by William Cherry | Sep 22, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, News, Pathway to Recovery, Predictions, Time Horizon
Pathway to Recovery® Series
A Better Crystal Ball
If you are a public sector budget officer, then this year you are going to need a better crystal ball. We can help with that.
I can appreciate the anxiety that municipal budget officers are feeling right now. Even in the best of times, putting together a spending plan for your organization that incorporates and addresses all of the “what ifs” that can happen between now and December 31st of the following year can be a daunting task. And the autumn of 2020 is definitely NOT the best of times.
I served as a budget officer for a small-to-medium size county in upstate New York for 18 years, and I had to deal with my share of challenges. In addition to the standard annual struggle to hold the line on property taxes while still providing much-needed services to the public, my rural community was still coming back from the economic impacts of the Great Recession when we were hit with historic flooding that swept through our scenic valley in 2011. Businesses closed, sales tax revenues fell, and some houses remained vacant and abandoned.
cashvest® by three+one® is like using a crystal ball for your entity’s finances
Covid-19 has presented us with challenges that none of us have ever seen before. There are many unanswered questions swirling about which compound the difficulty of making revenue projections for the coming year. Will Congress approve more federal aid to states and local governments? Will every municipality receive a fair and direct share of that desperately needed aid, regardless of the size of their population? Will the coronavirus be contained over the next two or three quarters, or will there be a second wave that could result in yet another blow to businesses struggling to survive?
Here at three+one®, we provide our clients with liquidity data and cash-flow projections that can help bring the financial picture into a sharper focus. We do this by equipping our clients with a broad range of financial technology tools. These can include our patented cashvest® liquidity monitoring and cash management system; access to our MC Forecast® cash-flow modeling tool which provides accurate, reliable data about what your municipality’s or higher-Ed institution’s cash position will be 6, 12, and even 18 months from now; and the option of utilizing our innovative rfpPrep® software that makes it easier than ever before to compare banking services and procure the best-performing and lowest-cost options that fit your particular needs.
The timing is perfect right now because besides providing you with a much clearer view of what your financial picture will look like over the next several quarters, three+one will also help you to immediately begin achieving real, significant financial benefits that can be incorporated into your 2021 budget. These include:
- Increased interest earnings by helping you put every available dollar to work—and extending the timeline that you can lock in the interest.
- Savings on bank fees by helping you to consolidate under-utilized accounts and embrace new banking technology measures that can help combat fraud.
- Our liquidity data can help reduce the number of times you have to borrow for short-term cash-flow needs; that means lower debt service.
- Higher credit ratings based upon the extensive liquidity data we provide can result in lower interest rates when you do have to borrow money.
Why not give three+one® a call? Our team of experienced financial professionals will be happy to help you polish up that crystal ball of yours and assist you in getting a more accurate picture of what the future holds.
The author served for a total of 38 years in local government at the village, town, and county levels, including 18 years as a county Budget Officer and eight years as a Disaster Recovery Coordinator. As Director of Public Partnerships for three+one®, he can be reached at 585-484-0311 or by email at: wec@threeplusone.us
by Joe Rulison | Sep 15, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, Pathway to Recovery, RFP, Time Horizon, vlog
cashvest® by three+one® has developed a comprehensive plan to navigate a changed marketplace since COVID. We previously shared the 1st step in this pathway; today we share Step 2 for getting your public or higher-ed entity on the financial Pathway to Recovery® with our 6-step plan.
by Joe Rulison | Sep 8, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, Time Horizon, vlog
Special note to our readers: At three+one® we have always believed in our mission to give back to the communities we serve. In that spirit, we want to recognize the life of our dear friend, David Flaum, and pay tribute to the numerous ways he supported so many communities.
A devoted husband, father, leader in faith and community, on both a local and national level, describes a person whose influence reached from Main Street to the streets of Washington and Jerusalem. Such a person describes an icon that only occurs once in a generation. That person is David Flaum, an incredible individual, with a strong faith in his family, religion, community—and a loyalty to those he knew and support to those he did not.
David Flaum with three+one CEO Joe Rulison
To understand David as a generational icon requires some background. What David personified was the same roots that defined him: the belief in family, and a desire to make a difference both at home and in his community. As the son of holocaust survivors, David never took life for granted. He believed one must define and create his or her own path of success, while helping others along the way who were not so fortunate.
