The Power of Cash

The Power of Cash

Imagine the power that cash holds in today’s marketplace. With short-term rates still hovering above 2.0%, the income generated on idle cash can have a major impact on one’s entity and those they serve 

As we enter the budget season mid-year or at year end, the challenge of stretching tax dollars often leads to less resources or decisions of where to cut, especially when tax caps can easily be outweighed by insurance premium increases, pension obligations, cost of living increases, or other essential services. 

Too many times the frame of mind in forming a budget comes down to cost controls, rather than revenue-producing opportunities. While this may be understandable at one level, it is not a mind-set that will move your entity forward.  At best, you will be in constant ‘treading water’ mode.  

A great example is the value of one’s cash. So many see the need to have idle cash available for ‘just in case’ circumstances rather than viewing cash as an asset to generate additional income and opportunities. 

At three+one® we can help a public entity find new sources of revenue through all levels of cash. In 2019, three+one®’s flagship service cashVest® will provide proprietary liquidity analysis and data that will result in over $100 million of new revenue to communities that will lead to:

  • Closing a budget gap
  • Preventing additional tax increases
  • Providing additional teachers, police, firefighters & EMTs 
  • Technology upgrades
  • New community services 
  • After-school programs
  • Student field trips 
  • Arts & Cultural community events 
  • New musical instruments 
  • Enhanced sports Programs 
  • Continuing Education & Online Learning

Obviously, the list can go on.  Simply put, the power of cash can have a wonderful impact on one’s budget today and in the future. The time is now to have a conversation with the team at three+one® about our cashVest® liquidity analysis service. The result could make all the difference between stagnation and growth in your 2019 and 2020 budgets. 

The Test of Liquidity

The Test of Liquidity

With one natural disaster after another, this year has tested communities across the country. From wildfires out west to flooding in the midwest and hurricanes in the southeast, the level and intensity of these disasters have put strains on us all.

The ability to cope with such disasters is as serious as the aftermath of cleaning up and moving on. For public entities and higher Ed institutions, being a leader in dealing with and bringing back normalcy is paramount. But doing so poses many challenges.

The Test of Liquidity

After any momentous emergency, the challenges are staggering. Local organizations strive to partner with state and federal agencies to provide relief and support. The altruistic efforts quickly become financially draining as the paperwork mounts up, quick reimbursements for claims and expenses get bogged down in a bureaucratic morass—and then the finger pointing starts.

Being ready for “just-in-case” emergencies and natural disasters is essential when it comes to financial preparedness, especially when you are not pressed to do so.

Here are five steps a public entity and higher Ed institution can take to be financially prepared in case of an unexpected disaster:

1.) In preparing a monthly, quarterly, and annual cashflow statement, set aside funds for a “just-in-case” scenarios, those least expected circumstances. Prepare a liquidity plan for when—and how—to get your hands on cash in a hurry.

2.) Build a cushion into your budget that will continue to grow each year. While these funds increase in value, invest the cash with a time horizon around the season of the year when a potential disaster is most likely to occur in your region.

3.) Prepare a plan with your financial institutions and share it with them early on. Your entity needs to have easy access to cash and be able to borrow if the need is greater than expected. These sudden needs could be for emergency services, overtime payroll, vendor payments for supplies, temporary housing, cash for incidentals, etc.

4.) Keep your cash working and plan accordingly. All too often, cash is left on the sidelines for “just-in-case” circumstances, sitting there and earning nothing. Such a lost opportunity will mean less money that can be built up as your emergency backup.

5.) If no emergency occurs, great. But don’t let your guard down. As you see the level of cash you’d set aside build, it’s tempting to use it for other purposes. Bad idea. Your “just-in-case” money should remain sacred and earmarked strictly for emergency purposes.

At threeplusone, we can help your entity be better prepared for natural and human-caused disasters. Our liquidity analyses and modeling algorithms factor in the stress level a public entity or higher Ed institution can withstand. Our systems foresee unexpected cash needs and strains and can prepare entities to handle them well in advance.

The time to plan in making money available for a state of emergency is not during the emergency, but well ahead of it. Take a proactive approach and you’ll eliminate the fear of not having enough available cash and be able to calmly handle any state of disruption.

Taxation, Finance & Budgets

Taxation, Finance & Budgets

A recent commissioned survey* reported that local public entities view taxation, finance, and budgets as their most important and pressing priorities. In simple terms, it all comes down to MONEY. The need to have enough money to meet public services, programs, and infrastructure needs requires levying taxes, managing budgets, and balancing finances.

Taxation, Finance & Budgets

Whatever the case may be, the need to produce and manage cash is a critical function for operating, non-operating, and capital planning.

As I have mentioned in previous blogs, one opportunity available to an entity’s finance department to produce a new source of income is through the proper management of its cash.

With finance as a top priority, the need to maximize the value of all cash should be front and center. Just imagine the dramatic effect a five-, six-, or even seven-figure increase in interest income would have in managing your taxes, finances, and future budgeting.

Let me be direct: threeplusone can help your entity proactively manage your liquidity, leading to tens, hundreds, and even millions of dollars in new interest income. And leading to lower taxes, stronger finances, and a simpler budgeting process.

If taxation, finance, and budgeting are top priorities for you, now is the time to proactively manage all your cash—with threeplusone helping ensure your success.

*Route Fifty’s research arm, Government Business Council (GBC), conducted an in-depth study on the priorities of city- and county-level government employees, including a large number of senior staff with collaboration and support from the U.S. Conference of Mayors.