Return to $ender

Return to $ender

Pathway to Recovery® Series
Return to $ender

No state or local official wants to send any of their CARES Act money back to the federal government, but they must act quickly or those funds could soon be marked “Return to Sender.” The rules for using the money are pretty straightforward: (1) the expenses must have been necessary to meet immediate needsrelated to the COVID-19 outbreak; (2) the expenditures should not have been included in the adopted 2020 municipal budget (with the exception of payroll expenses); and (3) the expenses must have been incurred during the period of March 1, 2020 through December 30, 2020.

Given all of the financial challenges presently facing states and local governments, returning millions of dollars in unused Coronavirus Relief Fund (CRF) money back to Washington, D.C. seems like blasphemy. I suspect that state and local officials may be trying to find “creative” ways to use their allocations of the $150 billion CRF funds rather than being forced to return any unused dollars. But unless Congress amends the CRF guidelines, these municipalities have until December 30th of this year to spend that money. Stockpiling of goods to be used beyond the end of this year is not permitted, nor is paying for services that extend past December 30th. The money must be spent in strict accordance with the law because ineligible expenditures will almost certainly be identified during future audits and those moneys could be “recouped” by the feds or be subject to a claw-back.

Clearly, officials are struggling with COVID-related revenue shortfalls and ever-increasing operating expenses. Many of them are eliminating vacant positions from their 2021 budgets and considering layoffs which will have a negative impact on public services. As of mid-October, no one knows if there will be another round of coronavirus-related financial aid approved by Congress, nor can we predict whether the rules adopted under the CARES Act will be relaxed prior to December 30th. Furthermore, we have no way of knowing whether the deadline will be extended into 2021.

According to a U.S. Treasury report, many of the states and local governments with populations of more than 500,000 people that did receive CRF money still have large unspent portions of their allocations tucked safely in their coffers. I can understand why states and large municipalities would want to hang onto their CRF money. They have been hearing political pundits and elected officials say that the December 30th deadline for the CARES Act might be extended, or that the CRF rules might be altered to allow the funds to be used to fill revenue shortfalls. But for now, the most prudent pathway to recovery for state and local governments that received direct CRF funding is to comply with the rules as they are currently written and as they are administered by the U.S. Treasury and the Office of the Inspector General (OIG).

We recently received some very good news, however. The U.S. Treasury issued updated guidance on September 2nd, and the OIG followed up on September 21st, saying that 100% of the salaries and benefit costs of every “public safety” employee will now be eligible for CRF funding. This means that states and local governments will be able to use CRF funds to pay for TEN FULL MONTHS of the salaries and benefits of every police officer on their payroll. This includes the salaries of all State Police officers, County Sheriffs, deputies, firefighters, EMS responders, corrections officers, jail guards, and dispatchers. Local governments will no longer have to certify that these public safety employees’ work schedules were “substantially dedicated” to addressing COVID-19.

The same thing goes for “public health” employees. The list of medical and health services includes all municipal employees of any public health department that is “directly engaged in matters related to public health” including all supervisory personnel. Similar to public safety employees, the OIG is assuming that every single public health employee will spend 100% of his/her worktime between March 1st and December 30th being “substantially dedicated” to addressing the pandemic.  The U.S. Treasury should be commended for this lenient interpretation of the CARES Act because it opens up the door for billions of CRF dollars to remain in the hands of local governments rather than being sent back to Washington, D.C. at the end of this year.

What does this mean? It means that states that received CRF funding should immediately pass the unused remainder of that money down to lower levels of government to be used to offset the salaries of local police, fire, and public health employees.

Take New York State for example. The state received $5.1 billion in CRF funding in April, but as of late August, they had only spent about $2.2 billion of that money. Keep in mind that there are 52 counties, 931 towns, 61 cities, and 534 villages in New York State that did not receive one cent of direct federal CARES Act aid! Imagine how many police officers, deputy sheriffs, and paid firefighters work for those hundreds of municipalities. New York State should quickly implement a plan asking every municipality within the state’s boundaries to submit a voucher showing the total of all salaries and benefits of their public safety and public health employees for the period of March 1st through December 30th. The state should then use its remaining CRF funds to reimburse local governments for those expenses. If the vouchers submitted exceed the total amount of CRF money still available, then distributions could be prorated whereby every municipality receives, for example, 80% or 90% of the amount claimed.

