Virginia Public School Authority

The Virginia Public School Authority operates several financing programs for public primary and secondary education. The goals of the VPSA's financing programs are to: provide market access to those communities which do not have ready access; provide low cost financing; and maintain the high credit quality to ensure that the lowest possible interest rates are obtained.

VPSA Programs and Business Activities

Pooled Bond Program - Tax Exempt Financing

VPSA provides financing to localities by using the proceeds of its bonds to purchase a "pool" of general obligation bonds from localities ("Local Issuers"). Each Local Issuer uses the proceeds to finance capital projects for public schools.

All local school divisions are invited to participate in the regularly scheduled pooled bond sales in the Spring and Fall of each year. Pooled bonds are issued by the VPSA under its 1997 Resolution and secured by the payments on general obligation school bonds ("Local School Bonds") purchased by the Authority. In the event of a default of any Local School Bond, a "State Aid Intercept" provision provides for a diversion to the holder of its local school bonds of all funds appropriated and payable to the Local Issuer by the Commonwealth.

Pooled bonds are additionally secured by a sum sufficient appropriation by the General Assembly to provide the difference, if any, between the debt service due on the VPSA bonds and the sum of (i) debt service payments made on the Local School Bonds and (ii) any funds obtained from enforcement of the State Aid Intercept provision.

Pooled bonds are rated AA+, Aa1 and AA+ by Fitch Ratings, Moody's and Standard & Poor's, respectively. The interest rates for the Local School Bonds are established at five (0.05%) basis points above the actual rates on VPSA's bonds. These five basis points are used to pay administrative expenses of the Authority.  Costs of issuance are passed through to the participating localities.

Pooled Bond Program – Taxable Build America Bonds (BABs)

New Issuance under the BABs Program expired in 2010.

The issuance of BABs is authorized by the American Recovery and Reinvestment Act of 2009.  The most popular variant (Direct Payment BABs) allows issuers to make an irrevocable election to receive a subsidy from the Federal Government equal to 35% of the interest due on each interest payment date.


  • Use of Proceeds: 100% of available construction proceeds must be used for capital expenditures (less amounts used for costs of issuance, which are capped at 2%); this provides less flexibility than with traditional tax-exempt bonds
  • Limited Use for Refunding: Generally, Direct Payment BABS may not be used to refund previously issued tax-exempt bonds

Literary Fund Interest Rate Subsidy Program

Currently, this program is suspended.

Periodically, the Department of Education (DOE) and the Authority are directed to provide a program for funding school construction and renovation projects using interest rate subsidies from the Literary Fund. This program is normally conducted concurrently with the Fall pooled bond issue of the Authority. The program funds Literary Fund loan projects on DOE's first priority waiting list by subsidizing the Local Issuers' debt service cost from the Literary fund. In this way, localities would be paying no more than if they had received a direct Literary Fund loan. The interest rates on Literary Fund loans are based on the composition index, and can be as low as two percent.

Stand Alone Bond Program

Special Obligation School Financing Bonds have a "stand alone" security structure. Each series is secured separately and solely by the general obligation school bonds of the individual county or city requesting the financing.

School Educational Technology and Security Notes

The Authority issues its School Educational Technology and Security Notes to be used primarily to make grants (i) to establish a computer-based instructional and testing system for the Standards of Learning (SOL) and to develop the capability for high speed Internet connectivity at high schools followed by middle schools followed by elementary schools, and (ii) to help offset the costs associated with the purchase of appropriate security equipment. The notes are limited obligations of the Authority payable solely from appropriations by the General Assembly from the Literary Fund and backed by a sum sufficient appropriation from the General Fund of the Commonwealth.

Statutory Requirements for Membership: Section § 22.1-164 of the Code of Virginia establishes the membership of the Virginia Public School Authority (VPSA). The State Treasurer, the State Comptroller, the Superintendent of Public Instruction or his designee, and five additional members appointed by the Governor constitute the VPSA Board. The gubernatorial appointees serve at the pleasure of the Governor for six-year terms (except appointments to fill vacancies are for the unexpired terms). The Governor appoints the Chair of the VPSA.

Gubernatorial Appointees

John R. Riley, Jr. (Chair)

Term effective: July 1, 2022

Term expiration: June 30, 2028

Betty J. Burrell
Cardell C. Patillo, Jr.

Term effective: July 1, 2018

Term expiration: June 30, 2024

Term effective: July 1, 2020

Term expiration: June 30, 2026

Michael Nguyen
Maria J. Perrotte (Vice Chair)

Term effective: July 1, 2020

Term expiration: June 30, 2026

Term effective: July 1, 2022

Term expiration: June 30, 2028


David L. Richardson Lewis R. McCabe
State Treasurer

Appointment effective: June 2, 2022

Serves at the Pleasure of the Governor

State Comptroller

Appointment effective: April 15, 2022

Serves at the Pleasure of the Governor

Dr. Lisa Coons
Superintendent of Public Instruction

Appointment effective: April 17, 2023

Serves at the Pleasure of the Governor

Legal Counsel

Donald R. Ferguson, Esq.
Sr. Assistant Attorney General
Office of the Attorney General
202 North Ninth Street
Richmond, Virginia 23219
PH: (804) 786-0004

Staff Contacts

James D. Mahone
Public Finance Manager
Department of the Treasury
P.O. Box 1879
Richmond, VA 23218-1879

PH: (804) 225-4928

Melissa W. Palmer
Senior Public Finance Analyst
Department of the Treasury
P.O. Box 1879
Richmond, VA 23218-1879
PH: (804) 225-4926