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Municipal Authorities
Municipal authorities may be created by any local government or school district. The type of
authorities which list and their numbers are shown in Table Four.
Table Four
Authorities
Type
Numbers
Airport ............................................................................ 35
Finance ........................................................................... 342
Housing .......................................................................... 85
Parking ............................................................................ 87
Recreation ....................................................................... 99
Redevelopment ............................................................. 46
School ........................................................................... 299
Sewer ............................................................................. 908
Solid Waste ................................................................... 68
Water ............................................................................. 558
Others ............................................................................ 186
Total .......................................................................... 2,713
The main purpose of an authority is to establish a governmental unit to raise money
independently for specified projects. The borrowing capacity depends on its ability to be selfsupporting.
Generally, authorities finance revenue-producing projects. The revenues generated by a
project must be adequate to operate the project, meet all debt payment obligations and provide for
reserve maintenance funds as needed.
Authorities may be simply financing organizations, or they may be financing and operating
units. A financing authority has the responsibility for obtaining funds, disbursing the funds for
engineering, legal fees and construction, and for making scheduled principal and interest payments
on the debt. A financing authority generally leases the completed project facilities back to the
municipality for operation.
In this kind of arrangement, the municipality and the authority should spell out clearly the
responsibilities of each, particularly with respect to capital expenditures for the system. Often the
municipality will set aside capital reserves within a fund to provide for capital expenditures such as
trucks or other movable equipment. In addition, the authority will usually maintain a capital
improvement fund for expansions or major improvements to the system.
A financing and operating authority differs from that described in the preceding paragraph.
An operating authority hires the labor and provides materials and equipment to operate the project
after completion. The employees work for the authority rather than the municipality. Except to
enact enabling ordinances, appoint authority board members and enforce collection of delinquent
accounts, the municipality has relatively little to do with the day-to-day operation of the project.
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