By adopting this model, local governments would get some badly needed breathing room; taxpayers would see direct relief and continuity of public services; and, best of all, states would not have to write huge checks back to the U.S. Treasury that are marked “Return to Sender.”

The author served for a total of 38 years in local government at the village, town, and county levels, including 18 years as a county Budget Officer and eight years as a Disaster Recovery Coordinator. As Director of Public Partnerships for three+one®, he can be reached at 585-484-0311 or by email at:


Public Servants to the Rescue

Public Servants to the Rescue

Pathway to Recovery® Series
Public Servants to the Rescue

We need to encourage more young people to enter public service because, when the chips are really down, it is always public servants who come to the rescue.

From the NYFD’s first responders on 9/11, to those brave men and women battling wildfires in the western states right now, to the FEMA hurricane relief efforts in the south, it is always public servants who have risen to the occasion when duty called. But all too often, public servants have taken a bad rap. In an oversimplification of a complex set of problems facing our communities, public servants often unfairly take the blame for high property taxes. But when you really need help, who do you call first? Public servants, without fail, in every single case.

If you ever have to make a desperate 9-1-1 call because of an emergency, a public employee will be on duty ready to dispatch the assistance you need. And, when you hear that siren signaling that help is on the way, you’re likely to bless the firefighters, police, or EMS responders that arrive in your hour of most desperate need. They are public servants, and they are funded by taxpayer dollars.

Of course, we rely on public employees for more than just emergency services. They also educate our children, plow our roads, serve in the armed forces, deliver much-needed (now more than ever) public health and human services, staff back-offices providing clerical services, and keep detailed financial records of how every tax dollar gets spent.

State and local governments have never fully recovered from the effects of the recession of 2008-2009, and they now face the additional challenges caused by COVID-19. Public sector payrolls have been steadily reduced over the past ten years, and vacancies can be hard to fill. New positions are almost impossible to get approved, despite a growing population and an ever-increasing demand for public services.

The steady but lackluster economic expansion of 2010 through 2019 brought no real relief to municipal budgets, and thus did not translate into job creation (or, more appropriately, job restoration) in the public sector. This has resulted in all those in public service being asked to “do more with less” in order to maintain and deliver critical public services.

If you have already dedicated yourself to a career in public service, we thank you. As Jacob Lew, former Secretary of the U.S. Treasury said: “There is no higher calling in terms of a career than public service, which is a chance to make a difference in people’s lives and improve the world.” If we hope to attract the best and brightest of the next generation to public service, then we must help to transform the nation’s dialogue about people serving in government.

All of us should be encouraging the next generation to serve their community and to do their part to make the world a better place. It is also important that we lead by example when it comes to things like integrity, honor, and the value of being transparent and honest with those we serve.  We have an obligation to show that public service is an honorable and noble profession, and we should mentor new hires in the “best practices” that we have developed and learned over the years. The taxpayers of the future deserve nothing less.

The overwhelming majority of public servants are dedicated, hard-working, trustworthy individuals who decided somewhere along the way to commit their lives to making the world a better place, while still managing to earn enough money to pay their bills, raise a family, and contribute to their community. And when the chips are really, REALLY down—as they are right now—it turns out that public servants are the people you count on the most to save the day.

The author served for a total of 38 years in local government at the village, town, and county levels, including 18 years as a county Budget Officer and eight years as a Disaster Recovery Coordinator. As Director of Public Partnerships for three+one®, he can be reached at 585-484-0311 or by email at:


You Are Going to Need a Better Crystal Ball

You Are Going to Need a Better Crystal Ball

Pathway to Recovery® Series
A Better Crystal Ball

If you are a public sector budget officer, then this year you are going to need a better crystal ball. We can help with that.

I can appreciate the anxiety that municipal budget officers are feeling right now. Even in the best of times, putting together a spending plan for your organization that incorporates and addresses all of the “what ifs” that can happen between now and December 31st of the following year can be a daunting task. And the autumn of 2020 is definitely NOT the best of times.

