33 - Approving a loan from the City of Paris to the Paris Economic Development Corpation in the amount of $2.5 million

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Every three years, the rate will be adjusted by taking the Wall Street Journal "Prime Rate", subtract the Wall Street Journal 10 -Year Constant Maturities Treasury Rate, take 25% of the difference, and then adding this back to the 10 -Year Constant Maturities Treasury Rate. Please see the "Determination of Interest Rate" paragraph for a more detailed description of the formula. There will be a 2% interest rate floor so as to protect the taxpayer's return on their funding. The purpose for using the Wall Street Journal is to give both parties known and verifiable values. With $2.5 million, the PEDC will be able to pay off their current loan as well as have some operational cash. The Finance Director and City Manager are both comfortable that the City can loan out $2.5 million and still cash flow operations and maintain absolute minimum reserve amounts. This however will significantly deplete our ability to fund many other large expenses from the reserve. We have some capability, but now very restricted. This will remain true for some years until our reserve builds back up. BUDGET: Please see the "Status of Issue" section above. OPTIONS: 1. Approve the Promissory Note with the PEDC and authorize the Mayor to sign. 2. Request additional information. 3. Reject this Promissory Note and/or edit it. RECOMMENDATION: 1. Approve the Promissory Note with the PEDC and authorize the Mayor to sign.