Councilor Davis,
We will do a followup presentation regarding the two bond allocations to
Columbus, Georgia at the council meeting on December 15, 2009 and will outline
the rfp process for the one bond opportunity being made available to private or
non profit businesses.
I am providing a response to your questions below based on the information
available at this time. Also, i have attached the agenda report that we
provided the mayor/council on October 27, 2009. It provides a brief summary
regarding the two bond programs.
Regading your specific questions, see below:
1.What is the city's fiducuiary responsibility with these bonds:
The city's responsibility is to create/identify the recovery/enterprise zone
for qualification and make sure that the private entity meets all
qualifications. Beyond this, the private entity is responsible for issuance of
the bonds and payback. The city may be required to provide the private entity a
document that authorizes them to use the allocation made available through the
city as the pass through agency. So, debt is paid by the private or non profit
businesses that owns and uses the property in the recovery/enterprise zone.
Interest is tax-exempt and the private entity/non profit entity must issue the
bonds by 12/31/10. This is my understanding at this time.
2. What is the criteria for qualification/selection?
The city has not developed specific qualification criteria. The funding agency
criteria is that the property be located in a recovery/enterprise zone as and
they have idrntified businesses that do not qualify ( rental housing,
apartments, health clubs, liquor stores, race tracks, luxury boxes, and
gambling massage parlors). The city will ask for specific financial
information and will use this as part of our selection process.
3. What will the city's rfp standards/request be:
RFP standards are being considered at this time.
4. Are both bonds for profit and non profit or can they be used both ways?
One bond is for public projects through the city/county and one is for private
or non profit businesses.
Columbus Consolidated Government
Council Meeting
October 27, 2009
Agenda Report # 436
TO: Mayor and Councilors
SUBJECT: Recovery Zone Bond Allocations
INITIATED BY: Finance Department
Recommendation: Approve a resolution authorizing the Mayor to sign the Recovery
Zone Bond Notice of Intent to Issue.
Background: On August 20, 2009, the Georgia State Financing and Investment
Commission (GSFIC) took action to officially recognize the Recovery Zone Bond
(RZB) allocations made by the United States Department of Treasury. The
American Recovery and Reinvestment Act of 2009 created two new bond programs
for local governments: Recovery Zone Economic Development Bonds and Recovery
Zone Facility Bonds. The ability of local governments to use both types of
Recovery Zone bonds expires on December 31, 2010. The allocation for the City
of Columbus is $2,090,000 of Recovery Zone Economic Development Bonds and
$3,135,000 for Recovery Zone Facility Bonds. The Recovery Zone Economic
Development Bonds are for public infrastructure and facilities. The Recovery
Zone Facility Bonds are tax-exempt private activity bonds for financing
economic development.
Analysis: The Notice of Intent to Issue is due by November 2, 2009. The local
government may, at any time, waive its Recovery Zone Bond allocation by
adopting a resolution of waiver and providing written notice to the Georgia
Department of Community Affairs. The Recovery Zone Bonds will be evaluated
during the bond issuance process for any project that meets the
qualifications. The Recovery Zone Bonds will be utilized if the city will
realize a savings.
Alternatives: If the City of Columbus does not submit the Notice of Intent to
Issue, the allocation will be deemed waived and available by the State to be
re-allocated.
Financial Considerations: The Recovery Zone Economic Development Bonds has an
option to issue as tax credit bonds or ?direct pay? taxable bonds that will
benefit the borrower with a 45% direct subsidy from the US Treasury on interest
payments. The Recovery Zone Facility Bonds are issued for private projects, is
tax-exempt, and has no cash subsidy from the Treasury.
Legal Considerations: Council action is required to authorize the Mayor to sign
the Recovery Bond Notice of Intent to Issue.
Recommendations/Actions: Approve a resolution authorizing the Mayor to sign
the Recovery Bond Notice of Intent to Issue.
