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.
Last week the Federal Reserve stated that there will be no more short-term rate hikes for the remainder of 2019. Their outlook seems to be influenced by concerns of slower economic growth both in the U.S. and worldwide.
While many may view the Federal Reserve’s recent announcement as a concern, we view it as a major opportunity. CashVest® by threeplusone® is specifically designed to transform stagnant cash holdings into a vibrant revenue- generating source for your entity.
This move triggers a major strategy shift around the value of cash. Over the last two years, those who have invested cash have kept to a 30-90 day rollover strategy.
This is now the time to extend your cash through the use of cashVest® by threeplusone® and its powerful time-horizon liquidity data. Through our proprietary liquidity analysis, we can demonstrate the actual need for cash while balancing the levels of cash needs over a 5-year period. This allows one to maximize the value of all cash, while allowing your financial institutions and advisors to invest your cash over an extended period of time, allowing the ability to preserve 2.25%+ on your cash.
Cash has value. The knowledge and power to accurately identify when you most need cash allows one to capture and preserve interest earning through the remainder of 2019 and into 2020.
You have a fiduciary obligation to manage the cash for those you serve. It’s time to preserve your cash’s value in the marketplace for a longer period of time, especially if you have the time-horizon data to provide the confidence to you and your financial institutions.
Allow your public sector organization or higherEd institution to find out what so many others across the country have learned: CashVest® by threeplusone® will provide new revenue quickly and directly by increasing the yield you receive from your existing cash.
It’s Wednesday. You feel tired, stressed, and you have a sales team waiting outside your door to pitch the latest product they have to offer. As you meet, you see their lips move but you’re not listening because it is a product pitch not a solution to a problem or stress in the office.
In today’s public and higher Ed marketplace, the strains on a finance office continue to grow with less resources to alleviate the stress. Instead of just another product sale, the focus by those who serve you should be solutions-based that reduce pain points while adding value to your organization and the bottom line.
There are three steps to providing a solution to address pain:
1.) Identifying the stress. This means taking the time to listen and understand the pain points.
2.) Formulating and implementing a tailored solution.
3.) Monitoring the success of solution(s) to make certain the pain point has been alleviated.
Too many times pain points are overlooked, and a product is just thrown against the wall to see what sticks, only to create another stressor and not a solution.
At threeplusone®our mission is to understand the needs and vulnerabilities of a public or higherEd entity and provide a solution to resolve any pain points. We listen, identify, and implement solutions that remove the source of stress to provide ease and comfort. We are solely a solution-based provider with no self-serving products to sell. Our interests dovetail with yours. Through our data platforms, threeplusone®can see what others overlook and then craft unique solutions, resulting in new sources of revenue and less amounts of work and stress.
Products have a place in the public and higher Ed marketplace, but only after they have been identified as a solution to the real problem.
As one looks through the eyes of a taxpayer, how do you think they would react to any one of the following responses from a public official when asking about how the entity manages their public cash?
1.) Why bother? Cash has no value.
2.) I don’t have the time, given all our other priorities.
3.) All our money is already invested in our bank.
4.) I don’t want to risk not having cash when I need it.
5.) I don’t currently have the staff or resources to look into this.
6.) It’s probably not going to be worth the effort.
7.) My board won’t approve it.
8.) It’s only going to bring in another $50K to$100K. That’s not enough to really impact my bottom line.
9.) All our cash is spread among so many banks and bank accounts, it would be a giant hassle.
10.) I don’t want to upset my bank or bankers.
Just imagine if those you serve heard those responses as they open their tax bill or tuition bill.
Given the financial stresses and tight margins public and higher Ed institutions experience, the need to have a single asset sitting dormant provides little cover when asked this hard question: “Why didn’t you?”
cashVest® by threeplusone® is our proprietary liquidity analysis service that helps public entities take unrecognized and underappreciated cash and turn it into a revenue-generating asset.
Cash has real value in today’s marketplace—on average 2.25%. That can add up to real income in the six- or even seven-figure levels.
As a treasurer of a public authority and a trustee to a university, I truly understand the stresses on a finance staff. One more request can mean putting something else aside. However, you do not need to do this alone. The threeplusone® team can analyze all your cash, develop time-horizon patterns on it, and work alongside you in having a conversation with your bank(s). The end result: higher earnings on your cash.
Regarding private higher Ed institutions, our liquidity analysis will substantiate your Financial Accounting Standards Board (FASB) liquidity-disclosure requirement in 2019.
Join the ranks of our clients whose most common question after using cashVest® by threeplusone® for the first time is: “Why didn’t I do this sooner?”
Debt financing is a necessary tool for all public entities when they are faced with major capital projects. School districts purchase new fleets of buses, counties manage infrastructure projects that span multiple years, and cities construct public spaces meant to attract residents and tourists. Though these endeavors carry a large price tag, they also provide worthwhile benefits.
Government entities, having limited sources of revenue, strive to pass balanced budgets each year. Debt financing allows for the opportunity to pursue more ambitious public works by funding the projects over several years.
Moreover, when a public entity borrows for a project, the financial burden is spread across generations of taxpayers. This is more equitable than asking current residents to pick up the entire tab for public parks and buildings that will be utilized well into the future.
If you’re a finance official who is currently navigating the debt-financing process, it is imperative that you know your duties don’t end once the funds are secured. Your cash is more valuable today than at any point in the past decade and these proceeds can significantly help reduce your initial borrowing costs.
Collaborating with project managers to develop an accurate draw schedule will help you maximize your earnings without sacrificing liquidity. Additionally, the IRS has arbitrage laws that limit the amount of interest certain entities can earn on borrowed proceeds. Don’t shy away from working to offset borrowing costs because arbitrage calculations seem intimidating. Rather, talk to your municipal advisors and work with vendors who specialize in these areas.
Finance officials will be called on to lead debt-financing efforts when their entity is considering a large project outside the scope of their routine activities, or if the state mandates a specific capital project.
Public entities that work with threeplusone® to receive time-horizon data feel confident that their operating and reserve funds are always earning the highest yield possible without sacrificing safety or liquidity. We encourage our clients to be proactive in managing their bond proceeds with a similar level of detail in order to offset borrowing costs to the fullest extent possible.