1g. Authorize Interfund Loans for Tax Increment Districts
CITY OF
CHANHASSEN
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PO Box 147
Chanhassen, MN 55317
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v'/ww.ci .chanhassen. mn. us
lC\
~
MEMORANDUM
TO:
Todd Gerhardt, City Manager
FROM:
Laurie Hokkanen, Assistant City Manager
~"1(0
February 18, 2009 : -""\ "
DATE:
SUBJ:
Approve Resolutions to Allow Interfund TIF Loans
PROPOSED MOTION:
"The City Council adopts resolutions authorizing Interfund Loan for the advance
of certain costs in conjunction with Tax Increment Financing Districts #5, #8,
and #9."
Approval of this item requires a simple majority vote of those City Council
members present.
BACKGROUND
For accounting purposes, each TIF District has a separate fund. From time to
time, it may be necessary to expend funds in one TIF District that exceeds the
balance of the account. State law requires that the City Council adopt a resolution
prior to expending dollars. Typically, the need for a loan has to do with the
timing of payments and the receipt of TIF funds.
These resolutions should have been in place at the time of the creation of the
District.
We anticipate two of the districts, Gateway #9 and Northbay #5, to have small
deficits at the end of the 2008 in the amounts of approximately $4,000 (#9) and
$13,000 (#5). Both of these Districts are fairly new and have administrative and
legal costs that have not been recouped at this point. NOlthbay #5 should be out
of deficit at the end of 2009. We anticipate Gateway coming out of deficit by
2010. We do not anticipate a shortfall in Presbyterian Homes #8 going forward.
All loans would be made from TIF District #4.
G\Admin\UI\TIF\lntcrfund Loan Staff Reportdoc
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrol;v
RECCOMENDA TION
Staff recommends approval of the attached Resolutions.
A TT ACHMENTS
1. Resolution Authorizing Interfund Loan for Advance of Certain Costs in
Conjuction with the Northbay TIP District (#5).
2. Resolution Authorizing Interfund Loan for Advance of Certain Costs in
Conjuction with the Presbyterian Homes TIF District (#8).
3. Resolution Authorizing Interfund Loan for Advance of Certain Costs in
Conjuction with the Gateway Apts. TIP District (#9).
G:\Adrnin\LI-l\TIF\Interfund Loan Staff ReporLdoc
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
RESOLUTION
Date
Resolution
Motion By
Seconded By
RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE
OF CERTAIN COSTS IN CONNECTION WITH THE
NORTHBA Y #5 TAX INCREMENT FINANCING DISTRICT
BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen,
Minnesota (the "City"), as follows:
SECTION 1. Background.
1.01. The City has established the Northbay Tax Increment Financing District #5 (the
"TIP District") within Development District No. 5 (the "Project"), and has adopted a Tax
Increment Financing Plan (the "TIP Plan") for the purpose of financing certain improvements
within the Project.
1.02. The City has determined to pay for certain costs identified in the TIP Plan
consisting of reimbursement of developer costs (collectively, the "Qualified Costs"), which costs
may be financed on a temporary basis from City funds available for such purposes.
1.03. 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.
1.04. The City intends to reimburse itself for the Qualified Costs from tax increments
derived from the TIP 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.
2.01. The City hereby authorizes the advance of up to $100,000 from the Entertainment
(#4) TIP Fund 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 advance is made, unless the written agreement states that the
maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes,
143758vOl
RNK:02/04/2009
1
Section 270CAO or Section 549.09 are from time to time adjusted. The interest rate shall be 0%
and will not fluctuate.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on December 31 (each a "Payment Date"), commencing on the first Payment Date on
which the City has Available Tax Increment (defined below), or on any other dates determined
by the City Manager, through the date of last receipt of tax increment from the TIF District.
2.03. Payments on this Interfund Loan are payable solely from "Available Tax
Increment," which shall mean, on each Payment Date, tax increment available after other
obligations have been paid, or as determined by the City Manager, generated in the preceding six
(6) months with respect to the property within the TIF District and remitted to the City by Carver
County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive,
as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future
bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on
parity with any other outstanding or future interfund loans secured in whole or in part with
A vail able Tax Increment.
2.04. 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.
2.05. This 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 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
City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to
pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of
A vailable 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 this 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 final Payment Date.
2.06. The City may amend the terms of this 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.
SECTION 3. Effective Date. This resolution is effective upon the date of its approval.
143758vOl
RNK02/04/2009
2
ADOPTED this
City of Chanhassen, Minnesota.
ATTEST:
Todd Gerhardt, Clerk/Manager
143758vOl
RNK:02/04/2009
day of
, 2009, by the City Council of the
Thomas A. Furlong, Mayor
3
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
RESOLUTION
Date
Resolution
Motion By
Seconded By
RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE
OF CERTAIN COSTS IN CONNECTION WITH THE
PRESBYTERIAN HOMES (#8) TAX INCREMENT FINANCING DISTRICT
BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen,
Minnesota (the "City"), as follows:
SECTION 1. Back2round.
