Every captain needs a lookout to spot trouble ahead…and then help to find ways to avoid it.
There are times when having experts at your side can be incredibly reassuring. You feel confident in the knowledge that there is an experienced team of professionals keeping a watch on the horizon and standing ready to help you navigate troubled waters or any uncharted territory you may be facing. It’s even better if those experts are professionals with whom you have already developed a bond of confidence and trust. Much like how telescopes have evolved into modern radar and sonar, the tools we now use to see financial trouble ahead have evolved as well.
A ship’s captain must be able to rely on his crew and on the latest technology to warn of danger ahead. We can’t always predict when we will need professional advice and support, but when we do, there’s nothing quite like that feeling of real confidence that comes from knowing that the team at your side has the expertise and experience necessary to guide you through the challenges ahead.
You are right to rely on your most trusted experts to provide you with advance knowledge of potential storm clouds on the horizon. After all, being proactive and avoiding problems before they have a chance to develop is a much better strategy than being forced to react during a crisis.
Here at three+one®, we are all about being proactive. With that in mind, we feel it is only prudent to inform public officials that some areas of the country are now seeing auditors focusing in on whether municipalities are maximizing interest earnings, or more specifically, looking at whether they may have missed opportunities to maximize interest earnings. As evidence of this trend, the New York State Comptroller has, just within the past 12 months, issued no less than eight adverse audit reports of local governments that zero in on three key recommendations:
(1) Local governments are being told to solicit interest-rate quotes from multiple financial institutions for the cash that they have on deposit;
(2) Public finance officials are being told to prepare monthly cash-flow forecasts that estimate precisely how much cash they have available for investment, and then to determine the maximum time period those funds can be invested; and,
(3) Municipalities and public officials are being told to use the data that they ascertain through the first and second recommendations to then maximize interest earnings.
We live in an era when public officials are expected to make the most of every taxpayer dollar entrusted to them. It would therefore be prudent to assume that additional cash-management audits of local governments are presently underway across the country. Likewise, it would be prudent for all local-government levels to prepare for the possibility that they may be next on the list of public entities that could face this kind of scrutiny. The days of public entities being allowed to have cash sitting in one local bank—or of letting their funds remain dormant in low-interest accounts without regularly searching out better opportunities—are clearly over.
Here at three+one®, we are experts in liquidity maximization and cash management. While we are based in New York State, our many satisfied clients span all regions of the country. We are confident that any auditor would find our clients’ cash-management and liquidity-investment practices to be second to none, and we have the results that prove it. We would welcome the opportunity to be your trusted advisor as well.
Our team of professionals can help you spot potential storm clouds on the horizon long before they become a problem. And we have the latest financial technology at our fingertips with which to help you navigate the safest course forward. When you are the captain of a ship, it’s comforting to know that you have trusted professionals standing beside you at the helm, and that your team of experts has the latest technology and tools at their disposal.
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 or through our website at https://threeplusone.us.
Fintech tools from three+one® include cashvest®, MC Forecast®, and rfpPrep®, all of which provide public entities with the kind of accurate, reliable cash-management data that they need in order to make the best financial decisions for the funds in their care.
cashvest® by three+one® has developed a comprehensive 6-step plan to navigate a changed marketplace since COVID. We’ve previously shared the Steps 1 through 3. In Step 4 it’s time to talk about how to leverage the power of your cash to make your financial institutions work for you. Remember, someone is always willing to pay you for your cash..
three+one® is pleased to announce the public entities and higher Ed institutions that are the recipients of the 2020 prestigious 90+ cashvest® Award.
