09 - PEDC 2016-17 Annual Audit ReportItem No. 9
TO, City Council
John Godwin, City Manager
FROM: Michael Paris, PEDC Executive Director
SUBJECT: PEDC 2016-2017 ANNUAL AUDIT REPORT
DATE: March 5, 2018
BACKGROUND: The Paris EDC Board nict on February 19, 2018, to discuss and possibly
approve the yearly Audit Report for the 2016-2017 fiscal year as presented by Brittany Martin of
McClanahan and Holmes.
STATUS OF ISSUE: The PEDC Board was given a presentation with the rnaior opinion frorri
Ms. Martin being that it was a "clean" audit, After a discussion of iters in the audit, the PEDC
Board voted unanirriously to accept the PEDC 2016-2017 Audit Report.
BUDGET: N/A
RECOMMENDATION: Accept the PEDC 2016-2017 Annual Audit Report as presented.
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Annual Financial'.. Report
Year .Ended September 30, 2017
(A Component Unit of the City of Paris, Texas)
Table of Contents
September 30, 2017
M
IndependentAuditors' Report ... .............. — ..................... — ........................................................................... ___ .............. ........ .... I
Financial Statements:
Governmental Funds Balance Sheet/Statement of Net Position ........ .......................................................................................3
Statement of Revenues, Expenditures, and Changes in Fund, Balances/Statemenit of Activities... ......... ......................................4
Notes to the: Financial Statements.. ............ ........... ........... ........ ..................................................... 5
Required Supplementary Information — Budgetary Comparison Schedule - General Fund....................................................... 12
Notes to the Required Supplementary Information ............ -- ................................... .......................................................... --- 13
Continuing Disclosure Information (Unaudited)., ...... .................... ................ — .............................................................. 14
•
STEVEN K MOHUNDRO, CPA
GEORGE H STRUVE, CPA
ANDREWS. REICH, CPA
RUSSELL P. WOOD, CPA
DEBRA J. WILDER, CPA
TIEFFANY A. KAVANAUGH, CPA
APRIL JI, HATFIELD, CPA
Board of Directors
Paris Economic Development Corporation
Paris, Texas
228 SIXTH STREET S.E.
PARIS, TEXAS 7.5460
90:3-7844316
FAX 903-7844310
304 WEST CHESTNUT
DENISON, TEXAS 75020
903-465-6070
FAX 903-465-6093
1400 WEST RUSSELL
BONHAM, TEXAS 75418
903-683-5674
FAX 903-583-S453
We have audited the accompanying financial statements of the governmental activities and each major fund of Paris
Economic Development Corporation (PEDC), a component unit of the City of Paris, Texas, as, of and for the year
ended September 30, 2017, and the related notes to the financial statements, which collectively comprise PEDC's
basic financial statements as, listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles! generally accepted in the United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial Statements that are
free from material misstatement, whether due to fraud or error,
Auditors" Responsibility
Our responsibility is to express opinions on these financial statements based on, our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the: entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions,
Board of Directors
Paris Economic Development Corporation
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, and each major fund of PEDC as of September 30, 2017, and the
respective changes in financial position for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Budgetary Comparison
Schedule be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic,
or, historical context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do, not express an opinion or provide any assurance on the: information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Management has omitted management's Discussion and Analysis that accounting principles generally accepted in
the United States of America require to be presented to supplement the basic financial statements. Such missing
information, although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial
statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial, statements that collectively comprise
PE,DC's basic financial statements, The Continuing Disclosure Information is presented for purposes of additional
analysis and is not a required part of the basic financial statements.
The Continuing Disclosure Information has not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we do not provide an opinion or any assurance: on it.
9 M W-177511 cl V W -F-1 A ro
Certified Public Accountants
January 31, 2018
Paris, Texas
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Governmental Funds Balance Sheet/Statement of Net. Position
September 30, 2017
Liabilities
Accounts Payable
$ -
$ - $ .
