2017-07H HRA ResolutionMOUND HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION NO. 17-07H
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE
OF CERTAIN COSTS IN CONNECTION WITH THE HARRISON BAY
SENIOR HOUSING TAX INCREMENT FINANCING DISTRICT
WHEREAS, the City Council of the City of Mound, Minnesota (the "City") and the
Housing and Redevelopment Authority of and for the City of Mound, Minnesota (the
"HRA"), intend to establish the Harrison Bay Senior Housing Tax Increment Financing
District (the "TIF District") within the Mound Harbor Project Area (the "Project"), and will
adopt a Tax Increment Financing Plan (the "TIF Plan") for the purpose of financing
certain improvements within the Project.
WHEREAS, the HRA has determined to temporarily borrow funds from the City
available for such purposes to use tax increments from the TIF District to pay for certain
costs identified in the TIF Plan, which may include land/building acquisition, site
improvements/preparation, utilities, other qualifying improvements, interest and
administrative costs (collectively, the "Qualified Costs").
WHEREAS, 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.
WHEREAS, the HRA intends to reimburse the City 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").
WHEREAS, on the date hereof, the City Council of the City will consider a
resolution approving the interfund loan from its general fund.
NOW THEREFORE BE IT RESOLVED by the Board of Commissioners (the
"Board") of the HRA as follows:
1. The HRA hereby requests that the City provide it with an interfund loan in an
amount up to $10,000, or so much thereof as may be paid as Qualified Costs,
from any legally authorized HRA fund. The HRA shall reimburse the City 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% 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 HRA has Available Tax
Increment (defined below), or on any other dates determined by the Executive
Director of the HRA, through the date of last receipt of tax increment from the TIF
District.
3. Payments on the 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 HRA, generated in the preceding six (6) months with respect to
the property within the TIF District and remitted to the HRA 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.
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 HRA 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 HRA 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 the
City or any political subdivision thereof, including, without limitation, the HRA.
Neither the State of Minnesota or the City, 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 HRA 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 HRA may amend the terms of this Interfund Loan at any time by resolution of
the Board with approval of the City Council, including a determination to forgive
the outstanding principal amount and accrued interest to the extent permissible
under law.
Adopted by the HRA this 23rd day of May, 2017.
Chair Mark Wegscheid
Attest: Catherine Pausche, Clerk