SUBJECT:
Title
A Resolution of the Town Council of the Town of Erie Approving the Assignment of the Town of Erie 2025 Private Activity Bond Allocation to the Colorado Housing and Finance Authority
Department
DEPARTMENT: Planning & Development
Presenter
PRESENTER(S): Eric Leveridge, Housing Management Analyst
Time
TIME ESTIMATE: 0 minutes
end
For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
N/A
Policy
POLICY ISSUES:
The Town of Erie’s adopted Affordable Housing Policies include a provision that the Town will actively collaborate with the Boulder County Regional Housing Partnership to advance efforts to achieve the region’s goal of 12% affordable housing by 2035. This assignment of the Town’s Private Activity Bond (PAB) allocation to Boulder County Housing Authority’s Willoughby Corner development supports this policy.
Recommendation
STAFF RECOMMENDATION:
Staff recommends that the Town assign its 2025 PAB allocation of $2,316,811 to the Colorado Housing and Finance Authority (CHFA) so the allocation is used towards Willoughby Corner Affordable Housing Development in Lafayette.
Body
SUMMARY/KEY POINTS
• Council approval is required to assign the Town’s Private Activity Bond (PAB) allocation.
• The Town has determined that it has no immediate need for this allocation.
• The Town has historically assigned the Town’s PAB allocation to other affordable housing developments in the region. This includes Willoughby Corner in 2022.
• Willoughby Corner has again requested the assignment of Town of Erie’s allocation.
BACKGROUND OF SUBJECT MATTER:
Private Activity Bonds (PAB) are allocated annually by the State to the Town of Erie. The 2025 allocation for Erie is $2,316,811. PAB’s are tax-exempt bonds issued by or on behalf of local or state government for the purpose of providing special financing benefits for qualified projects. The financing is most often for projects of a private user, and the government generally does not pledge its credit. These bonds are used to attract private investment for projects that have some public benefit. Strict rules apply as to which projects qualify (e.g., single-family mortgage revenue bonds sold by local or state agencies, affordable housing projects, hazardous waste facilities, small issue manufacturing industrial development bonds for construction of manufacturing facilities, among others). This type of bond results in reduced financing costs because of the exemption from federal tax.
Each year the IRS publishes the maximum amount of PAB’s each state may issue, referred to as its “cap”. Pursuant to Federal legislation, each state is authorized to allocate rights to issue PABs to various state agencies, county and local governments. In Colorado, just under half of the State cap is allocated to the Colorado Housing and Finance Authority (CHFA). The remaining cap is allocated to the State’s counties and municipalities that exceed a minimum population size. Erie received an allocation of $2,316,811 in 2025.
Allocations of PABs expire each Sept. 15 unless one of two actions is taken. If a specific project is planned that will utilize PABs, the local government can roll over its allocation for up to three years. Alternatively, the local government can reallocate its allocation to CHFA either associated with a project or to go back to the State allotment. CHFA can then use the allocated PABs to further its mission “to increase the availability of affordable, decent, and accessible housing for lower income Coloradans.” Since the Town of Erie does not have immediate need of the PAB allocation, staff recommend assigning its 2025 allocation to the Boulder County Housing Authority project Willoughby Corner.
priorities
TOWN COUNCIL PRIORITY(S) ADDRESSED:
☐ Attractive Community Amenities
☒ Engaged and Diverse Community
☒ Prosperous Economy
☐ Well-Maintained Transportation Infrastructure
☒ Small Town Feel
☐ Safe and Healthy Community
☒ Effective Governance
☐ Environmentally Sustainable
☒ Fiscally Responsible
attachments
ATTACHMENT(S):
1. Resolution 25-131
2. Assignment of Allocation
3. Request from BCHA
4. Town of Erie Private Activity Bond Allocation Notice Letter