Through its “pay-as-you-build” Progress Payment System, the MSBA reimburses districts for eligible project costs during construction. After a community enters into a Project Funding Agreement with the MSBA and submits project costs that have been incurred and paid locally, the MSBA audits the submitted invoices and reimburses the district for eligible project costs. The MSBA typically makes payment within 15 days of receiving the reimbursement request. The major benefits to the system are:
- Communities avoid having to borrow the MSBA’s share of project costs, which reduces both the amount of debt on the local books and interest costs related to financing.
- Communities receive the full amount of the MSBA’s share of project costs during construction and its close-out audit. No longer do they have to wait 20 years to receive their full grant.
- The MSBA is auditing projects as they are built, avoiding the many-year delay between project completion and final cost reconciliation.
- Consistent, predictable payments allow communities to better manage their cash flow.
Q: How are MSBA reimbursement rates calculated?
A: View our Reimbursement Rate Calculation document, which provides a description of the methodology used to calculate the reimbursement rate.
Q: When can I expect payment and recap letter for a monthly progress payment submission?
A: Upon receiving a request for reimbursement, the MSBA will process the request for reimbursement within fifteen calendar days. After the MSBA reviews the request for reimbursement, the MSBA sends a recap letter to the community that states the reimbursement amount, amounts paid to date, and a detail of eligible/ineligible costs.