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HomeMy WebLinkAbout06726ORDINANCE NO. 6726 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 FINANCING MULTI - FAMILY RENTAL HOUSING, 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 financing multifamily rental housing projects for 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 rental housing 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 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 2001 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 15, 2001 (the "2001 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 2001 Allocation; and WHEREAS, the City has determined that the 2001 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 rental projects for low- to moderate - income persons and families; and WHEREAS, the City Council of the City of Pueblo has determined to assign $718,594 of its 2001 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 $718,594 of the City of Pueblo's 2001 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 13, 2001 f • - ll. ATTEST: Gina utcher City Clerk PASSED AND APPROVED: August 27 2001 Councilperson ��LF Background Paper for Proposed ORDINANCE AGENDA ITEM # DATE: AUGUST 13, 2001 DEPARTMENT: HOUSING AND CITIZEN SERVICES/TONY BERUMEN 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 FINANCING MULTI - FAMILY RENTAL HOUSING, PURSUANT TO THE COLORADO PRIVATE ACTIVITY BOND CEILING ALLOCATION ACT. ISSUE This Ordinance will allow the City to assign to the Colorado Housing Finance Authority (CHFA) $718,594, which represents part of the PAB awarded to the City pursuant to the Colorado Private Activity Bond Ceiling Allocation Act. These bonds will be used for the financing of multi - family rental housing for low -to — moderate - income families. RECOMMENDATION Approve the Ordinance, thus authorizing CHFA to administer on behalf of the City of Pueblo its part of the bond allocation in the amount of $718,594 for multi- family rental housing. BACKGROUND The City and County Housing Departments have held public forum meetings to receive input on the needs of the Pueblo residents. Safe and decent affordable rental housing continues to be a need as expressed by our citizens. In an effort to meet this need, the City wishes to use part of its PAB allocation, to facilitate the financing of projects. The City will issue a Notice of Funding Availability (NOFA) for these set -aside funds. If there is no response to the NOFA then the City has the option to assign the funds for use in single - family MRBs. FINANCIAL IMPACT By assigning the allocation to CHFA, the City provides additional funding to this community without incurring costs. CHFA administers the bonds free of charge to the City of Pueblo. 111:0:r11:3 1 r1% ASSIGNMENT OF ALLOCATION This Assignment of Allocation (the "Assignment "), dated this 13' day of August 2001, 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 financing multifamily rental housing projects for 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 2001 State Ceiling for the issuance of a specific principal amount of Private Activity Bonds prior to September 15, 2001 (the "2001 Allocation "); and WHEREAS, the Assignor has determined that, in order to increase the availability of adequate affordable housing by 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 2001 Allocation; and WHEREAS, the Assignor has determined that the 2001 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 ( "Revenue Bonds "), and the Assignee has expressed its willingness to attempt to issue Revenue Bonds with respect to the 2001 Allocation; and WHEREAS, the City Council of the Assignor has determined to assign to the Assignee $718,594. of its 2001 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 $718,594. of its 2001 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 $718,594. of Assignor's 2001 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 a mortgage loan to qualified respondents of a proposed Request For Proposal process to finance multi - family rental housing for low- to moderate- income individuals and families with special needs, located in the City of Pueblo, Colorado. In the event Assignee is unable to finance the project or other multifamily rental housing projects located within Assignor's boundaries on or prior to December 31, 2002, Assignee agrees to use its best efforts to use the 2001 Allocation hereby assigned in connection with the issuance of Revenue Bonds to finance one or more other multifamily rental housing projects anywhere within the State, as it may in its discretion determine. 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 the project or to use the allocation hereby assigned it to finance any other multifamily rental housing project located in the City of Pueblo. 6. This Assignment is effective upon execution and is irrevocable. IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment on the date first written above. CITY OFJ PUEBLO, [SEAL] ATTEST: By: of the City Council r City Jerk A" �o'°,•QORA72es. a I. 4 0 • U s...• OL-e COLORADO HOUSING FINANCE AUTHORITY By: Executive Director Assistant Secretary