Total
Total
Accrued Liabilities
7,514
Debt Service
Governmental
Governmental
Intergovernmental Payable
General Fund
'Fund
Funds
Adjustments* Activities
Assets
Cash and Cash Equivalents
3,080,915
$ -
$ 3,080,915
$ - $ 3,080,915
Investments
576,986
-
576,986
576,986
Taxes Receivable
247,149
-
247,149
- 247,149
Restricted Assets,.
7,514
7,514
(341,244)
348,758
Bond Debt Service Fund
Investments
-
34,498
34,498
- 34,498
Bond Reserve Fund
1,942,5'21
- 1,9'42,521
1,942,521
-
Cash and Cash Equivalents
-
1,718
1,718
- 1,718
Investments
-
376,336
376,330
- 376,330
Land Development Costs
1,942,521
-
1,942,521
- 1,942,521
Total Assets
$ 5,847,571
$ 412,546
$ 6,2.60,117
- 6,260,117
Liabilities
Accounts Payable
$ -
$ - $ .
Accrued Liabilities
7,514
- 7,514
-
7,514
Intergovernmental Payable
Liabilities Payable from Restricted Assets
Current Portion of Bonds Payable
-
- -
(340,000)
340,000
Accrued. Interest Payable
-
(1,244)
1,244
Bonds Payable (Net of Current Portion)
-
Total Liabilities
7,514
7,514
(341,244)
348,758
Fund I3alane'Net Positron
Fund Balance:
Nonspendable-Land' Development Costs
1,942,5'21
- 1,9'42,521
1,942,521
-
Restricted for Debt Service
-
412,546 412,546
412,546
-
Committed to Industrial Incentives
877,400
- 877,400
877,400
-
Unassigned
3,020,136
- 3,020,136
3,020,136
-
Total Fund Balance
5,840,057
412,546 6,252,603
6,252,603
-
Total Liabilities and Fund Balance
$ 5,.847,571
412,546 $ 6,260',117
Net Position:
Restricted for Land Development Costs
(1,942,521)
1,942,521
Restricted for Debt Service
(71,302)
71,302
Restricted for Industrial Incentives
(877,400,)
877,400
Unrestricted
(3,.020„136)
3,020,136
Total Net Position
$ (5,911,359)
$ 5,911,359
*Primarily long-term liabilities are not reported in the funds,
The notes to financial statements are an integral part of this statement.
0
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Statement of R'evenu'es, Expenditures, and Changes, in Fund Balances/Statement of Activities
Year Ended September 30, 2,017
Total Total
Debt Service Governmental Governmental
General Fund Fund Funds Adjustments* Activities
Revenues
Sales Taxes $ 1,446,7'06 $ $ 1,446,706 $ $ 1,446,706
Investment Earnings 12,203 182 12,385 12,385
Total Revenues 1,458,909 182 1,459,091 11,459,091
Expenditures/ Expenses
Current:
Personnel
214,678
214,678
214,678
Administration
78,111
78,111
78,111
Job Training
51,216
5'1,236'
51,236
Marketing and Promotion
80,501
80,501
80,5'01
Direct Business Incentives
7,4,,199
74,199
74,199
Debt Service:
Principal
325,000
325,000
(325,000)
-
Interest
28,251
28,251
(1,110)
27,141
Fees
750
7'5�0
750
Total Expend itures/Expenses
498,725
354,001
852,726
(326,110).
526,616
Excess (Deficiency) of Revenues Over
Expenditures/Expenses
960,184
(353,819)
606,365.
(326,110)
932,475
Other Financing, Sources (Uses)
Gain on Return of Asset
33,999
33,999
3,3,999
Refund from SRMMA Project
533,778
533,778
533,778
Transfers - Internal Activities
(361,520)
361,520
-
Total Other Financing Sources (Uses)
206,257
361,520
567,777
567,777
Net Change in Fund Balances/Net Position
1,166,441
7,701
1,174,142
(326,110)
1,500,252
Fund Balances/Net Position - Beginning
4,673,616
404,845
5,078,4611
667,354
4,411,107
Fund Balances/Net Position - Ending
5,840,057
$ 412,546,
$ 6,252,603
341,244
$ 5,911,359
*Primarily long-term liabilities not reported in the: funds.
