16-1238r HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD,MINNESOTA
RESOLUTION NO. 1238
RESOLUTION APPROVING INTERFUND LOAN TO THE LYNDALE GATEWAY WEST TAX
INCREMENT DISTRICT ACCOUNT FOR DEBT SERVICE PAYMENTS WITH RESPECT TO
CERTAIN GENERAL OBLIGATION BONDS OF THE CITY OF RICHFIELD
BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment
Authority in and for the City of Richfield,Minnesota(the"Authority")as follows:
Section 1. Background.
1.01. Pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the
"TIF Act"), the Authority and the City of Richfield, Minnesota (the "City") have duly established the
Lyndale Gateway West Tax Increment District (the "TIF District"), which is administered by the
Authority.
1.02. Under Section 469.178, subdivision 7 of the TIF Act, the Authority 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 finance expenditures that are eligible to be
paid with tax increments under the TIF Act.
1.03. On September 6, 2012, the City issued its Taxable General Obligation Tax Increment
Refunding Bonds, Series 2012B (the "Bonds"), in the original aggregate principal amount of$2,970,000,
for the purpose of refinancing various public improvements within the TIF District. The amount of tax
increment generated by the TIF District is insufficient to pay the semi-annual debt service on the Bonds.
The Bonds mature in 2025 and the TIF District may remain outstanding until December 31,2029.
1.04. In order to pay principal of and interest on the Bonds, the Authority has determined to
approve a loan in the amount of up to $650,000 (the "Interfund Loan") to the TIF District account. The
Authority shall draw on the Interfund Loan over time as needed to pay debt service on the Bonds.
Section 2. Terms of Interfund Loan.
2.01. Each draw on the Interfund Loan shall be made from Authority's General Fund, or any
other fund designated by the Authority, for deposit to the account for the TIF District. The Authority will
use such funds for the payment of the debt service on the Bonds.
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 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 Authority 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, principal and
interest ("Payments") on the Interfund Loan shall be paid annually on December 31 (the "Payment Date"),
487804v3 JAE RC125-240
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 annually on December 31 of each year and added to principal, unless otherwise,
specified by the Interfund Loan form.
2.04. The Interfund Loan shall bear interest at the rate of 1.5%per annum on the principal amount
advanced, accruing from the date of each advance on the Interfund Loan; provided,however that the interest
rate shall not exceed the greater of the interest rates specified under Minnesota Statutes, Section 270C.40 or
Minnesota Statutes, Section 549.09 as of the date the advance is authorized. The maximum interest rate in
effect for calendar year 2016 is 4.0%.
2.05. The principal sum and all accrued interest payable under the Interfund Loan is prepayable 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 any interfund loan.
2.06. The Interfund Loan is evidence of an internal borrowing by the Authority in accordance with
Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax
Increment pledged to the payment thereof under this resolution. The Interfund Loan shall not be deemed to
constitute a general obligation of the State of Minnesota or any political subdivision thereof, including,
without limitation, Hennepin County. Neither the State of Minnesota, nor any political subdivision thereof
shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto
except out of Available Tax Increment. The Authority 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.
2.07. The Authority may amend the terms of the Interfund Loan at any time by resolution of the
Board of Commissioners,to the extent permissible under law.
Section 3. Interfund Loans Authorized.
3.01. The Interfund Loan with the terms set forth in Section 2 hereof is hereby approved.
3.02. Authority 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 4. Effective Date. This resolution shall be in full force and effect from and after its
approval.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 17th day of October, 2016. ‘g
Mary B./Su
Mary pP le, Chair
ATTEST:
/
Doris Rubenstein, Secretary
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