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 …

icon/Link Go to link

Reading

Identifying budget line items with consistent surpluses

Identifying budget items with a consistent surplus can help leaders identify …

icon/Link Go to link

Resource

Creating a special revenue fund

Whatcom County, WA created a COVID-19 special revenue fund through an ordinance that…

icon/Link Go to link

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, …

icon/Link Go to link