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HomeMy WebLinkAboutResolution No. 2018-064 Authorizing interfund loan Grandview 2 TIF District y J CITY OF EDINA HENNEPIN COUNTY STATE OF MINNESOTA Council member �tSG�er introduced the following resolution and moved its adoption: RESOLUTION NO. 2018-64 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH GRANDVIEW 2 TIF DISTRICT. BE IT RESOLVED by the City Council (the "Council") of the City of Edina, Minnesota (the "City"), as follows: Section I. Background. 1.01. The City has approved the establishment of the Grandview 2 Redevelopment Tax Increment Financing District (the "TIF District") within the Southeast Edina Redevelopment Project Area (the "Project Area"), and has adopted a Tax Increment Financing Plan (the "TIF Plan") for the purpose of financing certain improvements within the Project Area. 1.02. The City has determined to pay for certain costs identified in the TIF Plan consisting of site improvements/preparation, interest, and administrative costs (collectively, the "Qualified Costs"), which costs may 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 authorized, in order to finance the Qualified Costs; provided the loan or advance is authorized by resolution of the City not later than 60 days after money is transferred, advanced, or spent, whichever is earliest. 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 "Interfund Loan"). Section 2. Terms of Interfund Loan. 2.01. The City hereby authorizes the advance of up to $500,000 from the Centennial Lakes TIF Account or so much thereof as may be paid as Qualified Costs. The City shall reimburse itself for such advances from Available Tax Increment (defined below) together with interest at the rate of 4%, which does not exceed the greater of the rates specified under Minnesota Statutes, Section 270C.40 or Section 549.09 as CITY OF EDINA 4801 West 50th Street•Edina,Minnesota 55424 wwwEdinaMN.gov•952-927-8861 • Fax 952-826-0389 of the date the loan is authorized. Interest accrues on the principal amount from the date of each tranche. 2.02. Principal and interest ("Payments") on the outstanding Interfund Loan balance shall be paid annually on each December 31 (each a "Payment Date"), commencing on the first Payment Date on which the City has Available Tax Increment (defined below), or on any other dates determined by the City Clerk, through the date of last receipt of tax increment from the TIF District. 2.03. 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 City Clerk, generated in the preceding twelve (12) 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 469.1794, all inclusive, as amended. Payments on this Interfund Loan may be subordinated 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 Interfund 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 Interfund Loan. 2.05. This Interfund 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 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. 2.06. Before the latest decertification of any tax increment financing district from which the interfund loan is to be repaid, the City may modify or amend the terms of this Interfund Loan, in writing, by resolution of the City Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law. 2.07. The City shall report in its annual report to the State of Minnesota (1) the amount of the Interfund Loan or advance made in a calendar year; and (2) any amendment of the Interfund Loan or advance made in a calendar year. Section 3. Effective Date. This resolution is effective upon the date of its approval. . Thel motion for the adoption of the foregoing resolution was duly seconded by Council member Frl') 4?, , and upon a vote being taken thereon, the following voted in favor thereof: Me s er, L> A(e, S-�i�., I al_c� C�-e�,-� ) and the following voted against the same: tko(�e, Dated:July 17, 2 1 ATTEST: James Hovland, Mayor Debra A. Mangen, City Clerk (Seal)