HomeMy WebLinkAboutItem 5: An Ordinance Establishing a Process and Standards for Issuing Economic Development Project Revenue Bonds as Recovery Zone Facility Bonds
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Public Hearing and Possible Action: An Ordinance Establishing a Process and Standards
for Issuing Economic Development Project Revenue Bonds as Recovery Zone Facility
Bonds
Meeting Date: December 13, 2010 Agenda Item Number: 5
Department: Central Services Staff Contact: Sue Cutsogeorge
www.eugene-or.gov Contact Telephone Number: 541-682-5589
ISSUE STATEMENT
In order to move forward with any financings that the City might undertake with Recovery Zone Facility
Bonds, Oregon Revised Statutes require that the City adopt a procedure and standards for approval for
issuance of economic development project revenue bonds. These procedures and standards must be in
place prior to issuing any of the bonds, and the deadline for issuing the bonds is December 31, 2010;
therefore, an ordinance is presented for council consideration to allow for the possibility of issuance of
Recovery Zone Facility Bonds.
BACKGROUND
The City received an allocation from the Federal government of Recovery Zone Facility Bonds of
$11,083,000. The bonds may be used by private companies to access tax-exempt financing. Up to $8
million of Recovery Zone Facility Bonds are proposed for the Bennett project (on Willamette Street,
adjacent to the Beam project). The remainder of the bonds were waived and reallocated by the state.
The proposed ordinance sets out a process and standards for projects to make application for the use of
Recovery Zone Facility Bonds. This is a requirement of Oregon Revised Statutes. Due to the Federal
government’s deadlines for issuing the bonds prior to December 31, 2010, the ordinance includes an
immediate effective date. Approval of an ordinance with an immediate effective date will require six
votes in favor. The council can take action on December 13 if no councilor objects to taking action that
night; if any councilor objects to taking action on December 13, the council will need to take action on
December 15.
RELATED CITY POLICIES
None. This action simply sets up a process. Policy issues around Recovery Zone Facility Bonds are
related to authorization of any specific application that would be requested under this ordinance.
Z:\CMO\2010 Council Agendas\M101213\S1012135.doc
COUNCIL OPTIONS
1.Approve the ordinance.
2.Request that the ordinance be brought back to the council on December 15 for final action.
3.Do not approve the ordinance.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends approval of the ordinance.
SUGGESTED MOTION
Move to approve an ordinance establishing a process and standards for issuing Economic Development
Project Revenue Bonds as Recovery Zone Facility Bonds.
ATTACHMENTS
A.An Ordinance Establishing a Process and Standards for Issuing Economic Development Project
Revenue Bonds as Recovery Zone Facility Bonds
FOR MORE INFORMATION
Staff Contact: Sue Cutsogeorge
Telephone: 541-682-5589
Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us
Z:\CMO\2010 Council Agendas\M101213\S1012135.doc
ATTACHMENT A
ORDINANCE NO. _______
AN ORDINANCE ESTABLISHING A PROCESS AND STANDARDS FOR
ISSUING ECONOMIC DEVELOPMENT PROJECT REVENUE BONDS
AS RECOVERY ZONE FACILITY BONDS.
The City Council of the City of Eugene finds that:
A.
The City received an allocation of $11,083,000 of recovery zone facility bond
volume cap under the American Recovery and Reinvestment Act of 2009 (“ARRA”). That
volume cap allows the City to issue tax-exempt bonds to finance privately owned depreciable
property.
B.
ARRA requires that recovery zone facility bonds be issued by December 31,
2010.
C.
The City is authorized by ORS 280.410 to 280.485 to issue economic
development project revenue bonds that qualify as recovery zone facility bonds under ARRA.
D.
ORS 280.420 requires the City to adopt an ordinance approving standards and a
process for receiving and processing applications for economic development project revenue
bonds that are issued under ORS 280.410 to 280.485.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1. Purpose.
The purpose of this ordinance is to provide procedures and
standards to carry out the powers granted to the City by ORS 280.410 to 280.485 with respect to
economic development projects that may be financed with recovery zone facility bonds that are
authorized by the American Recovery and Reinvestment Act of 2009 (“ARRA”). ORS 280.410
to 280.485 authorize the City to issue revenue bonds to finance or refinance certain economic
development projects and to loan the proceeds of those bonds to private entities to provide for
the construction, substantial rehabilitation or permanent financing of those economic
development projects. The provisions of this ordinance are to be liberally construed in order to
carry out this purpose.
Section 2. Applications.
Applications for financing with economic development project
revenue bonds that qualify as recovery zone facility bonds may be filed with the City Manager
not later than two weeks prior to the last scheduled council meeting in calendar year 2010; or, if
the legislation authorizing issuance of recovery zone facility bonds is extended beyond
December 31, 2010, then not later than two weeks prior to the last scheduled council meeting
Ordinance - Page 1 of 2
before expiration of the extended authorization deadline. Applications may be in the form of a
letter addressed to the City Manager; the application shall describe the proposed project, the
amount of recovery zone facility bond financing that is requested for the project, and the
proposed purchaser of the recovery zone facility bonds.
Section 3. Standards and Approval.
The City Council may consider any relevant data
before approving a project for financing with economic development project revenue bonds that
qualify as recovery zone facility bonds. Before approving a project for that financing the City
Council shall consider the benefit to the community of the project, the availability of recovery
zone facility bond volume cap for the project, and the likelihood that applicant will be successful
in having the recovery zone facility bonds issued by December 31, 2010, or any later date
authorized by the federal government for issuance of recovery zone facility bonds. The issuance
of economic development project revenue bonds that qualify as recovery zone facility bonds may
be approved by resolution of the City Council.
Section 4. Effective Date.
ARRA currently requires recovery zone facility bonds to be
issued by December 31, 2010. Therefore, this ordinance shall take effect immediately upon its
approval by the City Council.
Passed by the City Council this Approved by the Mayor this
____ day of December, 2010 ____ day of December, 2010
City Recorder
Mayor
Ordinance - Page 2 of 2