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09. Resolution 5428 - Designating the City of Kalispell as a Recovery ZoneCity of Kalispell Post Office Box 1997 -Kalispell, Montana 59903 Telephone: (406) 758-7701 Fax: (406) 758-7758 TO: Mayor Tamrni Fisher and Kalispell City Council FROM: Jane Howington, City Manager SUBJECT: Resolution Designating the City of Kalispell as a Recovery zone MEETING DATE: May 3, 2010 BACKGROUND: The American Recovery Act (ARRA) provides various funding and loan opportunities for local jurisdictions. One of the requirements for access to these opportunities provides that projects for which funding are sought be located in a designated recovery zone. In response to this requirement, the County Commissioners approved legislation designating Flathead County as a recovery zone. The attached legislation mimics the County's legislative language via overlaying the City of Kalispell's designation as a recovery zone for all properties within the corporate limits. RECOMMENDATION: Council approves the resolution designating Kalispell as a recovery zone. FISCAL IMPACT: Neutral. Respectfully submitted, aane Howington City Manager A RESOLUTION DESIGNATING THE CITY OF KALISPELL, FLATHEAD COUNTY, MONTANA AS A RECOVERY ZONE FOR PURPOSES OF THE A.MERICAN RECOVERY AND REINVESTMENT ACT OF 2009 WHEREAS, the American Recovery and Reinvestment Act of 2009 ("ARRA") was signed into law on February 17, 2009, which includes the following Statement of Purposes: (1) to preserve and create jobs and promote economic recovery; (2) to assist those most impacted by the recession; (3) to provide investments needed to increase economic efficiency by spurring technological advances in science and health; (4) to invest in transportation, environmental protection and other infrastructure that will provide long-term economic benefits; and (5) to stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive State and local tax increases; and WHEREAS, the ARRA provides that gross income does not include interest on any bond designated by the issuer thereof as a recovery zone economic development bond or a recovery zone facility bond ("Recovery zone Bonds"); and WHEREAS, the ARRA provides that the proceeds of recovery zone economic development bonds must be used for qualified_ economic development purposes, i.e. - expenditures for purposes of promoting development or other economic activity in a recovery zone; and WHEREAS, the ARRA provides that ninety-five (95 %) or more of the net proceeds of a recovery zone facility bond must be used for recovery zone property which is in a recovery zone and is in the active conduct of a qualified business by the taxpayer in such zone; and WHEREAS, the ARRA provides with respect to recovery zone economic development bonds and recovery zone facility bonds that a recovery zone is (1) any area designated by the issuer of such bonds as having significant poverty, unemployment, rate of home foreclosures, or general distress, (2) any area designated by the issuer of such bonds as distressed by reason of the closure or realignment of a military installation pursuant to the Defense Base Closure and Realignment Act of 1990, and (3) any area for which a designation as an empowerment zone or renewal community is in effect; and WHEREAS, Recovery Zone Bonds are designed to provide tax incentives for State and local governmental borrowing at lower borrowing costs to promote job creation and economic recovery targeted to areas particularly affected by employment decline; and WHEREAS, the ARRA provides that Recovery Zone Bonds shall be subject to volume cap allocations, any portion of which received by a county or large municipality may be waived by such county or large municipality and re -allocated pursuant to the ARRA and Montana House Bill 645, adopted by the 2009 State Legislature, by the Montana Department of Administration (the "Department") in any reasonable manner as the Department deems in good faith, in its discretion, to be reasonable; and WHEREAS, Internal Revenue Service Notice 2009-50, provides, in part, that issuers designate eligible recovery zones based on certain specified criteria and that issuers that receive volume cap allocations for Recovery Zone Bonds may mare designations of recovery zones in any reasonable manner as such issuer shall determine in good faith, in its discretion; and WHEREAS, on the 27th day of October 2009, the Flathead County Commissioners, by Resolution No. 2228, designated Flathead County as a recovery zone for purposes of the American Recovery and Reinvestment Act of 2009. Now THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KAT ISPELL AS FOLLOWS: SECTION I. That the City of Kalispell (the "Issuer") shall avail itself of the economic development stimulus provisions contained in the ARRA, after careful consideration of all economic indicators in Flathead County and the City of Kalispell, including but not limited to, loss of employment, rate of home foreclosures, loss of retail sales and declining tax revenues, in its discretion and in good faith, and in compliance with Section 1400U-1(b) of the Internal Revenue Code of 1986, hereby designates the City of Kalispell as a recovery zone (the "Recovery Zone"). SECTION II. The City Council hereby finds that the Recovery Zone has suffered significant unemployment, a large increase in home foreclosures, and general economic distress. SECTION III. All actions of the officers, agents and employees of any issuer of Recovery Zone Bonds that are in conformity with the purposes and intent of this Resolution, whether taken before or after the adoption hereof, are hereby ratified, confirmed and adopted. SECTION IV. Issuer shall administer and serve as issuer of any Recovery Zone Bonds for which an allocation is granted to Issuer, unless otherwise allocated by Issuer or the Department in accordance with ARRA. SECTION V. This Resolution shall be in full force and effect from and after its final passage and approval according to law. