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Item # 7.2. <br /> City of <br /> Elk -�-� <br /> River <br /> MEMORANDUM <br /> TO: Housing & Redevelopment Authority <br /> FROM: Catherine Mehelich, Director of Economic Development�J),� <br /> DATE: January 27, 2003 <br /> SUBJECT: Consider Resolution Establishing a Policy on Interfund Loans for <br /> a Tax Increment Financing (TIF) District of the HRA <br /> Attachment <br /> • Resolution Establishing a Policy on Interfund Loans for a TIF District of the HRA <br /> Background <br /> • The Minnesota state statute in regards to TIF requires the pre-approval of interfund loans or <br /> advances that are made from the HRA/City to a TIF district. The attached resolution <br /> prepared by the City's TIF attorney,Jim O'Meara, establishes a policy for the HRA to make <br /> interfund loans to finance expenses in preparation for a downtown TIF district. The <br /> resolution also formalizes the HRA's intent to repay the interfund loan with interest from <br /> the tax increment of the applicable district once established. <br /> Preliminary expenses, as reviewed by the HRA, may include: <br /> • Legal services <br /> • Financial services <br /> • Engineering <br /> • Relocation services <br /> The HRA took similar action with regard to TIF 16 —the King and Main project. <br /> If a TIF district were ultimately not established, then the expenses would become the <br /> responsibility of the HRA and would be deducted from its revenues. <br /> Recommendation <br /> Staff recommends the HRA consider adoption of the attached resolution that establishes a <br /> policy on interfund loans in connection with the downtown TIF district. <br /> i <br />