Res. #13-001 - Modifying Municipal Development District No. 1 & Modifying the Development Program & Est. Dis. No. 7

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(d) The Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Development District by private enterprise. The reasons supporting this finding are that the development activities are necessary so that development and redevelopment by private enterprise can occur within the Development District. 4. Public Purpose The adoption of the Development Program for the Development District, and the adoption of the Tax Increment Financing Plan for the Tax Increment District therein conform in all respects to the requirements of the Act and will help fulfill a need to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. 5. Interfund Loan The City has determined it may pay for public improvement costs and the administrative costs associated with the establishment of the Tax Increment District (the "Qualified Costs ") on a temporary basis from the General Fund or any other fund from which such advances may be legally made (the "Fund ") as an Interfund Loan pursuant to Minnesota Statutes, Section 469.178, Subd. 7. The City intends to reimburse itself for the payment of the Qualified Costs, with interest thereon, from tax increments derived from the Tax Increment District in accordance with the following terms (which terms are referred to collectively as the " Interfund Loan"): (a) The City shall repay to the Fund from which the Qualified Costs are initially paid, the principal amount not to exceed $222,000. The actual amount will be set by the City Council based on the actual amount of Qualified Costs. (b) The Interfund Loan shall be paid annually on February 1 and August 1 commencing with the first August 1 (the "Payments "). The amount of the payment will be not less than 90% of collected tax increment until the full amount of the Interfund Loan is prepaid or the Tax Increment District is decertified, whichever occurs first. (c) The maximum rate of interest that can be charged is limited to the annual rate charged by the state courts or by the Department of Revenue, whichever is greater. The interest rate on the Interfund Loan shall be set at 1.6 %. Interest payments on the Interfund Loan are payable solely from tax increment revenues collected by the City. (d) The principal sum payable under the 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 the Interfund Loan. (e) 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. 4