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<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, 2009
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<br /> Note 4: Public Funds I vestment Pools (Continued)
<br /> not have a business relationship with the Pool and are qualified to advise the Pool; 2) maintain a
<br /> continuous rati g of no lower than AAA or AAA-m or an equivalent rating by at least one nationally
<br /> recognized rat g service; and 3) maintain the market value of its underlying investment portfolio
<br /> within one-hal of one percent of the values of its shares.
<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 20-like, in which case they are reported at share
<br /> value. A 20-like Pool is one which is not registered with the Securities and Exchange Commission
<br /> (SEC) 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 /> Temporary investments at September 30, 2009, are invested in Lone Star Investments, $390,964,
<br /> (Texas Political Subdivisions Investment Pool) and MBIA Municipal Investors Service Corp.,
<br /> $1,526,331. These investments are reported with the bank accounts as Cash and Cash Equivalents.
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<br /> Note 5: Notes Receivable
<br /> PEDC has ante receivable bearing interest at 7.00% from a corporation located in Paris, Texas, to
<br /> assist with the urchase 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 secure by a security agreement, which lists PEDC as having a subordinate interest in all
<br /> respects to the financial institution involved and to other individuals as listed in the security
<br /> agreement. T balance of this note at September 30, 2009, was $2,247,281.
<br /> In past years, EDC granted incentives to a company to assist in locating a business locally and who
<br /> did not compl with the terms of the incentive agreement. As a result, the company is repaying a
<br /> portion of the i centive $6,000 monthly. The balance remaining at September 30, 2009, is $50,000.
<br /> Note 6: Notes and Bon Is Payable
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<br /> PEDC has ante payable to a bank to provide funding for an industrial park and other purposes.
<br /> This note bear interest at a rate of 4.942% with principal and interest payments due on a monthly
<br /> basis. The not is secured by a tax assignment and security agreement. It also contains, to the extent
<br /> permitted by law, a right of setoff in all accounts PEDC has with the lender. The balance of the note
<br /> at September 3), 2009, was $55,644.
<br /> PEDC has ou standing Paris Economic Development Corporation Taxable Sales Tax Revenue
<br /> Bonds, Series 998 originally issued at $4,200,000, bearing interest at 6.25% to 6.625°/x. Principal
<br /> payments are due serially in varying annual amounts to September 1, 2018, from $215,000 to
<br /> $365,000.
<br /> Sales and Use Taxes (one-quarter of one percent) levied by the City of Paris, Texas, within its
<br /> boundaries under the Development Corporation Act of 1979, are pledged for payment of bonds and
<br /> interest. The resolution authorizing the issuance of the bonds requires that monthly deposits be made
<br /> to the Debt Service Fund in an amount sufficient to pay the next maturing bonds and interest.
<br /> A Reserve Fu is required to be maintained with a balance of at least $388,708, the average annual
<br /> principal and interest requirements of the bonds. At September 30, 2009, the balances in the Debt
<br /> Service Fund a d Reserve Fund are $20,333 and $468,012, respectively.
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