A port authority is a political subdivision formed by a local community under Ohio Revised Code Section 4582.
The Columbus-Franklin County Finance Authority was created by the City of Columbus and Franklin County as a port authority. The Finance Authority is a government entity and will facilitate economic activity, capital investment, job creation and retention in Central Ohio.
Ohio law allows port authorities to construct facilities, issue bonds, make loans, and sell or buy real and personal property.
A port authority can structure, package and coordinate the financing transaction with multiple lenders including commercial banks, state financing and other public sector financing. Port authorities can own property: hold title under a capital lease; own property under an off-balance sheet lease; own infrastructure that is essential to a project, i.e. parking structures.
One key function a port authority can perform that a city cannot is the sale and lease of publicly-owned property. In most cases, municipalities and counties must sell or lease through public bid. Port authorities are specifically exempted from this requirement and can be a conduit for sale of excess government property for the benefit of economic development.
The political subdivisions (City of Columbus and Franklin County) that created the Finance Authority appointed a board of directors that adopted rules and regulations for the Finance Authority. Additionally, the board of directors meetings are made open to the public under Ohio’s open meetings act. Finally, the Auditor of State is responsible for auditing the Finance Authority yearly; and the records for the Finance Authority are treated as public records except certain confidential business data.
A port authority bond fund is a credit-enhancement vehicle based on a system of program reserves established in special funds of the port authority deposited with a qualified corporate trustee. Those program reserves, additional reserves funded in connection with each series of revenue bonds issued to finance costs of approved projects, the portfolio of loans that are made from those proceeds and the collateral for each such loan, are all pledge under the applicable trust agreement to support the revenue bonds issued for those projects. The program reserves are typically funded with a combination of local contributions, state loans (repaid only from investment earnings), and bank letters of credit.
A bond fund is a unique and important tool for economic development because it enables a port authority to provide real value to many projects for which it could only otherwise act as a “conduit” and to much smaller projects. Port authorities have also pooled the resources of their bond funds and of state programs to provide financing for projects of significant size and have used their bond funds to fill funding gaps on major economic development projects.
Ohio Revised Code Charter 4582: Port Authorities - http://codes.ohio.gov/orc/4582.