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HomeMy WebLinkAbout09993 ORDINANCE NO. 9993 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 2021 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 15, 2021 (the "2021 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 2021 Allocation; and WHEREAS, the City of Pueblo has determined that the 2021 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 $6,220,659.00 of its 2021 Allocation to the Authority, which assignment is to be evidenced by an Assignment of Allocation between the City of Pueblo and the Authority (the "Assignment of Allocation"); Now, Therefore, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Assignment of Allocation, a copy of which is attached hereto and made a part hereof by reference, by and between the City of Pueblo, a Municipal Corporation, and the Colorado Housing and Finance Authority, after having been approved as to form by the City Attorney, is hereby accepted and approved; provided, however, that the Mayor is hereby 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 2 The Mayor of the City of Pueblo is hereby 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 affect the aforesaid assignment in accordance with the intent of this Ordinance, and any execution by electronic signature is hereby attributable to the Mayor and the City of Pueblo. SECTION 3 The assignment to the Authority of $6,220,659.00 of the City of Pueblo's 2021 Allocation be and hereby is approved. 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 and staff of the City are authorized to perform any and all acts consistent with the intent of this Ordinance and the Assignment of Allocation to implement the transactions described therein. SECTION 6 This Ordinance shall become effective on the date of final action by the Mayor and City Council. Action by City Council: Introduced and initial adoption of Ordinance by City Council on August 9, 2021 . Final adoption of Ordinance by City Council on August 23, 2021 . President of City Council Action by the Mayor: ☒ Approved on August 24, 2021 . □ Disapproved on based on the following objections: _ Mayor Action by City Council After Disapproval by the Mayor: □ Council did not act to override the Mayor's veto. □ Ordinance re-adopted on a vote of , on □ Council action on _______ failed to override the Mayor’s veto. President of City Council ATTEST City Clerk City Clerk’s Office Item # R-8 Background Paper for Proposed ORDINANCE COUNCIL MEETING DATE: August 9, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Nicholas A. Gradisar, Mayor VIA: Marisa Stoller, City Clerk FROM: Bryan Gallagher, 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) $6,220,659.00 in Private Activity Bonds, previously awarded to the City pursuant to the Colorado Private Activity Bond Ceiling Allocation Act, C.R.S. 24-32-1701 et seq. 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: Not applicable to this Ordinance. BACKGROUND: The Ordinance continues the practice of assigning to the Colorado Housing Finance Authority (CHFA) the City’s Private Activity Bond (PAB) allocation for use in multi-family and single-family Mortgage Revenue Bonds (MRB). This year, the Housing Trust Group, a private developer, has requested use of the bond allocation in conjunction with other CHFA financing to acquire and construct the Fairway Village, a 222-unit, affordable housing development on a nine-acre site, located near the intersection of HWY50A and Elizabeth Avenue on Parcel No. 513038002 & 513038003. The Housing Trust Group is also requesting funds through CHFA’s 4% low-income housing tax credit program. The estimated project cost is $44M. FINANCIAL IMPLICATIONS: By assigning the allocation to CHFA for the Fairway Village, the City provides additional bonding capacity for the developer to construct the project. The developer’s prospectus anticipates that $22M in PAB capacity is needed to construct the project. BOARD/COMMISSION RECOMMENDATION: Not applicable for this Ordinance. STAKEHOLDER PROCESS: Not applicable for this Ordinance. ALTERNATIVES: If the Ordinance is not approved, the funds will not be assigned to CHFA and the allocation will revert to the State of Colorado under the statewide balance on September 15, 2021. RECOMMENDATION: The Department of Housing and Citizen Services recommends approval of the Ordinance. ATTACHMENTS: Proposed Ordinance 2021 Assignment of Allocation 2021 Private Activity Bond Attorney Certification chfa® assignment of allocation - city y Multifamily Housing Facility Bonds/Single Family Mortgage Revenue Bonds This Assignment of Allocation (the "Assignment"), dated this .Z 3' day of August 2021, is between the City of Pueblo , Colorado (the "Assignor" or the "Jurisdiction") and 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 finance such projects 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 2021 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 15, 2021, (the "2021 Allocation"); and WHEREAS, the Assignor has determined that, in order to increase the availability of adequate affordable rental housing for low- and moderate-income persons and families within the Jurisdiction, Colorado and elsewhere in the State, it is necessary or desirable to provide for the utilization of all or a portion of the 2021 Allocation; and WHEREAS, the Assignor has determined that the 2021 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 financing one or more multifamily rental housing projects for low- and moderate- income persons and families or 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 2021 Allocation assigned herein; and WHEREAS, the City Council of the Assignor has determined to assign to the Assignee all or a portion of its 2021 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 $ 6,220,659 of its 2021 Allocation (the "Assigned 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 the Assigned Allocation, subject to the terms and conditions contained herein. The Assignee agrees to use its best efforts to issue and sell Revenue Bonds in an aggregate principal amount equal to or greater than the Assigned Allocation, in one or more series, and to make proceeds of such Revenue Bonds available from time to time for a period of one (1) year from the date of this Assignment to finance multi-family rental housing projects located in the Jurisdiction,or to issue Revenue Bonds for the purpose of providing single-family mortgage loans to low-and moderate income persons and families in the Jurisdiction. 