EDA RES 26-11City of Elk River
Economic Development Authority
Resolution 26-11
A Resolution of the Economic Development Authority in and for the City of Elk River
authorizing internal loan for advance of certain costs in connection with a Tax Increment
Financing District
WHEREAS, the City of Elk River, Minnesota (the "City') and the Economic Development Authority
for the City of Elk River (the "Authority") previously established Tax Increment Financing District No. 30
(an economic development district) (the "TIF District"), pursuant to Minnesota Statutes, Sections 469.174
through 469.1794, as amended (the "TIF Act"); and
WHEREAS, the City and the Authority may incur certain costs related to the TIF District which costs
may be financed on a temporary basis from available City or Authority funds; and
WHEREAS, pursuant to Section 469.178, subdivision 7 of the TIF Act, the City and the Authority are
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; and
WHEREAS, the City and the Authority have determined to pay for certain costs of the TIF District
including administrative costs which costs may be financed on a temporary basis from the Authority's
Fund Balance, the City's Development Fund, or any other City or Authority funds available for such
purposes (the "Cost Advances"); and
WHEREAS, the Authority hereby designates the Cost Advances as an interfund loan in accordance
with the terms of this resolution and the TIF Act.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Economic Development
Authority for the City of Elk River, Minnesota as follows:
1. The Authority and the City will reimburse themselves for the Cost Advances including,
without limitation, administrative costs all in an aggregate amount not to exceed the greater of $25,000
or the adopted and, if applicable, Tax Increment Financing Plan budget for the TIF District (the "Interfund
Loan") together with interest at the rate stated below. Interest accrues on the principal amount from the
date of each advance. The maximum rate of interest permitted to be charged is limited to the greater of
'' e rates specified under Minnesota Statutes, Section 270C.40 and Section 549.09 as of the date the loan
advance is authorized, unless the written agreement states that the maximum interest rate will
fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 are
from time to time adjusted. The interest rate shall be 7.00% and will not fluctuate.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semiannually on
each February 1 and August 1 (each a "Payment Date"), commencing on the first Payment Date on which
the City or the Authority has received Available Tax Increment (defined below), or on any other dates
determined by the City Finance Director, through the date of last receipt of tax increment from the TIF
District (the "Maturity Date").
3. Payments on the Interfund Loan will be made solely from the tax increment from the TIF
District received by the Authority or the City from Sherburne County in the 6-month period before any
Payment Date, net of the amount paid under any agreement with a private developer or otherwise
pledged 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 Finance Director.
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 Finance Director. 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.
4. The principal sum and all accrued interest payable under this resolution is pre -payable in
whole or in part at any time by the Authority without premium or penalty.
5. This resolution is evidence of an internal borrowing by the Authority or 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 Authority or the City. Neither the State of
Minnesota, nor 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 and neither the
full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is
pledged to the payment of the principal of or interest on this Interfund Loan or other costs incident
hereto. Neither the Authority nor the City shall have any obligation to pay any principal amount of the
Interfund Loan or accrued interest thereon, which may remain unpaid after the termination or expiration
of the TIF District.
6. The Authority or the City, as applicable, may at any time decide to forgive the outstanding
principal amount and accrued interest on the Interfund Loan, in whole or in part, on any date from time
to time, to the extent permissible under law.
7. The Authority 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.
Approved by the Board of Commissioners of the Economic D-velopi lent Authority of the City of Elk
River this 21 day of September, 2026. 1 -__
Ma�tll�li+estgaard, i�resid
AFEST
Brent O'Neil, Executive Director