Manage cash funds
Since cities need cash on hand for essential services, managing cash operations becomes crucial. Cities should slow the net flow of cash out the door, which can be accomplished in a variety of ways: negotiating vendor payments, reducing material and contractors’ costs, and re-balancing investment allocations to maximize liquidity.
ASSESSMENT
Some questions to guide your thinking
- Which costs can be temporarily eliminated, delayed, or reduced?
- Which budget line items and funds can support overall liquidity in a responsible way?
Reading
Considering a one-time interfund transfer
Government Finance Officers Association (GFOA) 1 minute
During a crisis, a one-time interfund transfer can mitigate a liquidity shortfall but needs to be appropriately justified.
- Relevant information is on page 13.
Reading
Identifying budget line items with consistent surpluses
Government Finance Officers Association (GFOA) 3 minutes
Identifying budget items with a consistent surplus can help leaders identify potential sources of liquidity for the crisis. Each line item should be studied to understand the root causes of the consistent surpluses and to decide whether that line item can be temporarily reallocated.
- Relevant information is on page 12.
Resource
Creating a special revenue fund
Municipal Research and Services Center (MRSC)
Whatcom County, WA created a COVID-19 special revenue fund through an ordinance that authorized an interfund loan from a utility fund to be repaid within 18 months in part through a FEMA reimbursement.
Reading
Considering risky near-term treatments to balance the budget
Government Finance Officers Association (GFOA) 30 minutes
During a crisis a local government will inevitably consider risky moves to manage its finances. This guide details a range of near-term techniques that are classified as either “cautionary,” “use extreme caution,” or “inadvisable.”
- Local governments should go for the proverbial “low-hanging fruit” before considering these riskier moves.
- Pages 3-5 detail a framework to evaluate near-term treatments.
Reading
Using safe near-term treatments to balance the budget
Government Finance Officers Association (GFOA) 30 minutes
In a crisis, what are the least-risky treatments or "low-hanging fruit" for managing finances? This guide details six techniques and describes how to set up a management system for them.
- Leadership is crucial toward achieving a culture of frugality.
- See page 10 for a summary of the six techniques with examples that include controlling personnel costs, pooling resources, and enhancing revenues.
Reading
Negotiating payment timelines with vendors
Government Finance Officers Association (GFOA) 3 minutes
In a crunch, city leaders may be able to negotiate payment timelines with vendors, which can create more favorable cash flows. (Essential vendors may not be able to negotiate payment deferrals.)
- Relevant information is on page 12.
Reading
Considering a one-time interfund transfer
During a crisis, a one-time interfund transfer can mitigate a liquidity shortfall …
Reading
Identifying budget line items with consistent surpluses
Identifying budget items with a consistent surplus can help leaders identify …
Resource
Creating a special revenue fund
Whatcom County, WA created a COVID-19 special revenue fund through an ordinance that…
Reading
Considering risky near-term treatments to balance the budget
During a crisis a local government will inevitably consider risky moves to manage …
Reading
Using safe near-term treatments to balance the budget
In a crisis, what are the least-risky treatments or "low-hanging fruit" for managing…
Reading
Negotiating payment timelines with vendors
In a crunch, city leaders may be able to negotiate payment timelines with vendors, …