Treasurer's Office

POOL Loan FAQ

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Pool Loan

 

Pool Loan

How was the Pool Loan Program created?

The University created the Pool loan program through the issuance of $40,000,000 seven-day variable rate bonds maturing November 1, 2030, through the Massachusetts Health and Educational Facilities Authority  (now MassDevelopment). The bonds have since been remarketed three times with only $20,000,000 outstanding.  The University, through the Treasurer's Office, will pay bondholders interest only on a monthly basis throughout the life of the bonds with a principal payment at maturity. See the Bond Issuance Official Statement (PDF file).

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What are the benefits of using the Pool compared to other financing mechanisms?

The Pool is a flexible, low cost financing mechanism that is administered by the Treasurer's Office. Therefore, you will receive significant savings of both money and time by financing through the Pool. The execution of a vendor supplied financing agreement requires a significant amount of time, and time is money. Because the Pool is already established, you don't need to burden yourself with the lengthy time and logistics involved in a purchase specific financing. In the Pool you are given a low fixed rate loan with no closing costs by just receiving campus and Treasurer's Office authorization, completing the requisition and supplying the appropriate supporting documentation.

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What type of expenditures can I receive a Pool loan for?

University Board of Trustee policy, Commonwealth legislation and federal tax principles limit the University to Pool loans that finance or refinance the acquisition of telecommunications, electronic, computer, office, research, equipment and administrative systems and the renovation costs related thereto. At all times and without exception, loans from the Pool must be for capital expenditures (defined by Treasury Regulation 1.150-1(b)) that are for the sole benefit of the University of Massachusetts in its educational mission and not for any private use. The University Treasurer's Office retains the right to disallow any item for inclusion in the Pool. Refer to the attached brochure for examples of pool eligible acquisitions and pool eligible expenses. Pool Loan Brochure.

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How do I request a loan from the Pool?

Each campus has a liaison that corresponds with the Treasurer's Office regarding their campus loan requests. Therefore, Pool loan requests should be coordinated through your campus liaison. These campus liaisons currently are: Amherst-Andrew Mangels; Boston-Neil Rosenberg; Dartmouth-Suzanne Audet; Lowell-John Perroni; Worcester-Sandra Flynn; UMassOnline/President's Office-Joseph Skrzek. All loans are structured as reimbursements. Complete and sign the Pool requisition Attach a copy of the invoice and any additional support as necessary to describe the purchase. Attach PeopleSoft transaction reports that support the expenditure and date of disbursement, copies of invoices and any additional support as necessary to describe the purchase.

Send the requisition and support to Joseph Skrzek at the University of Massachusetts Treasurer's Office, 333 South Street, Suite 450, Shrewsbury, MA 01545-4176.

Please contact Joseph Skrzek in the Treasurer's Office at (774) 455-7587 to ensure that your purchase is allowable and that sufficient Pool funds are available prior to your initial outlay if your purchase is contingent upon receiving a loan from the Pool.

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What repayment terms will I have for my loan?

Based upon current market conditions, the annual Pool interest rate on loans is 2.0%. Please note that the Treasurer's Office has the authority to modify the pool loan interest rate based upon market conditions. Each requisition from the Pool will result in a schedule of repayments to the Pool, including quarterly principal and monthly interest payments amortized at the Pool interest rate. See the Pool Loan Repayment Examples in this Capital Finance web page. The repayments will be amortized based upon the type of project or purchase, typically ranging from one to ten years, without a penalty for prepayment. At no time can a loan be amortized beyond the financed item's useful life and the Treasurer's Office must approve the campus's requested amortization period.

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Can I determine a repayment schedule prior to requesting or receiving a loan?

Yes and you have a few options. The first is to view our example amortization schedules located in this Capital Finance section of the Treasurer's Office home page. These examples present a variation of loan amounts and amortization periods. See the Pool Loan Repayment Examples in this Capital Finance web page.

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How will I make my Pool repayments?

Each campus will receive a repayment schedule detailing the monthly interest and quarterly principal payments at the time of each requisition from the Pool. The Treasurer's Office will automatically take the required monthly repayment from the campus using the PeopleSoft chartfield strings provided by each campus, on the last business day of every month

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What is the accounting treatment for Pool transactions?

The accounting for the Pool transactions is similar to that of the University leases. The University Treasurer's Office will maintain records and supporting documentation for the Pool activity and the University Controller's Office will generally make on-top entries to campus financial statements at each fiscal year end. However, based upon the type of Pool transaction, the campuses may need to book Pool activity locally. In addition, the University Controller's Office has developed draft Accounting and Reporting Guidelines for the Pool activity that can be located in this Capital Finance section of the Treasurer's Office home page. See the Pool Accounting and Reporting Guidelines in this Capital Finance web page.

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Where can I get more information on the Pool loan program?

This Capital Finance section of the Treasurer's Office home page has additional detailed information on the Pool loan program, including Pool Guidelines, Pool Loan Repayment Examples and Pool Accounting and Reporting Guidelines. Also, feel free to contact Joseph Skrzek in the University Treasurer's Office to request a brochure at jskrzek@umassp.edu or (774) 455-7587.

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