I served as a budget officer for a small-to-medium size county in upstate New York for 18 years, and I had to deal with my share of challenges. In addition to the standard annual struggle to hold the line on property taxes while still providing much-needed services to the public, my rural community was still coming back from the economic impacts of the Great Recession when we were hit with historic flooding that swept through our scenic valley in 2011. Businesses closed, sales tax revenues fell, and some houses remained vacant and abandoned.

cashvest® by three+one® is like using a crystal ball for your entity’s finances

Covid-19 has presented us with challenges that none of us have ever seen before. There are many unanswered questions swirling about which compound the difficulty of making revenue projections for the coming year. Will Congress approve more federal aid to states and local governments? Will every municipality receive a fair and direct share of that desperately needed aid, regardless of the size of their population? Will the coronavirus be contained over the next two or three quarters, or will there be a second wave that could result in yet another blow to businesses struggling to survive?

Here at three+one®, we provide our clients with liquidity data and cash-flow projections that can help bring the financial picture into a sharper focus. We do this by equipping our clients with a broad range of financial technology tools. These can include our patented cashvest® liquidity monitoring and cash management system; access to our MC Forecast® cash-flow modeling tool which provides accurate, reliable data about what your municipality’s or higher-Ed institution’s cash position will be 6, 12, and even 18 months from now; and the option of utilizing our innovative rfpPrep® software that makes it easier than ever before to compare banking services and procure the best-performing and lowest-cost options that fit your particular needs.

The timing is perfect right now because besides providing you with a much clearer view of what your financial picture will look like over the next several quarters, three+one will also help you to immediately begin achieving real, significant financial benefits that can be incorporated into your 2021 budget. These include:

  • Increased interest earnings by helping you put every available dollar to work—and extending the timeline that you can lock in the interest.
  • Savings on bank fees by helping you to consolidate under-utilized accounts and embrace new banking technology measures that can help combat fraud.
  • Our liquidity data can help reduce the number of times you have to borrow for short-term cash-flow needs; that means lower debt service.
  • Higher credit ratings based upon the extensive liquidity data we provide can result in lower interest rates when you do have to borrow money.

Why not give three+one® a call? Our team of experienced financial professionals will be happy to help you polish up that crystal ball of yours and assist you in getting a more accurate picture of what the future holds.

The author served for a total of 38 years in local government at the village, town, and county levels, including 18 years as a county Budget Officer and eight years as a Disaster Recovery Coordinator. As Director of Public Partnerships for three+one®, he can be reached at 585-484-0311 or by email at:


The 20% Rule

The 20% Rule

Pathway to Recovery® Series
The 20% Rule

“Even if only 20% of the bones in your body were broken, you would still feel 100% miserable.”

Sometimes, 20% is a lot. Like when you are in pain. It can be a significant number in other situations as well. Imagine if 20% of the fuel in your car’s gas tank was mostly water. Or how you would feel if 20% of the food you ate for dinner was tainted.

Likewise, our economy cannot fully recover from COVID-19 if a substantial 20% segment of our nation’s economic engines are stalled and sputtering. That’s the percentage of our nation’s overall economic activity that is generated by state and local governments. The federal government is responsible for another 20%, and the remaining 60% of GDP is created by the private sector.

three+one economic pathway to recovery The total annual Gross Domestic Product of the U.S. is about $20 trillion.  That figure includes every segment of the economy—private industry, manufacturing, energy, government—from the hot dog vendor on the curb, to the boardrooms of the biggest corporations, to your local library. To put things into perspective, the largest U.S. manufacturing business is the automobile industry. The total economic output of the entire American vehicle production industry—including every car and truck manufacturer, and every parts supplier—is less than $1 trillion. That’s about 3% of the total U.S. economy.

By contrast, spending by city and county governments on goods and services equals just over $2 trillion per year (about 10% of the nation’s total GDP). And state governments add another $2 trillion per year (an additional 10%). Which means that state and local governments are responsible for a remarkable 20% of our nation’s total economic activity! The federal government spends about the same amount as state and local governments do combined, so the total impact of public-sector spending on necessary goods and services equates to fully 40% of our country’s GDP.

