Laserfiche WebLink
Mounds View City Council August 26, 2002 <br />Regular Meeting Page 13 <br /> <br />made and that was the initiative behind this Resolution. He then indicated that the Resolution <br />does three things. First it takes the interfund loans from 2001 and continues them to 2002; <br />Second it authorizes a further loan from the community fund to the TIF districts up to $621,000 <br />to be used to meet TIF district obligations in the year 2002; and Third, it sets an interest rate for <br />all interfund loans at 4.5% for 2002. <br /> <br />Council Member Stigney asked if that is for new loans or a change to existing loans. <br /> <br />Finance Director Hansen indicated that would change the existing loans. <br /> <br />Council Member Stigney questioned how the City could change the interest rate on a loan it has <br />already given at a fixed rate. <br /> <br />Finance Director Hansen commented that it is a matter of philosophy as there are fixed rate and <br />variable rate loans and the intent is to address the loans as a variable rate loan that is addressed <br />from year to year. <br /> <br />Council Member Stigney questioned whether the recipient of the loan would have the right to <br />complain that the rate is changed or can Council do this. <br /> <br />City Attorney Riggs clarified that Council is talking about internal loans so Council can set the <br />rate. <br /> <br />Council Member Stigney asked if the EDA should be dealing with this item as it is a TIF district <br />issue. <br /> <br />Finance Director Hansen indicated it is a City Council issue but the question is whether the EDA <br />should also take action on it. <br /> <br />City Attorney Riggs advised dealing with the item as both entities. <br /> <br />Mayor Sonterre noted the TIF portion should come back at the next EDA meeting. <br /> <br />Council Member Stigney commented that the City took excess funds out of the TIF funds to be <br />used within the legislative constraints and now it is being loaned back to the districts and the City <br />will not have access to it. <br /> <br />Finance Director Hansen indicated the City took the position when it made the transfer of pre- <br />1997 interest that under state law that was not TIF money. He then indicated that one of the <br />points of contention with the state auditor is that the state auditor is making the contention that it <br />still is TIF money and that matter has not reached resolution yet. He further indicated that the <br />TIF districts should have a surplus in 2003 and be able to begin paying the loan back. <br /> <br />Council Member Stigney asked if it would be paid back within a year. <br />