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HomeMy WebLinkAbout[06b] Transfer of Funds Date: May 19, 2015 Memo To: Members of the EDA Administrator City Administrator Weyrens Judy Weyrens Memo From: Cynthia Smith-Strack - MDG, Inc. Mayor Rick Schultz RE: AuthorizeTransfer of Funds and Interfund Loans Councilors Matt Killam Background Bob Loso The EDA discussed transferring additional funds in to the EDA Revolving Loan Fund at the April Renee Symanietz meeting in conjunction with two loan requests. To those ends the following actions are Dale Wick requested: EDA 1.Approve transfer in the amount of $2,500 from EDA line item G157-10100 to line item Doug Danielson EDA G250-10100. Larry Hosch Gary Osberg 2.Consider Approval of EDA Resolutions 01-2015 and 02-2015. These are interfund loan Rick Schultz resolutions which allow the EDA to be reimbursed for eligible TIF administration Dale Wick expenses from the associated administration line items within individual TIF districts. Action Authorization of items one and two above. Page 20 of 47 ST. JOSEPH ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 01-2015 RESOLUTION APPROVING THE TERMS OF UP TO A $12,000INTERFUND LOAN IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 3-1 BE IT RESOLVED by the Economic Development Authority(the "EDA") of the City of St. Joseph, Minnesota (the "City"), as follows: Section 1.Background. (a)The City has heretofore approved the establishment of Tax Increment Financing District No. 3-1 (the "TIF District") within Development District No. 3, and has adopted a tax incrementfinancing plan for the TIF District (the "TIF Plan"). (b)The EDAhas determined to pay for certain costs identified in the TIF Plan consisting of administrative costs (the "Qualified Costs") incurred in connection with the establishment and administration of the TIF District, which costs will be financed on a temporary basis from EDA funds available for such purposes. (c)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 made, in order to finance the Qualified Costs. (d)The City’s financial policies and practices delegate responsibility for interfund transfers from one EDA fund to anther EDA fund to the EDA. (e)The EDAintends to reimburse itself for the payment of the Qualified Costs, plus interest thereon, 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. (a)The EDAhereby authorizes the advance of up to $12,000from G150-10100 or so much thereof as may be paid as Qualified Costs. The EDAshall reimburse itself 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 4.5% and will not fluctuate. (b)Principal and interest on the Interfund Loan shall be paid from the first Available Tax Increment commencing with the Payment Date on which the City has Available Tax Page 21 of 47 4974172v1 Increment (defined below), or on any other dates determined by the City Administrator, through the last receipt of tax increment from the TIF District. (c)Payments on the Interfund Loan are payable solely from "Available Tax Increments" which shall mean, on each Payment Date, all of the tax increment available prior to other obligations have been paid, generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the City by StearnsCounty, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799. Payments on the Interfund Loan are superior 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. (d)The principal sum and all accrued interest payable under the Interfund Loan are pre-payable in whole or in part at any time by the EDAwithout 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. (e)The 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. The 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 the 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 the 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. (f)The City may amend the terms of the Interfund Loan at any time by resolution of the City Council, including a determination to forgive theoutstanding principal amount and accrued interest to the extent permissible under law. Section 3.Effective Date. This resolution is effective upon the date of its approval. Adopted this ______ day of ________________, 2015. __________________________________________ EDA President ATTEST: EDA Secretary 2 Page 22 of 47 4974172v1