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.

Before and After: Getting a Clear Picture of County Finances Amidst COVID-19

Before and After: Getting a Clear Picture of County Finances Amidst COVID-19

As a proud partner of NACo, three+one jointly presented a webinar with the National Association of Counties on navigating public finances in the wake of the pandemic. COVID-19 has left its mark on 2020, and its impact on your county’s liquidity position is likely to last past 2020. New data opportunities allow your county the opportunity to explore how to best maximize the value on all taxpayer dollars after the COIVD-19 pandemic using liquidity analysis. This webinar will focus on how to get a clear picture of your liquidity needs, and how to use data to communicate those needs to internal stakeholders, external stakeholders, and financial providers.

An on-demand recording of this important webinar:

In this webinar you will discover how to:
-Investigate the impacts of an economic shock on your county’s liquidity position.
-Forecast liquidity to plan for different scenarios in 2021.
-Learn how to use liquidity analysis.
-Evaluate financial partners to maximize value for the taxpayers.
-Use data to share your county’s changing financial picture with stakeholders.

The information deck from the webinar:

 

Every Captain Needs a Lookout

Every Captain Needs a Lookout

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.

The audit reports are available online at: osc.state.ny.us/local-government/audits

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.

cashvest by three+one uses data & technology to maximize the value of your cashOur 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.

And the Awards Go To….

And the Awards Go To….

2020 cashvest® 90+ and National Leadership Award

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!