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HomeMy WebLinkAbout07640ORDINANCE NO. 7640 AN ORDINANCE ASSIGNING AND TRANSFERRING TO EL PASO COUNTY, COLORADO, A PORTION OF CITY OF PUEBLO, COLORADO'S 2007 ALLOCATION FROM THE STATE CEILING FOR PRIVATE ACTIVITY BONDS TO FINANCE RESIDENTIAL HOUSING FACILITIES FOR LOW- AND MIDDLE - INCOME PERSONS AND FAMILIES WITHIN THE CITY AND CERTAIN OTHER COUNTIES IN THE STATE OF COLORADO; AUTHORIZING THE DELEGATION TO EL PASO COUNTY, COLORADO OF THE AUTHORITY OF THE CITY WITH RESPECT TO THE ISSUANCE OF SINGLE FAMILY HOME MORTGAGE REVENUE AND REFUNDING BONDS TO FINANCE RESIDENTIAL HOUSING FACILITIES FOR LOW- AND MIDDLE - INCOME PERSONS AND FAMILIES WITHIN THE CITY AND CERTAIN OTHER COUNTIES IN THE STATE OF COLORADO; APPROVING SUCH BONDS AND THE SINGLE FAMILY MORTGAGE LOAN PROGRAM; AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DELEGATION AND PARTICIPATION AGREEMENT, AN ASSIGNMENT AGREEMENT AND OTHER DOCUMENTS IN CONNECTION THEREWITH. WHEREAS, the City of Pueblo, Colorado (the "City ") and El Paso County, Colorado (the "Issuer") are each authorized by the County and Municipality Development Revenue Bond Act, constituting Article 3 of Title 29, Colorado Revised Statutes, as amended (the "Act "), to finance projects as defined in the Act, including residential housing facilities for low- and middle- income persons and families; and WHEREAS, the City has been awarded on January 1, 2007 $4,427,183 (the "2007 Allocation ") of the bond ceiling for the State of Colorado (the "State ") and its issuing authorities pursuant to the Colorado Private Activity Bond Ceiling Allocation Act, constituting Part 17 of Article 32 of Title 24, Colorado Revised Statutes, as amended (the "Allocation Act "), for use in the issuance of private activity bonds to finance projects under the Act among the issuing authorities of the State of Colorado; and WHEREAS, the Allocation Act provides for the assignment of bond allocations between issuing authorities of the State; and WHEREAS, the City desires to assign and transfer to the Issuer an amount equal to $1,500,000 of the 2007 Allocation, which the City will commit and reserve for the issuance of such private activity bonds, to finance residential housing facilities for low- and middle- income persons and families within the City and other counties in the State of Colorado; and WHEREAS, it is necessary to evidence such assignment and transfer and the acceptance thereof by the execution and delivery by the City of an Assignment (the "Assignment ") by and between the City and the Issuer in substantially the form presented at this meeting; and WHEREAS, Section 29 -3- 104(2) of the Act provides that a county or municipality may delegate by resolution or ordinance, as the case may be, to any other county or municipality authority to act on its behalf in the financing of projects under the Act and that any such delegation may be general or limited in scope and time and may be irrevocable for the term or terms of any financing agreement or bond issue, all as provided in such resolution or ordinance; and WHEREAS, the Issuer proposes to issue single family home mortgage revenue and refunding bonds pursuant to the Act (the "Bonds ") to finance residential housing facilities for low- and middle- income persons and families within the City and other counties in the State of Colorado (the "Single Family Mortgage Loan Program "); and WHEREAS, the City desires to delegate to the Issuer the authority of the City to finance and otherwise take action and exercise power under the Act on behalf of the City with respect to the Single Family Mortgage Loan Program within the City; and WHEREAS, it is necessary to evidence such delegation by the execution and delivery by the City of a Delegation and Participation Agreement (the "Delegation and Participation Agreement ") by and between the City and the Issuer in substantially the form presented at this meeting; NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: Section 1. In order to facilitate the origination of single family mortgage loans within the boundaries of the City as part of the Single Family Mortgage Loan Program, the City hereby (i) assigns and transfers to the Issuer an amount equal to $1,500,000 of the 2007 Allocation, (ii) delegates to the Issuer the authority of the City to finance and otherwise take action and exercise power under the Act on behalf of the City with respect to the Single Family Mortgage Loan Program within the City and (iii) approves, and authorizes and directs the President of the City Council to sign and deliver and the City Clerk to attest and deliver, the Assignment and the Delegation and Participation Agreement in substantially the forms presented at this meeting. Copies of the proposed Assignment and Delegation and Participation Agreement are on file in the office of the City Clerk and are available for inspection by the public. Section 2_ The Council hereby approves the Bonds and the Single Family Mortgage Loan Program for purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended. Section 3_ The President of the City Council is hereby authorized and directed to execute and deliver and the City Clerk is hereby authorized and directed to attest and deliver such other agreements and certificates and to take such other actions as may be necessary or convenient to carry out and give effect to the Delegation and Participation Agreement, the Assignment, and this Ordinance, including any agreement or certificate approving the Bonds or the Single Family Mortgage Loan Program for purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended. Section 4. Nothing contained in this Ordinance, the Assignment, or the Delegation and Participation Agreement shall constitute a debt, indebtedness or multiple - fiscal year direct or indirect debt or other financial obligation of the City within the meaning of the Constitution or statutes of the State of Colorado or the home rule charter of any political subdivision thereof, nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. Section 5. 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 any such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. Section 6. This Ordinance shall be in full force and effect upon its passage and approval. INTRODUCED Auqust 13, 2007 APPROVED: a ESID NT%J City Council ATTESTED BY: CITY CLERK BY Randy Thurston Councilperson PASSED AND APPROVED: August 27, 2007 06. llv�iO Background Paper for Proposed ORDINANCE AGENDA ITEM # ' DATE: August 13, 2007 DEPARTMENT: HOUSING AND CITIZEN SERVICES /ADA RIVERA CLARK TITLE AN ORDINANCE ASSIGNING AND TRANSFERRING TO EL PASO COUNTY, COLORADO, A PORTION OF CITY OF PUEBLO, COLORADO'S 2007 ALLOCATION FROM THE STATE CEILING FOR PRIVATE ACTIVITY BONDS TO FINANCE RESIDENTIAL HOUSING FACILITIES FOR LOW- AND MIDDLE - INCOME PERSONS AND FAMILIES WITHIN THE CITY AND CERTAIN OTHER COUNTIES IN THE STATE OF COLORADO; AUTHORIZING THE DELEGATION TO EL PASO COUNTY, COLORADO OF THE AUTHORITY OF THE CITY WITH RESPECT TO THE ISSUANCE OF SINGLE FAMILY HOME MORTGAGE REVENUE AND REFUNDING BONDS TO FINANCE RESIDENTIAL HOUSING FACILITIES FOR LOW- AND MIDDLE - INCOME PERSONS AND FAMILIES WITHIN THE CITY AND CERTAIN OTHER COUNTIES IN THE STATE OF COLORADO; APPROVING SUCH BONDS AND THE SINGLE FAMILY MORTGAGE LOAN PROGRAM; AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DELEGATION AND PARTICIPATION AGREEMENT, AN ASSIGNMENT AGREEMENT AND OTHER DOCUMENTS IN CONNECTION THEREWITH b *'jlL This Ordinance will allow the City of Pueblo to assign to El Paso County, Colorado a portion of the 2007 Private Activity Bond (PAB) allocation, awarded to the City pursuant to the Colorado Private Activity Bond Ceiling Allocation Act. These funds will be used to originate mortgages for first -time homebuyers within the City of Pueblo. RECOMMENDATION Approve BACKGROUND El Paso County approached the City and the County of Pueblo in 2007 to partner in the El Paso County, Colorado Single Family Bond Program. The County has already assigned its 2007 allocation in the amount of $1,994,738. The Department of Housing recommends that we allocate $1.5 million of the $4,427,183, 2007 allocation to the Bond Program. This translates to approximately 14 loans. We are confident that 14 loans will be originated in the Pueblo Community. The Bond Program has a couple of components that make