RES 13-52 RESOLUTION NO. 13-52
AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS
IN CONNECTION `VIT.H TAX INCREMENT FINANCING.DISTRICT NO. 23
BE IT RESOLVED By the City Council of the City of Elk River, Minnesota (the "City")as
follows:
Section 1. Background,
1.01. The City is proposing to establish Tax .Increment Financing District No. 23 (the
"TIF District") within Municipal Development District No. 1 (the "Development District")
pursuant to Minnesota Statutes, Sections 469.174 to 469.1799; as amended (the"TIF Act").
1.02. The City may incur certain costs related to the TIF District which may be
financed on a temporary basis from available City fluids.
1.03. Under Section. 469.178, Subdivision 7 of the TIF Act, the City is authorized to
advance or loan money from. any fund from. which such advances may be legally made in order
to finance expenditures that are eligible to be paid with tax increments under the TIF Act.
1.04. The City has determined that it may pay for administrative costs associated with
the establishment of the TIF District and certain other costs incurred in connection. with the
proposed development of the TIF District, including but not limited to land and site improvement
costs in the amount of 51,153,878 (the "Costs Advances") on a temporary basis from the General
Fund or any other fund from which. such advances, from time to time, may be legally made (the
"Fund") as an interfund loan pursuant to .Minnesota Statutes, Section 469.178, Subd. 7.
1.05. The City hereby designates the Costs Advances as an interf and loan in accordance
with the terms of this.resolution and the TIF Act.
Section 2. Repayment of Interfiind Loan,
2.01. The City will reimburse itself for the Costs Advances in an amount not to exceed
the adopted and, if applicable, amended Tax Increment Financing Plan. budget for the TIF
District (the "Interfund Loan"), together with interest at the rate prescribed by the statute
(Minnesota Statutes, Section 469.178, Subdivision 7), which is the greater of the rates specified
tinder Sections 270.75 or 549.09 at the time a Interfund .Loan, or any part of it, is first made,
subject to the right of the City Administrator to specify a lower rate.
2.02. Principal acid interest ("Payments") on the Interfund Loan shall be paid semi-
annually on each February 1 and August 1. (each a "Payment .Date"), commencing on the first
Payment Date on which the City has Available Tax .Increment (defined below), or on any other
dates determined by the City Administrator, through the date of last receipt of tax increment
frorn the TIF District.
1
2.03. Payments on the Interfund Loan will be made solely from the tax increment from
the TIF .District received by the City fiom Sherburne County in the six-month period before any
Payment Date, net of the amount paid under any agreement with a private developer or otherwise
pledge to the payment of any obligation (the "Available Tax Increment"), Payments shall be
applied first to accrued interest, and then to unpaid principal, unless otherwise specified by the
City Administrator. Interest accruing from the Loan Date will be compounded semiannually on
February 1 and August. 1 of each year and added to principal, unless otherwise specified by the
City Administrator. Payments on this Interfund Loan may be subordinated to any outstanding or
future bonds, notes, or contracts secured in whole or in.part with available tax increment, and are
on a parity with any other outstanding or future interfund loans secured in whole or in part with
available tax increment.
2.04. The principal sum and all accrued interest payable under this resolution is pre-
payable in whole or in part at any time by the City without premium or penalty.
2.05. This resolution is evidence of an. internal borrowing by the City in accordance
with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely
from Available Tax Increment pledged to the payment hereof under this resolution. The
Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota
or any political. subdivision thereof, including, without .Limitation, the City. Neither the State of
Minnesota, Dior any political subdivision thereof shall be obligated to pay the principal of or
interest on the Interfund Loan or other costs incident hereto except out of Available Tax
Increment. The City shall have no obligation to pay any principal amount of the Interfund Loan
or accrued interest thereon., which may remain unpaid after the final Payment Date.
2.06. The City may at any time make a determination to forgive the outstanding
principal amount and accrued interest on the Interfiind Loan, in whole or in part, on any date
from time to time, to the extent perin.issible under law.
2.07. The City may from time to time amend the terms of this Resolution to the extent
permitted by law, including without .limitation amendment to the payment schedule and the
interest rate; provided that the interest rate may not be increased above the maximum specified in.
Section 469.178. subd. 7 of the TIF Act.
Section 3. Effective Date. This resolution is effective upon execution in full of the
Contract.
Adopted this 3"' day of September, 2013.
"VY J
ATTEST:
Tina Allard, City Clerk
2