Municipal financial planning: “holistic” is the magic word

Municipal financial planning: “holistic” is the magic word

by | Jun 29, 2021 | Borrow

Annual financial and budget planning is a challenge for many municipalities even in ordinary times. The as yet unforeseeable consequences of the COVID 19 pandemic now make it even more difficult. In the Loanboox webinar, the most important basics and examples for a solid financial management of municipalities were shown. The most important insight: The magic word is “holistic”.

The guide produced by the Fachhoschule Graubünden at the request of the Swiss Association of Municipalities shows how it is done: Mission statement, strategy and legislative plan, plus integrated task and financial planning (IAFP) and finally liquidity planning. Dominik Just, professor of finance and accounting at the University of Applied Sciences Graubünden, explains the individual steps. Click on the image to learn more.

Integrated task and finance plan makes it easier

“There are municipalities that don’t have all that,” he explains, referring to the Swiss militia system and the many small municipalities where financial administration is done on a part-time basis. These municipalities have a much harder time with long-term and sustainable planning of larger projects, Just says. That is why at least the minimal version of the IAFP is recommended – and relatively easy to implement with the guide. “You have to look at financial management as a holistic issue,” says Just.

“The IAFP shows what the impact is on us”.

Patricia Bär makes the theory clear with a case study. The head of the finance department of the city of Bern reports on the financial planning for the new 50-metre swimming hall. The cost was 75 million Swiss francs.

In the video she explains how the project was integrated into the budget planning.

Do not postpone investments

Patricia Bär admits that the city of Bern is also struggling with the issue of new debt: “But that doesn’t necessarily have to do with COVID-19.” Tax revenues were already lower than expected in 2020. The city has reacted with a package of savings measures, but this does not affect planned investments – such as new school buildings or the renovation of sports and water facilities. This makes it all the more important to draw up financial and budget plans that are as accurate as possible.

Andi Burri, Co-Founder and Managing Director Loanboox Switzerland, also feels the uncertainties in daily conversations with financial managers. In addition to Corona-related additional expenditures and lower tax revenues, negative interest rates and the threat of a loss of creditworthiness are a concern for municipalities. “We try to support and advise them with our expertise,” says Burri.

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“The new normal”. How digital solutions help through the pandemic

by | Jun 1, 2021 | Borrow

What are the biggest challenges for treasurers on the way back after the COVID 19 pandemic? In a multi-part virtual conference, the auditing firm PwC gets to the bottom of this question and sheds light on the various facets behind it.

Is there a new “new normal” with COVID-19? And how might it change the work of treasury staff? Experts from international technology companies and financial service providers will share their views on the development of tax regulations, green finance and cyber security, for example.

In addition, the webinar series will focus on the possibilities of digital transformation and how finance processes can be optimised as a result. Stefan Feller, Head Capital Markets/Bonds, will participate on behalf of Loanboox. Keyword: Digital Treasury. 

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Does that sound exciting? Then register now for the webinars on 01 and 08 June 2021.

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Saving 15’000 francs of taxpayers’ money? The municipality of Niederwil explains how to do that.

by | Mar 22, 2021 | Borrow

How do Swiss municipalities finance themselves and what is important to them when raising capital? We asked Jessica Meili, Head of Finance at the Niederwil municipality.

How does capital raising work in the municipality of Niederwil?

Ongoing investment and financial planning is used to determine the municipality’s capital requirements for the coming years. Depending on the liquidity needs, short- or long-term loans are then taken out. In each case, several offers must be obtained for comparison.

What is important to you when raising capital?

In addition to favourable conditions and a wide range of comparison options, we attach great importance to an uncomplicated and efficient process.

How can Loanboox help you with this?

With just a few clicks and within a very short time, we receive a large number of interesting offers. In addition to saving an enormous amount of time, this allows us to find the most suitable offer for us in a clear and transparent manner. We will continue to use the Loanboox platform to raise capital in the future.

 

“Thanks to Loanboox, Niederwil is saving tax money to the tune of 15,000 francs.” 

 

– Jessica Meili, Head of Finance, Niederwil Municipality

Would you like to find out at what conditions Niederwil has already financed via Loanboox? Read more in the case study.

 

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Innovation Days: Playground and Pool of Ideas

by | Mar 4, 2021 | Borrow

Two days, six groups and lots of good ideas – these were the basics for Loanboox’s internal “Innovation Days”, which focused on one thing above all: making the debt financing platform better for customers.

“Guys, I’m excited,” texts Loanboox Switzerland Managing Director Andi Burri in the shared chat of his working group. There is still half an hour until the workshop presentation. Together with four other colleagues, he has been working on the topic of “emotional design”, i.e. the question of where the financing platform could be used to better meet customers. To this end, the team has developed pop-up windows, created new buttons and revised e-mail notifications. Now they are putting the finishing touches to the slides, because of course they want to convince the others of their own ideas – after all, at the end of the “Innovation Days” a winner is to be chosen.