The notes to financial statements are an integral part of this statement.
2
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements
September 30, 2017
1. SLUmmary Of Sigrifflicant-Accounting Policies
A. Description of Govemment-Wide Financial Statements
The: government -wide financial statements (i.e., the statement of net position and the statement of activities)
report information on all of the nonfiduciary activities of the primary government. Governmental activities
are supported by taxes, intergovernmental revenues, and other nonexchange transactions. The statement of
activities reports both the gross and net cost of Paris Economic Development Corporation's (PEDC) function
(economic development). Economic development is supported by general, government revenues (sales tax
and interest on investments).
B. Reporting Entity
The Paris Economic Development Corporation is a governmental non-profit corporation established July 19,
1993, funded by a quarter percent sales tax. PEDC was organized exclusively for the purpose of benefiting
and accomplishing public purposes of the City of Paris, Texas, by promoting, assisting, and enhancing
economic development activities as provided by the Development Corporation Act of 1979. PEDC is a
component unit of the City of Paris, Texas, and the: business and affairs are managed by a five -member board
of directors appointed by the governing body of the City of Paris, Texas,
C. Basis of Presentation — Government -Wide! and Fund Financial Statements
The fund financial statements provide information about PEDC's funds. However, the financial statements
include both government -wide (reporting the unit as a whole) and fund financial statements (reporting
PEDC's major funds).
PEDC reports the following major governmental funds
General Fun - The General Fund is the general operating fund and is used to account for all financial
resources except those required to be accounted for in another fund.
Debt Service Fund — The Debt Service Fund is used to account for the accumulation of resources for,
and the payment of, general long-term debt.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting, Measurement focus indicates the type of resources being measured such as current
financial resources or economic resources. The basis of accounting indicates the timing of transaction or
events, for recognition in the financial statements.
In the statement of net position, the governmental activities column is reported using the accrual basis of
accounting and an economic resources measurement focus, which recognizes all long-term assets and
receivables as well as long-term debt and obligations, if any. Net position is reported in various categories
based on current financial reporting pronouncements. The reporting policy regarding committed
classification is that when a contractual obligation is created by the governing board, the amount of the
incentive is considered committed. When payments are made, they are considered to have been paid from
the fund balance classification in which they were: accumulated.
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
1. SummNy of Significant Accounting Policies, (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
The financial transactions of PEDC are reported in two individual funds in the combined financial statements
using the current financial resources measurement focus and the modified accrual basis of accounting. These
funds, are accounted for by providing a separate set of self -balancing accounts that comprise their assets,
liabilities, fund equity, revenues, and expenditures. The focus lof the governmental funds,' measurement (in
the fund statements column) is upon determination of financial position and changes in financial position
(sources, uses, and balances of financial resources) rather than upon net income. P,EDC considers all
revenues available if they are collected within sixty days after year end and expenditures are recognized when
the related liability is, incurred.
E. Budgetary Information
Basis of Accounting
Annual budgets, are adopted on a basis consistent with generally accepted accounting principles, for
the general fund and the debt service fund.
2. Excess of Expenditures Over Appropriations
For the year ended September 30, 2017, expenditures exceeded appropriations (budget) for
personnel expenditures by $6,002.
F. Assets, Liabilities, and Fund Balance/Net Position
1. Cash and Cash Equivalents
Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with original maturities of three months or less from the date of acquisition.
2. Investments
PE,DC's holds investments in two external investment pools, Texas Class and Lone Star
Investments. Both investment pools carry investments at amortized cost, which approximates fair
value. Investments are priced daily and compared to the carrying value. If the ratio of the fair value
of the portfolio of investments to the carrying value of investments is less than .995 or greater than
1.005, the investment pools will sell investment securities, as required, to maintain the ratio at a
point between .995 and 1.005.
