HomeMy WebLinkAboutCity Council Resolution 2022-265
C ITY OF P LYMOUTH
R ESOLUTION N O. 2022-265
R ESOLUTION A PPROVING THE T ERMS OF AN I NTERFUND L OAN IN
C ONNECTION WITH A P ROPOSED T AX I NCREMENT F INANCE D ISTRICT
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, 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 $4,000,000, 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
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Resolution 2022-265
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District ("Payment Dates") which Payments will be 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 25th day of October, 2022.
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