Higher Credit Ratings = Lower Borrowing Costs

by William Cherry | Jan 19, 2021 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, News, Pathway to Recovery, Predictions, Time Horizon

Higher Credit Ratings = Lower Borrowing Costs

Pathway to Recovery® Series

If your municipality or university is considering refinancing existing debt or borrowing money during 2021, then you will want the bond-rating agencies to recognize your strengths. One sure way to do that is for you to have a precise picture of your organization’s overall liquidity.

Having a cash flow report on hand as you begin the borrowing process is not the same thing as bringing an accurate, up-to-date liquidity analysis.

Cash flow measures the surface, the “ups and downs” and “ins and outs” of daily transactions. A liquidity analysis does much more, measuring the true depths of your entity’s overall financial resources.  Imagine “cash flow” as the waves that roll and swell on the topmost surface of the ocean. The waves may have peaks and valleys, but they do not provide you with a picture of what lies beneath. Now think of “liquidity” as those ocean trenches that descend fathoms deep, all the way to the bottom.  The deeper your “ocean,” the stronger your finances.  The bond-rating agencies recognize that having a precise picture of a public entity’s liquidity can help them determine how much risk to assign to your borrowing.  The stronger your liquidity, the lower the risk and, ultimately, the lower your debt-service charges.

As a longtime County Treasurer and CFO, I participated over the years in many S&P and Moody’s ratings discussions. I can tell you that having accurate liquidity data at your fingertips can help reduce borrowing costs, and ultimately, save taxpayer’s money.

Allegany County (NY) Treasurer Terri Ross, a good friend and highly respected colleague, recently announced that she saved $1.5 million in interest charges on a recent refinancing, thanks to three+one®’s liquidity data!

Our team here at three+one® stands ready to assist your public entity by providing you with a precise measurement of your liquidity.  We have the expertise, the professional staff, and the latest fintech tools to help you present the strongest possible position to S&P, Moody’s, and Fitch Ratings the next time you issue debt.

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.

Looking Backward Helps Us to Move Forward

by William Cherry | Jan 5, 2021 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, News, Pathway to Recovery, Predictions, Time Horizon

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.

Every Captain Needs a Lookout

by William Cherry | Dec 8, 2020 | Banking Relationship, Banking Trends, Budgets, Cash Management Practices, Data & Technology, Fintech, Liquidity Analysis, News, Pathway to Recovery, Predictions, Time Horizon

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.

Our 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.