Higher Credit Ratings = Lower Borrowing Costs

Higher Credit Ratings = Lower Borrowing Costs

Higher Credit Ratings = Lower Borrowing Costs

Pathway to Recovery® Series

If your municipality or university is considering refinancing existing debt or borrowing money during 2021, then you will want the bond-rating agencies to recognize your strengths. One sure way to do that is for you to have a precise picture of your organization’s overall liquidity.

Having a cash flow report on hand as you begin the borrowing process is not the same thing as bringing an accurate, up-to-date liquidity analysis.

Cash flow measures the surface, the “ups and downs” and “ins and outs” of daily transactions. A liquidity analysis does much more, measuring the true depths of your entity’s overall financial resources.  Imagine “cash flow” as the waves that roll and swell on the topmost surface of the ocean. The waves may have peaks and valleys, but they do not provide you with a picture of what lies beneath. Now think of “liquidity” as those ocean trenches that descend fathoms deep, all the way to the bottom.  The deeper your “ocean,” the stronger your finances.  The bond-rating agencies recognize that having a precise picture of a public entity’s liquidity can help them determine how much risk to assign to your borrowing.  The stronger your liquidity, the lower the risk and, ultimately, the lower your debt-service charges.

As a longtime County Treasurer and CFO, I participated over the years in many S&P and Moody’s ratings discussions. I can tell you that having accurate liquidity data at your fingertips can help reduce borrowing costs, and ultimately, save taxpayer’s money.

Allegany County (NY) Treasurer Terri Ross, a good friend and highly respected colleague, recently announced that she saved $1.5 million in interest charges on a recent refinancing, thanks to three+one®’s liquidity data!

Our team here at three+one® stands ready to assist your public entity by providing you with a precise measurement of your liquidity.  We have the expertise, the professional staff, and the latest fintech tools to help you present the strongest possible position to S&P, Moody’s, and Fitch Ratings the next time you issue debt.

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.

The Year of a Checkup

The Year of a Checkup

Pathway to Recovery® Series

As we enter the new year, the aftermath of the COVID-19 outbreak is being addressed with a combination of vaccines and a series of stimulus funds in an effort to recover. This year may be considered a year to perform a “checkup” on the health and financial well-being of your entity.

The only way a doctor can perform a checkup is to conduct a series of tests, ranging from blood tests to various bio-technology procedures.  The information gathered in performing these tests provide data ranging from what has occurred to assessing your health going forward.

three+one liquidity checkupThat same level of a liquidity review should be considered for your public or higher Ed entity given the traumatic landscape experienced in 2020.  A complete liquidity review should incorporate a holistic perspective of all financial transactions and the ebbs and flows of dollars during the pandemic.  The information gathered through an in-depth analytical review will be extremely helpful, not only around what your entity experienced through an historic multi-generational occurrence, but also how you might better address such events in the future.

A liquidity review should incorporate the following:

— A collection and review of all dollars and financial transactions that flow through an organization on a daily, weekly, monthly and annual basis.

— A review of all bank accounts and fees associated with each financial institution.

— A review of all technology being used to perform financial transactions, including investments.

— A review of fraud protections and policies associated around all financial transactions and financial institutions used.

— In preparation for any current debt, refinancing and/or future lending needs, a complete qualitative and quantitative liquidity analysis report should be prepared for the rating agencies to review.

— A review of one’s Investment Policy Statement, Electronic Payment Policy and an all-inclusive review of banking relationships.

— A projection of cash impact on the entity from the effects of COVID-19, and patterns detected from its implication and any subsequent funds received to address the pandemic, social unrest or natural catastrophe. Please keep in mind, the data collected during 2020 and 2021 will have significant impact on how you manage for the future of your entity’s financial well-being.

At three+one®, our cashvest® platform provides proprietary liquidity analysis and data that allows you to have the confidence in dealing with the financial implications of a major event, such as COVID-19, natural disaster or human inflicted occurrence.

A cashvest® liquidity checkup over 2021 will provide you with new sources of revenue, savings efficiencies and the peace of mind, all while allowing you to focus on what is most important, that being those you serve.

Looking Backward Helps Us to Move Forward

Looking Backward Helps Us to Move Forward

Looking Backward Helps Us to Move Forward

Pathway to Recovery® Series

In order to make forward progress, you have to be able to see and evaluate what is going on behind you. Imagine driving your car and suddenly realizing that your rearview mirror and both side mirrors were no longer visible to you. There’s a reason they describe that perspective as having a “blind spot.” It is because you feel temporarily blinded, despite having already moved beyond those points. Even though you are able to clearly see the road ahead of you, you might still take your foot off the gas pedal or even apply the brakes. Ironically, due to your inability to see what is behind you, your forward progress is disrupted or even brought to a stop.

As we begin the new year and try to envision what the next 12 months might look like, it’s important that—in our careers as well as in our private lives—we rationally evaluate what we may have done right over the past year, as well as what we could have done better. That’s really the only way to make sure that we continue to improve and progress, both professionally and personally.

After having spent many years serving in local government myself, I can honestly say that our public institutions simply do not have the available manpower to spend a lot of time reviewing, evaluating, and analyzing prior performance. In keeping with our “driving a car” analogy, municipalities and other public institutions tend to look forward— “through the windshield” as it were—and they frankly don’t have the staff, nor the time, to be constantly checking those rearview mirrors to evaluate what has already happened. And therein lies the potential “blind spot.”

