HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/07/2015 - RESOLUTION 2015-062 AUTHORIZING THE ASSIGNMENT OFAgenda Item 17
Item # 17 Page 1
AGENDA ITEM SUMMARY July 7, 2015
City Council
STAFF
Sue Beck-Ferkiss, Social Sustainability Specialist
Beth Sowder, Director of Social Sustainability
John Voss, Controller/Assistant Financial Officer
SUBJECT
Resolution 2015-062 Authorizing the Assignment of the City's Private Activity Bond Allocation for 2015 to the
Fort Collins Housing Authority to Finance the Development and Rehabilitation of Affordable Housing Units at
The Village on Cunningham Corner and The Village on Redwood.
EXECUTIVE SUMMARY
The purpose of this item is to assign the City's 2015 Private Activity Bond Allocation (PAB) in the amount of
$7,610,250 to the Fort Collins Housing Authority (FCHA) for the purpose of affordable housing development
and rehabilitation. Specifically, the bond proceeds will be used to finance the rehabilitation of 284 affordable
housing units located at the Villages on Cunningham Corner and the development of 72 new units located at
the Village on Redwood. There have been no other requests to use the 2015 PAB allocation.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BACKGROUND / DISCUSSION
Private Activity Bonds (PAB) are tax-exempt bonds that can be issued by eligible authorities. The proceeds of
the sale of the bonds may be used for specific purposes as determined by the Internal Revenue Service.
Permitted purposes include, but are not limited to, affordable housing development and rehabilitation. PAB
financing has also been used by the City for economic and industrial development purposes. The State of
Colorado PAB allocation program is established by the Colorado Private Activity Bond Ceiling Allocation Act,
Section 24-32-1707, et seq., C. R S. (Allocation Act).
In 2015, the total amount available statewide is $535,586,600. Fifty percent of the state ceiling is allocated
directly to statewide authorities and the other half is allocated directly to local governments based on
population size. The City has been notified that, pursuant to section 24-32-1706 of the Allocation Act, that its
allocation of the state ceiling for 2015 is $7,610,250. (Attachment 1) This is merely the authority to take on
debt and is not an allocation of funding. The City will not incur debt by assigning this allocation and this will not
affect the City's credit rating. If the City does not issue bonds or assign the bond cap to an eligible entity for a
local project by September 15 annually, the City allocation automatically reverts back to the state’s pool of
available bond capacity.
Historically, Fort Collins has assigned its annual allocation on a first come first served basis. From 2009
through 2012, the Fort Collins allocation was not used locally and therefore reverted back to the state’s pool of
available bond capacity. In 2013 and 2014, the City assigned its full allocation to the Fort Collins Housing
Authority (FCHA) for the rehabilitation of affordable rental housing units. FCHA is successfully using the
Colorado Housing Finance Authority’s (CHFA) 4% Low Income Tax Credit Program as a financing mechanism
for the development and rehabilitation of affordable housing. CHFA requires these types of financing deals to
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include private activity bonds. FCHA is acquiring enough bond capacity to issue bonds for several
development projects. This will require them to seek the local allocations for several years to come. FCHA can
aggregate PAB allocations from the City, county or other local jurisdictions to help them achieve the required
capacity. (In 2013, FCHA requested and received allocations from Larimer and Weld counties in addition to the
Fort Collins PAB Allocation). This financing structure will also allow FCHA to leverage Community
Development Block Grant - Disaster Recovery funds.
The City has received a formal request from the FCHA (Attachment 2) for the entire 2015 PAB allocation. The
proposed and allowable use of bond proceeds is the financing of 72 new affordable housing flats and
townhomes at the Village on Redwood and the rehabilitation of 284 units located in the Village on Cunningham
Corner. (Attachments 3 and 4) These properties, owned by the non-profit development arm of the FCHA,
serve households within the income range of 30% -80% area median income (AMI). The Village on Redwood
will meet the needs of residents earning 30-60% AMI. The FCHA estimates it will utilize approximately
$30,000,000 in bond capacity for these two projects. It is anticipated that FCHA will need to aggregate several
years of allocations to get to that sum. There is a three year carryover process that FCHA can use if they do
not use the bond cap by the end of a calendar year. If the bond capacity is not carried over or used, it reverts
to the state’s pool. The Affordable Housing Board recommends that the City grant FCHA's request and that
City Council adopt a resolution assigning the 2015 PAB Allocation to FCHA. (Attachment 5)
FCHA intended use of developing new affordable rental housing units and rehabilitating and preserving
existing affordable rental housing units is a permissible and beneficial use of the City’s 2015 allocation. These
housing needs have been identified as priorities for our community and are consistent with the goals of the
City’s existing and proposed Affordable Housing Strategic Plans. This is the third year in a row that FCHA was
the only entity requesting the PAB allocation. The City has not received any other requests for the 2015 PAB
Allocation.
