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Regular Council Meeting December 13, 2021 Page 10 Mayor Portugal inquired about how many cars go through that intersection. Dan Perry said approximately 30,000 vehicles a day go through that intersection. Jay Hodge said the intention of funds being contributed to this project did not guaranteed this project would be funded through the State. A Motion to approve this item was made by Council Member Pilgrim and seconded by Mayor Pro -Tem Hughes. Motion carried, 6 ayes— 0 nays. 33. Discuss and act on RESOLUTION NO. 2021-053: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, APPROVING A LOAN IN THE AMOUNT OF TWO MILLION FIVE HUNDRED THOUSAND DOLLARS AND NO/100 ($2,5000,000.00) TO THE PARIS ECONOMIC DEVELOPMENT CORPORATION; APPROVING A PROMISSORY NOTE REGARDING SAID LOAN; AUTHORIZING THE MAYOR TO SIGN PROMISSORY NOTE; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. City Manager Grayson Path said earlier in 2021 then Mayor Steve Clifford proposed to the City Council and the PEDC the concept of the City loaning the PEDC available funding for the purposes of 1) paying off a PEDC note, 2) giving the PEDC a lower interest rate to help save tax dollars, and 3) giving the City a higher interest rate to help produce revenue greater than traditional investment mechanisms. He said the note would have to give the City ability to call its funding if a financial emergency were to occur. Mr. Path said the City was not a lending entity by nature, but as the PEDC was a function of the City, this was a valid route for the City Council to take. Mr. Path reported after many months of negotiation and work, the note in their packets had been completed and it was for $2.5 million. He explained the first three years would be an interest rate of 2.14%. He said it was a ten-year note with a fifteen -year amortization, which meant they would make monthly payments for ten years and at the conclusion of ten years, there would be a balloon payment for the balance. Mr. Path also said every three years the rate would 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 add this back to the 10 -Year Constant Maturities Treasury Rate. Mr. Path said there would be a 2% interest rate floor so as to protect the taxpayer's return on their funding. PEDC Director Maureen Hammond said this was a very long process and she truly thought this was a win-win and was symbolic of the relation between the City Staff and the PEDC. Mr. Path said the City will maintain its Reserves but this did limit the City in some respects. Council Member Pankaj asked when Staff would feel comfortable with this transaction and Finance Director Gene Anderson said in two to three years. A Motion to approve this item was made by Council Member Pilgrim and seconded by Council Member Pankaj. Motion carried, 6 ayes — 0 nays. 34. Convene into executive session pursuant to Section 551.072 of the Texas Government Code to deliberate the purchase, exchange, lease, or value of real property if deliberation