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Resolution to Designate Recovery Zone <br />August 17, 2009 <br />Page 2 <br />There is no financial obligation on the part of the City for issuing <br />these bonds. The intent of these bonds is to help stimulate investment <br />for development in today's tight commercial credit market. <br />The Community Development Agency will be working to identify potential <br />projects that could utilize the Recovery Zone Facility Bonds. <br />Recovery Zone Economic Development Bonds <br />Recovery Zone Economic Development Bonds are only available to state and <br />local governments. The bonds can be used to finance infrastructure <br />projects at a lower borrowing cost to the City. This is achieved by a <br />direct federal subsidy of 45 per cent of the interest on the bonds, for <br />projects such as street improvements, sewer and other Public Works <br />infrastructure projects. <br />In this current economic crisis, staff does not anticipate issuing bonds <br />for local infrastructure projects as the City would have to demonstrate <br />the capacity to service the debt on these bonds. However, this <br />resolution provides the City the flexibility to issue bonds in the future <br />as its fiscal stability strengthens. <br />All Recovery Zone Bonds must be issued by December 31, 2010. <br />FISCAL IMPACT <br />There is no fiscal impact associated with this item. <br />r <br />Cynt is J. elson <br />Deputy City Manager for Development Services <br />Community Development Agency <br />CJN/LAS/mm <br />55A-2 <br />