2007-030 RES-Aut. the City Manger to propose a cash settlement to prepay the Pat Mayse Reservoir Purchase contract for water rights

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".~ ~"~ ,.,. ,.,~~ ,~;.. ~ ~ ~ ~ ~~ ~` ,off ~~; ;,Y ~~ ~ , ~R~I ~ ., S ~ \ Q ~ .,.. y a~. .., .,.._.,._.,.,~~ ~` ,..n,. i ~ ~~ .P a. .w..._.: ,~ February 27, 2007 The Honorable Kay Bailey Hutchison 284 Russell Senate Office Building Washington, DC 20510 Reference: Prepayment of water purchase contract on Pat Mayse Reservoir Dear Senator Hutchison: The City of Paris, Texas would respectfully request consideration of the following proposal to conclude the purchase of all water contracts between the U. S. Corps of Engineers and the City of Paris, Texas. City of Paris, Texas Summary of Proposed Financing to U.S. Corps of Engineers To Prepay the Pat Mayse Reservoir Purchase Contract for Water Rights Whereas the City of Paris owes the U.S. Corps of Engineers ("the Corps") as of March 31, 2007 the following amounts: 1. Principal payoff on space one 2. Principal payoff on space two 3. Principal payoff on spaces three, four, & five 4. Accrued interest on above $1,925,722 principal (3.137% compounded annually since 6-15-78); $ 208,515.69 (paid current) $ 370,399.16 (paid current) $1,925,722.00 $2,864,691.22 Whereas the city contends that compounded interest vs. simple interest is not a reasonable charge to the citizens of Paris; Whereas the amount of accrued interest on the outstanding principal of $1,925,722.00 calculated using simple interest vs. compounded interest would be only $1,739,301.70 vs. $2,864,691.22 (see attached schedule A); Whereas the city may not be financially able to pay the amount due in the future under the existing contract terms; The City of Paris thereby~proposes a cash settlement on or about 6-1-07 of $3,635,819.24 based on the following amounts; EXHIBIT., P.O. BOX 9037 PARIS, TEXAS 75461-9037 (903) 785-7511 FAX (903) 785-8519