CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance approving the transfer of $15,506,610 of the 2019 Volume Cap in connection with private activity bond issues in such manner as shall be directed by Sand Creek Capital
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Director of Finance
BOARD/COMMISSION REVIEW:
NA
BACKGROUND:
The Volume Cap Program is a federally authorized program, which allows the state to allocate tax-exempt bond authority to various projects throughout the state. With this authority, bond issuers are able to finance projects at interest rates below that of the conventional market.
The Tax Reform Act of 1986 established a unified state volume cap to regulate the activities permitted to be financed with tax-exempt private activity bonds. Private activity bonds are issued by states and local authorities to provide affordable financing for a wide range of public purpose projects, such as single family mortgages, manufacturing facilities, multifamily housing, economic development, student loans, and certain non-profit and environmental facilities.
In the past, the City has transferred all or portions of its Volume Cap to other organizations, these include:
* In 2009 and 2010, Naperville transferred the volume cap to two homebuyer programs: Illinois Housing Development Authority and to the City of Aurora First-Time Homebuyer Down Payment Assistance Program.
* In 2011, Naperville transferred the volume cap to the Will Kankakee Regional Development Authority. This organization works with home rule communities to accumulate volume cap and then identifies expanding businesses that can benefit from the tax-exempt borrowing rates.
* In 2012, Council approved a transfer of $4 million of the 2012 Volume Cap to the Village of Addison to support SWD, Inc, a fastener sorting corporation expansion project.
* In 2013, Council approved the transfer of all of the Volume Cap ($13,563,435) to the Village of Downers Grove...
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