Resolution - #07-02-052 - 02/13/2007

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Councilmember Jeffrey introduced the following resolution and moved for its adoption: RESOLUTION #07-02-052 APPROVING THE TERMS OF $100,000 INTERNAL LOAN IN CONNECTION WITH TIF DISTRI.CT NO.2 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RAMSEY, MINNESOTA ("CITY") AS FOLLOWS: Section 1. Background. 1.01. The City has heretofore has established Tax Increment Financing District No.2 (the "TIF District") within Development District No. 1 (the "Development District"), and has adopted a tax increment financing plan for the purpose of financing certain improvements for the Project within the Development District. 1.02. The City has determined to pay for certain costs identified in the TIF Plan consisting of $100,000 in Demolition and related Site Improvement expenses (collectively, the "Qualified Costs"), which costs will be financed on a temporary basis from the Public Improvements Revolving Loan fund (PIR). 1.03. Under Minnesota Statutes, Section 469.178, Subdivision 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. 1.04. The City intends to reimburse itself for the Qualified Costs from tax increments derived from TIF District No.2 in accordance with the terms of this resolution (which terms are referred to collectively as the "TIP Loan"). Section 2. Terms ofTIF Loan. 2.01. The City shall repay, to the City fund from which the Qualified Costs are initially paid or advanced, the principal amount of funds advanced not to exceed $100,000, together with interest on the principal amount advanced, accruing from the date of each initial expenditure or advance, at the greatest of (a) the rate specified under Minnesota Statutes, Section 270CAO or (b) the rate specified under Minnesota Statutes, Section 549.09. The interest rate for each calendar year during the term of the TIF Loan will, without further action by the Council, be determined as of each January 1, using the maximum rate under clauses (a) or (b) in effect as of that date. 2.02. Principal and interest ("Payments") shall be paid semi-annually on each August 1 and February 1 ("Payment Dates"), commencing on the first Payment Date after receipt of the tax increment from TIP District No.2 and continuing through the earlier of (a) the date the principal and accrued interest of the TIP Loan is paid in full, or (b) the date of last receipt of tax increment from the TIF District. Payments will be made in the amount and only to the extent of Available Tax Increment as hereinafter defined. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the date of each expenditure to the first Payment Date shall be compounded semiannually on February 1 and August 1 of each year and added to principal, unless otherwise specified by the City of Ramsey.