11-1093r HRA RESOLUTION NO. 1093
RESOLUTION AUTHORIZING TRANSFER OF FUNDS REMAINING IN RICHFIELD
REDISCOVERED ACCOUNTS TO DEVELOPMENT FUND
WHEREAS, between July 23, 1990 and October 11, 1999, the Housing and
Redevelopment Authority ("the HRA") created the Richfield Rediscovered A-1, B-1, A-2,
B-2, A-3, B-3, A-4, B-4, A-5, and B-5 and the Richfield Rediscovered II Tax Increment
Financing Districts (the "TIF Districts") within its Richfield Redevelopment Project Area
(the "Project"); and
WHEREAS, the TIF Districts were established to finance in part the HRA's
expanded New Home Program, which promoted the development, redevelopment and
construction of new single family homes within the City of Richfield (the "City"); and
WHEREAS, the public redevelopment costs delineated in the tax increment
plans related to the TIF Districts (the "Tax Increment Plans") included acquisition of land
and existing homes, demolition, and site preparation and the HRA anticipated that these
public redevelopment costs would be paid with a loan from City to be repaid with tax
increment derived from the TIF Districts, the proceeds of the sale of land within the TIF
Districts, and other available revenues; and
WHEREAS, pursuant to a memorandum included in the materials for the HRA
meeting held on July 16, 1990 attached hereto as Exhibit A (the "HRA Letter No. 19"),
the HRA anticipated that the City would loan the HRA approximately $1,620,950 to help
finance the costs of the public redevelopment costs set forth in the Tax Increment
Plans, which the HRA would repay over 25 years from tax increment derived from the
TIF Districts and land sale proceeds; and
WHEREAS, on July 16, 1990, the HRA Board adopted Resolution 385 attached
hereto as Exhibit B (the "1990 HRA Resolution), which approved the Redevelopment
Plan for the Project, certain Tax Increment Plans for the initial TIF Districts, and the loan
from the City to pay public redevelopment costs; and
WHEREAS, on December 20, 2011, the HRA Board adopted a resolution
decertifying the TIF Districts as of December 31, 2010; and
WHEREAS, on the date hereof, there is approximately $639,000 remaining in the
funds related to the TIF Districts (the "Richfield Rediscovered Account"); and
WHEREAS, a Financial Reporting Analysis regarding the Richfield Rediscovered
TIF Districts was delivered to the HRA for consideration on May 16, 2001, and such
report indicated that, at that time, $4,187,381 had been expended to accomplish the
goals set forth in the Tax Increment Plans and such expenditures had been funded with
$501,262 considered to be tax increment and $3,686,119 from other funding sources,
including $2,145,819 in net transfers in from other funds; and
WHEREAS, as of December 31, 2009, the HRA's internal accounting and the
annual reports created for the Tax Increment Plans and submitted to the Minnesota
Office of the State Auditor indicated that, during the duration of the TIF Districts,
$2,215,676 was transferred into the Richfield Rediscovered Account from the HRA's
Development Fund to pay for the costs of the HRA's expanded New Home Program
and had not been repaid; and
WHEREAS, a recent analysis of the accounting for the Richfield Rediscovered
Account performed by HRA Staff and the HRA's consultants indicates that the funds
remaining in the Richfield Rediscovered Account are not tax increment; and
WHEREAS, in 2001, Minnesota Statutes, Section 469.178, subd. 7 (the "TIF
Interfund Loan Statute") was enacted and made effective July 31, 2001, and provided
particular procedures for interfund loans made in relation to tax increment districts; and
WHEREAS, the TIF Interfund Loan Statute ratified interfund loans made prior to
the effective date of the statute with the following conditions (i) the interest accrued or
paid after July 31, 2001 could not exceed the statutory limitation set for in the TIF
Interfund Loan Statutes, and (ii) if there was no resolution or other document created
contemporaneously with the making of the interfund loan that specifies a principal
amount of the loan, the loan is limited to a maximum amount equal to the largest
negative cash balance that existed at any time in the fund that received the loan; and
WHEREAS, the 1990 HRA Resolution and accompanying HRA Letter No. 19
represent contemporaneous documentation establishing a tax increment interfund loan
for purposes of the TIF Interfund Loan Statute; and
WHEREAS, the HRA has determined to apply the remaining funds in the
Richfield Rediscovered Account toward reimbursing the HRA's Development Fund for a
portion of the principal amount of the interfund loans made to the Richfield
Rediscovered Account to help finance the HRA's New Home Program; and
NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. HRA staff is directed to transfer all remaining monies in the Richfield
Rediscovered Account to the HRA's Development Fund to reimburse the Development
Fund for a portion of the principal amount of the interfund loans made to the Richfield
Rediscovered Account to help finance the HRA's New Home Program.
2. If the funds remaining in the Richfield Rediscovered Account are
characterized as tax increment in the future, HRA staff is directed to apply such funds to
the repayment in part of the principal amount of the tax increment interfund loans
provided by the City, as described in the 1990 HRA Resolution and the HRA Letter No.
19.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 20th day of June, 2011. /,
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Suz a M. Sandahl, Chair
ATTEST:
I
J =n Helmberger, Secreta