EAST LANSING: 517.484.8000 | NOVI: 248.533.0741 | WEST MICHIGAN: 616.588.7700
MFA 2022 State Aid Note Program – Documents Now Available!
The Michigan Finance Authority’s (MFA) August 2022 state aid note program materials, including the loan application, cash flow form, instructions, and calendar, are now available on the MFA’s website at www.michigan.gov/treasury/finance/mfa/note.
The general powers school district and ISD filing deadline to file application materials with the MFA is Tuesday, July 5, 2022.
Public school academies (PSAs) can find applicable documents here:
The PSA deadline for filing application materials is Monday, July 11, 2022. PSAs should contact their note counsel for additional details.
As in the past, the MFA requires that schools adopt a resolution authorizing the state aid note, and the resolution must be prepared by nationally recognized note counsel. The form of resolution for the August 2022 state aid note program is now available. Accordingly, schools should begin preparing cash flow materials and provide those materials to your Thrun finance attorney for preparation of the school’s resolution.
General powers school districts and ISDs will have the option to participate in the “set-aside pool,” the “no set-aside pool,” or both. With the set-aside pool, a district must make monthly payments on the note before the note matures, as set forth below:
3 set-asides - May 2023 through July 2023
5 set-asides - March 2023 through July 2023
7 set-asides - January 2023 through July 2023
In contrast, the no set-aside pool allows a district to pay the principal and interest on the note as a lump-sum payment when the note matures in August 2023.
The MFA’s borrowing parameters are largely unchanged from last year.
As always, to participate in the MFA’s SAN program, schools must reasonably project a cash flow deficit. If your cash flow does not show a deficit (due to receiving federal COVID-19 funding, for example), but you still want to borrow for operating purposes, please contact your Thrun finance attorney to discuss other options.
A school that has been denied qualified status by the Michigan Department of Treasury will need to file its “prior approval” application with Treasury at least 30 business days (i.e., 6 weeks) before approval is needed. For a school participating in the MFA SAN program, the prior approval application will need to be filed with Treasury no later than Thursday, June 9, 2022. The authorizing resolution must also be adopted by that date, so it can be filed with Treasury in conjunction with the prior approval application.
Regardless of whether your school plans to participate in the MFA SAN program, if you expect to issue a state aid note or tax anticipation note this summer, please contact your Thrun finance attorney to begin the process.
Jeffrey J. Soles – (517) 374-8835
Michael D. Gresens – (517) 374-8838
Christopher J. Iamarino – (517) 374-8862
Mathew F. Hiser – (248) 533-0737
Ian F. Koffler – (517) 374-8865
Fredric G. Heidemann – (517) 374-4535
Ryan J. Nicholson – (517) 374-8863