Having grown up in New Jersey and then making his way to Syracuse to attend Syracuse University, he developed roots in Upstate New York which only blossomed by meeting and marrying his first love, Ilene Birnbaum. Together they came to Rochester to build a family, an extensive real estate company, and a community presence of philanthropy and caring.
Getting to know David personally was truly a gift. A gift of learning, dreaming, receiving, and developing a better life for the Rochester community. His reach was literally worldwide, which was actual muted by his humility, and soft-spoken approach. David’s level of kindness was the same to a strange voice on the other side of the phone seeking help for a referral into the Flaum Eye Institute, or to the President of the United States asking for guidance on matters dealing with Israel.
David Flaum had a sense of people, what they needed, and when they needed it. His community involvement was never reactive but rather proactive, intuitive, and pacesetting. David had a keen sense of taking action without being asked, while garnering support from others to make community dreams become a reality.
If it were not for the Flaums, many crown jewels in communities throughout the Northeast United States would still be encrusted in dirt, decaying with hopes of being recognized for the value underneath. David saw what something could be, while others would simply pass by.
Over the years, David helped me buy a business, sell a business, and then start up another business that now has a national presence. In each case, he used these opportunities to teach me the value to my family, the community, and those we serve. At the same time, he reminded me of the community we need to nurture and build for all of us to work, live, and play, no matter what political influence.
David Flaum
Perhaps David’s greatest success was his life with Ilene and the incredible family they developed, who instill the very ethic, values, and beliefs that embodied them. This was recognized by the Rochester Rotary in 2017, when David and Ilene were awarded the Rochester Civil Award, and again in the same year, being awarded the Rochester Philanthropy Multi-Generational Award which recognized the entire Flaum family for their commitment to the Rochester community.
Whether it was the RPO, WXXI, Foodlink, Geva Theatre, School of The Holy Childhood, Syracuse University, University of Rochester and its Flaum Eye Institute, the Holocaust Museum in Washington, D.C., Temple Beth El, Rochester Rotary Sunshine Camp, or Camp Good Days and Special Times, David’s generous support was universal in helping those who needed the help, whether it was requested or not.
David’s level of leadership was vast and deep. While Rochester is rich in having incredible individual talent with deep roots and strong influence, David was one who loved to enjoy his moments of success and recognition with others, with little desire to have the spotlight on himself. Rather, he loved to share his moments of success with his family, his friends and the community.
The stories of David’s generosity, leadership, steadfastness to religious and community causes, coupled with family involvement make him an icon that only happens once in a generation. His legacy will live on and get stronger as time goes on as his family will carry on his works.
It was a true gift to have personally known David Flaum and to have learned how to live, do business, and make a difference through family, faith, and community. It has been a true honor having been one of his friends. He will be truly missed.
by William Cherry | Sep 1, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, News, Pathway to Recovery, Predictions, Time Horizon
Pathway to Recovery® Series
The 20% Rule
“Even if only 20% of the bones in your body were broken, you would still feel 100% miserable.”
Sometimes, 20% is a lot. Like when you are in pain. It can be a significant number in other situations as well. Imagine if 20% of the fuel in your car’s gas tank was mostly water. Or how you would feel if 20% of the food you ate for dinner was tainted.
Likewise, our economy cannot fully recover from COVID-19 if a substantial 20% segment of our nation’s economic engines are stalled and sputtering. That’s the percentage of our nation’s overall economic activity that is generated by state and local governments. The federal government is responsible for another 20%, and the remaining 60% of GDP is created by the private sector.
The total annual Gross Domestic Product of the U.S. is about $20 trillion. That figure includes every segment of the economy—private industry, manufacturing, energy, government—from the hot dog vendor on the curb, to the boardrooms of the biggest corporations, to your local library. To put things into perspective, the largest U.S. manufacturing business is the automobile industry. The total economic output of the entire American vehicle production industry—including every car and truck manufacturer, and every parts supplier—is less than $1 trillion. That’s about 3% of the total U.S. economy.
By contrast, spending by city and county governments on goods and services equals just over $2 trillion per year (about 10% of the nation’s total GDP). And state governments add another $2 trillion per year (an additional 10%). Which means that state and local governments are responsible for a remarkable 20% of our nation’s total economic activity! The federal government spends about the same amount as state and local governments do combined, so the total impact of public-sector spending on necessary goods and services equates to fully 40% of our country’s GDP.
