Under the federal tax reform act enacted in 1986, the State of Nevada receives an annual allocation of tax exempt private activity bond cap (PABC) authority.  PABC provides states and local governments’ authority to issue federally tax-exempt bonds on behalf of private infrastructure, utility and affordable housing projects and programs.  For 2017, the City of Sparks’ share of PABC is $4,947,997.41.  The City Council may request (by resolution) that the State of Nevada reserve the City’s allocation for a specific project(s) or for a specific program(s).

In recent years, the City Council has allocated their PABC for first time homebuyer programs operated by the Nevada Housing Division (NHD) and the Nevada Rural Housing Authority (NRHA).  This year, the City received requests from both agencies requesting transference of the City’s 2017 PABC allocation for their respective housing programs (see attachment “B”, letter from NHD dated June 12, 2017 and letter from NRHA dated July 6, 2017).

The City received requests from NHD and NRHA for use of the City’s 2017 PABC to capitalize their respective single family housing programs.  Both agencies have consistently provided mortgage products to benefit City of Sparks’ residents such as:

• Mortgages
• Down Payment Assistance Programs
• Grant Programs

These agencies document the benefits of their programs to Sparks’ residents in their respective letters (see Attachment B).

After review and consultation, staff recommends the City’s 2017 capacity be split between NHD (75% or $3,710,998.06) and NRHA (25% or $1,236,999.35) to support implementation of their respective single family housing programs.

In 2016, the Sparks City Council allocated the entire PABC allocation to NRHA (2016 PABC totaled $4,890,856.59), as NHD did not request PABC from Sparks in 2016.  This year, both agencies requested the City’s PABC.  Staff is recommending a split of 75% to NHD and 25% to NRHA.

1. The Council may elect to allocate the entire PABC allotment to either agency or any portion to the agencies.

2. The Council may elect to take no action at this time in which case the City’s PABC allocation will automatically revert to the State.

I move to adopt Resolution No. 3316 authorizing the transfer of the City’s 2017 tax exempt bond volume capacity to be divided as follows:  75 percent to the Nevada Housing Division (NHD) and 25 percent to the Nevada Rural Housing Authority (NRHA) to support their respective homeownership and single family housing programs.