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RESOLUTION: 2003-12
SUBJECT: Authorizing the assignment of $3,404,725 of the City of Lakewood's Private Activity Bond Allocation for 2002 to the Colorado Housing and Finance Authority. A Resolution of Council reserved this portion of the City's 2002 Allocation on September 9, 2002.
RECOMMENDATION: Staff recommends approval of the Resolution transferring the remainder of the City's 2002 Private Activity Bond Allocation to the Colorado Housing and Finance Authority ("CHFA"). This transfer will enable CHFA to initiate several metro- area transit oriented developments creating multi-family rental housing developments serving low and middle-income persons and families throughout the Denver metro area.
SUMMARY AND BACKGROUND OF SUBJECT MATTER: State law established the State of Colorado's Private Activity Bond ("PAB") Allocation Act (24-32-1701 et seq., C.R.S.) to provide for the allocation of the State's PAB ceiling under the Federal Tax Reform Act of 1986. Fifty percent (50%) of the state ceiling is allocated to local governments throughout the State of Colorado. Cities and Counties that warrant allocations of $1,000,000 or more receive direct allocations. The City of Lakewood's PAB allocation for 2002 was a total of $5,404,725. In addition to the City allocation, there is a statewide balance that can be used for approved projects throughout the State of Colorado.
The Colorado Housing and Finance Authority (CHFA) is a public enterprise working to finance affordable housing, business and economic growth opportunities for Colorado. CHFA offers financing in three main areas: Home Finance, Rental Finance and Business Finance. CHFA's Mission Statement includes the following:
· Increase the availability of affordable, decent, and accessible housing for lower income Coloradans.
· Strengthen the State's economy by providing financial assistance to
businesses.
The transfer of this PAB Allocation will enable CHFA to develop future multi-family
housing projects serving low and middle-income residents with a preference for
public transit oriented projects.
Nothing in the Resolution constitutes a direct or indirect debt, indebtedness, or multiple fiscal-year obligation of the City of Lakewood.
RESOLUTION ADOPTION DATE: February 10, 2003
ATTACHMENTS: Assignment Agreement
ORIGINATED BY: Larry Dorr, Financial Analyst, Department of Finance, 303-987-7668
STAFF PERSON RESPONSIBLE: Larry Dorr, Financial Analyst, Department of Finance, 303-987-7668
SUBMITTED BY:
Larry Dorr, Financial Analyst
REVIEWED BY:
Jacque Wedding-Scott, Finance Director
Joni Inman, Director of Mayor and City Manager's Office
ASSIGNMENT OF ALLOCATION
THIS ASSIGNMENT (the "Assignment") dated this ___ day of February,
2003, is between the City of Lakewood, Colorado (the "Assignor"),
and the Colorado Housing and Finance Authority (the "Assignee").
RECITALS
1. 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.
2. 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").
3. 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.
4. Pursuant to Section 24-32-1706 of the Allocation Act the Assignor has remaining
an allocation of the 2002 State Ceiling for the issuance of a principal amount
of Private Activity Bonds equal to $3,404,725 (the "2002 Allocation")
which it desires to assign to the Assignee for the purposes further described
herein.
5. The Assignor intends to participate with one or more other Denver metropolitan
area cities (the "Metro Cities"), who are also making similar allocation
assignments to the Assignee, in selecting multifamily rental housing projects,
with a preference for public transit oriented projects, for financing and Assignee
has expressed its willingness to hold such collective allocations on behalf
of such entities (the "Pooled Allocation").
6. The Assignor and other Metro Cities have determined that the Pooled Allocation
will enhance their ability to facilitate the financing of one or more multifamily
rental housing projects for low- and moderate-income persons and families within
the Denver metropolitan area, and the Assignee has expressed its willingness
to attempt to issue multifamily housing revenue bonds ("Revenue Bonds")
for such purpose.
7. Assignor and Assignee recognize that for federal income tax purposes an
allocation may be carried forward for a period limited to three calendar years
and to the extent such allocation is not then applied it shall expire.
8. The Assignor has determined to assign to the Assignee the 2002 Allocation
for the purposes described herein, 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 the 2002 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 the
2002 Allocation, subject to the terms and conditions contained herein.
3. Assignee hereby agrees to carryforward for federal income tax purposes such
2002 Allocation for multifamily housing purposes and to administer the Pooled
Allocation on behalf of the Metro Cities upon their collective direction, provided,
however, if the Metro Cities have not provided any direction to Assignee by
September 1, 2003 (including, without limitation, a direction that the Metro
Cities have not yet selected a project for financing) or in the event Assignor
and Assignee have not reached a mutual agreement as to the administration of
the Pooled Allocation by September 1, 2003, the Assignor may direct the Assignee
to assign an amount of 2003 State Ceiling volume cap to the Assignor in an amount
equal to the 2002 Allocation assigned hereunder and the Assignee hereby agrees
to make such assignment.
4. The Assignee agrees to use its best efforts to issue and sell Revenue Bonds,
in one or more series to finance the multifamily rental housing project or projects
selected by the Metro Cities. In the event Assignee is unable to finance the
project or projects selected by the Metro Cities, Assignee hereby agrees to
assign an equal amount of State Ceiling allocation to the Assignor or its designee
in an amount equal to the Pooled Allocation, or such lesser amount as is requested
by the Metro Cities, at the written request of Assignor and other participating
Metro Cities.
5. 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.
6. Nothing contained in this Assignment shall obligate the Assignee to finance
any project or projects selected by the Metro Cities, however, in the event
Assignee is unable or will not finance any project or projects selected by Metro
City's for financing, the Assignee will at the Assignor's request assign to
Assignor or its designee an amount equal to the allocation transferred hereunder.
7. 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.
8. This Assignment is effective upon execution and is irrevocable.
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 LAKEWOOD, COLORADO, as Assignor
By:
Stephen A. Burkholder, Mayor
ATTEST:
Margy Greer, City Clerk
COLORADO HOUSING AND FINANCE AUTHORITY, as Assignee
By:
Executive Director
ATTEST:
Assistant Secretary
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