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HomeMy WebLinkAboutResolution No. 2013-026 RESOLUTION 2013-26 CITY OF COLUMBIA HEIGHTS RESOLUTION APPROVING AND SPECIFYING TERMS OF AN INTER-FUND LOAN FROM THE COLUMBIA HEIGHTS HRA RECITALS A. The City of Columbia Heights ("City") and its Housing and Redevelopment Authority ("Authority") desire to enter into a mutually-beneficial sixty(60) day inter-fund loan agreement. B. The Authority is currently undertaking to divest itself of all operations. Therefore it is impractical for the Authority to invest in long-term high-earning investments at this time. Consequently, the Authority's building repairs reserve for Parkview Villa North is currently invested in a demand deposit account with an interest rate of approximately 0.35 percent per annum. It would be advantageous for the Authority to safely earn a higher rate of interest for a sixty day period. C. The City receives two large payments of property taxes each year as its primary source of funds. Therefore the City invests upon receiving these payments and then liquidates the investments over the following six months until the next tax collection. It would be advantageous for the City to hold more of these investments to full maturity beyond the next tax collection date of June 20,2013,instead of liquidating them in the current market. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Columbia Heights: 1. The City authorizes acceptance of a loan from the Authority in the maximum amount of$750,000 (the "Loan"), to be drawn from Fund 203 —Parkview Villa North. Such amount will be made available to the City on April 24,2013. 2. The outstanding principal balance of the Loan bears interest at the rate of 1.0 percent per annum. Interest accrues from April 24,2013. 3. The Loan is payable from the City's Investment Fund 886 and shall be due in full, including all accrued interest,on June 24,2013. 4. The principal sum and all accrued interest payable under the Loan are pre-payable in whole or in part at any time by the City without premium or penalty. All payments shall be applied first to accrued interest, and then to unpaid principal of the Loan. 5. The Authority and City may amend the terms of this Loan at any time by mutual resolutions. 6. The City Council authorizes and directs staff to take all actions and execute any documents necessary to carry out the intent of this resolution. Passed this 8v'day of April 2013 Offered by: Williams Seconded by: Diehm Roll call: Schmitt;Aye, Williams;Aye, Diehm; Aye,Nawrocki;Aye, Peterson; Aye. All Ayes Mayor Gary r. Peterson Attest: Tori Leo t City G�1e Council Secretary