2009-1552-Resolution No. 2009-133 Recorded 12/14/2009IEW
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LEGAL COUNSEL
COUNTY OFFICIAL
NANCYUTES BLANKENSHIP, COUNTY CLERKDS CJ 2009'1551
COMMISSIONERS' JOURNAL
111111111 ill 11111111 12/14/2009 11;33;31 AM
2009-3ss2
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
A Resolution Authorizing the Creation of a
Recovery Zone under the Provisions of the
American Recovery and Reinvestment Act of
2009 for the Purpose of Issuing Recovery Zone
Economic Development Bonds and Recovery
Zone Facility Bonds; Delegation of Authority to
Suballocate Volume Cap; and related matters.
RESOLUTION NO. 2009-133
WHEREAS, the American Recovery and Reinvestment Act of 2009 ("ARRA")
authorized, among other things, certain local governments to issue recovery zone economic
development bonds ("RZEDBs") and recovery zone facility bonds ("RZFBs" and together with
RZEDBs, the "Recovery Zone Bonds") pursuant to volume cap allocated to such local governments;
and
WHEREAS, pursuant to I.R.S. Notice 2009-50 ("Notice 2009-50"), the County was
allocated $10,795,000 of RZEDB volume cap ("RZEDB Volume Cap") and $16,192,000 of RZFB
volume cap ("RZFB Volume Cap" and together with the RZEDB Volume Cap, the "Recovery Zone
Volume Cap"); and
WHEREAS, RZEDBs may be issued by governments with volume cap before
January 1, 2011 to finance certain "qualified economic development purposes" for use within
designated "recovery zones;" and
WHEREAS, RZFBs may be issued by governments with volume cap before January 1,
2011 to finance certain "recovery zone property" for use within designated "recovery zones;" and
WHEREAS, for these purposes, the Internal Revenue Code of 1986, as amended (the
"Code"), defines the term "recovery zone" to mean: (1) any area designated by the issuer as having
significant poverty, unemployment, rate of home foreclosures, or general distress; (2) any area
designated by the issuer as 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 the
effective date of ARRA, which effective date is February 17, 2009; and
WHEREAS, the Code defines the term "qualified economic development purpose" to
mean any expenditures for purposes of promoting development or other economic activity in a
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
PAGE 1 OF 3 — RESOLUTION NO. 2009-133 (12/09/09)
WHEREAS, the Code defines the term "recovery zone property" generally to include
certain depreciable property (1) that was constructed, reconstructed, renovated, or acquired after the
date on which the designation of the recovery zone took effect, (2) the original use of which in the
recovery zone commences with a beneficiary, and (3) substantially all of the use of which is in the
recovery zone and is in the active conduct of a "qualified business" by a beneficiary in such zone.
WHEREAS, the Code defines the term "qualified business" generally to mean any trade
or business except (1) residential rental property, and (2) any trade or business consisting of the
operation of any private or commercial golf course, country club, massage parlor, hot tub facility,
suntan facility, racetrack, or other facility used for gambling, or any store the principal business of
which is the sale of alcoholic beverages for consumption off premises.
WHEREAS, Notice 2009-50 provides that for this purpose, any local government that
receives a volume cap allocation for Recovery Zone Bonds may make these designations of recovery
zones in any reasonable manner as it shall determine in good faith in its discretion; and
WHEREAS, the Board of County Commissioners of the County has caused to be
prepared a factual report (Attachment "A"), which is attached to and incorporated by reference in this
Resolution, and which provides the factual basis for designating the entire geographic area of the
County as a recovery zone; and
WHEREAS, pursuant to Notice 2009-50, the County is permitted to allocate a portion
or all of its Recovery Zone Volume Cap to other local governments in any reasonable manner as the
County shall determine in good faith in its discretion for use for qualified economic development
purposes or recovery zone property, as applicable, that are located within, or attributable, to both the
jurisdiction of the local government and the County; and
WHEREAS, certain local governments that are located within the County may request
that the County suballocate its volume cap in order for such local governments to issue Recovery Zone
Bonds for qualifying capital projects.
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES
COUNTY, OREGON, as follows:
Section 1. Designation of Recovery Zone. Based on the Report, the Board hereby
finds that the entire geographic area of the County is experiencing significant poverty, unemployment,
rate of home foreclosures, or general distress for purposes of § 1400U -1(b) of the Code. The entire
geographic area of the County is hereby designated as a recovery zone for purposes of § 1400U -1(b) of
the Code.
