You may recognize these building blocks from the floor of your child’s playroom or classroom. While we didn’t create the popular social media post or the impressive array in the above illustration, we are staunch advocates of the message it conveys.
Much like the pile of jumbled blocks at the upper left, data that is disorganized and lacks proper management can be a nuisance to any finance office. Data and information like this will surely cause more harm and headaches than good.
Data management and analysis requires two core competencies: (1) a strategy and (2) technology.
Your finance officials should set clear goals on what they hope to achieve with liquidity data, such as stress-testing, forecasting, and benchmarking. Once clear objectives are established, the only thing keeping you from new earnings and savings is the technology needed to take massive amounts of raw data and build actionable visualizations.
Looking at raw transaction and bank fee data can cause more pain than accidentally stepping on one of these building blocks. cashvest® was designed to alleviate these pressures and give your office new tools to build for the future.
If you could make one move that would positively affect your entity’s credit rating, would you consider it?
Today, various credit rating agencies are looking at the overall liquidity health of public entities, especially after the impact of the COVID-19 pandemic.
What level of cash does your entity have on hand? What’s its ability to pay bills? How does carrying debt look on the balance sheet, both quantitatively and qualitatively?
The fact is that rating agencies are currently weighing the impact of liquidity on an entity’s credit rating by at least 10%. That means having an up-to-date liquidity analysis on hand could favorably impact your credit outlook and your actual rating.
Remember, liquidity is more than just having cash on hand. It is the level of information that can impact what you can borrow and the rate you have to pay.
Consider it as a 10% difference that could be worth millions to your entity—and your taxpayers.
three+one® was honored to spend time with county officials from across the state of Maryland at the 2021 MACo Summer Conference in Ocean City. While there, we had the chance to listen to many MACo members, better understand the challenges faced by local communities, and provide some of our own insights into preparing for 2022 and beyond.
We feel privileged knowing that our liquidity tools are mitigating the frustrations so many public finance offices face in meeting their ongoing cash-management challenges. Like your public service colleagues in Maryland, you and your entity can benefit significantly from our proven 6-step Pathway to Recovery®.
Take the 1st Step
What if the COVID-19 delta variant takes a more dire path than one could imagine? Any renewed level of restrictions placed on the public, educational and business communities, overlaid with potential heavy burdens on healthcare and frontline workers must be considered. While actions like these are not expected, they should be top of mind when making emergency plans.
The good news is that you are prepared. You have the experience, the data, and the resources necessary to respond to these possible events. As you make such preparations, you should prioritize the actions that need immediate attention.
In my view, Job One should be preserving your newly received American Rescue Plan (ARP) funds. They may well be needed as an additional resource as this pandemic runs its course. As hard as it was to secure this high level of federal funding, it’s unlikely your state, county, municipality, or institution will receive any additional COVID relief funds.
Your community, institution, or public entity has been provided with a major source of support. It is now your fiduciary responsibility to use this valuable resource wisely, especially given the unpredictable nature of this pandemic. This is definitely a moment in time when you’d want to “Play It Safe.”
Over the past two years, we have seen our partners experience operational challenges that most folks would say could not have been planned for. The data we provided to these entities led to well-developed strategic plans, enabling them to maximize the value of their liquidity in any market condition.
Clearly, we were on the right track.
Here are just three examples:
A New York State county: A comprehensive treasury-services review allowed its finance office to evaluate their banks on an “apples-to-apples” basis and streamline their service arrangements. This effort led to $299,000 in fee savings.
A Pennsylvania county: Prior to its relationship with three+one®, the entity felt it could practicably invest no more than $30.5 million. The cashvest® data we provided showed the county’s finance officers they could confidently invest $83.1 million. Before our assistance, they were earning only 81% of peer benchmarks. Now, using cashVest liquidity management and data, the county is outperforming benchmarks by 3500%.
A South Carolina city: During Q2 of 2021, the city’s effective interest rate on funds was earning a net yield of 0.59%. It should be noted that the federal benchmark during this same period was just .016%. Thanks to cashvest® data, this city’s finance officials can tell its stakeholders that their management practices are exceeding benchmarks by a whopping 3587%.
You will often hear our teammates say, “Nothing bad will come from planning.” Our track record of results confirms that message.
We’d like to help you and your entity on the Pathway to Recovery®.