RES 26-60Elk
River
City of Elk River
City Council
Resolution 26-60
A Resolution of the City Council of 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"); a n d
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 City Council of the City of Elk River 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 the rates
specified under Minnesota Statutes, Section 270C.40 and Section 549.09 as of the date the
loan or 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 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.
Passed and adopted this 21 day of September 2026.
ATTEST:
Justin µ unford, City Clerk
finD iet 61 ayor