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 Assigned Allocation as an allocation for a project with a carryforward purpose or to make a mortgage credit certificate election, in lieu of issuing Revenue Bonds. 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 any particular multi-family rental housing project located in the Jurisdiction or elsewhere or to finance single- family 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 or mortgage credit certificates to finance single-family housing facilities in the Jurisdiction, provided that any Revenue Bond proceeds attributable to the Assigned Allocation shall be subject to paragraph 2 above. 6. This Assignment is effective upon execution and is irrevocable. 7. Counterparts. This Assignment may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Assignment by electronic image scan transmission will be effective as delivery of a manually executed counterpart of the Assignment. IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment on the date first written above. City of Pueblo , Colorado � r By:_�, l� Name: Nicholas A. Gradisar Title: Mayor COLORADO HOUSING AND FINANCE AUTHORITY By: l 6? V Name: Cris A. White Title: Executive DirectorICEO CERTIFICATE OF THE CITY OF PUEBLO COLORADO CONCERNING ASSIGNMENT OF PRIVATE ACTIVITY BOND VOLUME CAP ALLOCATION 1, the undersigned, hereby certify that I am a duly chosen, qualified and City Attorney of the City of Pueblo. Colorado (the "City"), and that: I. The City is a public body politic and corporate, duly organized and existing under the constitution and laws of the State of Colorado. 2. The City has been previously notified that, pursuant to Section 24-32-1706 of the Colorado Private Activity Bond Ceiling Allocation Act, Part 17 of Article 32 of Title 24, Colorado Revised Statutes (the "Allocation Act"), it has an allocation of the State ceiling (as defined in the Allocation Act) for 2021 in the amount of$6,220,659.00 (the "2021 Allocation"). 3. Attached hereto as Exhibit A is a true and correct copy of an ordinance and the related minutes thereto (the"Ordinance")authorizing the assignment to the Colorado Housing and Finance Authority (the "Authority") of all or a portion of the 2021 Allocation in an amount equal to $6,220,659.00 (the "Assigned Allocation"), and authorizing the execution and delivery of an Assignment of Allocation dated _August 9-3 , 2021 (the "Assignment of Allocation") between the City and the Authority in connection therewith, which Ordinance was duly adopted by the City Council of the City (the "City Council") at a meeting thereof held on August _23, 2021, at which meeting a quorum was present and acting throughout and which Ordinance has not been revoked, rescinded, repealed, amended or modified and is in full force and effect on the date hereof. 4. The meeting of the City Council at which action has been taken with respect to the Assignment of Allocation was a regular meeting properly called and open to the public at all times. 5. With respect to the Assigned Allocation, the City has not heretofore: (a) issued private activity bonds; (b) assigned the Assigned Allocation to another "issuing authority," as defined in the Allocation Act; (c) made a mortgage credit certificate election; or (d) treated the Assigned Allocation as an allocation for a project with a carry forward purpose, as defined in the Allocation Act. 6. The Assignment of Allocation, attached hereto as Exhibit B, is in the form presented to and approved by the City Council at the meeting thereof held on August 23, 2021. 7. On or before the date hereof, counterparts of the Assignment of Allocation were officially executed by the Mayor and the City Clerk of the City. On the date.of such signing, such persons were the duly sworn, qualified and acting officers of the City authorized to execute the Assignment of Allocation and holding the offices of the Mayor and City Clerk, respectively. S\Resolutions&Ordinances Beth\Reso&Ordinances\ordinances\3031\Private Activity Bond\3031 City Attorney Certificate docv 8. The City has authorized the execution, delivery and due performance of the Assignment of Allocation,and the execution and delivery of the Assignment of Allocation and the compliance by the City with the provisions thereof, will not, to the best of my knowledge, conflict with or constitute on the part of the City a breach of or a default under any existing Colorado law, City ordinance, court or administrative regulation, decree or order or any agreement or other instrument to which the City is subject or by which it is bound. 9. To the best of my knowledge, there does not exist any action, suit, proceeding or investigation pending, or threatened against the City, contesting (a) the corporate existence of the City,(b)the title of its present officers or any of them to their respective offices, including, without limitation, the members of the City Council, (c) the validity of the Assignment of Allocation, or (d) the power of the City to execute, deliver or perform the Assignment of Allocation. 10. No referendum petition has been filed concerning the Ordinance; and to the best of my knowledge none is being circulated or planned for circulation. WITNESS my hand and the seal of the City this_August �.. , 2021. ��,, City Attorney a 40 4:. �,, '" ` ltf S/ /�• e C, 'N �0 e