1. Cash Management and Capital Planning
Practical Thoughts on Cash Flow Planning and Capital

2. For our Discussion Today:
Cash Management vs. Budget & Capital Planning
Cash Management in General
Cash Flow Planning & Capital Planning Nexus
Pulling it all Together: Practical Application
Please stop me and ask questions.

3. Cash Management vs. Budget & Capital Planning vs. Accounting
Cash Management = Having funds on hand to pay the bills.
The actual outflow and inflow of resources
Budget = The Legal Authority to Spending.
Fulfilling the Legal Requirements
Satisfying the Pre-Audit Standard
Accounting = The appropriate recording of the outflows and inflows.
Appropriately processing transactions
Cash Management vs. Budget & Capital Planning vs. Accounting

4. Government Finance is like a three legged stool.
Accounting
Cash Management
Budget & Capital Planning

5. Cash Management in General
Understanding Your Organizational Spending
How Much Do you spend monthly?
Not All Months are Equal
Knowing the Outstanding Commitments
Foundational to Cash Flow Planning
Cash Management in General VS

6. Cash Management in General
Understanding Your Risk Tolerance.
What is your organizational exposure?
How much “cash” should you keep on hand?
Not Necessarily Fund Balance Policy
Risk Assessment vs. % Basis
Emergencies vs. Contingencies
Cash Management in General VS

7. Cash Flow Planning & Capital Planning Nexus
Ensuring You Have Enough Money in the Bank to Pay the Bills.
Striking a Balance with Liquidity.
Cash Flow Planning & Capital Planning Nexus
Chase Security not Return

8. Cash Flow Planning & Capital Planning Nexus
Have a Capital Plan:
The Three Fundamental Finance Questions
How Much?
What Will It Be Spent On?
When Will you Spend It?
Remember Budget v. Cash Flow
Asset Life Considerations
Cash Flow Planning & Capital Planning Nexus
“If you fail to plan, you are planning to fail.” – Benjamin Franklin

9. Cash Flow Planning & Capital Planning Nexus
Know Your Funding Sources
Debt Funding?
Reimbursement Resolutions & Tracking Costs
Working with The LGC
Know Your Market Access
Know Your Timing
Pay-as-You-Go Funding
Grant Funding
How is Grant Funding Received?
Other Requirements
Cash Flow Planning & Capital Planning Nexus
Maximize the use of your Financial Advisor and your Bond Counsel

10. Cash Flow Planning & Capital Planning Nexus
Know Your Expenditure Expectations
Assess Contracts
Work With the Project Managers
Encumbrance Schedules?
How will progress payments be made?
Will there be retainage?
Will there be large 1x expenses?
The LGC may require you to have bid a project before they will let you issue the debt.
Cash Flow Planning & Capital Planning Nexus
You must communicate with the project managers!

11. Pulling it All Together: Practical Application
The BASE amount you should keep on hand?
Estimated Monthly Operating Expenditures
Estimated Monthly Operating Revenues
Estimated Monthly Debt Services
Applying Your Operational Risk Tolerance
Add Your Estimated Monthly Capital Spend
Estimated Progress Payments
Estimated 1x Items
Estimated Non-Operating Revenues
Applying Your Capital Risk Tolerance
Pulling it All Together: Practical Application

12. Pulling it All Together: Practical Application
Invest the Excess
Using your expenditure Plan to Gauge Maturities
In Accordance with General Statutes
Not All Months are Equal
Apply Your Risk Tolerance
Pulling it All Together: Practical Application
Chase Security not Return

13. Pulling it All Together: Practical Application
If you are using Debt:
Are you reimbursing yourself?
Have your FA Plan an Issuance Calendar
Feasibility Studies
Rate Models
Regulatory Issues
GO Bond Elections
Type of Debt to be Issued
Communicate with the LGC
LGC Calendar
LGC Documents Needed
Issuance Calendar
Type of Issuance to be Done
Pulling it All Together: Practical Application
Maximize the use of your Financial Advisor and your Bond Counsel

14. Closing Thoughts: Other Items
Investment Policy: Have One!
Pooled Cash vs. Funds
May Need an Interfund Loan Policy
Talk to Your Auditors
Know the General Statutes
Debt Policy: Have One!
Talk to your FA
Talk to your Bond Counsel
Capital Policy: Have One!
Closing Thoughts: Other Items
Cash Flow Management is Critical, Don’t Set it and Forget it!

15. Questions?
Thank You!