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HomeMy WebLinkAbout07875ORDINANCE NO. 7875 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 2008 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 15, 2008 (the "2008 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 2008 Allocation; and WHEREAS, the City has determined that the 2008 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 $4,462,458 of its 2008 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 $4,462,458 of the City's 2008 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. BY Vera Ortegon Councilperson APPROVE �. A S C)1ay, � CLERK INTRODUCED August 25, 2008 PASSED AND APPROVED: September 8 2008 0YCt.• I b I5 nj Background Paper for Proposed ORDINANCE AGENDA ITEM # 1 DATE: August 25, 2008 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) $4,462,458, awarded 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 Approve 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 2007, the City assigned to CHFA $2.9 million of its allocation for single - family Mortgage Revenue Bonds (MRB). To date C14FA issued $2.9 million in loans in Pueblo County, and $2.1 million in the City. Twenty -five loans were originated within the City. The average loan amount was $98,484, with an average purchase price of $88,217. The average income was $34,770. In total CHFA originated over 265 loans in Pueblo County for over $26 million in 2007. 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. "EXHIBIT A" ASSIGNMENT OF ALLOCATION This Assignment of Allocation (the "Assignment "), dated this 8th day of September 2008, 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 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 2008 State Ceiling for the issuance of a specified principal amount of Private Activity Bonds prior to September 15, 2008 (the "2008 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 2008 Allocation; and WHEREAS, the Assignor has determined that the 2008 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 2008 Allocation; and WHEREAS, the City Council of the Assignor has determined to assign to the Assignee $4,462,458 of its 2008 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 $4,462,458. of its 2008 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 $4,462,458. of Assignor's 2008 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 $4,462,458. 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. IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment on the date -first written above. CITY OF PUEBLO, COLORADO [SEAL] ATTEST: By: President of the City Council By City (&rk [SEAL] ATTEST: By: ( A f q Secretary HOUSING FINANCE AUTHORITY Executive Director