This massive government spending isn’t wasteful—it is vital to our economy and to our quality of life. Some examples might include building and maintaining roads and bridges so that interstate commerce can take place; operating hospitals and public health services to keep our families healthy; providing police and law enforcement to keep our communities safe; creating school systems to educate our children; operating colleges and universities to prepare the leaders of the next generation.  The list could go on and on to include fire protection in our communities; clean drinking water; parks and recreation; courts and the legal system; and human-services programs. You get the idea.

Government services—and government spending—is the enormous mainsail that propels America’s “ship of state” forward. Its huge 40% share is by far the biggest and most influential and impactful segment of our national economy, accounting for more than $9 trillion of our $20 trillion GDP. State and local governments combined account for half of that 40% share, so they play a major role in determining whether the economy is healthy. Or sick.

Which brings us back to why the federal government will be shooting itself in the foot if Congress stands by and watches as state and local governments struggle to deal with the revenue shortfalls brought about by COVID-19. These temporary revenue shortfalls are not anyone’s fault. They are not based on political party affiliation.  The coronavirus did this to all of us! Counties and cities didn’t bring this crisis upon themselves through wasteful spending or careless fiduciary policies. Quite the opposite. Local governments are, by and large, cost efficient, frugal, and the most responsible providers of critically important public services. After all, the people serving in those municipalities pay taxes too!

We all want to see the federal government act responsibly with our tax dollars. But providing direct aid to state and local governments is not frivolous. On the contrary, it is far and away the best pathway forward for our nation to make it through this economic crisis relatively unscathed. As I noted above, state and local governments make up 20% of our GDP. If they become crippled by budget crises, then they will have no choice but to eliminate services and cut spending. That will lead to higher unemployment, even lower tax revenues, and a downward spiral that will impact every segment of the American economy. It could take years, and even decades, to pull out of that kind of a tailspin.

three+one liquidity managementThe issues may be complicated, but the solution is clear. The best way to keep COVID-19 from derailing the entire economy of the United States of America is for the federal government to use its massive financial might to keep state and local governments afloat.

After all, even if only 20% of your bones are broken, you still feel 100% miserable.

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 and 9 years as a Disaster Recovery Coordinator.  As Director of Public Partnerships for three+one, he can be reached at 585-484-0311 or by email at:

What Now?

What Now?

It’s confusing…will schools reopen for in-person learning, be online, or opt for a hybrid model?  No matter how much planning can or has been done over the summer, the outcome of “what’s around the corner?” has everyone wondering. This is when the patience of Job is going to really be tested. In addition, the impact of enrollment for higher Ed institutions is yet to be determined so late in the registration cycle. What all institutions are experiencing is unprecedented, and the impact will not only influence the 2020/2021 school year but many years in the future.

As students and parents determine the value of on-campus/in-person learning vs. online classes, the financial implications have rippling effects. While most think online learning provides institutions with a higher profit margin, the loss of room and board, facility rental, and bookstore revenue is significant, becoming major challenges now and in the future. This does not just apply to four-year institutions and graduate schools, but also to community colleges.

It’s interesting that the percentage of students that prefer in-person learning has not changed as a result of COVID-19; it remains steady at over 70%. While most students are open to some level of online learning, there is naturally a strong desire to socially interact with others. They see that as a key component of campus life. This is why most higher Ed institutions are pressing for a hybrid model, combining both in-person and online classes (if not prohibited by state guidelines). It should also be noted that once a decision is made, unsafe student behavior and other events may cause institutions to alter their plans. Over the past week alone, we’ve already seen a number of schools close their campuses due to a spike in positive coronavirus cases.

As higher Ed administrators look to understand all the implications, three+one®’s MC forecast model® is becoming a very valuable tool for them in determining short-term liquidity levels and needs. While historical data is used to determine future patterns, potential implications of the “unexpected or anomalies” can be incorporated to determine possible scenarios over the coming months. This information can be found to be extremely useful in evaluating the impact on cash reserve funds or the need to tap into lending facilities or potential emergency endowment funds.

