Thought Leadership Thursday
Helping Local Units of Government
Thought Leadership Thursday Article
I hope this newsletter finds you well and your offices going strong. I know we have all worked hard to be innovative and creative during this unusual year! With that said, I also know that it’s not lost on this audience that COVID-19 has had a direct impact not just on state government, but on local units of government as well. I am hoping to use this Thought Leader Thursday to start the conversation about how State Treasurers can help local governments by sharing some examples of how my team, which includes the Indiana Bond Bank (IBB), has risen to the challenge of helping our locals continue to survive and thrive.
In Indiana, the State’s response to COVID-19 led to an Executive Order that, among other things, extended the deadline by 60 days for individuals and businesses to pay their spring property taxes without penalty. Indiana local governments, from small townships to larger cities and towns, rely on these property tax distributions to help fund their day-to-day operations. As Treasurer of State, I serve as the Chair of the IBB, which exists to create programs that provide financing opportunities, often of the pooled variety, to “qualified entities” of state and local government (QEs). The IBB recognized the potential cash-flow shortfalls that could occur due to the tax deadline extension and was able to offer affordable, short-term financing to QEs across the state in the form of a pooled tax anticipation warrant program, the 2020 Midyear Advance Funding Program. The IBB partnered with my Treasury Team as the purchaser of the notes, to offer, at an all-inclusive rate of 1.69%, thirty-three (33) QEs over $81 million in cash-flow financing. One of those entities was the City of Evansville, whose Mayor, in regards to this program, said, “In a time of uncertainty for local units of government, education and small business, having the IBB as a trusted source of cashflow stability at an attractive, all-inclusive rate, gave our team at the city one less obstacle to overcome.”
Another avenue of support in 2020 has been the IBB’s continued quest to seek out innovation within existing programs to add value for Indiana QEs. One such approach has been the implementation of a programmatic linking of state deposits to act as a rate “buy down” for the IBB’s Hoosier Equipment Lease Purchase (HELP) program. The HELP program exempts the need for local governments in Indiana to bid out the financing for essential items of equipment by connecting them to a statewide network of participating lenders. By linking state deposits to the financings, the IBB was able to “buy down” the rates in the bids submitted by these lenders which has resulted in over $115,000 in savings on equipment leases – with an average savings of 39.4 basis points per lease to date.
Marketing and outreach are other examples of regular business practices that have been upended. While 2020 has certainly offered many challenges as to how we all conduct our business, it has also provided several opportunities for us to connect with our stakeholders in new, meaningful ways. Postponing nearly all in-person visits to communities throughout Indiana, my teams have shifted their outreach to focus on virtual communications, like e-learning activities, to ensure that communities are aware of how our services, like the IBB’s Advance Funding program, can assist them. The IBB has decided to virtually host its annual Flipping Finance Challenge, a design sprint in which innovators throughout the state are connected with local units of government to offer customized solutions to their most pressing challenges.
In an effort to continue to grow through the sharing of ideas, my team at the IBB and the team at the Vermont Bond Bank are preparing to co-host the first-ever virtual idea summit of state bond banks and related state agencies in Spring of 2021. Due to the unique nature that bond banks play in serving local units of government in their respective states, this will be an opportunity to share best practices amongst similarly empowered state actors. Topics to be covered include Bond Bank History, CRM and Database Management, Marketing and Community Awareness/Outreach to Local Government, New Program Innovation/New Ways to Serve Local Government, and Talent Attraction. More information on the date and registration procedures will be announced in December. If you’re interested, please email Brian Carman, Indiana Bond Bank Director of Marketing and Business Development.
Hopefully this leaves you with a few ideas for your state! I know not all of us are involved with our state’s bond banks, but we all care deeply about the fiscal health of our communities and their local units of government.
From my office to yours, Happy Thanksgiving!
Treasurer Kelly Mitchell, Indiana