Recovery Zone Designation Makes County Eligible

10/27/2009

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Washington County was declared a Recovery Zone on Tuesday by the County Board.
With that decision, the county now can access more than $7 million in low interest loans to stimulate local business growth.
The board also authorized the nonprofit Economic Development/Washington County as coordinator of the county’s new $7.09 million Recovery Zone Facility Bond (RZF) program. That board vote was 27-0, with three county supervisors absent.
County Supervisor Roy Justman of West Bend cast the lone no vote to the Recovery Zone designation, stating he was “sick and tired” of federal funding programs. “I think we can survive without something like this.”
“This is for private business use, not for government use,” said County Board Chairman Herb Tennies of the RZF bonds program. “This is money that would have to be repaid at a low cost interest rate. I believe this would be a good thing for the county.”
“It is a loan,” said County Supervisor Mark McCune from the town of Erin. “It will be repaid. It’s not a bailout.”
High unemployment in the county and especially West Bend, as well as a rising number of foreclosure court cases, were used to justify the Recovery Zone designation under the American Recover and Reinvestment Act of 2009, commonly called the federal stimulus package.
The RZF bonds program offers federal subsidies, which allow qualifying businesses to receive the same low interest rates on bonds as counties and municipalities can get.
RZF Bonds can be used in a designated Recovery Zone.
Counties and municipalities with populations over 100,000 can designate their own Recovery Zones if the designated area has either significant poverty, unemployment, home foreclosures, is in general distress, is affected by a military realignment or is designated an empowerment zone or renewal community.
While the county can declare the Recovery Zone designation and set up a local RZF Bonds program, it cannot issue the bonds. That’s why the county designated the EDWC as the program’s coordinator. The EDWC’s board already has agreed to do so.
RZF Bonds are a new category of private activity bonds that can provide tax-exempt financing for projects that historically would not qualify, including large manufacturing plants, distribution centers, hotels and research parks, according to the state’s Department of Commerce.
Municipalities in the county will be notified the bonds are available for local businesses. If proposals are made, the EDWC will prioritize them, county officials have said.
The $7.09 million in RZF bonds must be used before Jan. 1, 2011.
The county is not eligible to apply for the RZf bonds, Tennies said. In a separate stimulus package program, the county could access up to $4 million in such low-interest loans if it wants to, he said.
Earlier this month, Tennies and County Administrative Coordinator Douglas Johnson asked the County Board’s Transportation Committee to consider if it wanted the Highway Department to apply for such federally subsidized low-interest loans to help pay for selected highway projects next year.
“These funds are there,” Johnson said at the time, designated for Washington County. If the county does not use the funding, it will be redistributed elsewhere in the state.
Highway projects are the most likely places where such bonds could be used, Tennies said.
Daniel Goetz, a county supervisor from Richfield and chairman of the Transportation Committee, said the committee will discuss that.
Economic Development/W ashington County is a nonprofit organization that works to enhance the economic vitality in the county. It’s $200,000 annual budget is funded through the county, private businesses and local economic development corporations.

Daily News Staff, Dave Rank