ACTION REQUESTED:
Title
Communication from the City Manager and Assistant City Manager with a Request for the Following:
A. APPROVE an INTERGOVERNMENTAL AGREEMENT (IGA) with TOWN OF NORMAL, Illinois, to Participate in a Mortgage Credit Certificate Program; and
B. ADOPT an ORDINANCE Authorizing the Town of Normal to Exercise the Powers of the City of Peoria in Connection with the MORTGAGE CREDIT CERTIFICATE PROGRAM and a LOAN FINANCE PROGRAM; and
C. ADOPT an ORDINANCE to Transfer $8,000,000.00 of PRIVATE ACTIVITY BOND CAP ALLOCATION to the Town of Normal, for the Mortgage Credit Certificate Program, and to Transfer $3,695,740.00 of Private Activity Bond Volume Cap to the Tri-County River Valley Development Authority for Private Activity Bonds.
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Background:
The Federal Tax Reform Act of 1986 (the "Code") as amended, imposes a limit on the aggregate amount of "tax exempt private activity" bonds (also known as "Volume Cap") that can be issued by a state. Every Municipality is allocated a certain amount of Volume Cap, $105 per resident of the Municipality in calendar year 2020. This Volume Cap may be allocated to certain tax-exempt private activity bonds (PAB). A tax-exempt PAB is issued by local governments for the purpose of extending special financing benefits for qualified projects. In general, PABs finance projects for a private user, which means the local government doesn't usually pledge its credit. In this way, they are used to attracting private investments for projects that have public or common utility. PABs can be used for private infrastructure or facilities, or for certain mortgage bonds or redevelopment bonds.
The City of Peoria receives an annual Volume Cap allocation as a Home Rule Unit of government in Illinois. The Volume Cap allocation for 2020 is $11,695,740, based upon $105 per resident and 111,388 residents in Peoria.
Under the authority of the Statues above the City of Peoria has made Volume Cap allocation transfers to Illinoi...
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