The Credit Enhancement Program helps cities and counties reduce the costs of borrowing to build certain public facilities.
Administered by the Minnesota Public Facilities Authority (PFA), the program provides limited state bond guarantees, which result in higher credit ratings for counties and lower interest rates on general obligation bonds.
Cities and counties apply to the PFA for a specific bond issue and enter into an agreement to comply with the requirements of state law.
If counties are unable to make a payment on the bonds covered under the program, the state will make the payment, provided that funds are available in the state general fund.
If the state pays part or all of a bond payment, the county's full-faith-and-credit pledge on the bonds automatically becomes a full-faith-and-credit pledge to repay the state, with interest.
Counties are eligible to apply. Debt obligations must be a general obligation bond issued to finance the construction of jails, correctional facilities, law enforcement facilities, social services and human services facilities, and solid waste facilities.
Cities are eligible to apply. The debt obligation must be a general obligation debt issued for the construction, improvement or rehabilitation of wastewater, drinking water, or stormwater facilities.
If a city or county is issuing bonds for a combination of eligible and ineligible purposes, bonds for the eligible purposes must be issued as a separate series. Effective May 1, 2010, refunding bonds are no longer eligible.
Minimum Project Requirements
The city council or county board must adopt a resolution authorizing the county to enter into the Credit Enhancement Program Agreement and agreeing to be bound by the provisions of state law.
The county must submit an application for participation to the PFA before the bonds are issued.
The application must include a completed Credit Enhancement Program application form, an opinion of bond counsel in the form required by the PFA, and a completed Credit Enhancement Program Agreement executed by the county and the paying agent for the bonds.
Applicants should contact the PFA well in advance of the bond issuance date. An application must be accompanied by a nonrefundable application fee of $500.
Download and print the following documents related to the Credit Enhancement Program: