Agenda Date: 06/03/2025
Subject:
Title
Resolution 56-2025: Authorizing assignment of the city’s private activity bond allocation for 2025 to the Housing Authority of the City of Littleton, Colorado dba South Metro Housing Options
Body
|
From: |
James L. Becklenberg, City Manager |
|
Prepared by: |
Julie Latham, Housing Policy Analyst |
|
|
Kathleen Osher, Deputy City Manager |
|
Presentations: |
N/A |
PURPOSE:
To assign the Private Activity Bond allocation to South Metro Housing Options
LONG-TERM OUTCOME(S) SERVED:
Robust and Resilient Economy
DISCUSSION:
City Council provided staff direction during their May 27 study session to bring forward a resolution assigning the allocation of Private Activity Bonds (PABs) to South Metro Housing Options, Littleton’s housing authority.
BACKGROUND:
Private Activity Bonds are tax-exempt bonds that offer low-cost financing for private projects serving a public purpose. The city is allocated funds on an annual basis that can be used to support projects. Unlike typical municipal bonds, PABs do not require the city to repay investors. Eligible uses include affordable multifamily rental housing, single-family mortgage revenue bonds, mortgage credit certificates, industrial development bonds for smaller manufacturing projects, qualified redevelopment bonds for blighted areas, and solid waste disposal bonds. Multifamily rental housing is the only PAB use that unlocks additional federal funding via the 4% Low Income Housing Tax Credit. Interest paid to bondholders is exempt from federal income tax, resulting in lower costs. Options for allocation are issuance, carryforward, relinquish to the statewide balance, or assign to a qualified issuer to support a project.
Private Activity Bonds have been a historically underutilized tool, with the city relinquishing its balance to the statewide balance for the past fifteen years. In 2010 the city assigned its allocation to the Littleton Housing Authority (now SMHO) for property renovations. Littleton’s PAB allocation for 2025 is $2,901,627.
Prior Actions or Discussions
5/27/2020 - City Council study session
FISCAL IMPACTS:
N/A
STAFF RECOMMENDATION:
Staff recommends council assign Littleton’s PAB balance to SMHO.
ALTERNATIVES:
1. Issue Bonds
2. Carryforward for up to 3 years
3. Assign PAB cap to another issuer (i.e., Other local governments, housing authorities, Colorado Housing and Finance Authority)
4. Do nothing: Relinquish to the Statewide Balance for DOLA to distribute
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 56-2025 authorizing assignment of the city’s private activity bond allocation for 2025 to the Housing Authority of the City of Littleton, Colorado dba South Metro Housing Options.