For FCHA to use this financing tool, the City Council must adopt a resolution assigning the 2015 PAB
Allocation to the FCHA so it can submit this with its application to the State no later than September 15, 2015.
Additionally, the use of the City’s allocation is evidence of local support for these FCHA projects, which helps
FCHA leverage other funding sources and is important to CFHA’s 4% Low Income Tax Credit Program. The
investment of tax credit equity will trigger a new affordability period for Village on Redwood and will extend the
affordability period for the Village on Cunningham Corners by a minimum of 30 years.
In addition to assigning the past two years PAB allocation to the FCHA, the City has used PAB allocation to
finance multifamily low and moderate income rental housing at Fox Meadow Apartments (2000) and Caribou
Apartments (2002), and multifamily senior housing at Oakbrook Manor (2005). In these examples, the City’s
allocation was assigned to CHFA who issued the bonds. Prior to that, the City was the issuer of multifamily
housing revenue bonds for Bull Run (1997) and Courtney Park Apartments (1995). FCHA has authority to
issue bonds so they will be the issuer of the bonds for these development projects.
CITY’S FINANCIAL IMPACTS
The Private Activity Bonds that will be issued by the FCHA cannot and will not be obligations of the City of Fort
Collins. The debt service on the bonds will be repaid from the revenue generated by the housing developments
and does not constitute a debt of the City. This action will not affect the City's credit rating. The construction of
new units and rehabilitation of existing units will require goods and labor which will benefit the local economy.
BOARD / COMMISSION RECOMMENDATION
The Affordable Housing Board recommends assigning the City’s 2015 PAB Allocation to the Fort Collins
Housing Authority.
PUBLIC OUTREACH
The use of private activity bonds for financing affordable housing is mentioned in the draft 2015-2019
Affordable Housing Strategic Plan. While there has been and continues to be outreach on the draft plan, no
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separate public outreach was conducted for the assignment of the 2015 allocation.
ATTACHMENTS
1. 2015 PAB Direct Allocations to Cities (PDF)
2. FCHA Request for 2015 PAB Allocation (PDF)
3. Cunningham Corners location map (PDF)
4. Village on Redwood location map (PDF)
5. Affordable Housing Board Minutes, May 7, 2015 (PDF)
2015
Colorado Private Activity Bond
Direct Allocations
Statewide Pop. PAB Cap Available
5,355,866 $535,586,600.00
Local Issuers Population PAB Cap Local Issuers Population PAB Cap
Denver 648,937 $32,446,850 La Plata County 53,446 $2,672,300
Colorado Springs 438,130 $21,906,500 Pueblo County 53,345 $2,667,250
Aurora 344,637 $17,231,850 Castle Rock 52,735 $2,636,750
Jefferson County 219,359 $10,967,950 Eagle County 52,338 $2,616,900
Douglas County 204,372 $10,218,600 Commerce City 49,623 $2,481,150
El Paso County 190,049 $9,502,450 Parker 48,652 $2,432,600
Fort Collins 152,205 $7,610,250 Fremont County 46,260 $2,313,000
Lakewood 147,235 $7,361,750 Littleton 43,825 $2,191,250
Weld County 145,880 $7,294,000 Montrose County 40,754 $2,037,700
Thornton 127,107 $6,355,350 Northglenn 37,371 $1,868,550
Arapahoe County 125,592 $6,279,600 Brighton 36,218 $1,810,900
Arvada 111,559 $5,577,950 Englewood 31,676 $1,583,800
Westminster 110,316 $5,515,800 Wheat Ridge 30,950 $1,547,500
Pueblo (city) 107,913 $5,395,650 Delta County 30,299 $1,514,950
Adams County 106,810 $5,340,500 Summit County 28,637 $1,431,850
Centennial 105,931 $5,296,550 Morgan County 28,311 $1,415,550
Boulder (City) 102,760 $5,138,000 Fountain 27,633 $1,381,650
Greeley 96,306 $4,815,300 Lafayette 26,685 $1,334,250
Longmont 90,227 $4,511,350 Montezuma County 25,650 $1,282,500
Mesa County 88,124 $4,406,200 Elbert County 23,679 $1,183,950
Larimer County 86,773 $4,338,650 Routt County 23,400 $1,170,000
Boulder County 81,296 $4,064,800 Teller County 23,278 $1,163,900
Loveland 71,224 $3,561,200 Logan County 21,858 $1,092,900
Grand Junction 59,687 $2,984,350 Windsor 21,407 $1,070,350
Broomfield 59,450 $2,972,500 Erie 20,109 $1,005,450
Garfield County 57,298 $2,864,900
$247,865,800.00
Population PAB Cap Minimum 20,000 $1,000,000
Total Local Issuers: 4,957,316 247,865,800 46%
Statewide Authorities:
CHFA $257,793,300 48%
CollegeInvest $0 0%
CADA $10,000,000 2%
Total Authorities $267,793,300
Statewide Balance 398,550 $19,927,500 4%
TOTAL PAB 5,355,866 $535,586,600 100%
Total Local Issuers:
ATTACHMENT 1
ATTACHMENT 2
ATTACHMENT 3
ATTACHMENT 4
ATTACHMENT 5
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RESOLUTION 2015-062
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE ASSIGNMENT OF THE CITY’S PRIVATE ACTIVITY BOND
ALLOCATION FOR 2015 TO THE FORT COLLINS HOUSING AUTHORITY
TO FINANCE THE DEVELOPMENT AND REHABILITATION OF AFFORDABLE
HOUSING UNITS AT THE VILLAGE ON CUNNINGHAM CORNER
AND THE VILLAGE ON REDWOOD
WHEREAS, the City of Fort Collins is authorized and empowered under the laws of the
State of Colorado (the “State”) to issue revenue bonds for purposes including the financing of
multi-family 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 (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 various
State and local governmental units, and further providing for the assignment of such allocations
from such governmental units to any entity or person with the authority to issue bonds; and
WHEREAS, pursuant to an allocation under Section 24-32-1706 of the Allocation Act,
the City has received a direct allocation of the 2015 State Ceiling for the issuance of Private
Activity Bonds in the aggregate principal amount of $7,610,250 (the “2015 Allocation”); and
WHEREAS, if the City does not issue bonds or assign its annual allocation to another
entity by September 15 of each year, its allocation is relinquished to the statewide balance; and
WHEREAS, the City of Fort Collins Housing Authority (the “Authority”) has requested
that the City assign all of the 2015 Allocation (the “Assigned Allocation”) to the Authority
pursuant to Section 24-32-1706 of the Allocation Act; and
WHEREAS, the Authority intends to use the Assigned Allocation to help finance two
projects: (1) the rehabilitation of a 284-unit rental housing project known as the Village on
Cunningham Corner, which includes a management office located at 3436 South Shields Street,
Fort Collins, Larimer County, Colorado and three rental housing properties whose names and
respective addresses are as follows: Hickory Hill Village, 3425 Windmill Drive, Fort Collins,
Larimer County, Colorado; Rose Tree Village, 1000 Horsetooth Road, Fort Collins, Larimer
County, Colorado; and Willow Grove Village, 1025 Cunningham Drive, Fort Collins, Larimer
County, Colorado; and (2) the development and construction of the Village on Redwood, a 72-
unit rental housing development to be located on property legally described as situated in the
west ½ Section 1, Township 7 North, Range 69 West, of the 6
th
P.M., Fort Collins Colorado
(collectively, the “Projects”); and
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WHEREAS, the City has determined that the 2015 Allocation can be utilized most
efficiently by assigning it to the Authority to issue Private Activity Bonds for the purpose of
financing the Projects; and
WHEREAS, the City has determined that such assignment to the Authority will advance
the City’s objective of increasing the availability of adequate affordable housing for low- and
moderate-income persons and families within the city; and
WHEREAS, the Council wishes to assign the 2015 Allocation to the Authority, which
assignment is to be evidenced by an Assignment of Allocation between the City and the
Authority in substantially the form attached and incorporated herein as Exhibit “A” (the
“Assignment of Allocation”).
