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HomeMy WebLinkAbout09339 City Clerk’s Office Item # R-1 Background Paper for Proposed ORDINANCE COUNCIL MEETING DATE: August 27, 2018 TO: President Christopher A. Nicoll and Members of City Council CC: Sam Azad, City Manager VIA: Brenda Armijo, Acting City Clerk FROM: Bryan Gallagher, Acting Director of Housing and Citizen Services SUBJECT: AN ORDINANCE AUTHORIZING ASSIGNMENT OF A PRIVATE ACTIVITY BOND ALLOCATION FROM THE CITY OF PUEBLO TO THE COLORADO HOUSING AND FINANCE AUTHORITY PURSUANT TO THE COLORADO PRIVATE ACTIVITY BOND CEILING ALLOCATION ACT SUMMARY: This Ordinance will allow the City of Pueblo to assign to the Colorado Housing and Finance Authority (CHFA) $5,807,603, previously awarded to the City pursuant to the Colorado Private Activity Bond Ceiling Allocation Act. These funds will be used to finance multi-family or single- family mortgage loans for low- and moderate-income persons and families within Pueblo County and throughout the state. PREVIOUS COUNCIL ACTION: None. BACKGROUND: The Ordinance continues the practice of assigning to CHFA the City’s Private Activity Bond (PAB) allocation for use in multi-family and single-family Mortgage Revenue Bonds (MRB). With an excess single-family mortgage cap this year throughout the State, it is recommended the City reserve the allocation for multi-family projects for the first twelve months and lift the restriction for any unused funds after that period. FINANCIAL IMPLICATIONS: The City has not identified any eligible projects for these funds. If no projects are identified, the funds revert to the Statewide Balance. By assigning the allocation to CHFA, the City provides additional mortgage funding to the community without incurring costs. BOARD/COMMISSION RECOMMENDATION: Not applicable for this Ordinance. STAKEHOLDER PROCESS: Not applicable for this Ordinance. ALTERNATIVES: If the Ordinance is not approved, the funds are not assigned to CHFA and will be kept with the City. If a project is not then identified, the allocation reverts to the Statewide Balance. RECOMMENDATION: Approval of the Ordinance. ATTACHMENTS: 2018 Assignment of Allocation 2018 PAB Attorney Certification ORDINANCE NO. 9339 AN ORDINANCE AUTHORIZING ASSIGNMENT OF A PRIVATE ACTIVITY BOND ALLOCATION FROM THE CITY OF PUEBLO TO THE COLORADO HOUSING AND FINANCE AUTHORITY PURSUANT TO THE COLORADO PRIVATE ACTIVITY BOND CEILING ALLOCATION ACT WHEREAS, the City of Pueblo is authorized and empowered under the laws of the State of Colorado (the "State") to issue revenue bonds for the purpose of financing qualified residential rental projects for low- and moderate-income persons and families; and WHEREAS, the City of Pueblo is authorized and empowered under the laws of 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; 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 of Pueblo has an allocation of the 2018 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 14, 2018 (the "2018 Allocation"); and WHEREAS, the City of Pueblo 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 2018 Allocation; and WHEREAS, the City of Pueblo has determined that the 2018 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 financing one or more multi-family rental housing projects for low- and moderate-income persons and families, or for the purpose of providing single-family mortgage loans to low- and moderate-income persons and families ("Revenue Bonds") or for the issuance of mortgage credit certificates; and WHEREAS, the City Council of the City of Pueblo has determined to assign $5,807,603.00 of its 2018 Allocation to the Authority, which assignment is to be evidenced by an Assignment of Allocation between the City of Puebloand the Authority (the "Assignment of Allocation"); Now, Therefore, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The assignment to the Authority of $5,807,603.00 of the City of Pueblo's 2018 Allocation be and hereby is approved. SECTION 2 The form and substance of the Assignment of Allocation be and hereby are approved; provided, however, that the City Manager be and hereby is authorized to make such technical variations, additions 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 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 The officers of the City are directed and authorized to perform any and all acts consistent with the intent of this Ordinance and to effectuate the policies and procedures described herein. SECTION 6 This Ordinance shall become effective upon final passage and approval. INTRODUCED: August 27, 2018 BY: Ed Brown MEMBER OF CITY COUNCIL APPROVED: PRESIDENT OF CITY COUNCIL ATTESTED BY: ACTING DEPUTY CITY CLERK PASSED AND APPROVED: September 10, 2018