About the MFA
Who is the Municipal Finance Authority?
 A Collective Structure
The
Municipal Finance Authority of British Columbia (MFA) was created
in 1970 to contribute to the financial well-being of local governments
throughout BC. The MFA pools the borrowing and investment needs of BC communities and through a collective structure is able to provide a range of low cost and flexible financial services.
Representation from Every Community in BC
MFA Members
The Members of the MFA are elected officials appointed by their regional boards of each regional district in BC. The number of MFA members (currently 38) is based on population of the regional district. All 28 regional districts are represented by the Members of the Authority.
The Members meet twice a year, once at the Annual General Meeting (AGM), held prior to March 31st each year, and again in the fall, in conjunction with the Annual Union of BC Municipalities Convention. At the Members’ meetings they review and authorize the issue and sale of securities as recommended by the Board of Trustees.
At the AGM, the Members elect ten Trustees and the Chair. Four Trustees must be from the Greater Vancouver Regional District, one from the Capital Regional District and the other five from the remaining regional districts.
Board of Trustees
The Board of Trustees provides certain executive and administrative powers and duties, including the appointment of the treasurer and secretary. Oversight of policy, strategy and business plans is conducted through a Finance and Audit Committee, a Human Resources Committee and an Investment Advisory Committee.
Credit Rating
Of all things that we do for BC communities, protecting our high credit rating is by far the most important. It is the key to our ability to provide ready, cost-effective access to capital for MFA clients. Our strong credit rating means that we have been independently rated by Moody's Investors Services, Standard & Poor's, and Fitch Rtings as having an "extremely strong" capacity to meeting our financial commitments. This high level is widely recognisezed by the global financial community. We earned it because of our strong liquidity position, a 37-year history of prudent lending operations, and the sound legislative framework that protects investor interests.
In 2005, each of our capital financings saw the MFA's borrowing
rates below those of the Province of Ontario. The MFA is the only
municipal borrower in Canada that can make this claim.
The MFA credit ratings are amonth the highest in Canada and are rated by Standard & Poor's, AAA; Moody's Investor Services, Aaa; and Fitch Ratings, AAA.
What does the MFA do?
 The
MFA provides long-term and short-term financing, investment management,
leasing and other financial services to communities and public institutions
in BC.
You may already be familiar with some of the work that we have done
to help build BC communities:
- Raised over $5 billion for community capital projects.
- Pooled long-term borrowing needs to negotiate low-interest rates
and favourable terms each year.
- Saved BC taxpayers million of dollars in debt repayments due
to our high credit rating.
Expansion of the Mandate
 Since
its founding, the MFA has focused on providing long-term capital
financing for its members. By 1989, it became obvious that the structure
and credit of the Authority could be used for purposes other than
capital borrowing. As a result, the objectives and activities of
the MFA have been expanded to include not only capital financing,
but also short-term investment opportunities, interim financing,
and leasing for members. These are optional products with competitive
rates.
Tools to help you grow your community
If you have only used MFA's Capital Borrowing Program, perhaps
it's time to take advantage of our other financial services. We
can save you money, provide quick and easy access to funding, and
help you build your community.
Since MFA's credit rating exceeds those of Chartered
banks, its rates of borrowing are below those offered by these banks.
These savings in interest costs are passed on to BC's local governments.
We also offer funding opportunities for educational institutions,
workshops to help communities deal with change, and a financial forum
to provide strategic guidance.
Discover how we can help your community grow by making the most
of its money or money needs.
Extending the Membership
The Act was amended to extend the investment and interim financing
programs to other public institutions in the Province. The Authority
has also taken on new capital financing commitments. In 1995, the
MFA assumed all new obligations of the Utilities that earlier had
been financed through the Province. In 1998 we did capital financing
for E-Comm, in 1999 we did capital financing for GVTA and the regional
hospital districts outside of the Greater Vancouver Regional District.
To see if you are eligible to be in one of our programs, please
contact our staff.
Current Debt Position
The net debt of the MFA from its traditional borrowers stabilized
at slightly more than $1 billion throughout the 1980s. Recently,
this "old" debt has been declining but, with taking on
debt from the GVRD utilities, E-Comm, GVTA and the regional hospital
district it is expected to peak near $2.9 billion in about 2005.
This aggregate total remains very comfortably within borrowing powers
and, importantly, is exceeded by municipal reserves and accumulated
surpluses.
Revenue Sources
For providing its pooled investment services, the Authority pays
itself approximately 7 basis points. This source of revenue is now
45% of our annual budget. Revenues from the investment pools and
other financial services continue to grow. Starting in 1994, the
Authority has paid an annual dividend of $250,000 to the funds'
participants. This is a dramatic improvement over our situation
in 1983, before user-pay financial services were initiated. In that
year, taxes provided 83% of revenue. In 1998, the taxes accounted
for only about 6% of total revenue.
For more information or questions about the MFA, please contact us at:
250-383-1181 / Inquiries
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