A Green Deal

A Green Deal

As politicians debate a newly proposed Green Deal, I would like to propose a Green Deal that can be implemented immediately and generate a new source of income for all Americans.

My Green Deal is a proposal to have all public monies be put to work while still remaining legal, safe, and liquid.

Our need to find new sources of revenue is imperative as our country’s infrastructure ages, coupled with greater demands for power, transportation, water, food, education, safety, and social services, just to name a few of the challenges.

The ability to generate additional dollars can only go so far in helping us meet our nation’s needs. So many public dollars go unnoticed and are left on the sidelines. What may be considered a small amount with little impact can, as a whole, lead to significant dollars with great impact.

New solar-energy initiatives, self-sufficient buildings, more innovative electric/hybrid vehicles—these innovations and more can be met with new sources of revenue, found through the proactive management of dollars that simply go unseen.

Up until a couple years ago, the possibility for a public entity to generate interest income on its cash did not exist. Today, that is no longer the case. With short-term interest rates above 2.0%, and the proprietary financial technology we have at three+one®, the ability to generate substantial new dollars is now available.

Now that the opportunity exists to earn additional yield on all your cash, a very “green” result can be immediate through the pure power of your own cash.  Let’s unleash the power of our dormant ‘green’ cash holdings to fuel the green initiatives that will help our environment, our infrastructure, and our economy.

We are shaping a new dynamic in public finance all across America that can have great impact this year—and for decades to come. 



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.

Top 10 Predictions For 2019

Top 10 Predictions For 2019

Over the last several years, three+one has blogged frequently about the changing landscape of banking and the value of cash as an asset.

Last year at this time, I made a prediction of the top 10 trends for 2018. My batting average edged up over that of 2017, from 70% to 75% in 2018. As we head into 2019, the top 10 trends I see evolving are as follows:

Top 10 Predictions For 2019

1.) The outlook on cash will continue to be very positive, with cash becoming an even more valuable asset; expect it to be earning 3.0%+ by year-end 2019.

2.) Liquidity analysis and data will become more prevalent and as a standard requirement, given the value cash has become. In 2019, the Financial Accounting Standards Board (FASB) has mandated that all non-profit organizations disclose such information on financial statement. We expect the Governmental Accounting Standards Board (GASB) to follow suit in coming years.

3.) The Federal Reserve will still raise short-term interest rates at a slower pace than in 2018, due to a divided outlook by members of the Fed’s board. The 30-day Treasury bill will reach 3.0% during the year. This will lead to a continual trend of U.S. Treasuries being purchased as an alternative to bank-deposit products.

4.) I do not expect an economic recession in 2019; rather, I believe the nation’s signs of economic growth will continue on a pace of 3.0% or greater. Consumer confidence will remain high, and unemployment at historic lows.

5.) Given the new leadership in the House of Representatives, pressure will mount to have greater oversight of banking, stalling any additional rollbacks of Dodd-Frank. I also foresee calls for banks to set aside additional reserves in case of financial market stresses appear to loom.

6.) Expect the big banks to continue building their presence in large metro areas, with regionals concentrating on mid-tier cities and counties, and community banks on smaller cities and towns. Community bank mergers will continue throughout 2019.

7.) Blockchain and 5G technology will lead the way for greater pressure on entities to upgrade their technology infrastructure.

8.) The average bank Earnings Credit Rate (ECR) will exceed 1.50%.

9.) Given the staggering growth in online purchasing and lower oil prices, prepare for a dip in sales-tax projections. This gap can be made up through the proactive management of “all” cash, generating significant revenue to offset the sales-tax shortfall.

10.) three+one will help public entities and higher Ed institutions earn an additional $100 million+ in new interest earnings, enabling a greater return to those they serve.

At three+one we strive to help clients navigate through the changing landscape of banking and an environment of rising interest rates.

Like 2017, 2018 was a great year for those entities that put our recommendations into practice. Next year promises to be even more rewarding, given the trends we have identified here.

If you don’t know where to start, please call us. If you have benefited from our work, please share the word. We’d like to help more entities like yours make real improvements to their budgets and bottom lines in 2019.

Every Quarter Matters

Every Quarter Matters

Each time the Federal Reserve raises interest rates by a quarter of a percent, the higher the value of your cash.

Earlier in the year, I made 10 bold predictions for 2018. My top three predictions were related to increased interest rates. They were:

1.) The Federal Reserve will approve three rate hikes of .25% each to reach a level of 2.00% on Fed fund rates.

2.) The 30-day T-bill rate will break the 2.00% level.