it attractive: Allows the City to work with local lenders to tailor the Program to targeted neighborhoods or populations; Provides a 4% grant to the buyer for down payment assistance. These funds are a gift and the property is not liened for said amount. This year we propose splitting up the allocation between the CHFA program (approx. $2.9 million) and the El Paso County Bond Program (approx. $1.5). The allocation is to be used within the City of Pueblo, however, if the allocation is not used then the balance becomes available to Pueblo and El Paso County residents. At present interested lenders are Wells Fargo and Countrywide. There will be a lender meeting in the near future to recruit additional lenders, pending the Council's approval of the assignment. FINANCIAL IMPACT By assigning the allocation to El Paso County, the City provides additional mortgage and down payment funding to the Pueblo community without incurring costs. Ord. 7640 EXHIBIT A DELEGATION AND PARTICIPATION AGREEMENT THIS DELEGATION AND PARTICIPATION AGREEMENT (this "Delegation and Participation Agreement ") is by and between the CITY OF PUEBLO, COLORADO, a home rule city, body corporate and politic and a political subdivision of the State of Colorado (the "City "), and EL PASO COUNTY, COLORADO, a county and political subdivision of the State of Colorado (the "Issuer "). RECITALS: WHEREAS, the City and the Issuer are each authorized by the County and Municipality Development Revenue Bond Act, constituting article 3 of title 29, Colorado Revised Statutes, as amended (the "Act "), to finance projects as defined in the Act, including residential housing facilities for.low- and middle - income persons and families; and WHEREAS, Section 29 -3- 104(2) of the Act provides that a county or municipality may delegate by resolution or ordinance, as the case may be, to any other county or municipality authority to act on its behalf in the financing of projects under the Act and that any such delegation may be general or limited in scope and time and may be irrevocable for the term or terms of any financing agreement or bond issue, all as provided in such resolution or ordinance; and WHEREAS, pursuant to an Assignment Agreement dated the date hereof (the "Assignment "), the City is assigning and transferring to the Issuer $1,500,000 of the City's 2007 bond ceiling for the State of Colorado and its issuing authorities computed under Section 146(d) of the Internal Revenue Code of 1986, as amended, under the Colorado Private Activity Bond Ceiling Allocation Act, constituting Part 17 of Article 32 of Title 24, Colorado Revised Statutes, as amended, for use in the issuance of private activity bonds; and WHEREAS, the Issuer proposes to issue single family home mortgage revenue and refunding bonds pursuant to the Act (the "Bonds ") to finance residential housing facilities for low- and middle - income persons and families within the City and other counties in the State of Colorado (the "Single Family Mortgage Loan Program "); and WHEREAS, the City wishes to participate in the Single Family Mortgage Loan Program; and WHEREAS, the City desires to delegate to the Issuer the authority of the City to finance and otherwise take action and exercise power under the Act on behalf of the City with respect to the Single Family Mortgage Loan Program within the City. NOW THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, the City and the Issuer hereby agree as follows: Section 1. The City hereby delegates to the Issuer the authority of the City to finance and otherwise take action and exercise power under the Act on behalf of the City with respect to the Single Family Mortgage Loan Program within the City. Section 2. The Issuer hereby accepts the delegation of authority from the City pursuant to Section 1 hereof and agrees to abide by each of the terms and conditions of this Delegation and Participation Agreement in connection with the use of such delegation. The Issuer agrees to make available to the City no less than $1,500,000 of the proceeds of the Bonds for the origination of home mortgages within the City's boundaries. Section 3. The participation of the City in the Single Family Mortgage