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CITY OF LAKE ELMO, MINNESOTA <br />RESOLUTION NO. 2002 -031. <br />APPROVING AND RATIFYING THE TERMS OF A $500,000 INTERNAL <br />LOAN IN CONNECTION WITH THE CITY'S WATER FUND <br />BE IT RESOLVED BY THE CITY COUNCIL ("CITY COUNCIL ") OF THE CITY OF <br />LAKE ELMO, MINNESOTA ( "CITY ") AS FOLLOWS: <br />Section 1. Background. <br />1.01. The City has heretofore created a water fund (the "Water Fund ") pursuant to <br />Minnesota Statutes, Chapter 444 (the "Act") for the purpose of financing expenditures authorized <br />by the Act (the "Facilities "). <br />1.02. The City intends to incur approximately $1,200,000 in construction costs for <br />expenditures authorized by the Act (the "Improvements ") and to pay for the costs of the <br />Improvements from revenues derived from operation of the Facilities. <br />1.03. The City is issuing bonds (the "Bonds ") pursuant to the Act to pay for $7330,000 of <br />the costs of the Improvements. <br />1.04. The City intends to pay for the remaining $500,000 in Improvement costs by using <br />monies in the City's general fund (the "General Fund ") with the intention of reimbursing the <br />General Fund with revenues derived from operation of the Facilities. <br />Section 2. Terms of Loan. <br />2.01. The City hereby determines that $500,000 in the General Fund shall be loaned to the <br />Water Fund to pay for a portion of the Improvement costs (the "Loan "), with no interest accruing on <br />the Loan. <br />2.02. "Net Revenues" of the Facilities (hereby defined as gross revenues of the Facilities, <br />less all normal and reasonable expenses of current operations of the Facilities) shall be used to <br />repay the Loan at such times as such revenues are available to make such payments. It is currently <br />anticipated that the Loan will be repaid on or before Dec. '24,204_7 _, but this date is an <br />estimate only and in no way shall restrict the City's ability to determine in its sole discretion when <br />and in what amounts Loan repayments should be made. <br />2.03. The Loan is hereby subordinated to the Bonds, to any other bonds or other <br />instrument issued to finance maintenance, improvements, or repairs to the .Facilities, and may be <br />further subordinated as the City in its sole discretion deems appropriate. <br />DJG- 21357lv2 <br />LA515 -1 <br />