General Business: 6.5
Title: Consideration and possible adoption of Resolution #3219 authorizing the transfer of the City of Spark’s 2012 State Volume Bond Capacity of $4,825,026.64 to the Nevada Department of Business and Industry for their First Time Homebuyers Program offered by the Nevada Housing Division (NHD) in the city of Sparks.
Petitioner/Presenter: Community Services/Armando Ornelas Jr., City Planner
Recommendation: Staff recommends that City Council authorize the transfer of the City of Sparks’ 2012 State Volume Bond Cap share of $4,825,026.64 to the Nevada Department of Business and Industry for their First Time Homebuyer Program provided by the Nevada Housing Division (NHD).
Financial Impact: None. The bonds will be issued by the State of Nevada.
Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.
Agenda Item Brief: This report proposes the allocation and transfer of the City’s 2012 State Volume Bond Cap share ($4,825,026.64) to the Nevada Housing Division (NHD) for their First Time Homebuyers program.
Background: Under the federal tax reform act enacted in 1986, the State of Nevada receives an annual allocation of tax exempt private activity bond volume authority. For 2012, the City of Sparks’ share of Private Activity Bonds (PAB) equates to $4,825,026.64. The City Council may request (by resolution) that the State reserve the City’s allocation for a specific project, or a number of specific projects, or for program(s).
In recent years, including 2011 City Council has allocated their State Volume Cap for First Time Homebuyer Programs through the Nevada Housing Division (NHD) and the Nevada Rural Housing Authority (NRHA). The City was prepared to follow suit as in previous years and distribute the PAB allocation to NHD and NHRA on an equal basis. However, we were recently contacted by Gary Longacker, Executive Director, of NRHA and Mr. Longacker requested that the full allocation PAB be provided to NHD due to NRHA’s current surplus of bond capacity. Accordingly, staff recommends full allocation of the City’s 2012 PAB capacity allocation to NHD.
Analysis: Staff had received requests for the City’s volume cap from both the Nevada Housing Division (NHD) and Nevada Rural Housing Authority (NRHA) to capitalize their respective First Time Homebuyer Programs.
NRHA later declined and requested that the full allocation be provided to NHD. Therefore, staff recommends allocation of the City’s cap to the Nevada Housing Division for their respective First Time Homebuyer Program. NHD has consistently and actively provided mortgages to Sparks’s residents. Over the past two years NHD have provided approximately $11,000,000 community investment in the form of mortgages and down payment assistance (2010 - $4,956,778.00, 2011 - $5,986,000.00) and have assisted a total of 87 households in the City of Sparks; with the 50%/50% PAB allocation split provided between the two agencies.
Alternatives: Alternatives to staff’s recommendation include:
1.The Council may elect to take no action at this time in which case the bond cap will automatically revert to the State.
Recommended Motion: I move for the adoption of Resolution 3219 to authorize the transfer of the City’s 2012 tax exempt bond volume capacity to the Nevada Department of Business and Industry to be allocated to the Nevada Housing Division (NHD) for the purpose of supplementing their first time homebuyer program in the Sparks community.
RESOLUTION DOCUMENT - AUGUST 27, 2012.pdf
City of Sparks - Certificate of Transfer - August 27, 2012.pdf
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