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HomeMy Public PortalAbout2004-024 Resolution Approving Terms of Internal Loan in Connection with TIF DistrictCITY OF MEDINA COUNTY OF HENNEPIN STATE OF NIINNESOTA Council member Smith introduced the following resolution and moved its adoption: RESOLUTION NO.04-24 RESOLUTION APPROVING THE TERMS OF $200,000 INTERNAL LOAN IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-9. BE IT RESOLVED by the City Council, (the "Council') of the City of Medina, Minnesota (the "City"), as follows: Section 1. Background. 1.01. The City intends to establish Tax Increment District No. 1-9 (the "TIF District") within Development District No. 1 (the "Project"), and will adopt a Tax Increment Financing Plan (the "TIF Plan") for the purpose of financing certain improvements within the Project. 1.02. The City has determined to pay for certain costs identified in the TIF Plan consisting of engineering, public improvements and administrative costs, (collectively, the "Qualified Costs"), which costs will be financed on a temporary basis from City funds available for such purposes. 1.03. Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to advance or loan money from the City's general fund or any other fund from which such advances may be legally made, in order to finance the Qualified Costs. 1.04. The City intends to reimburse itself for the Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "TIF Loan"). Section 2. Terms of TIF Loan. 2.01. The City shall repay to the City fund from which the Qualified Costs are initially paid, the lesser of the principal amount of $200,000 or the actual total expenditures, together with interest on the principal amount expended accruing from the date of each initial expenditure, at the greatest of (a) the rate specified under Minnesota Statutes, Section 270.75, or (c) the rate specified under Minnesota Statutes, Section 549.09. If the actual total expenditures are less than the principal amount, the total principal amount of the TIF Loan and the repayment schedule of the TIF Loan shall be adjusted to be the actual expenditure amount. The interest rate for each calendar year during the term of the TIF Loan will be determined as of January 1, 2004 using the maximum rate under clauses (a) or (b) in effect as of that date. The interest rate will be the rate Tor the life of the TIF Loan. 2.02. Principal and interest ("Payments") shall be paid semi-annually on August 1, 2006 and each August 1 and February 1 thereafter to and including the earlier of (a) the date the principal and accrued interest of the City Note is paid in full, or (b) the date of last receipt of tax increment from the TIF District ("Payment Dates") which Payments will be made in the amount and only to the extent of Available Tax Increment as hereinafter defined. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest Resolution No. 04-24 DATE: April 20, 2004 ATTEST: Chad M. Adams, City Administrator accruing from the date of each expenditure to the first Payment Date shall be compounded semiannually on February 1 and August 1 of each year and added to principal. 2.03. Payments on this TIF Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, 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 City by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive, as amended. Payments on this TIF Loan are subordinate to any outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on 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 TIF Loan are pre -payable in whole or in part at any time by the City without premium or penalty. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under this TIF Loan. 2.05. This TIF Loan is evidence of an internal borrowing by the City in accordance with Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. This TIF Loan and the interest hereon 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, nor any political subdivision thereof shall be obligated to pay the principal of or interest on this TIF 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 TIF Loan or other costs incident hereto. The City shall have no obligation to pay any principal amount of the TIF Loan or accrued interest thereon, which may remain unpaid after the fmal Payment Date. 2.06. The City may amend the terms of this TIF Loan at any time by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Section 3. Effective Date. This resolution is effect on thy ate of its approv1. P 1 Zietlow, M.yor The motion for the adoption of the foregoing resolution was duly seconded by member Brinkman and upon vote being taken thereon, the following voted in favor thereof: Workman, Lane, Zietlow, Smith, Brinkman and the following voted against same: None Whereupon said resolution was declared duly passed and adopted. Resolution No. 04-24