CITY OF
COMMUNITY DEVELOPMENT DEPARTMENT
TO: Mayor and City Commission
FROM:
BY:
DATE: March
9, 2010
SUBJECT: Request to Designate Economic Recovery
Zone and for Authorization to Pursue Future Funding
Tonight, we are requesting your
approval to designate the City of North Lauderdale a “Recovery Zone” for
purposes of making funding available from Broward County to companies and
organizations through the Recovery Zone Facility Bonds, Recovery Zone Economic
Development Bonds or other future programs that may become available within the
“Recovery Zone” as a result of the American Recovery and Reinvestment Act (ARRA).
Background
On February 17, 2009, the President signed into law the American Recovery and Reinvestment Act of 2009, Pub. L No. 111-5 Stat. 115 (209 “ARRA”). Section 1401 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 added Sections 1400U-1 through 1400U-3 to the Internal Revenue Code (the "IRS Code"), authorizing state and local governments to issue Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds.
These Recovery Zone Economic Development Bonds are taxable, tax-credit governmental bonds that may be used to finance certain "qualified economic development purposes," defined as promoting development or other economic activity in a designated Recovery Zone, including (1) capital expenditures paid or incurred with respect to property located in the recovery zone, (2) expenditures for public infrastructure and construction of public facilities, and (3) expenditures for job training and educational programs. Recovery Zone Facility Bonds are private activity bonds that may be used to finance certain private activity projects located within the Recovery Zone.
Broward County, Florida has been allocated $40,739,000 in Recovery Zone Economic Development Bonds, and $61,108,000 in Recovery Zone Facility Bonds, which must be issued on or before December 31, 2010. They are making the Recovery Zone Facility Bonds available to qualified companies and organizations located within a designated Recovery Zone through a currently advertised application process.
In order to make these programs available to companies and organizations within North Lauderdale or for the City to apply for funding through any potential future programs, the City must first designate a Recovery Zone that meets the criteria of having significant levels of increased unemployment, increased levels of home foreclosures, and the general increase of economic distress. Although there have been no projects currently identified that the Administration recommends that funding be pursued for under the Recovery Zone Facility Bond Program, since this is a bond that would have to be paid back and not a grant program, we are recommending that the City consider designating a “Recovery Zone” at this time. The unemployment rate in the City of North Lauderdale has been rising steadily since December 2006 increasing from 2.4% to 9.0% in December 2009 according to the U.S. Department of Labor, Bureau of Labor Statistics. The volume of foreclosures has also escalated by fortyfold since 2006 from 11 foreclosures to 470 in 2009. Both of these events have impacted our residents and businesses. We are, therefore, presenting a Resolution tonight for your consideration to authorize the zone and to authorize the City Manager to make application for any future programs offered under the ARRA that the City may be interested is deemed to be eligible for.
Recommendation
Staff has reviewed the criteria for designation
of a Recovery Zone and deemed that the City’s entire geographical boundaries
meet the criteria. Staff has also
reviewed the guidelines of the Recovery Zone Facility Bond Program and does not
feel it is suitable for the City at this time due to the economic challenges
that we are currently facing. This is a bond program that needs to be paid back
and not a grant. However, staff recommends
that the City Commission designates this Recovery Zone, in case the City needs
to pursue funding in the future that may become available under the ARRA and to
support any applications by companies or organizations within the Recovery Zone.
Therefore, tonight the City Administration is recommending the Commission’s consideration and adoption of the attached resolution authorizing designation of the Recovery Zone and authorizing the City Manager to make application for programs offered under the ARRA in the future that the City is deemed to be eligible for and to support applications from companies and organizations within the Recovery Zone.
Should the City Commission concur with this recommendation, the following motion is in order:
Motion:
“To approve the attached Resolution designating the entire geographic boundaries of the City a Recovery Zone and authorizing the City Manager to apply for funding through ARRA programs in the future, if needed, and support applications from companies and organizations within the Recovery Zone.”
