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Regular Council Meeting August 28, 2017 Page 8 the EDC had never set aside money for that and it was part of the future cash flows. Council Member Clifford said he did not think this would happen, but if the loan were to be defaulted, then PEDC would have to pay $4.7 million dollars that it did not have. Mr. Paris said it would be paid out of future cash flows but not immediately. Mayor Clifford said this is the item that is keeping PEDC quite a bit in the hole for the next two years. Mr. Paris said Chapter 380 agreements and incentive agreements are all funded with future cash flows by economic development corporations. Mayor Clifford said they did just receive a legal opinion that the entire deal may not be valid at all. Mayor Clifford said the expert opinion came from an economic development lawyer. Mr. Paris said the lawyers he talked to said it was legal but unfortunately it was not the smartest thing to do. Mayor Clifford confirmed with Mr. Paris that PEDC was promising future money should it become payable. Mr. Paris went over the estimated income and expenses. Council Member Knox wanted to know what PEDC did with their surplus. According to their Bylaws, Mr. Paris said the surplus goes back into the general fund and is placed into two mechanisms that hold their reserve cash. Council Member Knox said this type of breakdown was exactly what she wanted and was helpful. With the changes stipulated by Council, a Motion to approve the Paris Economic Development Corporation's budget was made by Mayor Clifford and seconded by Council Members Knox and Portugal. Motion carried, 6 ayes — 0 nays. 20. Discuss and act on RESOLUTION NO. 2017-030: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, CALLING A PUBLIC HEARING FOR SEPTEMBER 5, 2017 ON THE CITY MANAGER'S PROPOSED BUDGET FOR FISCAL YEAR 2017-18; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. Mr. Godwin said he had nothing new and that at this point, they needed to call the public hearings on the proposed budget and proposed property tax rate. Mr. Godwin reminded City Council they would have a special meeting next Tuesday, September 5 at 5:30 p.m. A Motion to approve this item was made by Mayor Clifford and seconded by Council Member Trenado. Motion carried, 6 ayes — 0 nays. 21. Discuss and act on RESOLUTION NO. 2017-031: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, CALLING TWO PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE CITY'S PROPOSED PROPERTY TAX RATE FOR FISCAL YEAR 2017-18; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. A Motion to approve this item was made by Council Member Drake and seconded by Mayor Clifford. Motion carried, 6 ayes — 0 nays.