This massive government spending isn’t wasteful—it is vital to our economy and to our quality of life. Some examples might include building and maintaining roads and bridges so that interstate commerce can take place; operating hospitals and public health services to keep our families healthy; providing police and law enforcement to keep our communities safe; creating school systems to educate our children; operating colleges and universities to prepare the leaders of the next generation. The list could go on and on to include fire protection in our communities; clean drinking water; parks and recreation; courts and the legal system; and human-services programs. You get the idea.
Government services—and government spending—is the enormous mainsail that propels America’s “ship of state” forward. Its huge 40% share is by far the biggest and most influential and impactful segment of our national economy, accounting for more than $9 trillion of our $20 trillion GDP. State and local governments combined account for half of that 40% share, so they play a major role in determining whether the economy is healthy. Or sick.
Which brings us back to why the federal government will be shooting itself in the foot if Congress stands by and watches as state and local governments struggle to deal with the revenue shortfalls brought about by COVID-19. These temporary revenue shortfalls are not anyone’s fault. They are not based on political party affiliation. The coronavirus did this to all of us! Counties and cities didn’t bring this crisis upon themselves through wasteful spending or careless fiduciary policies. Quite the opposite. Local governments are, by and large, cost efficient, frugal, and the most responsible providers of critically important public services. After all, the people serving in those municipalities pay taxes too!
We all want to see the federal government act responsibly with our tax dollars. But providing direct aid to state and local governments is not frivolous. On the contrary, it is far and away the best pathway forward for our nation to make it through this economic crisis relatively unscathed. As I noted above, state and local governments make up 20% of our GDP. If they become crippled by budget crises, then they will have no choice but to eliminate services and cut spending. That will lead to higher unemployment, even lower tax revenues, and a downward spiral that will impact every segment of the American economy. It could take years, and even decades, to pull out of that kind of a tailspin.
The issues may be complicated, but the solution is clear. The best way to keep COVID-19 from derailing the entire economy of the United States of America is for the federal government to use its massive financial might to keep state and local governments afloat.
After all, even if only 20% of your bones are broken, you still feel 100% miserable.
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 and 9 years as a Disaster Recovery Coordinator. As Director of Public Partnerships for three+one, he can be reached at 585-484-0311 or by email at: wec@threeplusone.us
by Joe Rulison | Aug 25, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Higher Ed, Liquidity Analysis, News, Predictions
It’s confusing…will schools reopen for in-person learning, be online, or opt for a hybrid model? No matter how much planning can or has been done over the summer, the outcome of “what’s around the corner?” has everyone wondering. This is when the patience of Job is going to really be tested. In addition, the impact of enrollment for higher Ed institutions is yet to be determined so late in the registration cycle. What all institutions are experiencing is unprecedented, and the impact will not only influence the 2020/2021 school year but many years in the future.
As students and parents determine the value of on-campus/in-person learning vs. online classes, the financial implications have rippling effects. While most think online learning provides institutions with a higher profit margin, the loss of room and board, facility rental, and bookstore revenue is significant, becoming major challenges now and in the future. This does not just apply to four-year institutions and graduate schools, but also to community colleges.
It’s interesting that the percentage of students that prefer in-person learning has not changed as a result of COVID-19; it remains steady at over 70%. While most students are open to some level of online learning, there is naturally a strong desire to socially interact with others. They see that as a key component of campus life. This is why most higher Ed institutions are pressing for a hybrid model, combining both in-person and online classes (if not prohibited by state guidelines). It should also be noted that once a decision is made, unsafe student behavior and other events may cause institutions to alter their plans. Over the past week alone, we’ve already seen a number of schools close their campuses due to a spike in positive coronavirus cases.
As higher Ed administrators look to understand all the implications, three+one®’s MC forecast model® is becoming a very valuable tool for them in determining short-term liquidity levels and needs. While historical data is used to determine future patterns, potential implications of the “unexpected or anomalies” can be incorporated to determine possible scenarios over the coming months. This information can be found to be extremely useful in evaluating the impact on cash reserve funds or the need to tap into lending facilities or potential emergency endowment funds.
COVID-19 poses challenges for every single public entity and higher Ed institution. Just know that three+one® is by your side to help you answer the question “What now?”
by Joe Rulison | Aug 18, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, Pathway to Recovery, RFP, Time Horizon, vlog
In a new series of vlogs, our team will present our proven methods for turning the tide of economic waves in a post-COVID market. Let cashvest® by three+one® help your public or higher-ed entity get on the financial Pathway to Recovery® with our 6-step plan.