RESOLUTION NO. ________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF NORTH LAUDERDALE,
FLORIDA; DESIGNATING THE CITY OF NORTH LAUDERDALE AS A RECOVERY ZONE FOR
PURPOSES OF SECTIONS 1400U-1, 1400U-2, AND 1400U-3 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED; PROVIDING FINDINGS OF FACT; PROVIDING THAT THE CITY
MANAGER OR HER DESIGNEE SHALL BE AUTHORIZED TO APPLY FOR RECOVERY ZONE FACILITY
BONDS ELIGIBLE ACTIVITIES/PROJECTS IN THE FUTURE AND SUPPORT APPLICATIONS FROM
COMPANIES AND ORGANIZATIONS WITHIN THE ZONE; PROVIDING FOR FINDINGS AND
CONCLUSIONS WITH REGARD TO THE BENEFITS TO BE DERIVED BY PROCESSING AND
OBTAINING SUCH FUNDS; AND, PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on February 17, 2009, the President signed into law the American Recovery and Reinvestment Act of 2009, Pub. L No. 111-5 Stat. 115 (209 “ARRA”); and
WHEREAS, Section 1401 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 added Sections 1400U-1 through 1400U-3 to the Internal Revenue Code (the "IRS Code"), authorizing state and local governments to issue Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds; and
WHEREAS, Recovery Zone Economic Development Bonds are taxable, tax-credit governmental bonds that may be used to finance certain "qualified economic development purposes," defined as promoting development or other economic activity in a designated Recovery Zone, including (1) capital expenditures paid or incurred with respect to property located in the recovery zone, (2) expenditures for public infrastructure and construction of public facilities, and (3) expenditures for job training and educational programs, and Recovery Zone Facility Bonds are private activity bonds that may be used to finance certain private activity projects located within the Recovery Zone; and
WHEREAS, the term “Recovery Zone” means: (1) any area designated as having significant poverty, unemployment, a high rate of home foreclosures, or general distress; (2) any area economically 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 as of February 17, 2009 the effective date of ARRA; and
WHEREAS, Broward County, Florida has been allocated $40,739,000 in Recovery Zone Economic Development Bonds, and $61,108,000 in Recovery Zone Facility Bonds, which must be issued on or before December 31, 2010; and
WHEREAS, Broward County is making the Recovery Zone Facility Bonds available to qualified companies and organizations through a currently advertised application process; and
WHEREAS, the City of North Lauderdale is desirous of designating a Recovery Zone due to significant levels of increased unemployment, increased levels of home foreclosures, and the general increase of economic distress throughout the municipality for the purpose of qualifying for potential future funding that may become available and making the current programs available to companies and organizations within the Recovery Zone; and
WHEREAS, the unemployment rate in the City of North Lauderdale has been rising steadily since December 2006 from 2.4% to 9.0% in December 2009, the volume of foreclosures in the City of North Lauderdale over the past four years, from 2006 through 2009, has increased greatly, and the significantly high unemployment rate and volume of home foreclosures in the City of North Lauderdale have impacted citizens and businesses county-wide and have resulted in the general distress of the City; accordingly, it is in the best interests of the City that the entire geographic area of the City be designated as a "Recovery Zone" for purposes of issuing Recovery Zone Bonds to promote job creation and economic recovery; and
WHEREAS, the matter was discussed at the March 9, 2010 City Commission meeting and recommended to full governing body for approval.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY
COMMISSION OF THE CITY OF NORTH LAUDERDALE, FLORIDA THAT:
Section
1: The City has experienced a
significantly high unemployment rate and volume of foreclosures that have
impacted citizens and businesses city-wide and have resulted in the general
distress of the City.
Section
2: The City’s “Recovery Zone,”
for the purposes of Section 1400U-1, 1400U-2, and 1400U-3 of the Internal
Revenue Code of 1986 is hereby designated to be the entire geographic area of
the City of North Lauderdale.
Section 3: The City finds that the “Recovery Zone” described above meets the requirements of Section 1400U-1 of the Code.
Section 4: The City Manager or her designee is authorized to sign the necessary documents to apply for funding in the future and support applications from companies and organizations who apply for funding that may be allocated through the Recovery Zone Facility Bonds, Recovery Zone Economic Development Bonds and/or other program funding that may become available within the “Recovery Zone” as a result of the ARRA.
Section 5: That this Resolution
shall be in full force and effect immediately upon its passage and adoption.
PASSED
AND ADOPTED on this _____ day of __________________, 2010.
APPROVED
AS TO FORM:
___________________________________
CITY
ATTORNEY SAMUEL S. GOREN
___________________________________
MAYOR JACK BRADY
___________________________________
VICE MAYOR JOHN R. CANGEMI
ATTEST:
___________________________________
CITY CLERK PATRICIA VANCHERI