HomeMy WebLinkAbout10-05 - Designating City of Costa Mesa as a Recovery Zone under The American Recovery and Reinvestment Act of 2009RESOLUTION NO. 10-5
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF COSTA MESA, CALIFORNIA, DESIGNATING THE
CITY OF COSTA MESA AS A RECOVERY ZONE UNDER
THE AMERICAN RECOVERY AND REINVESTMENT
ACT OF 2009 FOR THE PURPOSES OF SECTIONS
14000-1, 14000-2 AND 14000-3 OF THE INTERNAL
REVENUE CODE OF 1986.
THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS
FOLLOWS:
WHEREAS, on February 17, 2009, the President signed into law the American
Recovery and Reinvestment Act of 2009 ("ARRA"); and
WHEREAS, Section 1401 of Title 1 of Division B of ARRA added Sections
14000-1 through 14000-3 to the Internal Revenue Code of 1986 ("Code"), and
authorizes state and local governments to issue Recovery Zone Economic
Development Bonds and Recovery Zone Facility Bonds; and
WHEREAS, Section 14000-1 imposes a national bond volume limitation
("volume cap") of $10 billion for Recovery Zone Economic Development Bonds and $15
billion for Recovery Zone Facility Bonds; and
WHEREAS, the volume cap for Recovery Zone Bonds is allocated among the
states and counties and large municipalities within the states based on relative declines
in unemployment in 2008; and
WHEREAS, Recovery Zone Economic Development Bonds may be issued by
each state and counties and large municipalities within each state before January 1,
2011 under Section 14000-2 of the Code, as provided in Section 14000-1 of the Code,
to finance certain "qualified economic development purposes" for use within designated
"Recovery Zones" as described; and
WHEREAS, pursuant to Section 14000-1 of the Code, the term "Recovery Zone"
means (i) any area designated by the City as having significant poverty, unemployment,
rate of home foreclosures, or general distress, (ii) any area designated by the City 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 (iii) any area
for which a designation as an empowerment zone or a renewal community is in effect;
and
WHEREAS, Section 14000-2(c) of the Code defines the term "qualified
development purpose" for purposes of Section 14000-2 of the Code 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
WHEREAS, Section 14000-1 (b) of the Code requires, in part, that issuers
"designate" eligible Recovery Zones based on certain specified criteria; and
WHEREAS, IRS Notice 2009-50 provides that for this purpose, any state, county,
or large municipality that receives a volume cap allocation for Recovery Zone Economic
Development Bonds may make these designations of Recovery Zones in any
reasonable manner as it shall determine in good faith in its discretion; and
WHEREAS, due to the significant decline in general economic conditions, the
City of Costa Mesa has encountered an increase in unemployment, an increase in
home foreclosures, and has otherwise suffered general economic distress; and
WHEREAS, Section 14000-1(a)(1)(A) of the Code provides that, subject to
Section 14000-1(a)(1)(B) of the Code (relating to minimum allocations), generally, the
Secretary of the Treasury (the "Secretary") shall allocate the $10 billion national volume
cap for Recovery Zone Economic Development Bonds among the states in the
proportion that each state's 2008 state employment decline bears to the aggregate of
the 2008 State employment declines for all of the States; and
WHEREAS, Section 14000-1(a)(3)(A) of th
state with respect to which the allocation is madE
Code is required, without discretion, to reallocate
and large municipalities in such state in proportioi
2008 employment decline bears to the aggregate
the counties and municipalities in such state.
Code provides generally that each
under Section 14000-1(a)(1) of the
such allocation among the counties
that each county's or municipality's
of 2008 employment declines for all
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby finds and determines that significant
poverty, unemployment, rate of home foreclosures, and general
distress exist in the City of Costa Mesa as a consequence of the
recent housing market collapse, the impact of the national
recession and the fiscal crisis experienced by the State of California
and local communities.
SECTION 2. For purposes of Sections 14000-1, 14000-2 and 14000-3 of the
Code, the City Council hereby designates the entire geographical
boundaries of the City of Costa Mesa.
SECTION 3. The City Council hereby authorized the City Manager, or his
designee, to take such other actions as may be necessary to
F -I ensure that the City of Costa Mesa is designated as a Recovery
Zone.
SECTION 4. The City Council authorizes the City Manager, or his designee, to
develop criteria for distribution of the Recovery Zone allocations.
SECTION 5. The City Council authorizes the City Manager, or his designee, to
execute any documents associated with the allocation and use of
the Recovery Zone Economic Development Bonds and Recovery
Zone Facility Bonds.
SECTION 6. This resolution shall take effect from and after its adoption.
PASSED AND ADOPTED this 19th day of January, 2010.
ATTEST:
Jul' Folcik, Cit Clerk
Allan R. Mansoor, Mayor
APPROVED AS TO FORM:
Y4-�' I�f 4,4j
Kimberly Hall Sarlow, City Attorney
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, JULIE FOLCIK, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY
that the above and foregoing is the original of Resolution No. 10-5 and was duly passed
and adopted by the City Council of the City of Costa Mesa at a regular meeting held on
the 19th day of January, 2010, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS: MANSOOR, LEECE, BEVER, FOLEY, MONAHAN
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the
City of Costa Mesa this 20th day of January, 2010.
JUL E -CIK,/CITY CLERK
(SEAL)