COVID-19 poses challenges for every single public entity and higher Ed institution. Just know that three+one® is by your side to help you answer the question “What now?”

Grab an Oar and Pull

Grab an Oar and Pull

Pathway to Recovery® Series
Because we’re all in the same boat now.

Rowing a boat takes teamwork, especially during a storm. It requires people working together towards a common goal. If half of the rowers are determined to head north, while the other half are just as resolved to head south, nothing gets accomplished—no forward progress is made, and the boat will never reach the safe haven of land.  

COVID-19 is very likely to be the storm of our lifetime. It’s too early to say for sure, but there is some chance that history will describe it as our “Storm of the Century”.  Either way, it is a tempest that is rocking the very foundations of our economy and our society. We are all sitting together in a lifeboat now, heaving and swaying as the storm rages around us. And we all have a responsibility to grab an oar and do our part to help our neighbors and ourselves if we’re going to make it safely to shore. We have much to be thankful for—our “ship” is sound and our backs are strong—and we have a common goal.

We must recognize that there are a huge number of heroes who are already pulling with all their might on their oars, and trying their very best to keep us alive. They are our nation’s healthcare workers, medical professionals, public health officials, and emergency responders. They are straining and struggling, putting their very lives on the line for us and our families, day in and day out.  Their hands are blistered and their muscles are weary, and it is our duty and responsibility to man our own oars to try to take some of the burden off their shoulders.

three+one liquidity analysisSome oars are more powerful than others and the rowers who hold them can make enormous contributions to the success of our journey. Members of Congress must put aside their political differences and pull together as one to help us make it safely through this storm. We need them to recognize that when one side of the boat rows in one direction and the other side rows in the opposite direction, the ship is dead in the water.

One thing that everyone should be able to agree on is that local governments are going to need substantial financial assistance during this pandemic if we are to have any chance at all of a really full recovery within a reasonable time period.  

As a former disaster recovery coordinator for a county in upstate New York, I saw firsthand just how critical federal funding is to a community that is struggling to get back on its feet in the aftermath of a natural disaster. With significant federal help (in our case, almost $100 million), it still took my community almost 10 years to recover from a devastating flood. WITHOUT any federal assistance??  We would still be running county offices from rented garages and using second-hand folding tables as desks. We would also be driving our local government deeper and deeper into debt as we tried to deliver necessary services such as law enforcement, road and bridge repairs, and public health. And trying to do all that with a taxpayer base that was already tapped out. Our boat would be leaking, foundering, and in serious danger of actually sinking.

We at three+one® are also doing our part to pull on the oars.  We help local governments make the most of what they have, so they can collect that much less from the taxpayers. We provide data and financial forecasts on the funds that a county or municipality has on deposit. That information gives them the opportunity to maximize the value of that cash.  For example, New York’s Orange County has been using our liquidity analysis services since 2018. Last year they earned $2.0 million MORE than similar-sized counties! That represents $2.0 million of public services and infrastructure improvements that did not have to be paid for by their taxpayers.  Another great example is Lehigh County, Pennsylvania.  They earned about $489,000 annually in interest before partnering with three+one® in 2017.  Last year Lehigh County earned more than $2.0 million in interest on their available cash – despite the fact that interest rates have actually gone down!

Each and every one of us can make our own contributions to help our communities and our nation make their way through this disaster. Though we must certainly address the public health crisis of COVID-19, we must also address the financial aftermaths that this pandemic will surely have on our society over the next several years. It is critically important that local governments receive direct federal funding now—before it’s too late—if necessary public services are to be delivered without interruption.

After all, we are all in this same boat together. It will take the willingness of each and every one of us to grab ahold of an oar, plant our feet firmly on the deck, and then do our best to pull in the same direction as the person in front of us and the person behind us. Our journey will be challenging, full of surprises, and potentially dangerous. But in the end, if we can all just keep the distant shoreline in sight and pull together towards a common goal, we can and will make it through this storm.

The team at three+one® is proud to partner with NACo as we jointly assist the nation’s county governments during these challenging times. To learn more about NACo and how it works with three+one® to develop financially sound solutions, contact Kyle Cline at or by phone at (317) 502-7415).