HomeMy WebLinkAbout08253ORDINANCE NO. 8253
AN ORDINANCE AUTHORIZING ASSIGNMENT TO THE
COLORADO HOUSING FINANCE AUTHORITY OF A PRIVATE
ACTIVITY BOND ALLOCATION OF THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION, FOR THE PURPOSE OF
PROVIDING SINGLE-FAMILY MORTGAGE LOANS, PURSUANT
TO THE COLORADO PRIVATE ACTIVITY BOND CEILING
ALLOCATION ACT.
WHEREAS, the City of Pueblo, a municipal corporation (the “City”) is authorized and
empowered under the laws of the State of Colorado (the “State”) to issue revenue bonds for
the purpose of providing single-family mortgage loans to low- and moderate-income persons
and families; and
WHEREAS, the Internal Revenue Code of 1986, as amended (the “Code”), restricts
the amount of tax-exempt bonds (“Private Activity Bonds”) which may be issued in the State to
finance such mortgage loans and for certain other purposes (the “State Ceiling”); and
WHEREAS, pursuant to the Code, the Colorado legislature adopted the Colorado
Private Activity Bond Ceiling Allocation Act, Part 17 of Article 32 of Title 24, Colorado Revised
Statutes (the “Allocation Act”), providing for the allocation of the State Ceiling among the
Colorado Housing and Finance Authority (the “Authority”) and other governmental units in the
State, and further providing for the assignment of such allocations from such other
governmental units to the Authority; and
WHEREAS, pursuant to an allocation under Section 24-32-1706 of the Allocation Act,
the City has an allocation of the 2010 State Ceiling for the issuance of a specified principal
amount of Private Activity Bonds prior to September 15, 2010 (the “2010 Allocation”); and
WHEREAS, the City has determined that, in order to increase the availability of
adequate affordable housing by low- and moderate-income persons and families within the City
and elsewhere in the State, it is necessary or desirable to provide for the utilization of all or a
portion of the 2010 Allocation; and
WHEREAS, the City has determined that the 2010 Allocation, or a portion thereof, can
be utilized most efficiently by assigning it to the Authority to issue Private Activity Bonds for the
purpose of providing single-family mortgage loans to low- to moderate-income persons and
families; and
WHEREAS, the City Council of the City of Pueblo has determined to assign $4,804,425
of its 2010 Allocation to the Authority, which assignment is to be evidenced by an Assignment
of Allocation between the City and the Authority (the “Assignment of Allocation”), attached
hereto as Exhibit A. NOW THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The assignment to the Authority of $4,804,425 of the City’s 2010 Allocation be and
hereby is approved.
SECTION 2.
The form and substance of the Assignment of Allocation be and hereby is approved:
provided, however, that the President of the City Council be and hereby is authorized to make
such technical variations, addition or deletions in or to such Assignment of Allocation as he shall
deem necessary or appropriate and not inconsistent with the approval thereof by this ordinance.
SECTION 3.
The President of the City Council of the City of Pueblo be and hereby is authorized to
execute and deliver the Assignment of Allocation on behalf of the City of Pueblo and to take
such other steps or actions as may be necessary, useful or convenient to effect the aforesaid
assignment in accordance with the intent of this ordinance.
SECTION 4.
If any section, paragraph, clause, or provision of this ordinance shall for any reason be
held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph,
clause, or provision shall not affect any of the remaining provisions of this ordinance.
SECTION 5.
This ordinance shall be in full force and effect upon its passage and approval.
INTRODUCED: August 9, 2010
BY: Judy Weaver
COUNCILPERSON
PASSED AND APPROVED: August 23, 2010
Background Paper for Proposed Ordinance
# R-6
AGENDA ITEM
DATE: August 9, 2010
DEPARTMENT:
HOUSING AND CITIZEN SERVICES/ADA RIVERA CLARK
TITLE
AN ORDINANCE AUTHORIZING ASSIGNMENT TO THE COLORADO HOUSING FINANCE
AUTHORITY OF A PRIVATE ACTIVITY BOND ALLOCATION OF THE CITY OF PUEBLO, A
MUNICIPAL CORPORATION, FOR THE PURPOSE OF PROVIDING SINGLE-FAMILY
MORTGAGE LOANS, PURSUANT TO THE COLORADO PRIVATE ACTIVITY BOND CEILING
ALLOCATION ACT.
ISSUE
This Ordinance will allow the City of Pueblo to assign to the Colorado Housing and Finance
Authority (CHFA) $4,804,425, allocated to the City pursuant to the Colorado Private Activity
Bond Ceiling Allocation Act. These funds will be used to originate mortgage loans for mostly
low- to moderate-income individuals and families within the City of Pueblo.
