HomeMy WebLinkAboutCity Council Resolution 2022-199
C ITY OF P LYMOUTH
R ESOLUTION N O. 2022-199
RESOLUTION APPROVING THE TERMS OF AN INTERFUND LOAN
IN CONNECTION WITH A PROPOSED TAX INCREMENT FINANCING DISTRICT
WHEREAS, the City of Plymouth, Minnesota (the "City") may establish a Tax Increment Financing
District (the "TIF District") within Development District No. 7 and may adopt a tax increment financing
plan for the TIF District (the "TIF Plan"); and
WHEREAS, the City has determined to pay for certain costs identified in the TIF Plan consisting of
land acquisition, public utilities, street improvements, trail and sidewalk improvements, bridge
improvements, site improvements/preparation, other eligible improvements, and administrative costs
(the "Qualified Costs") incurred in connection with the TIF District and development of land within the
TIF District, which costs may be financed on a temporary basis from City funds available for such
purposes; and
WHEREAS, 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; and
WHEREAS, the City intends to reimburse itself for the payment of the Qualified Costs, plus
interest thereon, 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").
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH,
MINNESOTA, as follows:
(1) Terms of Interfund Loan.
(a) The City hereby authorizes the advance of up to $10,000,000.00 from the City's General
Fund or any other fund designated by the City, or so much thereof as may be paid as
Qualified Costs. The City shall reimburse itself 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 or 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 4.00% and will not fluctuate.
(b) Principal and interest on the Interfund Loan (the "Payments") shall be paid annually on
each December 31 commencing with the date the tax increments from the TIF District
are available and not otherwise pledged to and including the earlier of (i) the date the
principal and accrued interest of the Interfund Loan is paid in full, or (ii) the date of last
receipt of tax increment from the TIF District ("Payment Dates") which Payments will be
Resolution 2022-199
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made in the amount and only to the extent of available tax increments. Payments shall
be applied first to accrued interest, and then to unpaid principal.
(c) Payments on the Interfund Loan are payable solely from the tax increment generated in
the preceding twelve (12) months with respect to the TIF District and remitted to the
City by Hennepin County, all in accordance with Minnesota Statutes, Sections 469.174
to 469.1794, as amended. Payments on this Interfund Loan are subordinate to any
outstanding or future bonds, notes or contracts secured in whole or in part with tax
increment, and are on parity with any other outstanding or future interfund loans
secured in whole or in part with tax increments.
(d) The principal sum and all accrued interest payable under this Interfund Loan are pre-
payable in whole or in part at any time by the City without premium or penalty. No
partial prepayment shall affect the amount or timing of any other regular payment
otherwise required to be made under this Interfund Loan.
(e) The Interfund Loan is evidence of an internal borrowing by the City in accordance with
Minnesota Statutes, Section 469.178, Subd. 7, and is a limited obligation payable solely
from tax increment pledged to the payment hereof under this resolution. The 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 City. 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 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 City shall have no obligation to pay any principal amount of the Interfund
Loan or accrued interest thereon, which may remain unpaid after the termination of the
TIF District. The City may amend the terms of the Interfund Loan at any time by
resolution of the City Council, including a determination to forgive the outstanding
principal amount and accrued interest to the extent permissible under law.
(2) Effective Date. This resolution is effective upon the date of its approval.
APPROVED by the City Council on this 26th day of July, 2022.