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PARIS ECONOMIC DEVELOPMENT CORPORATION
<br />(A Component Unit of the City of Paris, Texas)
<br />Notes to the Financial Statements (Continued)
<br />September 30, 2017
<br />II. Detailed Notes on All Activities AvAFunds (Continued)
<br />E. Commitments
<br />PEDC has extended several incentive agreements to various companies and other commitments:
<br />I . Daisy Dairy — In 2009, the Board of Directors reached an incentive agreement with Daisy Dairy
<br />providing, that upon the creation and retention of jobs, PEDC will reimburse Daisy Dairy for the
<br />difference between Daisy Dairy's annual potable water bill from the City of Paris and Daisy Dairy's
<br />fixed annual water bill (calculated at a rate of $1,20/1,000 gallons) multiplied by the actual usage
<br />for the year. The remaining balance is estimated to be $569,400.
<br />2. Potters Industries — In September 2015, the Board of Directors reached an incentive agreement with
<br />a producer of engineered glass materials for training reimbursement and cash for capital investment
<br />in manufacturing space and new equipment and new jobs, for $45,000, of which $9,000 remains
<br />outstanding at September 30,, 2017.
<br />3. in connection with a first lien: loan by a bank to Paris Warehouse Southwest LLC in the: amount of
<br />$5,800,000, PEDC has entered into a Guaranty of Collection agreement. The loan payment is
<br />guaranteed by an individual (and a related company), and in addition, PEDC has guaranteed the full
<br />and prompt collection of the principal and interest due under the note together with limited cost of
<br />collection. If the lender makes demand under the Guaranty of Collection agreement, the lender will
<br />allow PEDC to satisfy its liability in monthly installments as specified in the original note. The
<br />agreement is dated September 23, 2010, and will terminate when the note is paid or the expiration
<br />of ten years.
<br />4. Retail and Office Structure - Incentive is to participate in reimbursement of sewer line construction
<br />to the extent of $250,000. The agreement will expire May 31, 2018.
<br />5. The Results Company — On January 19, 2016, the Board of Directors approved an incentive
<br />agreement to offer up to $50,000 to The Results Company for training reimbursement to help retain
<br />existing jobs and to create additional full-time equivalent jobs.
<br />F. Risk Management
<br />PEDC is exposed to various risks of loss and has obtained insurance related to general liability, loan
<br />enforcement liability, errors and omissions liability, and automobile liability,
<br />G. Long -Tenn Liabilities
<br />Bonds Payable
<br />PEDC has outstanding Paris Economic Development Corporation Sales Tax Revenue Refunding Bonds,
<br />Series 2010, originally issued at 52,685,000, bearing interest at 4.1% to 4.39%. The final principal payment
<br />is due September 1, 2018', in the amount of $340,000.
<br />Sales and Use Taxes (one-quarter of one percent) levied by the City of Paris, Texas, within its boundaries
<br />under the Development Corporation Act of 1979, are pledged for payment of bonds, and interest. The:
<br />resolution authorizing the issuance of the bonds requires that monthly deposits be made to the Debt Service
<br />Fund in an amount sufficient to pay the next maturing bonds and interest.
<br />A Reserve Fund is required to be maintained with a balance of at least $354,926, the average annual principal
<br />and interest requirements of the bonds. At September 30, 2017, the balances in the Debt Service Fund and
<br />Reserve Fund are $34,498 and $378,048, respectively.
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