3.) The average bank Earnings Credit Rate (ECR) will break the 1.00% level.

All three predictions have occurred, which means the value of your cash has gone up by .75% or more over the last 10 months. This equates to an additional $7,500 on every $1 million invested or being used to cover banking fees on an annual basis.

It’s anyone’s guess what the Federal Reserve will decide at their next meeting in December. Chairman Powell has indicated that it is his intention to continue on a path of slowly raising short-term interest rates despite mounting political pressure to do otherwise.

At threeplusone we believe very dollar of cash has value in the marketplace. Identifying “all” cash through our proprietary liquidity modeling is what makes our services unique to public entities and higher Ed institutions.

A quarter of a percent rate increase means $2,500 more in earnings per million dollars. That may not sound like much but, as the numbers add up, it could increase your bottom line by tens to hundreds of thousands of dollars per year.

And that can mean a lot to your entity and to those you serve.

Just As Predicted

Just As Predicted

At the end of last December, I made ten predictions for 2018. Two interrelated predictions were that (a) the U.S. economy would grow at a 4.0% pace and (b) short-term interest rates would top 2.0%. Both of these trends are well underway, leading to new opportunities that we’ve not seen in years.

Ever since the 2008 financial crisis, the economic recovery progressed at an anemic rate, leaving interest income at historic lows.

That is until 2017.

Just As Predicted

With the economy improving, short-term rates going up, and public entities’ cash levels on the rise, the elements for a strong second half of 2018—and into 2019—look extremely positive.

I predict short-term rates will hit 3.0% in 2019. This will yield incredible results for those entities that are proactively managing all their cash as an asset. However, it will cost more when borrowing for gap funding or capital projects.

I cannot bang the table hard enough to get our message out: Cash is an asset and, with a stronger economy, public entities and higher Ed institutions have an incredible opportunity to put their cash to work. Done right, it can lead to hundreds of thousands—or even millions—of dollars in new revenue from everyday cash.

At three+one, our liquidity analyses and ongoing data are pure and independent. Our message has been consistent throughout: Cash should be viewed as a revenue-generating asset that will lead to significant levels of additional income to your bottom-line. Since we are not a bank, financial advisors, or registered investment advisors, we serve no other interests than those of our clients.

This growth opportunity is happening just as I had predicted. It is now incumbent on you to take the first step to take full advantage of it. If you haven’t already begun the process, now’s the time. For those who are already using cash to its fullest, you will continue to be very pleased with the increases to your bottom line this year and the next.

Budgeting for 2019

Budgeting for 2019

“One-year Treasuries will reach between 1.50%-2.00%.” – three+one Blog Post on June 6, 2017

Over the last several years, we have provided guidance on what public entities and higher Ed institutions should budget for in interest income for the following year. I am pleased to say that we have been very accurate in our forecasting. We will continue to provide an independent perspective to the value of an entity’s operating and non-operating cash.

Budgeting for 2019

With the Federal Reserve taking action last week to increase the Fed fund rates by another quarter of a percent (i.e., .25%), the rate is now 1.75% compared to 1.00% at this same time last year. I expect at least one, if not two, more quarter-percent increases by yearend.

The basis of the Fed’s moves is to bring short-term rates back into their normal historic levels (3.0% to 4.0%). The level of these rates will help temper the potential of an overheating U.S. economy; that could lead to unexpected and unwanted inflation levels.

So, given the Federal Reserve’s action and the anticipation of more moves, what should you plan to budget for investment income in 2019?

First, short-term rates will hover between 2.50% to 3.0% by the end of 2019. As a result, a conservative average range to budget should be 2.50%.

Second, bank deposits will lag these increases, but should still average between 1.0% to 2.0%.

Third, short-term Treasuries will move more aggressively in anticipation of more increases by the Fed. As a result, 30- to 90-day Treasures will likely predominate as investments for public and higher Ed entities.

Please note, your budget line for 2019 should reflect an increase of investment income by 25% to 50% or more if you are proactively managing your cash as an interest-earning asset.

At three+one, our sole mission is to help public entities and higher Ed institutions identify all cash as an asset. We can provide the time horizon and marketplace data to share with their financial institutions to achieve the highest rate of interest earnings on their cash. These entities can use the extra income to lower taxes or help alleviate budget constraints.

As I emphasize almost every week, your cash has value and it is only increasing with every rise in short-term rates. After all, it’s your taxpayers’, students’ or ratepayers’ money you’re dealing with. So let’s make the most of it in 2019!