds then initiates a second 60-day timeline during which states MUST pass along 90% of the received funds down to local public-school systems and charter schools.

The state-by-state breakdown of funding can be found here:

That means your local school district’s share of $109 billion will be flowing into your district’s coffers sometime between now and July 9, 2021. By the way, these are ADDITIONAL DOLLARS for your local schools. Under Section 2004 of the ARP, states are prohibited from reducing or diverting their pre-existing aid to schools and then trying to use these federal ARP funds to fill in the gap. This provision, is called “Maintenance of Effort”; you can read more about it on page 21 of the bill: (view legislation here).

A few examples of how the ARP funds can be used include reducing class sizes; improving ventilation systems and replacing windows; hiring more custodians and school nurses; expanding bus-transportation systems; and increasing summer-school programs. There are numerous other acceptable ways the Plan’s funds may be used.

If you have any questions about the funding included in the American Rescue Plan, or how those funds may be used, please feel free to contact three+one here.

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, ext. 709.

Maximize Your Entity’s ARP Benefit

Maximize Your Entity’s ARP Benefit

Pathway to Recovery® Series

If information is power, then data is the key to unlocking that power. The ability to translate data into reliable action plans to maximize the benefit of your entity’s American Rescue Plan funds is vital. You have the power to magnify the positive impact of these stimulus funds through liquidity-data resources over the next 44 months! In these uncertain times, let data be your entity’s north star on the pathway to recovery. You cannot be “lost” if you know precisely where you are and in which direction you are heading.

For municipalities navigating the details of the ARP funds, three+one® has the critical resources you need. We can help you determine allowable-use scenarios for the ARP funds, the interpretation of U.S. Treasury guidelines as they are issued, and how to maximize the value of those dollars through 2024. 

three+one® provides public sector and higher Ed institutions with new liquidity-data resources to make calculated financial decisions about current and future cash needs. Here are a few of the questions you may be asking yourself: “How much cash will I need 6 or even 12 months from now?”; “Should I be leaving all of my ARP money in a liquid account?”; or “How long could I put this cash to work to preserve its value?” These and many other questions can be answered with greater confidence and ease when you have our cashvest® tools and team of dedicated professionals working for you. 

three+one® has helped its clients generate over $400 Million in new, previously untapped, revenue and savings by harnessing cashvest® liquidity data. Our technology and MC Liquidity Forecast Model® allowed these entities to implement best practices of cash management, no matter the economic environment.

See why your peers, the National Association of Counties (NACo), and over ten state associations are partnering with three+one® and putting their trust in our data. If cashvest® can’t provide your entity a benefit, there is no expense to you. It’s that simple.

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, ext. 709.

The Good & the Bad (Press) About Your Entity’s Finances

The Good & the Bad (Press) About Your Entity’s Finances

The Good & the Bad (Press) About Your Entity’s Finances

If you serve as an elected or appointed public official—at the county, town, city, village, or school district level—you already know that you are responsible and answerable to your constituents about their hard-earned tax dollars. You also know how seriously your constituents take the management of these funds.

cashvest tool for cash management practicesOversight bodies are also taking a more deliberate approach to reviewing the management policies and practices of finance offices and officials. And because these findings are publicly disclosed, you can be the hero by taking action now to ensure best fiscal practices. At a time when the added pressures of COVID-19, changes in market environment, and work-load burdens are stretching public finance offices to their max, you need an ally to help mitigate some common findings that could be cited for improvement.

We work diligently with our public sector partners across the country, with municipalities and districts of all sizes and compositions. We have shown your colleagues that the liquidity management solutions and time horizon data produced by our cashvest® and rfpPrep® fintech tools will aid in avoiding the very criticisms seen in these excerpts of actual audit reports from entities who did not utilize three+one® as trusted resource:

“…[focus on] preparation of monthly cash flow forecasts to estimate available funds for investment, soliciting interest rate quotes from multiple financial institutions, and investing available funds (within legal limits) in financial institutions offering the highest interest rates.”

“…develop and manage a comprehensive investment program to ensure interest earnings were maximized and bank fees were minimized. Had officials invested available funds in a financial institution with higher interest rates, interest earnings could have increased by $215,120.”

“…for investments to earn the maximum yield possible in a safe and liquid manner, the District could have earned as much as $367,963…”

Even in an era of low interest rates, these audit findings prove that there is still real value to be found in maximizing interest earnings and reducing bank fees. When it comes to tax dollars, every single one counts; any public official understands that.

At three+one®, we help public entities know exactly how much cash they have on hand; how long that cash will likely remain on deposit before it is needed; and where that liquidity can best be put to work earning the highest available interest income, along with the lowest possible bank fees. And we do that for our clients continually, month after month, year after year.

Count on our team and our innovative financial tools and you can benefit in these ways:

-Your public entity or school district will earn the maximum possible interest revenue;

-Your constituents will have confidence that their money is being well managed;

-And you won’t be reading an article in your local newspaper that auditors found fault with your cash-management procedures. Instead, you’ll be the hero for your proactive approach.

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.