The Pooled BANs Program
Each year, the MCIA offers municipalities the opportunity to convert their accumulated short-term bond anticipation notes (BANs) to permanent financing through the Pooled BANs Program.
The program, first offered in 1993, is designed to enable municipalities to save issuance and interest costs by pooling their BANs into a single, Improvement Authority bond sale. The larger, aggregate bond sale has proven more attractive to buyers in the municipal bond market and historically has generated attractive interest rates.
Participants also may use the program to meet the financing needs for new money to fund capital expenditures approved by ordinance.
Unlike municipalities entering the bond market on their own, the MCIA's financial professionals have the unique flexibility to adjust the terms of the bonds during pricing to achieve the lowest possible cost of obtaining the funds.
The MCIA begins surveying municipalities during the summer to determine the need for and interest in the program. The bonds usually are sold in December.
The Monmouth County Improvement Authority was the first improvement authority in the state to offer this program.
The Pooled Capital Equipment Lease Program
The Pooled Capital Equipment Lease Program has been offered every other year since its creation in 1991.
The Pooled Equipment Lease Program enables municipalities and school districts to pool their equipment needs into a single MCIA bond sale of a size that generates interest from bond buyers and usually accomplishes lower interest rates than individual participants would achieve going to the market on their own.
Backed by a guarantee from Monmouth County, the participants realize the benefits of the county's AAA credit rating. To date 47 municipalities and some school districts and utility authorities have obtained equipment through the MCIA's Pooled Capital Equipment Lease Programs. The MCIA recently closed on its eleventh program.
Participants are able to obtain equipment for which they normally could not sell bonds through the MCIA - police cars, fire trucks, public works vehicles, computer systems and much more - because each participant's repayment schedule is based on the useful life the equipment obtained.
The MCIA's professional team also is able to structure the repayment schedules for the debt to accommodate each individual participant's needs. And, because the equipment is obtained through a lease with the MCIA, the equipment purchases do not diminish a municipality's debt service limits.
Stand-Alone Financing and Refundings
The MCIA can tailor a financing to meet the specific needs of municipalities and school districts.
These stand-alone financings enable participants to take advantage of the MCIA's fine reputation in the bond market, its unique financing flexibility to conduct negotiated bond sales and its ability to structure repayment of the debt to accommodate the participant's future capital improvement needs.
The MCIA has designed and implemented stand-alone financing to fund the building of new schools, town halls, municipal libraries, water and sewerage treatment plants and other public facilities, and open space preservation.
In addition to the interest savings these entities have realized by financing through the MCIA, several have used the Improvement Authority to refund the principal balance when conditions in the tax-exempt bond market were favorable.
The MCIA's team of financial professionals constantly watches the bond market for improvements in interest rates and will move quickly to obtain Local Finance Board approval when market conditions improve.
Generally, the MCIA does not conduct a refunding unless the borrower will realize a true interest cost savings of at least 3 percent.
The MCIA is currently in the process of financing their first solar project. This program will benefit the participants with electric cost savings for many years to come.
For more information about MCIA programs, please call the office at 732-308-2975.