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CITY OF PEQUOT LAKES CROW WING COUNTY STATE OF MINNESOTA Council member Nagel introduced the following resolution and moved its adoption: RESOLUTION NO. 07-20 RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-13. BE IT RESOLVED by the City Council (the "Council") of the City of Pequot Lakes, Minnesota (the "City"), as follows: Section 1. Background. 1.01. The City has heretofore approved the establishment of Tax Increment Financing District No. 1-13 (the "TIF District") within Development District No. 1 (the "Project"), and has adopted a Tax Increment Financing Plan (the "TIF 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 TIF Plan consisting of land write down, loan interest and administrative 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 $84,900 from the Business Park 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 270.75 or Section 549.09 as of the date or advance is made, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270.75 or Section 549.09 are from time to time adjusted. The interest rate shall be 6% and will not fluctuate. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on each August 1 and February 1 (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 Clerk, through the date of last receipt of tax increment from the TIF District.