This award signifies the excellence in the implementation and management of all liquidity in the public marketplace set by three+one. To qualify for this award, an entity must have received a cashvest® score of 90% or above for four consecutive quarters. It should be mentioned that multiple qualifiers are calculated into the cashvest® score to determine the rating. The five qualifying categories include:
-Percent of available funds providing value -Liquidity proficiency -Warnick rate indicator® -Cashflow optimization -Investment policy practices
A cashvest® score of 90+ signifies to the country, state, and taxpayers that these counties have achieved the highest value available on financial resources. The following counties have met the criteria to receive the cashvest® 90+ Award by achieving a score above 90 for four consecutive quarters. They are:
Counties: Beaufort County, South Carolina; Hon. Maria Walls, CPA County Treasurer Chautauqua County, New York; Ms. Kitty Crow, Director of Finance Orange County, New York; Comm. Karin Hablow, Commissioner of Finance Rensselaer County, New York; Mr. Mark Wojcik, Chief Financial Officer Wayne County, New York; Hon. Patrick J. Schmitt, County Treasurer
Cities: The City of Dublin, Ohio; Mr. Matthew Stiffler, Director of Finance The City of Huber Heights, Ohio; Mr. James Bell, Director of Finance The City of New Albany, Ohio; Ms. Bethany Staats, Director of Finance
Towns: Town of Aurora, New York; Hon. James Bach, Supervisor Town of Batavia, New York; Hon. Gregory Post, Supervisor Town of Perinton, New York; Mr. Brian Dick, Director of Finance
Colleges/Universities: Dickinson College, Pennsylvania; Mr. Sean Witte, Vice President for Financial Operations Jefferson Community College, New York; Mr. Daniel Dupre, Vice President for Finance University of Redlands, California; Dr. Ralph Kuncl, President
In addition, this year’s National Leadership cashvest® Award recipient is the Honorable Scott D. German, Treasurer of Genesee County, New York. This prestigious award recognizes and acknowledges the leadership that Scott has demonstrated, both statewide as well as nationally, in establishing and practicing the highest possible standards of financial governance and liquidity management.
Treasurer German has been a leading advocate for the implementation of best practices in identifying and managing all levels of cash as a revenue-generating asset. The new innovations he has adopted in treasury services have strengthened the protection of taxpayer monies entrusted to him while also significantly increasing interest revenues for his county.
Congratulations to this year’s cashvest® award recipients!
Pathway to Recovery® Series Sometimes, You Have to Reevaluate Your Baskets
We all know the old adage cautioning us not to put all of our eggs in one basket. That saying has survived all these years because it imparts a great deal of financial wisdom in just a few brief words. We can all appreciate that simple logic, yet there still may be times when we become a bit too comfortable or complacent with the assortment of baskets that are available to us.
If you serve as the CFO of a county, town, city, public education institution, or public authority, then you are responsible for a lot of “eggs.” In order to protect and effectively manage the assets that are in your care, you need to have at your disposal a diverse and strategic selection of “baskets” in which to deposit the funds for which you are responsible.
Though protection of principal is certainly the primary goal, earning the highest-available interest on those dollars is also a very important consideration. One size definitely does NOT fit all when it comes to banks, money-market accounts, CDs, municipal pools. and the range of interest rates they offer on any given day. The most successful public sector CFOs are being proactive byseeking out the most advantageous interest rates for the funds in their care. That can mean earning an additional 25 or 50 basis points on their available cash. Higher interest earnings directly equate to increased revenues for your public institution.
As municipalities struggle to deal with new economic challenges, we are seeing more and more public-sector CFOs being asked to find additional non-tax revenue streams. One way to do that may be to add more banking options and more investment choices to your portfolio. That simple strategy will provide you with two direct benefits: first, it adds more baskets in which to diversify (and thus safeguard) your eggs. And second, having more baskets to choose from will give you a wider variety of options when selecting the one that offers the highest-possible return for the specific timeline that you expect to have those funds on deposit.
You may also be aware that, in some states, financial-oversight agencies are looking more closely at whether the municipalities under their jurisdiction are being too passive when it comes to cash management. Even in this low-rate interest environment, some CFOs and their legislative boards are being criticized for not proactively soliciting interest rate quotes in order to maximize the value of their cash. It’s no longer good enough to just park most of your cash in a money-market account or pool and then stop looking for other (perhaps better) options. Public entities are also being required to prepare cash-flow forecasts in order to determine the optimum amount of funds that they have available for investment right now as well as in future months.
Having access to precise liquidity data allows CFOs to know how much total cash they have on deposit. By using forecasting models, they can also determine when that cash will be needed. This creates a clear window of opportunity that can be used to maximize the interest earnings on that cash, and to deposit it over the longest possible timeline. Reliable forecasting opens up the possibility of using 6-month, 12-month, or even 18-month fixed-rate CDs and US Treasuries to lock in higher earnings for longer time frames. In this era of extreme scrutiny of all taxpayer-funded organizations and government agencies, employing proactive cash-management techniques and liquidity-analysis practices is simply good policy.
