A Story to Tell

A Story to Tell

Are you looking for a way to alleviate escalating expenses, cut out miscellaneous fines/taxes for your taxpayers, or close a budget gap—but can’t seem to find a solution? CFO Sarah Sullivan and her team at the Richland Library in South Carolina have experienced similar issues. After working closely with three+one® over the last couple of years, developing and implementing a clear liquidity plan, the library has increased its interest earnings by over 150%. This has enabled the library to solve some serious financial challenges.

With Sarah’s proactive approach, and by incorporating three+one®’s time horizon and treasury data, the library will completely eliminate all overdue fines this upcoming fiscal year. The library is able to go fine free and put their mission first by encouraging current and past customers to use the resources, services and programs that they offer—without the fear of fines. 

With Sarah and her team’s hard work and dedication to increasing interest earnings over the last year, the library recorded over $208,000 in interest earnings (net of fees) and has the potential to exceed $260,000 (net of fees) over the next 12 months. Here are a few ways the library has achieved record interest earnings:

• By ensuring 100% of all the library’s funds are providing value, either through direct interest earnings or by offsetting banking fees.

• By continuing to work on balancing the library’s operating balances and using three+one®’s time horizon data as cash flows change to ensure all low- and non-performing cash receive the maximum rate potential.

• By utilizing three+one®’s liquidity data to identify solutions within their current banking relationship for short-term funds. Doing so ultimately resulted in 50% of their annual earnings.

We’re thrilled for Sarah Sullivan and her team and are pleased to share the Richland  Library’s success story.

Now let three+one® help put all your entity’s cash to work, finding solutions for potential budget shortfalls, lowering tax burdens on constituents, and so much more.

Leading By Example

Leading By Example

by Tyler Frame

Lycoming County, Pennsylvania is located approximately 130 miles northwest of Philadelphia and is the largest county in the state by land area. It has a population of approximately 113,000, and its county seat, Williamsport, is the birthplace of Little League Baseball. Lycoming County is divided by the Appalachians and is beautified by rivers, creeks, and watersheds. As gorgeous as the landscape in this county is, what makes it such an incredible place is the people; they are kind, hardworking, professional, and the county officials are true public servants.

With the partnership and collaboration of the county’s Commissioners, Director of Administration, Fiscal Services, Treasurer’s Office, and the Controller’s Office, the county has made cashVest® by three+one® an integral part of its liquidity monitoring responsibilities. All officials have made earnings and savings a priority for the taxpayers’ cash. When asked about the importance of the cashVest® program, Matthew McDermott, Director of Administration, stated: “Counties have a myriad of responsibilities and functions they carry out to serve their residents.  Lycoming County recognized that it did not possess the in-house capability or expertise to effectively monitor and conduct the analysis of its liquidity, so we turned to three+one® to make the most out of our cash.”   

During the county’s initial cashVest® period (January 2017 – December 2017), the county was focused on investing its available cash. With an annual budget of nearly $103 million, the county earned $603,165 in interest during that initial 12-month period.

Over the last 12 months, Lycoming County used liquidity data, technology, and treasury services and is on track to earn no less than $2.1 million in interest—an increase of over 248%. “I’m here to do everything I can for the Lycoming County taxpayers. This program has increased our collaboration with the county’s banks and has provided valuable data that the Treasurer’s Office uses,” says County Treasurer Connie Rupert. 

The question your entity should be asking is this: Would such an increase in interest income/savings benefit your taxpayers? Whether it helps fund a new capital project, hire an additional staff member, increase wages for current staff, pay down debt services, or something else, the answer must be an emphatic ‘Yes!’

Lycoming County officials have done an outstanding job utilizing three+one®’s data and analytics to maximize the potential of its cash in the following ways:

● Allowing 100% of funds to provide value to the county by having equitable banking relationships.

● Increasing liquidity proficiency by ensuring its cash is taking advantage of time-horizon data.

● Maximizing the rates earned on all cash through market statistics.