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the assignment to the Authority of the City’s 2015 Allocation of
$7,610,250, for use by the Authority for the purposes set forth herein, is hereby approved.
Section 2. That the City Manager is hereby authorized to execute the Assignment of
Allocation in substantially the form attached hereto as Exhibit “A”, along with such other terms
and conditions as the City Manager, in consultation with the City Attorney, determines are
necessary or appropriate to protect the interests of the City or effectuate the purposes of this
Resolution.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 7th
day of July, A.D. 2015.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Exhibit A
ASSIGNMENT OF ALLOCATION
THIS ASSIGNMENT (the “Assignment”), dated July , 2015 is between the City of
Fort Collins, Colorado, a municipal corporation (the “Assignor”), and the Fort Collins Housing
Authority, a body corporate and politic (the “Assignee”).
RECITALS
A. The Assignee intends to finance the rehabilitation of 284-unit rental housing
project known as the Village on Cunningham Corner which includes a management office
located at 3436 South Shields Street, Fort Collins, Larimer County, Colorado and three rental
housing properties whose names and respective addresses are as follows: Hickory Hill Village,
3425 Windmill Drive, Fort Collins, Larimer County, Colorado; Rose Tree Village, 1000
Horsetooth Road, Fort Collins, Larimer County, Colorado; and Willow Grove Village, 1025
Cunningham Drive, Fort Collins, Larimer County, Colorado; and the Assignee intends to finance
the development and construction of the Village on Redwood, a 72-unit rental housing
development to be located on property legally described as situated in the west ½ section 1,
Township 7 North, Range 69 West, of the 6
th
P.M., Fort Collins Colorado (collectively, the
“Projects”). The Projects will each be designed to qualify as a “project” within the meaning of
Title 29, Article 4, Part 2, Colorado Revised Statutes, as amended (the “Act”).
B. The Assignee intends to provide for the issuance of its Multifamily Housing
Revenue Bonds (the “Proposed Bonds”), pursuant to the provisions of the Act for the purpose of
financing the Projects.
C. The Assignee has requested that the Assignor assign to the Assignee all
$7,610,250 of the Assignor’s 2015 allocation (the “Allocation”) under 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 (the “Code”) as provided for the Assignor as a “designated
local issuing authority” under part 17 of article 32 of title 24, Colorado Revised Statutes (the
“Allocation Act”), for use in connection with the financing of the Projects.
D. Subject to the terms and conditions set forth herein, the Assignor desires to assign
to the Assignee, and the Assignee desires to accept, $7,610,250 of the Assignor’s 2015 allocation
from the State Ceiling.
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. The Assignor hereby assigns and transfers to the Assignee the Assignor’s 2015
Allocation from the State Ceiling for private activity bonds in an amount equal to $7,610,250.
EXHIBIT A
2
The Assignor and the Assignee understand that such assigned allocation shall automatically be
relinquished to the “Statewide Balance” as defined under the Allocation Act unless (a) the
Proposed Bonds are issued by the Assignee on or before September 15, 2015, or (b) Section
24-32-1706(3)(c), C.R.S., applies.
2. The Assignor represents that it has received no monetary consideration for the
assignment set forth above.
3. The Assignee hereby:
(a) accepts the assignment of $7,610,250 of the Assignor’s Allocation from
the State Ceiling described above;
(b) agrees to use its best efforts to issue and use the Proposed Bonds for the
purpose of financing the Projects; and
(b) agrees to abide by each of the terms and conditions of this Assignment in
connection with the use of such Allocation.
4. 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.
5. This Assignment shall not constitute the debt or indebtedness or financial
obligation of the Assignor within the meaning of the constitution or statutes of the State of
Colorado, nor give rise to a pecuniary liability or charge against the general credit or taxing
power of the Assignor.
[The remainder of this page is intentionally left blank]
[Signature Page to Assignment of Allocation]
S-1
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.
CITY OF FORT COLLINS, COLORADO,
as Assignor
____________________________________
[SEAL] Darin A. Atteberry, City Manager
ATTEST: APPROVED AS TO FORM:
____________________________________ ____________________________________
City Clerk Assistant City Attorney
FORT COLLINS HOUSING AUTHORITY,
as Assignee
By: ________________________________
[SEAL] Its: ________________________________
ATTEST:
By: ________________________________
Its: ________________________________