2005.04.18 RESO 2005-0025 - Laserfiche WebLink

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RESOLUTION NO. 2005 -25 RESOLUTION APPROVING THE TERMS OF INTERNAL LOAN IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-2 BE IT RESOLVED by the City Council (the "Council") of the City of Hugo, Minnesota (the "City"), as follows: Section 1. Background. (a) The City plans to establish Tax Increment Financing District No. 1-2 (the "TIF District") within its Municipal Development District No. 1 (the "Development District"), and adopt a tax increment financing plan (the "TIF Plan") for the purpose of acquiring certain land and financing certain improvements within the TIF District. (b) The City has determined to pay for certain costs (the "Qualified Costs") identified in the attached Exhibit A and to be listed in the TIF Plan consisting of the costs of acquiring certain land in the TIF District, which costs will be financed on a temporary basis from Funds designated by the City's Finance Director. (c) Under Minnesota Statutes, Section 469.178, Subd. 7, the City is authorized to advance or loan money from the City's general fund or any other fund from which such advances may be legally made, in order to finance the Qualified Costs. (d) The City intends to reimburse itself for the Qualified Costs from tax increments derived from the TIF District in accordance with the terms of this resolution (which terms are referred to collectively as the "Interfund Loan"). Section 2. Terms of Interfund Loan. (a) The City shall repay to the City fund(s) from which the Qualified Costs are initially paid, the principal amount of approximately $2,000,000 together with interest at 4% per annum [not more than the greater of (a) the rate specified under Minnesota Statutes, Section 270.75, or (b) the rate specified under Minnesota Statutes, Section 549.09] from the from the date of each expenditure. (b) Principal and interest ("Payments") shall be paid semi-annually on each February 1 and August 1 commencing with the first February 1 or August 1 occurring after the date of receipt of the first increment from the TIF District to and including the earlier of (a) the date the principal and accrued interest of the Interfund Loan is paid in full, or (b) the date of last receipt of tax increment from the TIF District ("Payment Dates") which Payments will be made in the amount and only to the extent of City Available Tax Increment as hereinafter defined. Payments shall be applied first to accrued interest, and then to unpaid principal. (c) Payments on this Interfund Loan are payable solely from "Available Tax Increment," which shall mean, on each Payment Date, all of the tax increment generated in the preceding six (6) months with respect to the property within the TIF District and remitted to the 17586o5v1