Section 2. Delegation for Suballocation and Determining Qualified Economic
Development Purpose and Recovery Zone Property. The Finance Director or the County
Administrator (the "County Official) is hereby authorized on behalf of the County and without further
action by the Board to allocate all or a portion of the County's RZEDB Volume Cap and RZFB
Volume Cap to any local government geographically located within the County so that such local
governments may issue RZEDBs for eligible costs of a qualified economic development purpose or
PAGE 2 OF 3 — RESOLUTION NO, 2009-133 (12/09/09)
recovery zone property projects that will promote development or other economic activity within the
County and RZFBs for recovery zone property.
Section 3. Determining Qualified Economic Development Purpose and Recovery
Zone Property. Before allocating all or a portion of the County's RZEDB or RZFB Volume Cap, the
County Official shall require that the local government requesting the allocation provide the County
Official with details of the proposed project and a supporting certification that such project is a
qualified economic development purpose or recovery zone property, as appropriate. The County
Official shall be entitled to rely on such certifications.
Section 4. The County Official will maintain the appropriate records to document each
allocation made to a local government and will not allocate an aggregate amount of RZEDBs to local
governments in excess of $10,795,000, and will not allocate an aggregate amount of RZFBs to local
governments in excess of $16,192,000.
Section 5. This Resolution shall take effect immediately upon its adoption.
DATED this day of December, 2009.
ATTEST:
Recording Secretary
Record of Adoption Vote
Commissioner Yes No
Tammy Baney
Dennis R. Luke
Alan Unger
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
00- V
TAMMY BANEY, Chair
.z
DENNIS R. LUKE, Vice Chair
OJ_" _ &J*
ALAN UNGER, Commissioner
Abstained Excused
PAGE 3 of 3 — RESOLUTION NO. 2009-133 (12/09/09)
[Deschutes County Letterhead]
[date]
[suballocation local government contact]
Re: Allocation of $ of Recovery Zone [Economic
Development/Facility] Bond Volume Cap
Dear
I am the County Administrator/County Finance Director, and pursuant to County
Resolution No. (the "Resolution") adopted by the Board of County
Commissioners of Deschutes County, Oregon, I am authorized to allocate all or a portion
of the County's Recovery Zone [EcoTiomic Development/Facility] Bond volume cap that
was allocated to the County under the American Recovery and Reinvestment Act of 2009
pursuant to I.R.S. Notice 2009-50.
Under the Resolution, the County has designated the entire geographic area of the County
as a recovery zone for purposes of § 1400U -1(b) of the Internal Revenue Code of 1986,
as amended (the "Code"). The [insert local government] (the "City/District") is located
within the County, and has requested that the County allocate $ of its local
suballocation of Recovery Zone [Economic Development/Facility] Bond volume cap to
the City/District to finance a (the "Project"). The City/District has
provided the County with certifications, which are attached to and incorporated by
reference to this letter, that provides the factual basis for the determination that the
Project is a [qualified economic development purpose/recovery zone property] for
purposes of Section [1400-2(c)/ 1400U -3(c)(1)] of the Code. Based solely on such
certification, I hereby find that the Project [will promote development or other economic
activity within the County/ is recovery zone property].
I hereby allocate $ of the County's local suballocation of its Recovery Zone
[Economic Development/Facility] Bond volume cap to the City/District for the purposes
of issuing Recovery Zone [Economic Development/Facility] Bonds to finance the
Project. I hereby determine that the Bonds may be issued by the City/District as the
ultimate beneficiary of the Project.
Sincerely,
[Attach certification by local government]
For Recovery Zone Economic Development Bonds, the local government will need to
provide a factual basis and certification to support the determination that the project is a
"qualified economic development purpose" which means any expenditures for purposes
of promoting development or other economic activity in a 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.
For Recovery Zone Facility Bonds, the local government will need to provide factual
basis and certification to support the determination that the project is a "recovery zone
property" which means any property to which Section 168 applies (or would apply but
for Section 179 of the Code) if (1) such property is being constructed, reconstructed,
renovated, or acquired by purchase (as defined in Section 179(d)(2) of the Code) by the
taxpayer after the date on which the designation of the recovery zone took effect, (2) the
original use of which in the recovery zone will commence with the taxpayer, and (3)
substantially all of the use of which is in the recovery zone and is in the active conduct of
a "qualified business" by the taxpayer in such zone.
