Muncipal Bonds available; reduced interest rate

Recovery Zone Economic Development Bonds

The Vermont Municipal Bond Bank (VMBB) has received authority from the
State of Vermont to issue up to $90.0 million in Recovery Zone Economic
Development Bonds (RZEDBs) in 2010.

RZEDBs are a category of Build America Bonds (BABs), used to fund
public infrastructure, facilities and equipment in “recovery zones”. The
entire State of Vermont has been declared a “recovery zone”. RZEDBs
are sometimes known as “super BABs”. Regular BABs are taxable bonds
with a 35% tax credit feature. RZEDBs are also taxable bonds, but with
a 45% interest payment subsidy. By passing the subsidy on to
participating municipalities, the VMBB is able to make a 20-year Recovery
Zone Economic Development Bond between 15% and 20% cheaper than
tax-exempt municipal bonds.

Interest rates change on a daily basis.

The final RZEDB pricing will be determined at the time the bonds are sold.
Eligible RZEDB borrowers include: counties; cities; towns; villages; school
districts; and other state recognized districts – the same definition as
those able to borrow on a tax-exempt basis through the VMBB.

Recovery Zone Economic Bonds can be used for the following:
1. New money capital expenditures for real and personal property;
2. Public infrastructure and facilities; and
3. Expenditures for job training and education programs.

In order to qualify for Recovery Zone Economic Development Bonds, a
funded bond project must have started after February 16, 2009. A bond
anticipation note (BAN) may be refinanced by an RZEDB provided the BAN
was entered into after February 16, 2009 for a permissible use.

Like tax-exempt bonds, Recovery Zone Economic Development Bonds
will require voter approval by Australian Ballot. Consult your local counsel
for advice and assistance with the bond approval process.

The VMBB will be using the same application process for Recovery Zone
Economic Development Bonds as that used for tax-exempt bonds. A
municipality wishing to be included in this July’s RZEDB pool will need to
file a VMBB application by May 15th along with the following: a CPA audit
of your municipality’s most recently completed fiscal year, a preliminary
bond counsel’s opinion; and three years of annual reports. See VMBB’s
website for further information on municipal finance and making application
for admission to the VMBB bond pool (www.vtbondagency.org).

To request an estimated debt amortization schedule or for more information
on Recovery Zone Economic Development Bonds and tax-exempt
bonds contact:

Robert W. Giroux, Executive Director
Vermont Municipal Bond Bank
20 Winooski Falls Way
Winooski, VT 05404
802-654-7377
bobg@vtbondagency.org