● Optimizing cash flow through banking technologies and account-balance optimization.

These steps have all led to providing the greatest value to the county’s taxpayers. The county is now earning over 3% of its total tax revenue from interest income and savings on an annual basis, creating a new stream of revenue which the county will use to mitigate tax increases.

By taking advantage of three+one®’s independent and objective analytics, you can be certain that all opportunities to earn more will be achieved. Just remember that Lycoming County is earning in excess of $150,000 in interest income and savings each month.

Let three+one® provide your entity with the tools it needs to prosper, just like we’ve done for Lycoming County.

Electrifying

Electrifying

The increase in the production and sales of all-electric vehicles has strong financial benefits, both in tax incentives and savings, as owners don’t have to buy gasoline. However, the threat that electric vehicles may pose to oil companies is not only a challenge to the marketplace. It is a strong concern to government entities. 

Gasoline taxes are folded into every gallon of gas sold and are shared by federal, state, and local sources. The income from these taxes covers transportation infrastructure costs and general-fund expenses. In many cases, sales taxes fall within the top-five revenue sources for county governments, with taxes on gasoline making up a sizable portion of a county’s sales-tax revenue.

The dilemma rests on how dependent local governments are on gas sales-tax receipts. What happens when less gasoline is consumed, as more vehicles run on rechargeable batteries year over year? This doesn’t change the imbedded infrastructure costs to build and maintain roads, bridges, and tunnels. All-electric and hybrid vehicles still account for wear and tear on our roads and streets.

The answer might be found in a recent legislative proposal in the state of Ohio. Under this proposed legislation, an owner of an electric vehicle would be charged a higher annual registration fee to make up for not paying gasoline taxes. If this proposal becomes law, Ohio owners will pay $200 per year to register their all-electric vehicles; hybrid owners would pay $100. Part of this additional revenue would go toward updating the state’s power grid as a result of higher electric demand.


No matter what means is finally taken on a state-by-state basis, you can be sure that government entities will be seeking ways for owners of hybrid and electric-only vehicles to pay their fair share in taxes.

Just as the “green-minded” public wants to save money and help reduce emission gases, government entities will be seeking workable ways to generate revenue to compensate for gas-tax losses.

I’d like to urge public officials to think differently on this and work with resources one has before looking to levy new taxes.

A majority of public entities today are sitting on cash that has great value and that can be a new source of revenue. The desire to put cash to work is often a low priority, either due to lack of resources or the expectation that cash needs to be close at hand in case of unexpected expenditures.

The point I want to stress is that all cash has significant value in the marketplace—and that can lead to unexpected revenue.  At three+one®, we can show you the true value of all your cash through our proprietary liquidity analysis and data. We’ve helped entities across the country see six- or even seven-figure increases in annual interest earnings.

Before creating additional taxes on the public you serve, look to put a new charge into the value of your taxpayers’ money.

The results can be electrifying.

Transparency

Transparency

In an era when information of all kinds is instantly available online, requested fiscal data from finance officers is expected at the snap of a finger. Greater awareness and access of information, through technology and social media, forces finance departments to be ready and able to provide a new level of transparency. This is especially true when it comes to taxes, budgets, and expenditures.

Whether it be the elected officials to whom you report, the media, the public, or your own employees, the expectation for accurate, real-time information has escalated.

The pressure to provide increased transparency—with fewer resources and in a more immediate time-frame to do so—creates greater stress to those in the government and Higher Ed. sectors. These areas are under more intense scrutiny due to new and stricter regulations, enhanced media coverage, and ongoing tax/tuition pressures.

When it comes to accountability, being able to report the level of cash an entity has on hand may be more difficult than one may think. With several banking relationships and dozens of bank accounts, an entity’s ability to tabulate and chart all cash can seem to be an overwhelming task. However, given that it is the taxpayers’ cash one is talking about, the need to be timely and proactive is imperative.

At three+one®, our cashvest® liquidity analysis and data can provide you with a complete picture of all your cash at the click of your mouse. Having such information at your fingertips gives you the confidence you need when difficult questions are asked—and transparency is expected.

