Frequently Asked Questions (FAQs)

What is the Public Finance Authority?
Public Finance Authority (“PFA”) is a governmental entity established under Section 66.0304 of the Wisconsin State Statutes, authorized to issue tax-exempt, taxable, and tax credit conduit bonds for public and private entities throughout all 50 states. PFA is jointly sponsored by the National Association of Counties, National League of Cities, Wisconsin Counties Association and League of Wisconsin Municipalities (the “Sponsors”).

The law firm of Orrick, Herrington & Sutcliffe LLP assisted the Sponsors in drafting Section 66.0304 and the joint exercise of powers agreement establishing the PFA, in each case specifically for the purpose of financing projects and programs throughout the country. At Orrick, contact Roger Davis at (415) 773-5758 or rogerdavis@orrick.com.

Why was PFA established?
PFA was established by local governments, for local governments, to provide a means to efficiently and reliably finance projects on behalf of local governments in Wisconsin and throughout the country. PFA’s mission is to provide local governments and eligible private entities access to low-cost, tax-exempt and other financing for projects that contribute to social and economic growth and improve the overall quality of life in communities throughout the country.

While PFA was pioneered in Wisconsin, its focus from the beginning has always been local governments in Wisconsin and all states – its reach has spanned 44 states in the last 10 years. Wisconsin showed great foresight and has benefited its own communities and countless others, with no risk to the taxpayer. PFA looks forward to continuing to provide local governments with the tools necessary to create economic vitality through projects which provide public benefits without any risk to the taxpayer.

What benefits does PFA offer to local governments?
PFA was created by local governments, for local governments, for the purpose of issuing tax-exempt and taxable conduit bonds for public and private entities nationwide for projects that are important to the community and present no risk to the taxpayer or any state or local government.

As local governments work to create jobs and opportunity, PFA stands ready to provide qualified projects serving a public benefit with access to the financial markets. Examples of public benefits that are provided to local government include:

  • Direct availability of Municipal Bond programs
  • Reduces costs, staff time and liability to cities and counties seeking to engage in private activity bond issuance and post-issuance compliance activities for projects that create jobs and improve community life, such as health care facilities, affordable housing, solid waste/pollution control facilities, manufacturing facilities, and recreational and cultural centers.
  • Provides a voice for communities by requiring the elected body of a local government in which jurisdiction the project resides to hold a public hearing and approve the financing prior to issuance of bonds by PFA.
  • Serves as an immediate resource to assist cities and counties in accelerating local economic development by utilizing cost-effective financing programs, including a programmatic approach to a range of federally authorized finance programs.
  • Seeks to act in the interest of local governments and their communities through its governing body consisting of, and appointed by, local government officials.
What benefits does PFA offer to the nonprofit and private sectors?
Since its creation, PFA has helped finance billions of dollars of public benefit projects across the country, resulting in job creation, affordable housing, and infrastructure investment. The Public Finance Authority has worked to enable financing of a wide range of nonprofit and community-based projects from healthcare to education to community service organizations without any risk to taxpayers or any state or local government.

PFA offers the following benefits to the nonprofit and private sector such as:

  • Up-to-date, cost-effective bond financing for a wide range of projects in all 50 states.
  • Ability to leverage economies-of-scale by using a single conduit issuer for borrowers financing facilities in multiple jurisdictions.
  • Program management staff with more than 20 years of experience in tax-exempt private activity and municipal finance, including necessary post-issuance compliance requirements of different offerings.
  • Ability to work effectively and efficiently with each borrower and its finance and legal teams to satisfy the governmental approval process, including local TEFRA approval, securing volume cap (when necessary), and securing PFA approval.
  • Increases opportunity for institutional borrowers and private businesses to access the municipal bond market by providing technical assistance to local governments that may otherwise be unable to issue conduit bonds due to limited resources or a lack of familiarity with the process.
  • In conjunction with its Sponsors and founding members, PFA engages in marketing and awareness activities to generate deal-flow and create new opportunities for finance professionals throughout the country.
  • Flexibility for borrowers to choose their own finance team.
  • A recognized national conduit issuer identity in the bond marketplace.
What control does a local government agency have in determining whether a project within its political jurisdiction is financed by PFA?
Federal tax law and Section 4 of PFA’s Joint Exercise of Powers Agreement require either the elected body or, when applicable, the highest elected official of a local government in which jurisdiction the project resides to hold a public hearing and approve the PFA financing prior to issuance of bonds by PFA.

This means three things:

  1. State and local governments would not be required to levy any tax or make any appropriation for payment of the bonds.
  2. For PFA-financed projects, the State of Wisconsin, Wisconsin local governments, and other local governments across the country are taking on no risk in a PFA transaction.
  3. PFA financing presents no risk to the taxpayer.

This accountability and transparency measure provides members of the public and their governing board most affected by a proposed project the ability to comment and approve or disapprove of the issuance of bonds for the project. This differs from most state conduit issuers that typically conduct all necessary public approvals within the confines of their state capitols, without regard to project location or local community input. Any project not approved by the local jurisdiction will not be financed through PFA.

Does the local government agency need to become a member or participant of PFA in order for eligible private borrowers in their community to participate in PFA finance programs?
No. Although the elected body of a local government is required to hold a public hearing and approve of the PFA financing within its jurisdiction, there are no membership or participation requirements.
Does the local government agency incur any liability in connection with a project financed through PFA?
No. All bonds issued by PFA are considered conduit debt obligations solely of PFA. No liability for debt repayment is attributed to the local government agency.

PFA’s local public benefit mission provides local governments with a voice and a vote in these projects, and operates without a risk to taxpayers or any state or local government.

Is PFA funded through taxpayer dollars?
PFA uses no public subsidies or tax dollars to facilitate its operations.
Who are PFA’s Board of Directors?
PFA’s governing board (the “Board”) is composed entirely of current or former local government officials – people who have dedicated their careers to the needs of local governments and their communities.

These board members were appointed by the Sponsors and approved by the Wisconsin founding members consisting of the City of Lancaster and the counties of Adams, Buffalo, Waupaca, and Bayfield. The Board determines all of PFA’s financing policies and procedures which includes a streamlined review and approval process for each proposed financing.

How can I find out more about PFA?

Please go to Contact Us page for more information.

General Information

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