RES 21-74of City of Elk River
City Council
River
Resolution 21-74
A Resolution of the City Council of the City of Elk River Authorizing an
Interfund Loan for Advance of Certain Costs
follows:
BE IT RESOLVED By the City Council of the City of Elk River, Minnesota (the "City' as
Section 1. Background.
1.01. The City is considering making certain infrastructure improvements in connection
with the Broadway at 10 Rental development, consisting of a combination of an approximately 91 unit
multifamily housing building and 24 single family townhomes located on parcel identification number
75-842-0010 in the City (the "Project").
1.02. The City may incur certain costs related to Project which may be financed on a
temporary basis from available City funds.
1.03. The City is proposing to use tax abatement in accordance with Minnesota Statutes,
Sections 469.1812 to 469.1812, as amended (the "Tax Abatement Act") to help finance the Project by
abating all or a portion of the City's property taxes on property benefitted by the improvements.
1.04. 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
abatements under the Tax Abatement Act.
1.05. The City has determined that it may pay for property acquisition for installation of the
public improvements, engineering expenses, and the construction of the infrastructure improvements
in connection with Project (the "Cost Advances") on a temporary basis from the City's general fund
or any other fund, as determined by the Finance Director, from which such advances, from time to
time, may be legally made (the "Fund").
1.06. The City hereby designates the Cost Advances as an interfund loan in accordance with
the terms of this resolution.
Section 2. Re a rnent of Interfund Loan.
2.01. The City will reimburse itself for the Cost Advances in an aggregate amount not to
exceed $700,000 (the "Interfund Loan"). Interest will not accrue on the Interfund Loan.
2.02. Principal ("Payments") on the Interfund Loan shall be paid semiannually on February
1 and August 1 (each a "Payment Date"), commencing on the first Payment Date on which the City
has received Tax Abatements (defined below), or on any other dates determined by the Finance
1
Director, over a period of 10 years or until the Interfund Loan is paid in full, whichever occurs earlier
(the "Maturity Date").
2.03. Payments on the Interfund Loan will be made solely from the tax abatements received
by the City from Sherburne County in the 6-month period before any Payment Date (the "Tax
Abatements") in accordance with the Tax Abatement Act. Payments shall be applied to unpaid
principal, unless otherwise specified by the Finance Director. Payments on this Interfund Loan map
be subordinated to any outstanding or future bonds, notes, or contracts secured in whole or in part
with Tax Abatements and are on a parity with any other outstanding or future interfund loans secured
in whole or in part with tax abatements at the discretion of the Finance Director.
2.04. The principal sum 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 and is a limited
obligation payable solely from Tax Abatements 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, not any political subdivision thereof shall be obligated to pay the principal of or interest
on the Interf ind Loan or other costs incident hereto except out of Tax Abatements.
2.06. The City may at any time make a determination to forgive the outstanding principal
amount on the Interfund Loan, in whole or in part, on any date from time to time, to the extent
permissible 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.
Section 3. Effective Date. This resolution is effective upon adoption.
Approved by the City Council of the City of Elk River this 1st day of November 2021.
hnMDietzikayor
ATTEST:
Tina Allard, City Clerk
NE136-281-741111.v4