The request for information today is more demanding than ever, but it doesn’t have to be a dreaded task. With our help, you can have the information you need at the moment you need it.  You will not have to divert precious time and labor to the calls for transparency that seem to be ever-increasing in current times.

The Technology Edge

The Technology Edge

One of the underlining reasons for the merging of large regional banks is to provide a scale of efficiency: less duplication of risk and compliance overhead, coupled with the ability to build greater, stronger & secure sources of technology for its organization and client base.

As I mentioned a couple blogs ago, this trend of regional banks merging is only just beginning. Where will this leave the smaller Community Banks? The answer is at a real disadvantage, especially when it comes to larger institutional clients like public entities and higher Ed & healthcare organizations.

The Technology Edge

Electronic banking, fraud protection security, and near field technology conveniences – just to name a few – are already being offered by the large banks. They have either built these systems internally or partnered up with fintech companies, requiring large sums of capital investment.

Community banks work with third-party vendors in providing some level of technology support. This comes at a hefty price and can be tough to calculate when pricing product offerings, especially for banking services RFPs.

As a result, the trends I see developing over the next couple of years will be:

1) Community banks will primarily focus on retail consumer banking, being managed out of a local branch. Banking will remain local.

2) Technology will be in the forefront of large banks, including the new entities formed by merging banks.

3) Larger banks will continue to partner with fintech companies to innovate new levels of security and the transfer of funds, like blockchain.

At threeplusone®, we remain a leader in tracking the innovation of bank technology and providers. It is important to be aware of these trends and the sources of such technology, so they can be applied where necessary and incorporated into banking services RFPs.

Technology is moving at the speed of light, and the ability to stay informed is essential in making your life simpler for you and those you serve. Contact us at threeplusone® to ensure you’re capitalizing on the efficiencies and gains financial technology can bring you.

Being Mobile

The United States is one of the most mobile countries in the world; we move around a lot. America’s interstate highway system transformed our country. Our economy greatly benefited by the ease with which goods could be moved from one part of this vast country to another. More than just moving goods, we also enjoy the freedom of driving our cars and going places. There is so much to see and being mobile has allowed us to do that.

 

Being Mobile

 

Now we are on the verge of a new mobile evolution. The ability to comparison shop, find deals, and make purchases digitally has been around for a while. Doing all that on smaller screen mobile devices (e.g., smartphones and tablets) is taking this further and becoming more mainstream. A report was issued earlier this month that noted that 25% of people who do their banking digitally now do it exclusively on mobile devices. Another report noted that one in five people no longer carry cash, and that 46% of consumers rarely use cash for purchases. That is a significant change from just five years ago.

I wonder how this will impact our banking and purchasing behavior in the next five years. The youngest of the “Millennial Generation” will be seniors in high school this coming school year. So in five years all millennials will be in the workforce, or really close to it. You can bet this tech-savvy generation will continue to influence digital and mobile banking and commerce.

This evolution will not be complete until some of the most serious concerns, chief among them being security, are resolved. Financial institutions and financial technology companies (FinTechs) are diligently working on this every day. Single-click solutions and user ease are making mobile activity more attractive, as long as we have comfort that our information is secure.

Yet one other great challenge exists. We, as consumers, hate fees associated with our transactions. We pay them when we must, but any additional overt fee is a deterrent to making mobile purchases. Fees must be embedded because if we see an add-on fee, we will find another way to make the transaction.

This brings us back to you—public entities, higher education institutions, and not-for-profit organizations. Most recognize it is expensive to absorb fees if the constituents are not assessed a fee. Are there not ways other than using the now common “convenience fee,” which only keeps the clear majority of constituents from making payments electronically? The answer is “Yes,” and we will discuss these in another blog.

Know this: if you want to overcome the inefficiencies associated with accepting cash, checks, and in-person payments, then you need to look at alternatives.

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Ohio GFOA – September
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