HomeMy Public PortalAbout2010-038 Resolution Approving Terms of Internal Loan in Connection with TIF DistrictMember Smith introduced the following resolution and moved its adoption:
CITY OF MEDINA
COUNTY OF HENNEPIN
STATE OF MINNESOTA
RESOLUTION NO.2010-38
RESOLUTION APPROVING THE TERMS OF $300,000 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 established Tax Increment District No. 1-9 (the "TIF District") within
Development District No. 1 (the "Project"), and adopted 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 land acquisition, 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 may advance from the Sewer capital Fund or any other fund moneys to pay
the qualified costs in an amount not to exceed $300,000. The City shall repay to the City Sewer
Capital Fund, the lesser of the principal amount of $300,000 or the actual total expenditures, together
with interest on the principal amount expended accruing from the date of each initial expenditure, at
the greater rate specified under Minnesota Statutes, Section 270C.40 or 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. The interest rate will, without further action by the City, be adjusted on
January 1 of each year to reflect the greater of the rate specified under Minnesota Statutes, Section
270C.40 or Minnesota Statutes, Section 549.09
Resolution No. 2010-38
June 1, 2010
2.02. Principal and interest ("Payments") shall be paid semi-annually on August 1, 2024
and each August 1 and February 1 thereafter to and including the earlier of (a) the date the principal
and accrued interest of the TIF Loan 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 accruing from June 1, 2010 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 final 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 effective upon the date of its approval.
DATED: June 1, 2010.
Resolution No. 2010-38
June 1, 2010
T.M. Crosby, Jr., Mayor
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ATTEST:
Chad M. Adams, City Administrator -Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member Weir and
upon vote being taken thereon, the following voted in favor thereof:
Smith, Weir, Crosby, Johnson, Siitari
And the following voted against same:
None
Whereupon said resolution was declared duly passed and adopted.
Resolution No. 2010-38 3
June 1, 2010