We already know not to put all of our eggs in one basket. Now we have reliable, accurate fintech tools to help us evaluate all of the available baskets, and to then select the ones that best serve our particular public entity’s needs.
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 or through our website at https://threeplusone.us. Fintech tools from three+one® include cashvest®, MC Forecast®, and rfpPrep®, all of which provide public entities with the kind of accurate, reliable cash-management data that they need in order to make the best financial decisions for the funds in their care.
cashvest® by three+one® was honored to present last week to the GFOA of South Carolina, and to sponsor this incredible virtual conference of public finance officials. Our team provided data-driven insights on maximizing value on public dollars during & after COVID-19.
We invite you to share in this presentation and learn more about getting your public or higher-ed entity on the financial Pathway to Recovery®.
As an industry leader in FinTech, three+one® was thrilled to share our key tools & resources via virtual booth with public entites this year at GFOA-SC.
“It is so important to link liquidity data together with marketplace opportunity.”
– Garrett Macdonald, three+one® Senior Vice President
Pathway to Recovery® Series Election Day is Finally Here
Regardless of which party comes out on top after today’s Presidential election and Congressional races, we must all now find ways to work together in the best interest of our nation. We have to find ways to build bridges with our neighbors and fellow Americans. Why? Because when the dust of this election settles, old-fashioned catchphrases like “cooperation,” “collaboration,” and “partnership” will be the best pathway to recovery for our nation, our communities, and for ourselves.
On some things, we should speak with one strong voice. That should certainly be the case when it comes to advocating for more federal aid to help states and local governments, of all sizes, to deal with the economic impacts of Covid-19. Fortunately, we have effective public policy advocates like the National Association of Counties (NACo) and many elected and appointed officials working on our behalf.
Where else can we find common ground? Perhaps with one of the most basic, common-sense principles that we all agree on: the fundamental premise that taxpayer dollars are sacrosanct and must be safeguarded, protected, and used in the most efficient, cost-effective ways possible. All Americans, regardless of political affiliation, want to see their tax dollars “handled with care.” A big part of that process is the implementation of effective cash-management techniques.
If you work in the finance office of any public entity, effective cash management includes the following prerequisites:
That the funds entrusted to you are safe and secure;
That those funds are earning reasonable rates of return that are comparable to best-available market-interest rates; and,
That you are forecasting just how much cash you will have available in the future in order to put that money to “work” maximizing interest income.
Even in these challenging times of historically low interest rates, public officials are still expected to fulfill their due diligence requirements by maximizing the value of all available cash entrusted to their care.
As proof of those expectations and professional standards, the New York State Comptroller’s Office recently issued a cash-management audit of a public entity in which their findings stated that “Officials did not formally solicit interest-rate quotes or prepare cash-flow forecasts to estimate the amount of funds available for investment.” This is especially important for public finance officials to be aware of, because none of us wants to be the subject of a critical audit that says that our finance office should, or could, have done things better.
The Comptroller’s written audit report then went on to say that municipalities and school districts should do the following:
Solicit interest-rate quotes from multiple financial institutions;
Ensure that available funds are invested within legal limits to maximize interest earnings; and
Prepare monthly cash-flow forecasts in order to estimate the amount of funds that are available for investment.
At three+one®, we provide our clients with liquidity data and cash-flow projections that can help bring their overall financial pictures into sharper focus. Important for public finance officials, our data will also satisfy the cash-management demands and recommendations made by the New York State Comptroller’s Office. And, if states and local governments do receive additional federal funding to offset the impacts of Covid-19, our cash-management tools can help public entities maximize and increase the value of those funds.
Our clients have access to a broad range of financial technology tools including our cashvest® liquidity-management system and the MC Forecast® cash-flow modeling tool which provides accurate, reliable financial forecasts for municipalities and higher-Ed institutions. And, when it comes to evaluating banking services, our innovative rfpPrep® software makes it easier than ever before to compare options and procure the best-performing and lowest-cost options that fit one’s particular banking needs.
Why not give three+one® a call today or check us out at https://threeplusone.us? We welcome the opportunity to tell you more about how we can provide real, measurable financial benefits to your municipality or higher-Ed institution. Our mission is to provide public entities with the kind of accurate, reliable cash-management data they need in order to make the best financial decisions for every taxpayer dollar in their care.
Now that is the kind of common-sense, common-ground principle that we can ALL vote for!