14-10902r CITY OF RICHFIELD
RESOLUTION NO. 10902
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF
CERTAIN COSTS IN CONNECTION WITH PROPOSED TAX INCREMENT
FINANCING DISTRICT NO. 2014-1.
BE IT RESOLVED by the City Council (the "Council") of the City of Richfield, Minnesota
(the "City"), as follows:
WHEREAS, the City and the Richfield Housing and Redevelopment Authority (the
"Authority") intend to establish Tax Increment Financing District No. 2014-1 (the "TIF District")
within the Richfield Redevelopment Project (the "Project") pursuant to Minnesota Statutes,
Sections 469.174 to 469.1794, as amended (the "TIF Act"), and will adopt a Tax Increment
Financing Plan (the "TIF Plan") for the purpose of financing certain improvements within the
Project.
WHEREAS, the City has determined that it may use tax increments from the TIF District
to pay for certain costs of demolition of substandard buildings within the proposed TIF District,
costs of environmental remediation, and administrative costs (the "Qualified Costs"), which
costs may be financed on a temporary basis from City or Authority funds available for such
purposes.
WHEREAS, under Section 469.178, Subd. 7 of the TIF Act, 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 authorized, in order to finance the Qualified Costs.
WHEREAS, the City intends to reimburse itself for all or a portion of 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 "Interfund Loan").
NOW THEREFORE BE IT RESOLVED by the Council as follows:
1. The City hereby authorizes the advance of up to $300,000 from the Capital Improvement
Reserve Fund or so much thereof as may be paid as Qualified Costs. The City shall
reimburse itself for such advances 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 or 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
4.0% and will not fluctuate.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on
each August 1 and February 1 (each a "Payment Date"), commencing on the first
Payment Date on which the City or Authority has Available Tax Increment (defined
below), or on any other dates determined by the Executive Director of the Authority,
through the date of last receipt of tax increment from the TIF District.
3. Payments on this Interfund Loan are payable solely from "Available Tax Increment,"
which shall mean, on each Payment Date, tax increment available after other obligations
have been paid, or as determined by the Executive Director of the Authority, 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 the TIF Act. Payments
on this Interfund Loan may be subordinated to any outstanding or future bonds or notes
issued by the City or the HRA and secured in whole or in part with Available Tax
Increment. The Interfund Loan shall be paid prior to any pay-as-you-go notes or
contracts secured in whole or in part with Available Tax Increment, and 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 Interfund Loan are pre-
payable in whole or in part at any time by the Authority 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 Interfund Loan.
5. This Interfund Loan is evidence of an internal borrowing by the City in accordance with
Section 469.178, Subd. 7 of the TIF Act, and is a limited obligation payable solely from
Available Tax Increment pledged to the payment hereof under this resolution. This
Interfund 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 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. The City shall have no obligation to pay any principal amount of
the Interfund Loan or accrued interest thereon, which may remain unpaid after the final
Payment Date.
6. The City may amend the terms of this Interfund Loan at any time by resolution of the
Council, including a determination to forgive the outstanding principal amount and
accrued interest to the extent permissible under law.
Approved by the City Council of the City of Richfield this 14th day of January, 2014.
f Atcl. (//'' ) di
Debbie Goettel, Mayor
ATTEST:
4,6(-4 Nancy Gibbs, ci y Clerk