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14-1175r RESOLUTION NO. 1175 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 Board of Commissioners (the "Board") of the Richfield Housing and Redevelopment Authority (the "Authority") of the City of Richfield, Minnesota, as follows: WHEREAS, the Authority and the City of Richfield, Minnesota (the "City") 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 Authority 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 Authority is authorized to advance or loan money from the Authority's general fund or any other fund from which such advances may be legally authorized, in order to finance the Qualified Costs. WHEREAS, the Authority 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 Board as follows: 1. The Authority 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 Authority 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 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 Authority 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 Authority. 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 Authority shall have no obligation to pay any principal amount of the Inter-fund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 6. The Authority may amend the terms of this Interfund Loan at any time by resolution of the Board, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. Approved by the Board of Commissioners of the Richfield Housing and Redevelopment Authority this 22nd day of January, 2014. Chat/ ATTEST: Se•retary