A RESOLUTION
No. ___
WHEREAS, the American Recovery and Reinvestment Act of 2009 created two new
bond programs for local governments: Recovery Zone Economic Development Bonds
and Recovery Zone Facility Bonds; and,
WHEREAS, the Georgia State Financing and Investment Commission (GSFIC) took
action on August 20, 2009 to officially recognize the Recovery Zone Bond
allocations made by the United States Department of the Treasury; and,
WHEREAS, the City of Columbus allocation for Recovery Zone Economic
Development Bonds is $2,090,000 and Recovery Zone Facility Bonds is $3,135,000;
and,
WHEREAS, the City of Columbus is required to submit a Notice of Intent to
Issue to confirm the allocation; and,
WHEREAS, the City of Columbus can choose to waive the allocation at any time
by resolution.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA HEREBY RESOLVES:
The Mayor is hereby authorized to submit the Recovery Bond Notice of
Intent to Issue in the allocation amounts listed above.
_________________
Introduced at a regular meeting of the Council of Columbus, Georgia,
held the _________day of _____________, 2009 and adopted at said meeting by the
affirmative vote of _____________members of said Council.
Councilor Allen voting __________.
Councilor Anthony voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Hunter voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
_______________________________ ____________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
Isaiah Hugley
City Manager
Columbus Consolidated Government
P.O. Box 1340
Columbus, GA 31902
Phone: (706) 653-4029
Fax: (706) 653-4032
Ihugley@columbusga.org
Glenn Davis
12/02/2009 06:06 PM
To
Isaiah Hugley
cc
gallen@aflac.com, juliusatty@aol.com, mwoodson@columbusga.org,
ewoodson@tsystsol.com, pops9784@aol.com, evelyn.pugh@suntrust.com, Jim
Wetherington , mbakercpa@charter.net,
Wontergrn@aol.com, wanthony@knology.net, eturner325@aol.com, skhndrs@aol.com,
Judy Thomas , David Arrington
, Lisa Goodwin ,
lturner@columbusga.org
Subject
Re: Email from Tony Whitehurst regarding Valley Healthcare System
isaiah.....as you remember i asked at council about the development
criteria for qualification/selection of the bonds when you asked us to
approve.....your response was "what do you mean".....you were suppose
to get back with me, or me with you.......it seems that there is now
an interest......please answer a couple of questions......1.) what is
the award process criteria going to be as related to the city's
fiduciary responsibility with these bonds? 2.) what is the criteria
for qualification/selection? 3.) what are the city's RFP
standards/request going to be? 3.) are there both bonds for
non-profit and for profit, or can they be used both ways? .....thanks,
glenn
On Wed, Dec 2, 2009 at 7:12 AM, Isaiah Hugley wrote:
> Councilor Henderson,
>
> Below is the email that I sent to some yesterday regarding the email from
> Tony Whitehurst.
>
>
>
> I saw Sarah Lang/Executive Director Valley Healthcare System some months ago
> and brought to her attention the Recovery Zone Bond opportunity through the
> City. The City is unable to use this Recovery Bond opportunity as it is to
> be designated for use by a nonprofit organization in a Recovery Zone. That
> Is why I approached Sarah Lang about this opportunity. I further had Pam
> Hodge, Joe Riddle and Rick Jones look into how we can make this work for
> Valley Healthcare System. As they looked into the matter, they discovered
> that the property location where Valley Healthcare plans to build is not in
> the Enterprise Zone and must be in the Enterprise Zone/Recovery Zone to
> qualify.
>
> Once learning that they were not in the Enterprise Zone, I had staff look at
> amending the Enterprise Zone to take in the tract of property where Valley
> Healthcare propose building. Staff reported back that this census tract did
> not meet at least three of the five criteria to qualify for the Enterprise
> Zone.
>
> Rick Jones did a presentation at the pre council last Tuesday wherein I made
> the point that staff have not convinced me that the property does not
> qualify by meeting three of the five criteria, when the property around the
> library site and extending back to Morris Road does qualify. We concluded
> the pre council discussion on the Enterprise Zone by letting the
> mayor/council know that we will do a follow up presentation to further
> discuss.
>
> With this said, if we can legally declared that they are in the Enterprise
> Zone or meet the criteria for a Recovery Zone, we will support Valley
> Healthcare as a candidate for the Recovery Zone Bond allocation. Please let
> me know if you have further questions.
>
>
> Isaiah
> Isaiah Hugley
> City Manager
> Columbus Consolidated Government
> P.O. Box 1340
> Columbus, GA 31902
> Phone: (706) 653-4029
> Fax: (706) 653-4032
> Ihugley@columbusga.org
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