HomeMy Public PortalAbout2014-034 Resolution Approving Interfund Loan to TIF Fund for Tax IncrementMember Martin introduced the following resolution and moved its adoption:
CITY OF MEDINA, MINNESOTA
RESOLUTION NO.2014-34
RESOLUTION APPROVING INTERFUND LOAN TO TIF FUND
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-9 FOR
REDEVELOPMENT PROJECTS
BE IT RESOLVED BY THE CITY COUNCIL (THE "CITY") OF THE CITY OF MEDINA,
MINNESOTA (THE "CITY") AS FOLLOWS:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the
"TIF Act"), the City duly established Development District No. 1 (the "Project Area") and Tax Increment
Financing District No. 1-9 (the "TIF District") within the Project Area and transferred the administration
of the TIF District to the Medina Economic Development Authority (the "Authority").
1.02. 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 (each such advance being
referred to as an "interfund loan") in order to fmance expenditures that are eligible to be paid with tax
increments under the TIF Act.
1.03. The Medina Economic Development Authority (the "Authority") has determined to
undertake several projects within the TIF District consisting of (i) paving and improving the parking lot
near the Hamel Community Building; (ii) moving utility boxes for safety reasons at the Sioux Drive/Hamel
Road intersection; (iii) the purchase of property within the TIF District for development purposes
(collectively, the "Project"). The total cost of the Project is expected to be $175,000.
1.04. In order to fmance the Project, the City will loan funds from the City's Sewer Capital
Improvement Fund, or any other fund designated by the City, to the TIF Fund for the TIF District to pay
for the Project (the "Interfund Loan") in accordance with the terms hereof.
Section 2. Terms of Interfund Loan; Interfund Loan Authorized.
2.01. The City hereby approves the Interfund Loan to the Authority in the amount of $175,000
and will deposit such funds in the TIF Fund to pay the costs of the Project, contingent upon the approval
of the Interfund Loan by the Board of Commissioners of the Authority. The terms of the Interfund Loan
shall be those set forth in the resolution to be adopted by the Board of Commissioners on the date hereof.
2.02. The Interfund Loan is repayable solely from and to the extent that Available Tax
Increment is available. "Available Tax Increment" means, on each Payment Date (as defined herein), all of
the tax increment generated in the preceding six (6) months with respect to the property within the TIF
District and remitted to the Authority by Hennepin County, all in accordance with the TIF Act. Payments on
the Interfund Loan, however, are subordinate to any outstanding pledges of Available Tax Increment from
the TIF District, including the pay-as-you-go note issued to Ryan Companies US, Inc., the pay-as-you-go
Resolution No. 2014-34
June 17, 2014
note issued to Target Corporation, and the general obligation bonds of the City, and are on parity with any
other outstanding or future interfund loans secured in whole or in part with Available Tax Increment, unless a
different priority of payment is established from time to time by the Mayor and City Administrator -Clerk or
under the terms of any contract, note, bond resolution, or indenture.
2.03. Provided that there is Available Tax Increment to repay the Interfund Loan to the City,
principal and interest ("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 after the advance of the Interfund
Loan. Payments shall continue until the earlier of (a) the date the principal and accrued interest of the
Interfund Loan is paid in full, or (b) the date of last receipt of tax increment from the TIF District. Payments
on the Interfund Loan will be made in the amount and only to the extent of Available Tax Increment.
Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the
date of each expenditure to the first Payment Date will be compounded semiannually on February 1 and
August 1 of each year and added to principal, unless otherwise specified by the Interfund Loan form.
2.04. The City may at any time determine to forgive the outstanding principal amount and accrued
interest on the Interfund Loan to the extent permissible under law.
2.05. The City may from time to time amend the terms of this resolution, including amendments
to the terms of and the Interfund Loan entered into under this resolution. However, the Mayor and City
Administrator -Clerk may initiate,, prepay, terminate, or modify the terms of the Interfund Loan authorized
under this resolution without further action by the City Council, so long as such actions are consistent with
the terms for the Interfund Loan described in this resolution.
2.06. City staff and officials are hereby authorized and directed to execute any documents and take
any other actions necessary to carry out the intent of this resolution.
Section 3. Effective Date. This resolution shall be effective upon the approval of the Interfund Loan
by the Board of Commissioners of the Authority.
Dated: June 17, 2014.
lith Weir, Mayor
ATTEST:
Scott T. Johnson, C ty Administrator -Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member Pederson
and upon vote being taken thereon, the following voted in favor thereof:
Anderson, Martin, Martinson, Pederson, Weir
And the following voted against same:
None
Whereupon said resolution was declared duly passed and adopted.
Resolution No. 2014-34 2
June 17, 2014