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Paris Economic Development Corporation <br />May 21, 2003 <br />Page 3 <br /> <br />for what they had legally restricted by issuance of the bonds. He said the only <br />restricted cash that has ever shown up on this cash flow statement had to do <br />with the legally required bond reserve or the legally required Interest and <br />Sinking Fund. There was nothing in that restricted cash number that applied <br />to Hearne Street or any other obligation that the board had taken because the <br />board had never voted to restrict the cash even though they entered into an <br />agreement to do those things. He advised that he made a little wording change <br />and instead of calling it restricted cash, he called it exactly what that restricted <br />cash is made up of, and that is Debt Reserve and Debt I&S Cash. <br /> <br />Mr. Anderson said that, Director Don Wall had informally requested financial <br />information having to do with the debt capacity of the PEDC in terms of <br />issuing bonded indebtedness, and the financial information reported to the <br />Board was specifically that. Mr. Anderson explained that his previous report <br />was different from the amount that the Board might be able to borrow at the <br />bank because there are very specific types of restrictions in bonded debt that <br />you do not necessarily have when you go to the bank to borrow money. In <br />summation, he said that was his charge and it was an informal one and that was <br />the only information he presented to the board because he was not asked to <br />present any other. <br /> <br />Mr. Anderson advised that another issue that he and Mr. Vest discussed was <br />excess funds kept in the reserve account. Mr. Anderson explained that the debt <br />reserve account was pre-funded in 1998 when the debt was issued and that, <br />over time, an excess of funds has accumulated in addition to the amount <br />required to be reserved, one year' s debt payment, due to interest accumulation. <br />It does not amount to that much money, not enough that he has had to be in a <br />rush to move it over to the operating account, but any case, it would not affect <br />the ability of the corporation to issue bonded debt. He explained that how <br />much money you have in the bank is not a factor in issuing bonded debt. Mr. <br />Anderson said what affects the Board's ability to issue bonded debt is cash <br />flow income and, specifically, sales tax income. Mr. Anderson advised that the <br />reserve has $40,000.00 more than it should have and the Interest and Sinking <br />Fund has about $100,000.00 more than it should. The excess built up by <br /> <br /> <br />