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HomeMy WebLinkAboutIV.A HEDRA Resolution Approving Interfund Loan_TIF 9- 1 - HASTINGS ECONOMIC DEVELOPMENT AND REDEVELOPMENT AUTHORITY RESOLUTION NO. 2022-____________ RESOLUTION APPROVING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 9 BE IT RESOLVED by the Board of Commissioners of the Hastings Economic Development and Redevelopment Authority, Minnesota (“HEDRA"), as follows: Section 1. Background. 1.01. The HEDRA has adopted Resolution No. ____ approving the establishment of Tax Increment Financing District No. 9 (the “TIF District”) and the adoption of Tax Increment Financing Plan relating to the TIF District, among other approvals, all pursuant to and in accordance with Minnesota Statutes, Sections 469.001 through 469.047, both inclusive, as amended, Minnesota Statutes Sections 469.090 through 469.1081, both inclusive, as amended, and Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive, as amended (collectively, the “Act”). 1.02. The HEDRA plans to incur certain costs related to the TIF District, which costs may be financed on a temporary basis from legally available HEDRA funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the HEDRA is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The HEDRA has determined that it may be necessary to finance up to $75,000 in administrative costs associated with the TIF District (the “Administrative Costs”) using HEDRA funds legally authorized for such purpose, and to reimburse such funds from tax increments from the TIF District when received. 1.06. The HEDRA intends to designate such advances as an interfund loan in accordance with the terms of this resolution and the TIF Act. Section 2. Repayment of Interfund Loan. 2.01. The HEDRA hereby authorizes the advance of legally available City funds up to $75,000 to reimburse the HEDRA for Administrative Costs, together with interest at the rate of 4.0% per annum (the “Interfund Loan”). Interest accrues on the principal amount from the date of - 2 - the final draw for the Administrative Costs (hereafter, the “Closing Date”). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270C.40 and Section 549.09, both in effect for calendar year 2022, and will not be adjusted. 2.02. 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 City has Available Tax Increment (defined below), or on any other dates determined by the City Administrator, through the date of last receipt of tax increment from the TIF District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, which means up to 10% of the amounts received as tax increment from collections of ad valorem taxes from the TIF District from Dakota County, Minnesota, in each year, which may be retained by the City until it has received $75,000 to reimburse it for the Administrative Costs over the duration of the TIF District. Payments shall be applied first to accrued interest, and then to unpaid principal. Simple interest will accrue from the Closing Date, unless otherwise specified by the City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre-payable in whole or in part at any time by the HEDRA without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the HEDRA 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 hereof 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, the City. 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 HEDRA 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. The HEDRA may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 2.07. The HEDRA may from time to time amend the terms of this Resolution to the extent permitted by law, including without limitation amendment to the payment schedule and the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon approval. - 3 - Adopted by the Board of Commissioners of the Hastings Economic Development and Redevelopment Authority this 10th day of February, 2022. __________________________________________ President ATTEST: Executive Director