And a qualified business means any trade or business except (1) the rental to others of
real property located in a recovery zone shall be treated as a qualified business only if the
property is not residential rental property (as defined in Section 168(e)(2) of the Code), or
(2) any trade or business consisting of the operation of any private or commercial golf
course, country club, massage parlor, hot tub facility, suntan facility, racetrack, or other
facility used for gambling, or any store the principal business of which is the sale of
alcoholic beverages for consumption off premises.
AGREEMENT REGARDING COUNTY COSTS AND LIABILITIES
between
DESCHUTES COUNTY, OREGON
and
[SUBALLOCATION LOCAL GOVERNMENT]
THIS AGREEMENT is executed by DESCHUTES COUNTY, OREGON (the
"County"), and (the "City/District").
1. Recitals.
a. The American Recovery and Reinvestment Act of 2009 ("ARRA")
authorized, among other things, certain local governments to issue recovery zone
economic development bonds ("RZEDBs") and recovery zone facility bonds ("RZFBs" and
together with RZEDBs, the "Recovery Zone Bonds") pursuant to volume cap allocated to
such local governments.
b. Pursuant to IRS Notice 2009-50 ("Notice 2009-50"), the County was
allocated $10,795,000 of RZEDB volume cap ("RZEDB Volume Cap") and $16,192,000 of
RZFB volume cap ("RZFB Volume Cap").
C. Under County Resolution No. adopted on ,
2009, the Board of County Commissioners designated the entire geographic area of the
County as a recovery zone for purposes of § 14000-1(b) of the Internal Revenue Code of
1986, as amended (the "Code").
d. The City/District has requested that the County allocate
$ of its RZEDB/RZFB Volume Cap to the City/District for the issuance of
RZEDBs/RZFBs (the "Bonds") to finance [insert project
description] (the "Project").
e. The County is willing to allocate the requested RZEDB/RZFB Volume
Cap to the City/District on the condition that the City/District pay any costs of the County
and indemnify the County for any claims against the County as described herein.
f. The parties execute this agreement to memorialize the obligation of
the City/District to pay those costs and provide such indemnification.
2. Payment of Costs.
Agreement Regarding City Costs and Liabilities — Page 1
In consideration of the County's allocation of RZEDB/RZFB Volume Cap, the
City/District agrees that it shall pay, within 30 days after receipt of an invoice, any fees and
expenses incurred by the County in connection with the allocation, regardless of whether
the City/District issues the Bonds. Such County fees and expenses include, but are not
limited to, fees and expenses of the County's bond counsel based on bond counsel's
standard hourly rates and charges.
3. Indemnity.
a. The City/District hereby agrees to indemnify and save the County, its
appointed or elected officials, employees and agents harmless against and from all claims
or settlements by or on behalf of any person, firm, corporation or other legal entity,
including the Federal Government, arising from: (i) the County's allocation of
RZEDB/RZFB Volume Cap; or (ii) the construction, acquisition, operation or use of the
facilities financed with the Bonds.
b. If a claim is made against any indemnified person or entity (an
"Indemnified Person") for which indemnification may be sought from the City/District under
this agreement, the Indemnified Person against whom the claim is made, or its agents,
shall promptly give written notice thereof to the City/District. However, any failure to give
or delay in giving such written notice shall not relieve the City's/District's indemnification
obligations as set forth above except to the extent such failure or delay prejudices the
City's/District's ability to defend or settle such claim. Upon receipt of such notice, the
City/District shall assume the defense thereof in all respects and may settle such claim in
such manner as it deems appropriate so long as there is no liability, cost or expense to the
Indemnified Party. The City/District shall select legal counsel to represent each
Indemnified Party and shall not be responsible for the legal fees and expenses of any legal
counsel retained by any Indemnified Party without the written consent of the City/District,
unless the County shall have reasonably concluded that there may be a conflict of interest
between the County and the City/District in the conduct of the defense of such action (in
which case the City/District shall not have the right to direct the defense of such action on
behalf of the County, but shall be responsible for the legal fees and expenses of the
counsel retained by the Indemnified Party whether incurred at trial, on appeal, in
bankruptcy proceedings or otherwise).
Agreement Regarding City Costs and Liabilities — Page 2
DESCHUTES COUNTY, OREGON
Authorized Representative
Agreement Regarding City Costs and Liabilities — Page 3
[CITY/DISTRICT]
Authorized Representative
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