PLAN TO ALLOW CITIES TO ACCESS TRADITIONAL MARKET INTEREST RATES FOR BONDS
WHEREAS, Deteriorating conditions in the credit markets have severely diminished the ability of cities to access traditional sources of funding for projects that meet critical local needs; consequently, many municipal projects today are in jeopardy or are being delayed, with prospects for their future realization highly uncertain; and
WHEREAS, Municipal projects provide important, effective economic stimulus and are worthy of partnership with the federal government; civic projects instantly create and cause the retention of multiple thousands of jobs in many different industries; city projects often include partnerships with the private sector that create a leveraging of mutual interests and maximum economic benefit for the greater community; many city projects are transit oriented, which spurs additional economic benefit; moreover, when projects involve the enhancement of development of public mass transit, they result in reduced highway congestion, reduced air pollution, and reduced dependence on foreign oil; and
WHEREAS, Projects supported by municipal bonds are vetted locally, approved in elections by local voters, and administered locally, conditions that promote the highest level of transparency and accountability; and
WHEREAS, Recently passed amendments to the Troubled Assets Relief Program (TARP) legislation that are contained in F.R. 384, Section 402, clarify the authority of the U.S. Treasury regarding municipal securities; exercising the authority to directly purchase such bonds, and/or provide credit enhancements fro them, would provide an opportunity to realize immediate, significant contributions to our economic recovery; and
WHEREAS, Directly purchasing municipal securities at appropriate interest rates, or providing credit enhancements that allow cities access to traditional market interest rates for bonds, would give the federal government the opportunity to be repaid, with interest, the entire sum it furnishes through the partnership; in result in a significant tax reduction for local taxpayers in the form of dramatically reduced publicly funded interest costs; and
WHEREAS, Working together to construct an efficient application of the authorization provided in H.R. 384, Section 402, would greatly enhance our country's progress toward economic recovery; now therefore, be it
NOW, THEREFORE, BE IT RESOLVED, That the US Conference of Mayors hereby respectfully urge U.S. Secretary of the Treasury Timothy Geithner to implement a plan that will allow cities affected by the credit crisis to access traditional market interest rates for bonds.