LOCAL GOVERNMENT INFRASTRUCTURE FINANCING offers Maryland counties
and municipalities a cost effective way to finance capital projects as well as
the delivery of essential police, fire and government services to communities.
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The City of Havre de Grace has received over $3 million
in bond proceeds for projects including construction of
and additions to a new city hall complex, purchase of
vehicles and equipment, replacement of the city pier,
and improvements to local parks.
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Through the Local Government Infrastructure Financing Program, the Maryland
Department of Housing and Community Development issues bonds, on behalf of
counties, municipalities and/or their agencies, to finance projects that serve
the community at large. These projects can include, but are not limited to,
streetscape improvements, transportation enhancements and water system and
waste water treatment facilities.
Bonds issued through the program are triple-A rated by virtue of municipal bond
insurance and participants enjoy fixed, tax-exempt interest rates. Actual
interest rates depend on market conditions at the time of sale, but depending
on the size of the issue, economies of scale can further reduce issuance costs.
Local governments receive loans from the bond proceeds. Local governments must
repay the debt incurred through the bond financing and pay their pro-rata share
of the costs of issuance of the pooled bonds. A loan is a general obligation of
the participating jurisdiction, secured by the full faith, credit and taxing
power of the local government.
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Whether funds are needed for a $150,000 effort or a $5 million project, Local
Government Infrastructure Financing is a convenient and streamlined resource
for those that:
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Do not routinely issue bonds
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Have limited access to capital markets
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Do not have the resources to initiate a public offering on their own
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WHO CAN APPLY
All Maryland counties, municipalities and/or their agencies are eligible,
provided they have legal authority for:
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Constructing, operating and maintaining the proposed project,
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Pledging security for and repaying the proposed loan, and
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Pledging income tax payments and various other shared revenue from the State
Additionally, local governments must certify the capacity to inspect the
project’s construction progress and agree to submit periodic status reports.
They must also ensure the adequacy and sufficiency of the project’s design and
construction. Local governments must also meet credit requirements.
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The City of Laurel
received bond proceeds
of $718,000 to purchase
a series of fleet vehicles,
including a police mobile
command unit, to increase the effectiveness of the delivery of services to the community.
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ELIGIBLE PROJECTS
Projects must support an essential physical element of a municipality’s public
service system and meet federal tax law requirements.
A project must be undertaken by or on behalf of a local government, including
its agencies. Projects may include, but are not limited to:
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Street lighting, landscaping, sidewalks and public space improvements
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Public safety vehicles and equipment
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Water production, treatment, storage and distribution systems
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Storm water control and sewer collection and treatment facilities
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Government office and meeting facilities
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Refinancing of existing debt for eligible projects as listed above
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Computer hardware and software systems
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Police, fire, transportation, education, health, recreation, maintenance and
other service related facilities
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APPLICATION
The local government is required to complete a form to evaluate credit
worthiness. The form may be submitted any time during the year. When bonds are
issued is determined by the volume and frequency of participation by local
governments.
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FOR MORE INFORMATION
Charles Day
Director
Local Government Infrastructure Financing
410-514-7245
dayc@mdhousing.org
Those local governments or jurisdictions requesting technical assistance may
submit an
Expression of Interest
(MS WORD) outlining
the proposed project or specific questions.
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The City of Frostburg received bond proceeds of
$1.4 million to install dome covers for the water plant in
an effort to protect and safeguard the public water
supply from airborne contaminates.
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