CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance approving the transfer of $16,313,440 of the 2021 Volume Cap to the Town of Normal
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Director of Finance
BOARD/COMMISSION REVIEW:
N/A
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 the authority, bond issuers can finance projects at interest rates below 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 transferred all or portions of its Volume Cap to other organizations, these include:
1. In 2009 and 2010, Naperville transferred the Volume Cap to two homebuyer programs: Illinois Housing Development Authority and the City of Aurora First-Time Homebuyer Down Payment Assistance Program.
2. In 2011, Naperville transferred the Volume Cap to the Will Kankakee Regional Development Authority. The organization works with home rule communities to accumulate Volume Cap and identifies expanding businesses that can benefit from the tax-exempt borrowing rates.
3. In 2012, Council approved a transfer of $4 million in Volume Cap to the Village of Addison to support SWD, Inc, a fastener sorting corporation expansion project.
4. In 2013, Council approved a $13.6 million Volume Cap transfer to the Village of Downers Grove.
5. In 2016, the County of Winnebago requested Naperville transfer $4.4 million of the Volume Cap allocation to be used to make a first mort...
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