|
<br />J
<br />
<br />I
<br />
<br />Paris Economic Development Corporation
<br />(A Component Unit of the City of Paris, Texas)
<br />Notes to Financial Statements (Continued)
<br />September 30, 2006
<br />
<br />Note 4: Public Funds Investment Pools (Continued)
<br />
<br />I
<br />
<br />PEDC's investments in Pools are reported at an amount determined by the fair value per share of the
<br />Pool's underlying portfolio, unless the Pool is 2a7-like, in which case they are reported at share
<br />value. A 2a7-like Pool is one which is not registered with the Securities and Exchange Commission
<br />(SEe) as an investment company, but nevertheless has a policy that it will, and does, operate in a
<br />manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940,
<br />
<br />Temporary investments at September 30, 2006, are invested in Lone Star Investments ($392,557)
<br />(Texas Political Subdivisions Investment Pool) and MBIA Municipal Investors Service Corp.
<br />($578,559). These investments are reported with the bank accounts as Cash and Cash Equivalents.
<br />
<br />Note 5: Notes Receivable
<br />
<br />PEDC has a note receivable bearing interest at 7.00% from a corporation located in Paris, Texas, to
<br />assist with the purchase of an existing business, The note is due in monthly installments of principal
<br />and interest of $32,000 through April 15, 2017, at which time the remaining principal is due. This
<br />note is secured by a security agreement, which lists PEDC as having a subordinate interest in all
<br />respects to the [mancial institution involved and to other individuals as listed in the security
<br />agreement. The balance of this note at September 30,2006, was $2,859,090.
<br />
<br />PEDC has a second non-interest bearing note receivable from a Minnesota corporation to assist with
<br />plans to create and operate a computer services business in Paris, Texas. The note is due in annual
<br />installments of $100,000 beginning June 15, 2005, with the provision that the corporation shall
<br />receive credits against the annual principal installments equal to $1 for every $10 in salaries which
<br />the corporation pays during the preceding year to all new employees working for the corporation in
<br />Paris, Texas. The balance of this note at September 30, 2006, was $1,400,000. The maximum
<br />amount of the credit allowed in any twelve month period shall not exceed the annual loan payment.
<br />At year end, the loan was not in compliance with the agreement and PEDC has been furnished
<br />information indicating that recovery may not be according to contractual terms. The amount which
<br />may not be collected cannot be reasonably determined at this time.
<br />
<br />Note 6: Notes and Bonds Payable
<br />
<br />PEDC has executed a note payable to fund an incentive agreement with a corporation planning to
<br />create and operate a computer services business in Paris, Texas. The note bears interest at a rate of
<br />3.692% with principal and interest payments due on a monthly basis. The note is secured by a tax
<br />assignment and security agreement. It also contains, to the extent permitted by law, a right of setoff
<br />in all accounts PEDC has with the lender. The balance of the note at September 30, 2006, was
<br />$371,360.
<br />
<br />A second note has also been executed to fund this incentive agreement and funding for an industrial
<br />park. This note bears interest at a rate of 4.942% with principal and interest payments due on a
<br />monthly basis. The note is secured by a tax assignment and security agreement. It also contains, to
<br />the extend permitted by law, a right of setoff in all accounts PEDC has with the lender. The balance
<br />of the note at September 30,2006, was $677,852.
<br />
<br />PEDC has outstanding Paris Economic Development Corporation Taxable Sales Tax Revenue
<br />Bonds, Series 1998 originally issued at $4,200,000, bearing interest at 6.625% to 7.75%. Principal
<br />payments are due serially in varying annual amounts to September 1, 2018, from $180,000 to
<br />$365,000.
<br />
<br />6
<br />
|