HomeMy WebLinkAbout4.2_Attachment D_Resolution for Interfund Loan
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COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY
CITY OF COTTAGE GROVE
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION AUTHORIZING INTERFUND LOAN FOR
ADVANCE OF CERTAIN COSTS IN CONNECTION WITH
TAX INCREMENT FINANCING DISTRICT NO. 1-20
(NORTHPOINT INDUSTRIAL)
BE IT RESOLVED by the Board of Commissioners of the Cottage Grove Economic Development
Authority (the “EDA”) as follows:
Section 1. Background.
1.01. The EDA has established Tax Increment Financing District No. 1-20 (Northpoint
Industrial) (the “TIF District”), pursuant to Minnesota Statutes, Sections 469.174 through 469.1794, as
amended (the “TIF Act”).
1.02. The EDA has and will incur certain costs (the “Preliminary Costs”) related to the TIF
District prior to such time as tax increment will be available to pay for such costs.
1.03. Pursuant to Section 469.178, subdivision 7 of the TIF Act, the city of Cottage Grove (the
“City”) is authorized to advance or loan money from any fund under its control from which such advances may
be legally authorized in order to finance the Preliminary Costs.
1.04. The EDA has proposed to borrow funds from the City’s Fund 286 in the amount of $750,000,
to finance the Preliminary Costs in accordance with the terms of this resolution (the “Interfund Loan”). Such
funds will be deposited in the EDA’s TIF Fund for TIF District No. 1-20. As the EDA receives tax increment
from the TIF District it will repay the Interfund Loan.
Section 2. Terms of Interfund Loan.
2.01. The City will advance up to $750,000 or so much thereof as may be required to pay the
Preliminary Costs. The EDA shall reimburse the City for such advances together with interest at the rate
stated below. Interest accrues on the principal amount from the date of each advance. The maximum rate
of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes,
Section 270C.40 and Section 549.09 as of the date the loan or advance is authorized, unless the written
agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota
Statutes, Section 270C.40 or Section 549.09 are from time to time adjusted. The interest rate shall be 4.0
percent and will not fluctuate.
2.02. Principal and interest (the “Payments”) on the Interfund Loan shall be paid semiannually
on each February 1 and August 1 (each a “Payment Date”), commencing on the first Payment Date on
which the EDA has Available Tax Increment (defined below), or on any other dates determined by the
EDA’s Executive Director, through the date of last receipt of tax increment from the TIF District.
2.03. Payments on the Interfund Loan are payable solely from Available Tax Increment, which
shall mean, on each Payment Date, tax increment available after other obligations of the TIF District have
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been paid, or as determined by the EDA’s Executive Director, generated in the preceding six (6) months
with respect to the property within the TIF District and remitted to the EDA by Washington County,
Minnesota, all in accordance with the TIF Act. Payments shall be applied first to accrued interest, and then
to unpaid principal. With the consent of the City, payments on the Interfund Loan may be subordinated to
any outstanding or future bonds or notes issued by the EDA and secured in whole or in part with tax
increment from the TIF District.
2.04. The principal sum and all accrued interest payable under the Interfund Loan are prepayable
in whole or in part at any time by the EDA without premium or penalty. No partial prepayment shall affect
the amount or timing of any other regular payment otherwise required to be made under the Interfund Loan.
2.05. The Interfund Loan is evidence of an internal borrowing by the EDA in accordance with
Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available
Tax Increment pledged to the payment hereof under this resolution. This Interfund Loan and the interest
hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political
subdivision thereof, including, without limitation, the EDA or the city of Cottage Grove. Neither the State
of Minnesota nor any political subdivision thereof shall be obligated to pay the principal of or interest on
the Interfund Loan or other costs incident hereto except out of Available Tax Increment, and neither the
full faith and credit nor the taxing power of the State of Minnesota or any political subdivision thereof is
pledged to the payment of the principal of or interest on the Interfund Loan or other costs incident hereto.
The EDA shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest
thereon, which may remain unpaid after the final Payment Date.
2.06. The EDA, with the consent of the City, may at any time determine to forgive the
outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under
law.
2.07. The EDA may from time to time amend the terms of this resolution, with the consent of
the City, to the extent permitted by law, including without limitation amendment to the payment schedule
and the interest rate; provided, however, that the interest rate may not be increased above the maximum
specified in Section 469.178, subdivision 7 of the TIF Act.
Section 3. Interfund Loan Approved.
3.01. The Interfund Loan with the terms set forth in section 2 hereof is approved subject to
approval of the Interfund Loan by the City Council.
3.02. The EDA officials and consultants are hereby authorized and directed to execute any
documents or take any actions necessary or convenient to carry out the intent of this resolution.
Section 4. Effective Date. This resolution is effective upon approval.
Adopted by the Board of Commissioners of the Cottage Grove Economic Development Authority this
14th day of December, 2021.
Myron Bailey, President
ATTEST:
Jennifer Levitt, Executive Director