Loan Program, and all undertakings, obligations, duties and rights of the City and the Issuer under this Delegation and Participation Agreement, are contingent upon the issuance of the Bonds for the Single Family Mortgage Loan Program. Section 4. In the event that the Bonds are not issued for use in the Single Familye, Mortgage Loan Program, this. Delegation. and Participation - Agreement -and, all. duties, obligations and rights of the Issuer and the City hereunder, shall terminate. If the Bonds are not issued for use in the Single Family Mortgage Loan Program, the City agrees to hold the Issuer harmless for any costs or any other liabilities incurred by the City with respect to the adoption and approval of this Delegation and Participation Agreement, the Ordinance of the City adopted with respect to the Single Family Mortgage Loan Program, or any other City actions related thereto. IN WITNESS WHEREOF, the City and the Issuer have caused this Delegation and Participation Agreement to be executed to be effective as of August 27, 2007. [SEAL] CITY OF PUEBLO, COLD ,46 By Pre dent of he City Council [SEAL] Attest: EL PASO COUNTY, COLORADO, as Issuer 9�� / By - Chair, Board of ommissioners By - - - - p� rr County Clerk A -2 Ord. 7640 EXHIBIT B ASSIGNMENT AGREEMENT This Assignment Agreement (the "Assignment ") dated the 27th day of August, 2007, is by and between the CITY OF PUEBLO, COLORADO, a home rule city, body corporate and politic and a political subdivision of the State of Colorado (the "Assignor ") and EL PASO COUNTY, COLORADO, a county and political subdivision of the State of Colorado (the "Assignee "). RECITALS: WHEREAS, the Assignor has been awarded $4,427,183 (the "2007 Allocation ") of the bond ceiling for the, State of Colorado and its issuing authorities (the "State Ceiling ") computed under Section 146(d) of the Internal Revenue Code of 1986, as amended (the "Code "), under the Colorado Private Activity Bond Ceiling Allocation Act, constituting Part 17 of Article 32 of Title 24, Colorado Revised Statutes, as amended (the "Allocation Act "), for use in the issuance of private activity bonds; and WHEREAS, subject to the terms and conditions set forth herein, the Assignor desires to assign and transfer to the Assignee, and the Assignee desires to accept, Assignor's 2007 Allocation in an amount equal to $1,500,000, which the Assignor agrees to commit and reserve for the issuance of such private activity bonds; and WHEREAS, the private activity bonds will be issued by the Assignee pursuant to the County and Municipality Development Revenue Bond Act, constituting Article 3 of Title 29, Colorado Revised Statutes, as amended (the "Act "), and such bonds will be used for a purpose which qualifies as a "project" as described in the Act. ASSIGNMENT In exchange for the agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. In accordance with action taken by the governing body of the Assignor on August 27, 2007, the Assignor hereby assigns and transfers to the Assignee, Assignor's 2007 Allocation from the State Ceiling for private activity bonds in an amount equal to $1,500,000 (the "Assigned Amount "). In addition, the Assignor hereby consents to the election by the Assignee, if the Assignee in its discretion so decides, to treat the Assigned Amount as an allocation for a project with a carry purpose and /or to make a mortgage credit certification election, thus avoiding reversion of the Assigned Amount to the statewide balance under the Allocation Act. 2. The Assignor represents that is has received no monetary consideration for the assignment set forth above. 3. The Assignee hereby: (a) Accepts the assignment of Assignor's 2007 Allocation from the State Ceiling described above; and (b) Agrees to abide by each of the terms and conditions of this Assignment in connection with the use of Assignor's 2007 Allocation. IN WITNESS WHEREOF, the Assignor and the Assignee have caused this instrument to be executed to be effective as of the date and year first written above. [SEAL] Attest: CITY OF PUEBLO. COLORADO b Presid nt of A City Council u [SEAL] EL PASO COUNTY, COLORADO, as Issuer B Chair, Board of Count Commissioners Attest: By Pe- Clerk