The Wisconsin Public Finance Authority (PFA), which was formed last year to issue tax-exempt conduit bonds for public and private entities, is promoting its services nationwide. The expansion has the support of the Washington-based(NLC) and the (NACo), but opponents, primarily local and state conduit bond issuers, say a national issuer is not necessary.
"The [PFA] partners with private borrowers and local governments to provide tax-exempt financing for public benefit projects that create temporary and permanent jobs, affordable, community infrastructure and improve the overall quality of life in local communities," according to PFA's website. The agency purports to lower costs through economies of scale, to improve access for issuers to the bond market, and to provide expertise to assist in .
"The [PFA] is out there to create an alternative at a time when communities are really struggling to generate economic activity," Liz Stephens, the PFA's Wisconsin-based program manager, told The Bond Buyer investor newspaper. "Access to capital is really difficult, and the PFA is there to provide another tool and resource to help local governments."
In an open letter issued April 4, NLC Executive Director Donald Borut and NACo Executive Director Larry Naake encouraged local governments and other agencies in all 50 states to tap the PFA's resources. "The persistent impediments that eligible, creditworthy borrowers face in accessing the tax-exempt bond market, coupled with the technical and legal hurdles that confront some communities' ability to serve as a conduit issuer, precipitated the need for a financing solution in those instances where one did not exist," the letter states. "Simply, PFA was created by local government for local government and provides communities with a voice in determining their economic destinies."
However, Illinois Finance Authority Executive Director Christopher Meister told the Bond Buyer that PFA is not needed, at least not in his state. Meister also is concerned about PFA's similarity to the California Statewide Communities Development Authority (CSCDA), particularly the fact that both the PFA and CSCDA contract with Walnut Creek, Calif.-based HB Capital Resources Ltd. to manage their operations. "Under state statutes, the IFA serves an essential public function, and there is a direct line of accountability to all branches of Illinois government," Meister told the Bond Buyer. "This model cuts the cord of essential accountability and transparency."