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HomeMy WebLinkAboutResolution No. 07-02 EDARESOLUTION NO. 07-02 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AUTHORIZING INTERNAL LOAN IN CONNECTION WITH LAKE DRIVE INTERCHANGE AND TAX INCREMENT FINANCING DISTICT NO. 1-11 BE IT RESOLVED by the Board Of Commissioners of the Lino Lakes Economic Development Authority (the "Authority") as follows: Section 1. Background. 1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") the Authority and City of Lino Lakes ("City") previously established tax increment financing district no. 1-11 (the "TIF District") within Development District No. 1. 1.02. The Authority or City may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority or City funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority or City 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 City currently plans to construct improvements to the I -35W and Lake Drive Interchange within the TIF District (the "Interchange Improvements"), financed by various sources including proceeds of $4,215,000 General Obligation Tax Increment Bonds, Series 2007A (the " llf Bonds"). 1.05. The Authority will also request the City to advance certain other City funds to finance a portion of Interchange Improvements, and the Authority intends to reimburse the City for the funds so advanced as an interfund loan in accordance with the terms of this resolution. Section 2. Repayment of Interfund Loan. 2.01. The Authority will reimburse the City for funds advanced to pay a portion of the cost of the Interchange Improvements in the maximum principal amount of $556,000 together with interest at the rate of 4% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of each disbursement of City funds to pay costs of the Interchange Improvements (hereafter, each such date is referred to as an "Accrual Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2007. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each February 1 and August 1, commencing August 1, 2008 (each a "Payment Date") and continuing through the earlier of the date the Interfund Loan together with interest thereon is paid in full or the date of last receipt of tax increment from the TIF District. 2.03. Payments on the Interfund Loan will be made solely from and to the extent of Available Tax Increment, which terms means 95 percent of the tax increments (as defined in the TIF Act) generated by the TIF District and received by the City from the County pursuant to the TIF Act in the six-month period before such payment date, subject to the following: (a) The pledge of Available Tax Increment under this resolution is subordinate to the prior pledge of tax increment to the TIF Bonds, the Authority's $1,000,000 Taxable Tax Increment Revenue Note, Series 2004, and any other obligation secured in whole or in part by tax increments from the TIF District to which the Authority, in its discretion, elects to make a pledge on a superior basis to this Interfund Loan. (b) The Authority has also, by Resolution No. 04-07, approved an interfund loan in the outstanding principal amount of $950,000 (the "Prior Interfund Loan") that is payable with tax increments form the TIF District; the Authority may in its sole discretion, apply Available Tax Increment under this resolution on a parity, superior or subordinate basis with the Prior Interfund Loan and any other interfund loan hereafter approved in connection with the TIF District. 2.04. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from each Accrual Date will be compounded semiannually on February 1 and August 1 of each year and added to principal, unless otherwise specified by the Executive Director. 2.05. 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. No partial prepayment shall affect the amount or timing of any other regular payment otherwise required to be made under Exhibit A. 2.06. This resolution is evidence of an interfund loan 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. 2.07. Authority staff and officials are authorized and directed to execute any collateral documents and take any other actions necessary to carry out the intent of this resolution. 2.08. The Authority may from time to time, with approval by the City, amend the terms of this Resolution to the extent pemiitted by law, including without limitation amendment to the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. subd. 7 of the T1F Act. 311948v1 SJB LN140-100 2 Section 3. Effective Date. This resolution is effective upon approval. Approved by the Board of Commissioners of the Lino Lakes Economic Development Authority this 25th day of June, 2007. ATTEST: Secretary l 311948v1 SJB LN140-100 3 Vice President