Have the courage to think “outside the box”.

The other five, multi-country groups also used the time to deal intensively with their respective focal topics. For example, how the financing process could really be thought through to the end completely digitally with a digital signature. And what advantages that would have for the customers. How to better connect platform users with each other or in which areas Loanboox could position itself more sustainably.

Loanboox Workshop Innovation Days

Creativity and inventiveness are remarkable, despite the physical distance. And there are also the workshop-type pizza orgies – only at home in front of the screen. Much of what the staff developed over the two days will be implemented. Smaller but important quick wins, such as making the funding button on the platform easier to find or a new 404 error page, have already been implemented.

The winner takes it all? Not in this case

And who will win the race in the end? The team that shows the needs of potential capital providers with a unique presentation and demonstrates how the platform could be adapted accordingly. But their success and the prize that comes with it – a team event when the Covid 19 pandemic is over – is not something the colleagues want to enjoy alone, but to share with everyone.

This is also good teamwork.

 

If you want to learn more about Loanboox, click here.

Interest rates and inflation – Daniel Stelter’s economic forecast

by | Jan 22, 2021 | Borrow

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How do cities and municipalities get through the Corona crisis? What do capital providers and investors need to be successful? And what advantages does digitalisation bring? In the loanboox.asks. series, we talk to experts about topics like these. Daniel Stelter kicks off our audio talks.

The forecasts for 2021 are mixed. On the one hand, highs on the stock market – on the other hand, dampened economic expectations due to the ongoing Corona pandemic. And on top of that, central banks are pumping massive amounts of money into the markets and keeping interest rates low. In loanboox.asks. we talked to the economic expert and author Daniel Stelter about how all this is connected. He says:

The economic consequences of the Corona crisis will keep us busy for a very long time.

Listen to his assessments in the following audio:

Niedrigzins und Inflation - ein Ausblick auf 2021 mit Daniel Stelter

by Simone Franzke

About Daniel Stelter:

Daniel Stelter is a macroeconomist, strategy consultant and author. In his podcast “Think beyond the obvious” he looks behind the scenes of economic and financial policy and explains important connections.

No time to listen to the audio? Then simply download the article.

Study on community financing in Switzerland. Part 3: The impact of the Corona-crisis

Study on community financing in Switzerland. Part 3: The impact of the Corona-crisis

by | Jan 18, 2021 | Borrow

Hardly any changes in the credit volume and a still good credit rating – this is how the financial situation of many Swiss municipalities looked until the beginning of 2020. But now the effects of the Corona crisis are likely to make themselves felt. In the third part of our blog series on municipal finance in Switzerland, we take a closer look at this aspect.

Since 2003, the Lucerne School of Economics (HSLU) has been providing reliable and detailed answers on the topic of municipal finances. In its most recent study, it also took a close look at maturities, interest rates and financing partners. In the study presented in summer 2020, the experts conclude, among other things, that the average loan volume of the municipalities has only increased slightly compared to previous years. It finds that about half of the municipalities have been able to greatly reduce their debt since 2016, but the other is significantly more indebted.

An account with many unknowns

But will this change due to the ongoing Corona crisis? Prof. Christoph Lengwiler, head of the study, dares to make a cautious assessment, even though it is still difficult to predict the overall development. Last spring, one of the most important goals was to prevent a second wave of contagion, says Lengwiler. “But unfortunately we did not succeed”. Now it is a matter of doing everything possible to block a third wave. Economic experts agree that this will have a significant impact on further economic development in Switzerland.

The effects become visible with a delay

But it is already clear that the municipalities are feeling the crisis, he says. On the one hand, the municipalities have saved money because projects could not be realised, but on the other hand, they have already had significantly higher additional expenses in the short term.
Prof. Christoph Lengwiler summarises the outlook for the municipalities as follows: 

 

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All of this will tend to keep the financial situation of the municipalities tense and increase debt, Lengwiler continues. He therefore assumes that additional or alternative financing measures will be necessary.

Details about the study and the participants

In 2003, the Institute of Financial Services Zug (IFZ) at the Lucerne School of Business under the direction of Prof. Dr. Christoph Lengwiler, conducted its first survey of the financing market for medium-sized municipalities in Switzerland. The study has been conducted six times since then – most recently at the end of 2019. The focus is on municipalities with 4,000 to 30,000 inhabitants. In the most recent study, a total of 470 municipalities were requested and 238 provided their data – this corresponds to just under eleven percent of all municipalities in Switzerland. With a participation rate of 50.6%, the survey can be considered largely representative. For the first time, Western Switzerland was also included, which is reflected in the credit volume with an increase of almost 30% compared to the 2016 study.

 

Read also Part 1 and Part 2 of the blog series on municipal finance in Switzerland.