Aurora’s $165,000 Example

Aurora’s $165,000 Example

The Town of Aurora, New York is located southeast of Buffalo and includes the Village of East Aurora. Its Main Street is famous for its energetic small-town ambiance with specialty shops, restaurants, and historic homes. It may be most celebrated as the home of Fisher-Price, the internationally renowned toy manufacturer.

The Town of Aurora, with a population of approximately 13,000 (2010 census), has an $8.9 million budget (all funds). In August 2017, Supervisor Jim Bach and the Town Board engaged the cashvest® & rfpPrep® services by three+one®, seeking to provide their taxpayers with as much additional revenue/savings as possible.

Supervisor Bach and Assistant to the Supervisor Kathleen Moffat have carried out three+one®’s plan. Over the past twelve months, the Town has achieved $165,820 in realized interest earnings and “soft savings” of $35,902 in banking fees.

Here are some of the ways the town accomplished this substantial spike in additional revenue:

(1)  100% of the town’s cash is earning interest and 79% of all the town’s cash is providing value through a diversified-liquidity strategy that is meeting the 30-day Treasury index. Current investments are earning between 1.89% and 2.15%. Due to the town’s proactive liquidity strategy employing time horizon data and stress-test modeling, the town has a significant portion of cash locked in fixed-income solutions earning 2.10% through October 2020 – something that could not have been achieved without time horizon data and fixed income solutions.

(2)   The town does not look at its cash in select “buckets.” The three+one® plan benchmarks all cash on a quarterly basis and helps the town implement a comprehensive liquidity strategy on all cash in order to guarantee all assets are bringing value to the taxpayers. There’s a science behind continually earning while offsetting banking services, ensuring cash flow for A/P & payroll, and strategic liquidity time horizons.

(3)   The Town Board revised and updated its investment policy statement and took steps to adopt electronic payment solutions. These steps provided the framework necessary to ensure the safety of public dollars while meeting all legal requirements and maximizing the value on cash. The adoption of electronic payment options: (1) decreased costs, (2) increased float (increased investment potential on funds), and (3) provided increased transparency through online ePayable technology.

The Town of Aurora’s Board is enthusiastic about trying solutions that provide additional revenue to the taxpayers. With proposed AIM (Aid and Incentives for Municipalities) funding cuts in New York, tax-cap limits, infrastructure needs, and abundant taxpayer service essentials, this new income will provide a much-needed boost in revenue.

If you are a town/village/city or school district weighing the options of whether to take advantage of bringing revenue benefits to your entity, consider the size of your budget and identify your year-to-date interest earnings.

Here are some examples of where interest earnings using cashvest® by three+one® should be:

$5 million budget = at least ~$94,860 in income

$19 million budget = at least ~$353,400 in income

$22 million budget = at least ~$409,200 in income

$69 million budget = at least ~$1,283,400 in income

$92 million budget = at least ~$1,711,200 in income

Finally, bear in mind that there is no one solution in today’s public banking marketplace. Be cautious and skeptical of any vendor that suggests a “one size fits all” product; they simply don’t exist. Public entities have different banks, ever-changing liquidity variations, strategic-liquidity amounts of different sizes, varying degrees of experience, and available time horizons.

We’re proud of the success The Town of Aurora has achieved. We stand ready to do the same for your entity.

Vlog: Celebrating 5 Years!

Vlog: Celebrating 5 Years!

Join our team at three+one® in officially celebrating the firm’s 5 year anniversary! This journey started as a mere dream between Joe Rulison & Peter Forsgren 25 years ago. Today we are able to boast more than $150M in new revenue for the public & higher-ed entities our company serves, and in turn for your taxpayers & students. 

Will you be a part of this continued success in our next 5 years?

 

Vlog: Investing in Public Finance Officials

Vlog: Investing in Public Finance Officials

Finance is a continuous and rapidly evolving industry. Technology, regulatory requirements, and obligations to our taxpayers or higher-ed stakeholders are at the forefront of policy considerations.

In today’s vlog we discuss the importance of investing in the education of our finance officials. Professional development is vital to the success of your finance office and your entity.

 

5 Must-Do’s to Maximize Shared Services

5 Must-Do’s to Maximize Shared Services

Across the country, local public entities find themselves in the same predicament: trying to do more with fewer resources, smaller staffs, and greater demands.

In today’s environment, these issues are virtually universal, in cities, towns, villages, and school districts within a given county—and adjacent counties.

On top of these constraints is a steady stream of unfunded federal and state mandates that public entities must implement, with ever fewer dollars to cover day-to-day overhead expenses.

It should come as no surprise that more and more entities are looking to work together to eliminate duplication of services and reduce unnecessary overhead. As a result, shared-services initiatives are gaining popularity, ranging from public works, public safety, self-insured healthcare plans, and cooperative purchasing programs.

The ability to join forces can have an immediate and beneficial financial impact. The one impediment is jurisdiction of control. Entities involved in sharing services should have a long-term perspective of outcome and address this clearly upfront—and in writing.

The need to consider or expand shared services may not be desirable, but rather an absolute necessity to survive. This is especially true for smaller entities within larger jurisdictions. In the minds of taxpayers, a proper business attitude is to be applied, rather than an emotional wrestling match over control.

Under a shared-services agreement, the concern of lost identity should not be raised; the initiative is a joint effort in providing/receiving services for the participants’ mutual benefit. In general, the initiatives should focus on saving money and/or generating revenue.

Here are 5 financial shared-service initiatives to consider: 

1. Conducting a universal banking services Request for Proposal. A banking RFP would create a large volume of buying power to use in negotiating competitive pricing on bank fees and deposit rates. A collaboration like this could include villages, towns, cities, school districts, and the county government, all at once. The end result could lead to hundreds of thousands—if not millions—of dollars in savings and or additional interest income. rfpPrep® by three+one® is the first-ever electronic banking RFP (Request for Proposal) service, entirely online and specifically designed to facilitate the bidding of banking services. Visit our rfpPrep site for more resources. 

2. County governments can be a source of purchasing the short-term paper of related entities as they come to market. As local villages, towns, and school districts issue Bond Anticipation Notes (BAN) or Tax Anticipations Notes (TAN), a county could be a bidder of such notes, as allowed by legal statutes, for investment purposes. As such, the county can be an additional bidder, helping to lead to lower rates and greater competitive pricing on cash for investment. 

3. Counties can provide additional resources and expertise through their finance offices in helping smaller local entities identify and manage their cash. It would still be expected that associated entities would control their cash, but alleviate the stress associated in identifying and investing cash. 

4. Combining technology efforts can be effective and beneficial both in financial and banking transactions, especially in the flow and protection of collections and payments. 

5. Finally, consider consolidating tax collection. In the future, all tax collections will be automated. The need to have a counter or have the control of check collection will become obsolete. Having one point of contact for tax payment and options payment can lead to major personnel and banking cost savings. 

Sharing services can be pathway to strengthening the financial well-being of all those involved. Let three+one help you in setting up and managing your shared-services initiatives.  What may seem as a major undertaking can be simplified with through our proprietary liquidity analysis and modeling capabilities.

As always, our mission is to help public entities to do more in serving their communities.

 

Prepare for Change

Prepare for Change

At recent GFOA conference, we surveyed attendees and discovered a startling disparity in the experience levels among municipal officers as 25% were comparatively new to their positions. With 50% of finance officials now age 55 or older, preparing for your entity’s leadership depth is essential.
 
In the near future the largest group of public finance officials will be new to their office. Today’s vlog introduces 5 key strategies to prepare you & your office for those changing demographics.