MFA 2024 State Aid Note Program Documents Now Available!

The Michigan Finance Authority’s (MFA) August 2024 state aid note program materials, including the loan application, cash flow form, instructions, and financing schedule, are now available on the MFA’s website at www.michigan.gov/treasury/finance/mfa/‌note. The gen­eral powers school district and ISD deadline for filing application materials with the MFA is Tuesday, July 2, 2024.

PSAs can find applicable MFA SAN documents at:

https://www.michigan.gov/treasury/finance/mfa/finance/school/public-school-academy-state-aid-note-psa-san.

The PSA deadline for filing application materials is Monday, July 8, 2024. 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 resolution for the August 2024 state aid note program is now available. School officials should complete their cash flow materials and provide them to their Thrun finance attorney for preparation of the state aid note authorizing resolution.

General powers school districts and ISDs may opt 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 2025 through July 2025
or
5 set-asides - March 2025 through July 2025
or
7 set-asides - January 2025 through July 2025

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 2025.

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, but you still want to borrow for operating purposes, please contact your Thrun finance attorney to discuss 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 state aid note program, the prior approval application must be filed with Treasury no later than Thursday, June 6, 2024. 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 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.