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EHLERS <br />& ASSOCIATES INC <br />To: Mike Mornson —Executive Director <br />O Roger Larson — Finance Director <br />2 From: Stacie Kvilvang — Ehlers and Associates <br />W Date: February 8, 2006 <br />2 <br />Subject: Amended Interfund Loan — TIF District 3-5 (Apache Redevelopment) <br />On June 14, 2005, the HRA approved an intefund loan in an amount up to $200,000 for various <br />administrative and capital expenditures in TIF District 3-5, in connection with the Northwest <br />Quadrant Redevelopment Project. The reason for the advancement to this District is that the first <br />increments (cash) generated in the District will not occur until 2006 and may not be sufficient to <br />pay for advancements to the District by the HRA and other third parry obligations. <br />To date, the HRA has not advanced any funds to the TIF District under the Prior Loan Resolution. <br />However, the HRA anticipates that it will now need to advance funds to the District to pay for <br />various project costs in excess of the $200,000. In order to accommodate this expenditure and <br />future unforeseen expenditures, the interfund loan cap is being raised to $500,000. <br />Attached is a "blanket" resolution authorizing an interfund loan of up to $500,000 to TIF 3-5 to <br />pay for these costs. The reason for this blanket interfand loan resolution is so the HRA will not <br />have to complete an interfurrd loan every time it is going to expend administrative costs in this <br />district. <br />As with other interfund loans, the HRA will reimburse itself for the above referenced costs (as they <br />are advanced) in the current principal amount, together with interest at the rate of 4% per annum. <br />The interest rate is set at the statutory maximum and will be adjusted annually on January lst of <br />each calendar year. Payments will be made with available tax increment on February 1 and August <br />1 of each year. <br />Please contact me at 651-697-8506 with any questions. <br />cc: Jerry Gilligan — Dorsey & Whitney <br />File <br />LEADERS IN PUBLIC FINANCE <br />3060 Centre Pointe Drive <br />Roseville, MN 55113-1105 <br />32 <br />Phone: 651-697-8506 Fax: 651-697-8555 <br />skvi lvang@ehlers-i nc.com <br />