The current marketplace is causing everyone to ask a lot of questions, but there are few definitive answers unless your entity is armed with data. A comprehensive liquidity analysis by cashvest® provides essential short- & long-term benefits to your entity. Here are 5 key benefits we are talking about today!
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.
cashvest® by three+one® has developed a comprehensive 6-step plan to navigate a changed marketplace since COVID. We’ve previously shared the Steps 1 through 3. In Step 4 it’s time to talk about how to leverage the power of your cash to make your financial institutions work for you. Remember, someone is always willing to pay you for your cash..
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
-Warnick rate indicator®
-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:
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
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
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
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!
Pathway to Recovery® Series
Sometimes, You Have to Reevaluate Your Baskets
We all know the old adage cautioning us not to put all of our eggs in one basket. That saying has survived all these years because it imparts a great deal of financial wisdom in just a few brief words. We can all appreciate that simple logic, yet there still may be times when we become a bit too comfortable or complacent with the assortment of baskets that are available to us.
If you serve as the CFO of a county, town, city, public education institution, or public authority, then you are responsible for a lot of “eggs.” In order to protect and effectively manage the assets that are in your care, you need to have at your disposal a diverse and strategic selection of “baskets” in which to deposit the funds for which you are responsible.
Though protection of principal is certainly the primary goal, earning the highest-available interest on those dollars is also a very important consideration. One size definitely does NOT fit all when it comes to banks, money-market accounts, CDs, municipal pools. and the range of interest rates they offer on any given day. The most successful public sector CFOs are being proactive by seeking out the most advantageous interest rates for the funds in their care. That can mean earning an additional 25 or 50 basis points on their available cash. Higher interest earnings directly equate to increased revenues for your public institution.
As municipalities struggle to deal with new economic challenges, we are seeing more and more public-sector CFOs being asked to find additional non-tax revenue streams. One way to do that may be to add more banking options and more investment choices to your portfolio. That simple strategy will provide you with two direct benefits: first, it adds more baskets in which to diversify (and thus safeguard) your eggs. And second, having more baskets to choose from will give you a wider variety of options when selecting the one that offers the highest-possible return for the specific timeline that you expect to have those funds on deposit.
You may also be aware that, in some states, financial-oversight agencies are looking more closely at whether the municipalities under their jurisdiction are being too passive when it comes to cash management. Even in this low-rate interest environment, some CFOs and their legislative boards are being criticized for not proactively soliciting interest rate quotes in order to maximize the value of their cash. It’s no longer good enough to just park most of your cash in a money-market account or pool and then stop looking for other (perhaps better) options. Public entities are also being required to prepare cash-flow forecasts in order to determine the optimum amount of funds that they have available for investment right now as well as in future months.
Having access to precise liquidity data allows CFOs to know how much total cash they have on deposit. By using forecasting models, they can also determine when that cash will be needed. This creates a clear window of opportunity that can be used to maximize the interest earnings on that cash, and to deposit it over the longest possible timeline. Reliable forecasting opens up the possibility of using 6-month, 12-month, or even 18-month fixed-rate CDs and US Treasuries to lock in higher earnings for longer time frames. In this era of extreme scrutiny of all taxpayer-funded organizations and government agencies, employing proactive cash-management techniques and liquidity-analysis practices is simply good policy.
We already know not to put all of our eggs in one basket. Now we have reliable, accurate fintech tools to help us evaluate all of the available baskets, and to then select the ones that best serve our particular public entity’s needs.
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.