EDA Resolution 2016-001CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA- 2016 -001
AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS
IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1 -34
BE IT RESOLVED By the Board of Commissioners of the City of Monticello
Economic Development Authority (the "Authority ") as follows:
Section 1. Background.
1.01. The Housing and Redevelopment Authority in and for the City of
Monticello (the "HRA ") previously established Tax Increment Financing District No. 1-
34 (the "TIF District ") within its Redevelopment Project No. 1 (the "Redevelopment
Project ") pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the
"TIF Act "), and later transferred the control and administration of such TIF District to the
Authority. In connection with establishment of the TIF District, the HRA approved a Tax
Increment Financing Plan for the TIF District.
1.02. The Authority may incur certain costs related to the TIF District, which
costs may be financed on a temporary basis from legally available Authority or City
funds.
1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority 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 Authority has determined that it may be necessary to finance up to
$500,000 in infrastructure costs associated with the construction of a highway
interchange within the TIF District (the "Infrastructure Costs ") using Authority or City
funds legally authorized for such purpose, and to reimburse such funds from tax
increments from the TIF District when received.
1.05. The Authority 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 Authority hereby authorizes the advance of up to $500,000 in legally
available Authority or City funds to pay the Infrastructure Costs, together with interest at
the rate of 4% per annum (the " Interfund Loan "). Interest shall accrue on the principal
amount of each advance from the date of such advance. 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 2016, and will not be adjusted.
475692v2 MNI MN190 -119 1
CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. EDA- 2016 -001
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 Authority 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, defined as tax increment from the TIF District received by the Authority from
Wright County in the six -month period before any Payment Date. Payments shall be
applied first to accrued interest, and then to unpaid principal. 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 a 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 resolution is
pre - payable in whole or in part at any time by the Authority without premium or penalty.
2.05. This resolution is evidence of an internal borrowing by the Authority 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 Authority and 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
Authority 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 Authority 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 Authority 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.
475692v2 MNI MN 190-119 2
CITY OF MOl TICELLO
WRIGHT COUNTY, TV1 ENNESOTA
ECONG MIC DEVELOPMENT AUrII"'IHIORIITY
RESOLUTION NO. EDA- 20116-001
Section 3. Effective Date. This resolution is effectivrr approval.
Adopted this 9th day of March, 2016.
Presi
ATTEST:
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Ex c ' e Director
475692v2 MNI MN 190-119 3