Here at three+one®, we provide financial tools to help our municipal and higher Ed clients see the whole picture—a panoramic view of the past—as well as a clear vision of the future. Our patented cashvest® technology instantly analyzes hundreds of thousands of past financial transactions; that gives our clients a crystal-clear picture of the precise revenues and expenditures that have flowed into, and out of, their dozens of bank accounts. All of that historical data, when combined with current banking index rates and accurate forecasts of how long that cash will remain in their accounts, provide a sharp, clear picture of how those funds can be used to generate maximum income.

Much like glancing into a car’s rearview mirrors while also scanning the road ahead, with cashvest® in their toolbox, our clients are provided with an accurate picture of the past, while our MC Forecast® projections provide them with a clear and detailed vision of what likely lies ahead. Just as when driving a car, the best way for government entities or higher Ed institutions to move forward is to continuously keep glancing backward.

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.

2021 Outlook

2021 Outlook

If there ever was a year in which past predictions could be swept under the carpet, 2020 was that year. Who could have predicted a worldwide virus pandemic, an economic collapse with a 32% drop in GDP, Fed funds at 0%, a stock market fluctuating between crazy highs and lows—all coupled with historic hurricanes and wildfires? With that being said, the need to look forward and plan for the new year is essential, especially after having experienced what will be considered the greatest of multigenerational events.

The top ten trends I see developing for 2021 are:

1. With a new administration and a split balance of power in Congress, expect a high number of executive orders issued from the White House and continual support for financial relief around the COVID pandemic. With Janet Yellen as the incoming U.S. Treasury Secretary, expect new emphasis to be placed on the oversight of financial institutions and the revival of the Dodd-Frank Wall Street Reform Act.

2. Sales tax revenue will be down slightly, but not as much as once feared. While direct restaurant, retail stores, and travel sales will be down in the first half of 2021, there will be a continual surge in home improvement, internet, and auto sales.

3. Short-term interest rates will remain low. Despite the low-rate environment, cash will still have value in the marketplace, allowing the opportunity to capture rates higher than the Treasury benchmarks. In 2021, big bank-balance sheets will be at peak levels, leading to scant appetite in taking on new deposits. Community banks deposit products may still be a great option. However, off-balance sheet investments will be much more likely. Proactive investment management of cash will be paramount. Dormant cash will not be viewed positively, especially given recent government audits highlighting cash-management practices.

4. Liquidity and financial data collected throughout 2020 will shed major light on certain trends and potential stresses on an entity’s liquidity during one or more major catastrophic events at once. Such data will allow public and higher Ed institutions to better prepare for future events, both in budgeting and financial forecasting.

5. Given the lower-rate environment, a larger sale of new municipal debt issuance and refinancing will occur. Rating agencies will continue to have a negative outlook on higher Ed debt; that may also cause these agencies to take the same view on local and state debt, given the financial stresses inflicted as a result of the pandemic. Please note that rating agencies use liquidity forecasting in consideration of one’s financial strength, with a weighting average up to 10% of the total rating. To help achieve or maintain a strong credit rating, a liquidity analysis—both quantitative and qualitative—is highly encouraged.

6. Technology will continue to be a big focus in 2021, with ongoing enhancements to virtual conferencing, along with stronger cybersecurity protection against potential malware and other levels of fraud impacting government, healthcare, and higher Ed institutions. Remote online banking will continue to grow in popularity, with less emphasis on direct branch banking.

7. Climate control and green initiatives will continue to gain public support, with greater emphasis on infrastructure projects. Solar will continue growing to meet electricity demands. Due to an aging national electrical grid, major financial commitments will be necessary from both the public and private sectors to be successful.

8. Pressure on higher Ed will continue from the COVID-19 fallout and a long-term trend of lower student enrollment. Though online classes will continue to expand, I foresee a major drop off in campus construction projects and greater competition in attracting new students. It should be noted that the forgiveness of student loans at some level will be a major initiative in early 2021.

9. Given what the COVID-19 pandemic has done to the nation’s economy, there’s likely to be a sizeable increase in Requests for Proposals (RFPs) for banking services in 2021. Competition will remain strong among larger national banks as they provide a broader suite of treasury services and fraud protections.

10. In-person association conferences will gradually phase in over the second half of 2021, with a hybrid model used between virtual and in-person attendance until vaccinations are sufficiently widespread across the United States.

As a fintech company, three+one’s liquidity management platforms—cashVest®, rfpPrep®, bankfee® and the Pathway to Recovery®—will continue to deliver new sources of revenue and savings to public institutions and higher Ed entities that utilize these platforms, reaching a cumulative level of over $500 million in 2021 back to those entities we serve.

It is our wish from three+one that you, your families, employees, communities, constituents, clients, and students stay safe and healthy throughout the new year. Please know that given whatever the circumstance, we are all here to be of help and support to your entities and those you serve.

Happy Holidays from three+one®

Happy Holidays from three+one®

We’re so thankful for all you’ve done.

Our family at three+one® wishes you a joyous holiday season & a prosperous new year. Together we have persevered through immense challenge, found creative solutions to do more with less, all the while never losing sight of our mission to serve the public. We thank you for your partnership.

5 Benefits of cashvest®’sLiquidity Analysis

5 Benefits of cashvest®’sLiquidity Analysis

The current marketplace is causing everyone to ask a lot of questions, but there are few definitive answers unless your entity is armed with data. A comprehensive liquidity analysis by cashvest® provides essential short- & long-term benefits to your entity. Here are 5 key benefits we are talking about today!