1.01. The City has established the Presbyterian Homes Tax Increment Financing District
(the "TIP District") within the Downtown Chanhassen Redevelopment Project Area
Development District No.8 (the "Project"), and has adopted a Tax Increment Financing Plan (the
"TIP Plan") for the purpose of financing certain improvements within the Project.
1.02. The City has determined to pay for certain costs identified in the TIP Plan
consisting of reimbursement of developer costs (collectively, the "Qualified Costs"), which costs
may be financed on a temporary basis from City funds available for such purposes.
1.03. 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.
1.04. The City intends to reimburse itself for the Qualified Costs from tax increments
derived from the TIP 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.
2.01. The City hereby authorizes the advance of up to $100,000 from the Entertainment
(#4) TIF Fund 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 advance is made, unless the written agreement states that the
maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes,
143758vOl
RNK:02/04/2009
1
Section 270CAO or Section 549.09 are from time to time adjusted. The interest rate shall be 0%
and will not fluctuate.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on December 31 (each a "Payment Date"), commencing on the first Payment Date on
which the City has Available Tax Increment (defined below), or on any other dates determined
by the City Manager, through the date of last receipt of tax increment from the TIP District.
2.03. Payments on this Interfund Loan are payable solely from "Available Tax
Increment," which shall mean, on each Payment Date, tax increment available after other
obligations have been paid, or as determined by the City Manager, generated in the preceding six
(6) months with respect to the property within the TIF District and remitted to the City by Carver
County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive,
as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future
bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on
parity with any other outstanding or future interfund loans secured in whole or in part with
A vailable Tax Increment.
2.04. 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.
2.05. This 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 A vai lable 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
City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to
pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of
A vailable 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 this 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 final Payment Date.
2.06. The City may amend the terms of this 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.
SECTION 3. Effective Date. This resolution is effective upon the date of its approval.
143758vOl
RNK:02/04/2009
2
ADOPTED this
City of Chanhassen, Minnesota.
ATTEST:
Todd Gerhardt, ClerkJManager
143758vOl
RNK02/0412009
day of
, 2009, by the City Council of the
Thomas A. Furlong, Mayor
3
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
RESOLUTION
Date
Resolution
Motion By
Seconded By
RESOLUTION AUTHORIZING INTERFUND LOAN FOR ADVANCE
OF CERTAIN COSTS IN CONNECTION WITH THE
GA TEW A Y APTS. (#9) TAX INCREMENT FINANCING DISTRICT
BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen,
Minnesota (the "City"), as follows:
SECTION 1. Background.
1.01. The City has established the Gateway Apts. Tax Increment Financing District (the
"TIP District") within Development District No. 9 (the "Project"), and has adopted a Tax
Increment Financing Plan (the "TIP Plan") for the purpose of financing certain improvements
within the Project.
1.02. The City has determined to pay for certain costs identified in the TIP Plan
consisting of reimbursement of developer costs (collectively, the "Qualified Costs"), which costs
may be financed on a temporary basis from City funds available for such purposes.
1.03. 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.
1.04. 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.
2.01. The City hereby authorizes the advance of up to $100,000 from the Entertainment
(#4) TIF Fund 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 270CAO
or Section 549.09 as of the date the advance is made, unless the written agreement states that the
maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes,
143758vOl
RNK:02/04/2009
1
Section 270CAO or Section 549.09 are from time to time adjusted. The interest rate shall be 0%
and will not fluctuate.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on December 31 (each a "Payment Date"), commencing on the first Payment Date on
which the City has Available Tax Increment (defined below), or on any other dates determined
by the City Manager, through the date of last receipt of tax increment from the TIF District.
2.03. Payments on this lnterfund Loan are payable solely from "Available Tax
Increment," which shall mean, on each Payment Date, tax increment available after other
obligations have been paid, or as determined by the City Manager, generated in the preceding six
(6) months with respect to the property within the TIP District and remitted to the City by Carver
County, all in accordance with Minnesota Statutes, Sections 469.174 to 469.1799, all inclusive,
as amended. Payments on this Interfund Loan may be subordinated to any outstanding or future
bonds, notes or contracts secured in whole or in part with Available Tax Increment, and are on
parity with any other outstanding or future interfund loans secured in whole or in pmt with
A vailable Tax Increment.
2.04. 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.
2.05. This 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 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
City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to
pay the principal of or interest on this Interfund Loan or other costs incident hereto except out of
A vailable 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 this lnterfund 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 final Payment Date.
2.06. The City may amend the terms of this 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.
SECTION 3. Effective Date. This resolution is effective upon the date of its approval.
143758vOl
RNK:02/04/2009
2
ADOPTED this
City of Chanhassen, Minnesota.
ATTEST:
Todd Gerhardt, Clerk/Manager
143758vOl
RNK:02/04/2009
day of
, 2009, by the City Council of the
Thomas A. Furlong, Mayor
3
Lake
Tax Inere \ Rile
ment Fi nan. .
for Interfund LClng District
oans