RECOMMENDATION
Approval of the Ordinance
BACKGROUND
This Ordinance continues the practice of assigning to CHFA the City’s Private Activity Bond
(PAB) allocation for use in single-family bond issues. In 2009, the City assigned to CHFA $4.7
million of its allocation for single-family Mortgage Revenue Bonds (MRB). To date CHFA issued
$2.7 million in loans. The balance of the funds will be used before year-end. Forty-seven loans
were originated within the City. The average loan amount was $90,442.59, with an average
purchase price of $88,942. The average income was $33,458. In total CHFA has originated
995 loans in Pueblo County for over $97 million from 2005-2009.
The allocation is to be used within the City of Pueblo, however, if the allocation is not used
locally within a two-year period, then the balance becomes available for statewide use.
FINANCIAL IMPACT
By assigning the allocation to CHFA, the City provides additional mortgage funding to this
community without incurring costs.
ASSIGNMENT OF ALLOCATION
(Single Family Mortgage Revenue Bonds)
This Assignment of Allocation (the "Assignment "), dated this 23rd day of August,
2010, is between the City of Pueblo, A Municipal Corporation (the "Assignor ") and the
Colorado Housing and Finance Authority (the "Assignee ")
WITNESSETH
WHEREAS, the Assignor and the Assignee are authorized and empowered under
the laws of the State of Colorado (the "State ") to issue revenue bonds for the purpose of
providing single- family mortgage loans to low - and moderate - income persons and
families, and
WHEREAS, the Internal Revenue Code of 1986, as amended (the "Code "),
restricts the amount of tax - exempt bonds ( "Private Activity Bonds ") which may be issued
in the State to provide such mortgage loans and for certain other purposes (the "State
Ceiling "), and
WHEREAS, pursuant to the Code, the Colorado legislature adopted the Colorado
Private Activity Bond Ceiling Allocation Act, Part 17 of Article 32 of Title 24, Colorado
Revised Statutes (the "Allocation Act "), providing for the allocation of the State Ceiling
among the Assignee and other governmental units in the State. and further providing for
the assignment of allocations from such other governmental units to the Assignee and
WHEREAS, pursuant to an allocation under Section 24 -32 -1706 of the Allocation
Act, the Assignor has an allocation of the 2010 State Ceiling for the issuance of a
specified principal amount of Private Activity Bonds prior to September 15, 2010, the
"Allocation "), and
WHEREAS, the Assignor has determined that, in order to increase the availability
of adequate affordable housing for low- and moderate - income persons and families
within the City of Pueblo and elsewhere in the State, it is necessary or desirable to
provide for the utilization of all or a portion of the Allocation, and
WHEREAS, the Assignor has determined that the 2010 Allocation, or a portion
thereof, can be utilized most efficiently by assigning it to the Assignee to issue Private
Activity Bonds for the purpose of providing single- family mortgage loans to low- and
moderate - income persons and families ( "Revenue Bonds "), and the Assignee has
expressed its willingness to attempt to issue Revenue Bonds with respect to the 2010
Allocation, and
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WHEREAS, the City Council of the Assignor has determined to assign to the
Assignee $4,804 425 of its 2010 Allocation, and the Assignee has agreed to accept such
assignment, which is to be evidenced by this Assignment.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows
1 The Assignor hereby assigns to the Assignee $4,804,425 of its 2010
Allocation, subject to the terms and conditions contained herein. The Assignor represents
that it has received no monetary consideration for said assignment.
2 The Assignee hereby accepts the assignment to it by the Assignor of
$4,804,425 of Assignor's 2010 Allocation, subject to the terms and conditions contained
herein. The Assignee agrees to use its best efforts to issue and sell Revenue Bonds, in
one or more series, and to make proceeds of such Revenue Bonds available from time to
time during the period of two (2) years from the date of this Assignment for the purchase
of mortgage loans in at least the aggregate amount of $4 804,425 to finance single - family
housing facilities located in the City of Pueblo Unless otherwise agreed to in writing, the
mortgage loans will be subject to all applicable current requirements of Assignee's
mortgage revenue bond program, including Assignee's income and purchase price limits.
3 The Assignor hereby consents to the election by the Assignee, if the
Assignee in its discretion so decides, to treat all or any portion of the assignment set forth
herein as an allocation for a project with a carryforward purpose
4 The Assignor and Assignee each agree that it will take such further action
and adopt such further proceedings as may be required to implement the terms of this
Assignment.
5 Nothing contained in this Assignment shall obligate the Assignee to
finance mortgage loans in any particular amount or at any particular interest rate or to use
any particular percentage of the proceeds of its Revenue Bonds to provide mortgage loans
to finance single - family housing facilities located in the City of Pueblo
6 This Assignment is effective upon execution and is irrevocable
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IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment
on the date first written above
City of Pueblo, A Municipal Corporation
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By' ! n ! i.d
ATTEST
Title President of City Council
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Title City Clerk
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ATTEST � Chief Financial Officer ‘......../
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Assistant Secretar'
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