HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/19/2000 - RESOLUTION 2000-150 ESTABLISHING AFFORDABLE HOUSIN AGENDA ITEM SUMMARY ITEM NUMBER: 31
FORT COLLINS CITY COUNCIL DATE: Decemberl9, 2000
STAFF:
Alan Krcmazik
SUBJECT:
Resolution 2000-150 Establishing Affordable Housing as the Highest Priority in the Use of the
City's Year 2001 Private Activity Bond Allocation.
RECOMMENDATION:
Staff, the Finance Committee, and the Affordable Housing Board recommend adoption of the
Resolution.
FINANCIAL IMPACT:
The State Division of Housing has determined that the Private Activity Bond Allocation for the City
of Fort Collins for the year 2001 will be$2,837,700. The City may issue private activity bonds on
behalf of eligible projects up to the amount of the allocation. The amount issued by the City may
be increased if projects received additional allocation from the statewide balance. The statewide
balance application process begins in January of 2001 and allocations from the balance are made in
March. Private activity bonds are issued by the City "on behalf of"the qualified project. They do
not constitute a debt of the City and do not affect its credit rating. Revenue to repay the bonds must
come from the project being financed or the proponent of the project. Under federal and state law,
City revenue cannot be used to make payments on the bonds.
EXECUTIVE SUMMARY:
Under Sections 103 and 141 of the Internal Revenue Code, the City may issue tax exempt private
activity revenue bonds for certain purposes. One of the qualified uses for private activity bonds is
for projects that will provide affordable housing for low and moderate income individuals and
families. The Colorado General Assembly established the Colorado Private Activity Bond allocation
program to provide for the allocation of the States PAB ceiling under the federal Tax Reform Act
of 1986.
The result of the federal and state laws is that the City of Fort Collins has a private activity bond
allocation of $2,837,700 for the year 2001. Based on recommendations in the City's Priority
Affordable Housing Needs and Strategies Report(the"Report")and the review and recommendation
of the Council Finance Committee, the proposed Resolution would set affordable housing projects
as the top priority use for the City's year 2001 private activity bond allocation. In the event that no
affordable housing applications are received, the City may assign the allocation to other projects
consistent with the City's and policies and guidelines for private activity bonds.
DATE: December19, 2000 1 2 ITEM NUMBER: 31
The Report was adopted by the Council in the first quarter of 1999. In the Report, staff identified
private activity bonds as one of the tools the City should use to help address affordable housing
needs of the community. The Report recommended that the City's preference for the use of its
private activity bond allocation should be for affordable rental housing projects. The Report also
recommended that the City actively solicit affordable housing developments to fully utilize the
annual private activity bond allocation and that a competitive process should be used for allocating
such bonds. Finally, the Report recommended that the private activity bond process should be
coordinated with the City's other programs that support affordable housing.
Through the Resolution,the Council formally establishes affordable housing as the highest priority
for the year 2001 private activity bond allocation.
• RESOLUTION 2000-150
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ESTABLISHING AFFORDABLE HOUSING AS THE
HIGHEST PRIORITY IN THE USE OF THE
CITY'S YEAR 2001 PRIVATE ACTIVITY BOND ALLOCATION
WHEREAS,the City of Fort Collins is authorized and empowered under the laws of the State
of Colorado (the "State") to issue private activity bonds to support the tax-exempt financing of
limited private activities or projects,including projects that will provide affordable housing for low
and moderate income individuals and families; and
WHEREAS, the Internal Revenue Code of 1986, as amended,restricts the amount of tax-
exempt private activity bonds that may be issued in the State to a total State Ceiling; and
WHEREAS, in view of the limitations in federal tax law, the Colorado General Assembly
has 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 Finance Authority and other governmental units in the State,
including the City of Fort Collins; and
WHEREAS,Section 24-32-1706(1),C.R.S.,establishes a formula by which the City of Fort
• Collins will receive an allocation of the year 2001 State Ceiling permitting the issuance of private
activity bonds with a total principal amount not to exceed $2,837,700, during the year 2001 (the
"2001 Allocation"), and
WHEREAS, in February 1999, the Council, by Resolution 99-16, adopted the Priority
Affordable Housing Needs and Strategies Report (the "Report"), which set forth various goals,
strategies and objectives, intended generally to assist the City in taking strategic action to obtain
housing assistance for persons in the greatest need of such assistance; and
WHEREAS, the Report included a recommendation that the City take various actions,
including the establishment of affordable housing activities and projects as the City's highest priority
in the use of its private activity bond allocation; and
WHEREAS, the Council supports the implementation of the recommendations set forth in
the Report,to the extent practicable,and has determined that the establishment of affordable housing
activities and projects as the City's highest priority in the use of its 2001 Allocation is both
appropriate and desirable.
NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that the Council hereby declares its policy and intent that affordable housing activities
and projects shall be the City's highest priority in the use of its 2001 Allocation for private activity
bonds.
Passed and adopted at a regular meeting of the City Council held this 19th day of December,
A.D. 2000.
Mayor
ATTEST:
City Clerk