Economic Recovery Designation

 

Missoula County Commissioners unanimously approved designating Missoula County an Economic Recovery Zone to enable private entities, the County, City, and other local governments to access federally subsidized financing. The American Recovery and Reinvestment Act of 2009, signed into law last February, authorizes the issuance of Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds with favorable interest rate subsidies to spur economic development within communities impacted by lack of employment.

 

The State of Montana received an allocation of $90 million in Recovery Zone Economic Development Bonds and $135 million in Recovery Zone Facility Bonds. Missoula County was designated by the U.S. Department of Treasury and the I.R.S. to receive 34.5% or $31,019,000 and $46,528,000, respectively of that allocation. Designating Missoula County as an Economic Recovery Zone enables the County to access its portion of the State allocation. With the Recovery Zone Economic Development Bonds the County or City could issue taxable bonds for traditional governmental facilities or job training centers in the Recovery Zone and be reimbursed 45% of the interest costs. The County has the ability to reallocate a portion of its share of the bonding capacity to eligible issuers within its jurisdiction. The County Commissioners reallocated $25 million dollars of its capacity to the City of Missoula for the potential construction of a new police station, building a connector road between Craig Avenue and Wyoming Street allowing access to the former Champion Mill site, and the construction of 14 acre park on the Clark Fork River.

 

Recovery Zone Facility Bonds provide tax exempt financing similar to what currently exists at the County, but now it will be made available to private companies conducting business within Missoula County. The Commission also a reallocated $8 million dollars of Recovery Zone Facility Bonds to the City to build a parking structure on the corner of Front and Pattee Streets.

 

The County plans on using a portion of its remaining capacity in both types of bonds to replace the aging irrigation infrastructure at the Larchmont Golf Course, fund several planned Rural Special Improvement Districts and potentially issue the second of three voter approved Open Space Bond issuances.

 

Board Chairman Bill Carey said “the really exciting part of this opportunity is providing the ability of any financially capable firm to access through the Recovery Zone Facility Bonds extremely low tax exempt financing for the creation or expansion of a business within Missoula County with the exception of residential real estate.” The intention of the Recovery Act Bonds is to spur economic activity and create jobs in communities that were hit hardest with a drop in employment. The County will not incur any liability with respect to these private activity bonds, it will simply act as a conduit between the bank buying the bonds and the borrower passing on its tax exempt status. The policies for private firms to access the tax exempt financing are still being developed. A link will be placed on the County website when more information is available. In the interim please contact the County’s Chief Financial Officer Andrew Czorny.