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KA L ISPELL, THIS 3rd DAY OF MAY, 2010. Tammi Fisher Mayor ATTEST: Theresa white City Clerk RESOLUTION NO. 21 A. RESOLUTION DESIGNATING FLATHEAD COUNTY AS A RECOVERY ,ZONE FOR PURPOSES OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 WHEREAS, the American Recovery and Reinvestment Act of 2009 ("ARRA") was signed into law on February 17, 2009, which includes the following Statement of Purposes: (1) to preserve and create gobs and promote economic recovery; (2) to assist those most impacted by the recession; (3) to provide investments needed to increase economic efficiency by spurring technological advances in science and health; (4) to invest in transportation, environmental protection and other infrastructure that will provide long-term economic benefits; and (S) to stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive State and local tax increases; and WHEREAS, the ARRA provides that gross income does not include interest on any bond designated by the issuer thereof as a recovery zone economic development bond or a recovery zone facility bond ("Recovery Zone Bonds"); and WHEREAS, the ARRA provides that the proceeds of recovery zone economic development bonds must be used for qualified economic development purposes, i.e. expenditures for purposes of promoting development or other economic activity in a recovery zone; and WHEREAS, the ARRA provides that ninety-five (95%) or more of the net proceeds of a recovery zone facility bond must be used for recovery zone property which is in a recovery zone and is in the active conduct of a qualified business by the taxpayer in such zone; and WHEREAS, the ARRA provides with respect to recovery zone economic development bonds and recovery zone facility bonds that a recovery zone is (1) any area designated by the issuer of such bonds as having significant poverty, unemployment, rate of home foreclosures, or general distress, (2) any area designated by the issuer of such bonds as distressed by reason of the closure or realignment of a military installation pursuant to the Defense Base Closure and Realignment Act of 1990, and (3) any area for which a designation as an empowerment zone or renewal community is in effect; and WHEREAS, Recovery Zone Bonds are designed to provide tax incentives for State and local governmental borrowing at lower borrowing costs to promote job creation and economic recovery targeted to areas particularly affected by employment decline; and WHEREAS, the ARRA provides that Recovery Zone Bonds shall be subject to volume cap allocations, any portion of which received by a county or large municipality may be waived by such county or large municipality and re -allocated pursuant to the ARRA and Montana House Bill 645, adopted by the 2009 State Legislature, by the Montana Department of Administration (the "Department") in any reasonable manner as the Department deems in good faith, in its discretion, to be reasonable; and WHEREAS, Internal Revenue Service Notice 2009-50, provides, in part, that issuers designate eligible recovery zones based on certain specified criteria and that issuers that receive volume cap allocations for Recovery Zone Bonds may matte designations of recovery zones in any reasonable manner as such issuer shall determine in good faith, in its discretion. NOW, THEREFORE, at a regular meeting of the governing body of Flathead County, duly called, noticed, and held on the 270' day of October, 2009, upon motion duly made and seconded, it is resolved, as follows: 1. In order for Flathead County (thc "Issuer") to avail itself of the economic development stimulus provisions contained in the ARRA, the Issuer, after careful consideration of all economic indicators in Flathead county including but not limited to, loss of employment, rate of home foreclosures, loss of retail sales and declining tax revenues, in its discretion and in good faith, and in compliance with Section 140OU-I(b) of the Internal Revenue Code of 1986, hereby designates Flathead County as a recovery zone (the "Recovery Zone"). 2. The Recovery Zone has suffered significant unemployment, a large increase in home foreclosures, and general economic distress. 3. All actions of the officers, agents and employees of any issuer of Recovery Zone Bonds that are in conformity with the purposes and intent of this Resolution, whether taken before or after the adoption hereof, are hereby ratified, confirmed and adopted. 4. Issuer shall administer and serve as issuer of any Recovery Zone Bonds for which an allocation is granted to Issuer, unless otherwise allocated by Issuer or the Department in accordance with ARRA. 5. This Resolution shall be in full force and effect from and after its final passage and approval according to law. Dated this 27 h day of October, 2009 ATTEST: Paul obinson, Clerk, By: Deputy BOARD OF COUNTY COMMISSIONERS Flathead county, Montana By: Dale W. Laum , Chairman By: A'd 40,*1" dA., .lose "-BR nnem Member By: J R. Dupont, Member