How It Works
How a project gets financed, and how the decision gets made.
The California Municipal Public Financing Authority (CalMuni PFA) is a California joint powers authority that issues tax-exempt financing on behalf of public agencies. This page covers both halves of that: the conduit structure the Authority uses, and PFA 360, the four stages every financing through the Authority follows.
The Problem
Capital financing is getting harder.
Public agencies are working against several pressures at once.
The result is that financing decisions get made project by project, often without full visibility into what they do to future capacity.
The Four Stages
PFA 360: how a financing runs
Every financing through the Authority follows the same four stages, and your board decides at each one.
Prioritize
Your agency sets which projects come first and the constraints that matter.
Move around the ring, or use the arrow keys.
Want the long view first? PFA 360 modeling, a 25-year projection of your agency’s finances, is available to members through CalMuni Advisors as a separate, optional engagement.
Sources of Capital
Three sources of capital. Use one, or layer them.
The same public issuing platform reaches three different sources. They price differently, move on different timelines, and suit different projects. A single project can draw on one of them or on all three at once, with each portion sized to what that source does well.
Layered on one project, or used on its own. Widest at the base, where the capital need is largest.
Federal & State Programs
Subsidized rates and the longest repayment, for the portion of scope that qualifies under the program.
- Subsidized interest rates
- Long-term repayment
- Policy-aligned project scope
Separate series. Separate security. One coordinated structure. Where sources are layered, each portion keeps its own terms and its own repayment, and the board approves the blend before anything is executed.
The Model
A conduit issuer turns a public purpose into tax-exempt capital.
The California Municipal Public Financing Authority is a California joint powers authority, formed under the Joint Exercise of Powers Act (Government Code section 6500 et seq.). Its purpose is to issue tax-exempt and taxable bonds on behalf of qualified borrowers across California: school and community college districts, cities and counties, special districts, and other public agencies.
The word conduit describes how the money moves. The Authority issues the bonds and lends the proceeds to the borrower. The borrower repays from its own revenues or a dedicated pledged source. The bonds are limited obligations, payable solely from those amounts, not a debt of the Authority, the State, or any member agency, and secured by no one's taxing power.
That structure is what lets a single statewide issuer finance projects for agencies that would otherwise have to stand up their own authority, while the responsibility for repayment stays with the borrower that benefits.
Pooling & Optionality
Share the cost of issuance. Keep the credit separate. Keep the choice open.
Pooling
Under the Marks-Roos Local Bond Pooling Act the Authority can issue multiple series under a single trust, and agencies can go to market together. The cost of issuance is shared. Security, terms, and repayment stay legally and financially separate, so no agency carries another agency's risk.
Optionality
Developing the information does not commit the agency to the transaction. The sequence is built so an agency can compare the alternatives and live terms, and then proceed when the timing and the conditions align, or wait until they do.
Competition as a Governance Tool
Every financing is competed, and the record shows what the market offered.
Competition here is a control, not a claim. Whether the agency runs a private placement or a public offering, the same package goes out: budgets, audited financials, project scope, schedule, cost estimates, and a standardized legal and security structure.
Competitive private placement
The financing is distributed to a broad list of banks and institutional investors. What gets compared is the package as a whole rather than the headline rate. Covenants, prepayment terms, and reporting obligations all carry cost that a rate on its own does not show.
Public offering competition
A competitive underwriter selection among experienced municipal firms, evaluated on execution and distribution rather than on fee alone.
The board sees the field, not a single quote.
Inside Execution
From the first call to closing, and what happens after.
The stages above are the method. This is the transaction: what each party signs, who authorizes what, and what carries on once the money is spent.
Scoping call
A short, no-cost conversation about the project, the agency, the timeline, and the funding already in play. The Authority confirms eligibility and program fit.
Membership and agreement
The agency joins the Authority, which is free, carries no obligation, and takes a single action by its governing board, and enters into an installment sale or loan agreement with the Authority. That agreement defines the repayment terms, the pledged source, and how the obligation is secured.
Authorization and documents
Applications and elections are prepared and filed and the bond and disclosure documents are drafted. The agency's governing board approves the structure and authorizes the Authority to proceed on the option it selected, with a public-approval (TEFRA) hearing where one is required.
Issuance and closing
The Authority issues one or more series secured by the agency's obligation, with different series available for different funding sources. Bonds are rated where applicable, priced, and sold. Proceeds fund at closing.
Funding, compliance, and monitoring
Proceeds fund the project. Continuing disclosure, CDIAC reporting, tax compliance, and any arbitrage-rebate and covenant monitoring are administered for the life of the financing, and what they show feeds the next planning cycle.
What It Changes
The value is in the discipline, not the complexity.
Decision support
Downstream impact is visible before the agency commits.
- Fewer surprises after closing
- Board discussions grounded in alternatives
- A record that makes the decision defensible later
Risk reduction
Execution and policy risk are managed in the sequence, not after it.
- Options compared before commitment
- Competitive term sheet comparison
- Credit risk separated by series
- Covenants reviewed before the board commits
Scalable and repeatable
The same framework fits a standalone project and a multi-year capital program.
- Structural and governance consistency across financings
- Designed for repeat use as the capital program evolves
- Less administrative lift each time it is run
Fiscal resiliency
The point of the discipline is what the agency still has afterward.
- Rate stability protected
- Debt capacity preserved
- Structural strain avoided
- Flexibility kept for a downturn
Retain Control
The Authority supplies the platform. The agency keeps the decisions.
CalMuni PFA is the issuer. It is not your agency's municipal advisor. The Authority's Board has engaged a municipal advisor and bond counsel to manage its programs and act as its administrative agents, so your agency reaches a platform with the critical roles already filled rather than a blank page to staff. Those professionals act for the Authority. Your agency is welcome to retain its own advisors in addition, and is encouraged to consider it.
What the Authority supplies
- Issuance under its joint-powers authority, on standardized documents
- Market testing and the competitive process
- Coordination across federal, state, and market funding
- Approval of each financing at a public Board meeting
- Post-issuance compliance for the life of the financing
- A limited-obligation structure that pledges no funds of its own or of any member agency
What the agency keeps
- The capital plan and the order of priorities
- The decision whether to finance at all
- The terms it is willing to accept
- The pledged repayment source and the project information
- The vote that authorizes the transaction
Questions
The questions boards ask first.
Yes. CalMuni PFA is a joint powers authority, and agencies that finance through it join as members. Joining is free and carries no obligation to finance: no application fee, no annual dues, and no commitment to a transaction. It takes a single action by your governing board, and it is handled as part of getting the financing done rather than as a hurdle to clear before the first conversation. Optional services an agency elects, such as financial modeling, are billed separately. Membership pledges none of your agency's funds and creates no liability for any other member's financing. Developers and 501(c)(3) organizations participate with the consent or approval of the local agency where the project is located.
No. The bonds are limited obligations, payable solely from the borrower's pledged revenues. They are not a debt of the Authority, the State, or any member agency, and no taxing power secures them.
Not necessarily. The Authority's Board has engaged a municipal advisor and bond counsel who manage the programs and serve as its administrative agents, facilitating each transaction, so your agency reaches the platform with those critical roles already filled. You are welcome to retain your own advisors in addition.
Issuance costs and the Authority's fee are customarily paid from bond proceeds rather than out of pocket, so they are financed as part of the transaction. Membership and the scoping conversation are at no cost. Optional services an agency elects, such as financial modeling, are billed separately.
Start with the capital plan, not the transaction.
Tell us what the agency is trying to build and over what period. The first conversation is about priorities and constraints, and it carries no cost and no obligation.