State statutes authorize PE,DC'to invest in obligations of the U.S. Treasury, direct obligations of the
State of Texas, other obligations guaranteed or insured by the State of Texas or the United States,,
obligations of states and political subdivisions of any state meeting certain rating requirements,
certificates of deposit and fully collateralized direct repurchase agreements having a defined
termination date.
3. Net Position Flow Assumption
Sometimes PEDIC will fund outlays for a particular purpose from both restricted (e.g., restricted
bond proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted
— net position and unrestricted — net position in the goverriment-wide financial statements, a flow
assumption must be made about the order in which the resources are considered to be applied. It is
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
1. Summary of Significant Accounting Policies (Continued)
F. Assets, Liabilities, and Fund Balance/Net Position (Continued)
I Net Position Flow Assumption (Continued)
the PEDC's policy to consider restricted — net position to have been depleted before unrestricted —
net position is applied.
nwmm����
Sometimes the government will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund balance). in order to
calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in
the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. It is the PEDC's policy to consider restricted fund
balance to have been depleted before using any of the components, of unrestricted fund balance.
Further, when the components of unrestricted fund balance can be used for the same purpose,
committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund
balance is applied last.
5, Fund Balance Policies
Fund balance of governmental funds is reported in various categories based on the nature of any
limitations requiring the use of resources for specific purposes. PEDC itself can establish limitations
on the use of resources through either a commitment (committed fund balance:) or an assignment
(assigned fund balance). The committed fund balance classification includes amounts that can be
used only for the specific purposes determined by a formal action of the PEDC's highest level of
decision-making authority. The governing board is the highest level of decision-making authority
for the PEDC that can commit fund balance. Once adopted, the limitation imposed by the board
remains in place until a similar action is taken to remove or revise the limitation.
6. Restricted Assets and Fund Balance Reserves
Certain resources set aside for repayment of revenue bonds and related interest are classified as
restricted assets on the balance sheet because their use is limited by applicable bond covenants. The
Bond Debt Service Fund is used to accumulate resources for debt service payments over the next
twelve months. Governmental funds report reservations of fund balances for amounts that are not
considered a current financial resource.
The Bond Reserve Fund is accumulated for the purpose of retiring the last of any bonds as they
become due or for debt service when the Bond Debt Service Funds are insufficient,
7. Land Development Costs
PEDC has acquired land and added improvements to develop an industrial park which is to be
divided and sold to businesses wanting to locate their facilities in such an area. Land and added
improvements are not depreciated because they are: expected to be sold or used as incentives and are
not used in PEDC's ongoing activities.
8. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not
available.
Wev'"Arm
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
I. Summa ry of SienifiggLit Accounting Policies (Continued)
F. Assets, Liabilities, and Fund Balance/Net Position (Continued)
8. Capital Assets (Continued)
Assets capitalized have an original cost of more than S5,000 and useful life in excess of one year.
Depreciation has been provided over the estimated useful lives using the straight-line method of
depreciation. The estimated useful lives are as follows:
Equipment 5-7 Years
Buildings, 40 Years
Improvements Other Than Buildings 50 Years
11. Detailed Notes, on All Activities and Funds
A. Cash Deposits with Financial Institutions
Custodial credit risk for deposits is the risk that in the event of a bank failure, the entity's deposits may not
be returned or PEDC will not be able to recover collateral securities in the possession of an outside party.
PEDC's policy requires deposits to be: secured by collateral valued at market or par, whichever is lower, less
the amount of the Federal Deposit Insurance Corporation insurance (FMC). Deposited funds may be invested
in certificates of deposits in institutions that are domiciled in the State of Texas. Collateral agreements must
be approved prior to deposit of funds as provided by law.
As of September 30, 2017, PEDC was not exposed to custodial credit risk since deposits are insured or
collateralized with securities pledged held in the name: of the entity. The entity's carrying amount of demand
deposits was $3,082,633 and the bank balance was $3,111,647,
B. Investments
The public funds investment pools in Texas are established under authority of the Interlocal Cooperation Act,
Chapter 79 of the Texas Government Code, and are subject to the provisions of the: Public Funds Investment
Act (the Act), Chapter 2256 of the Texas Government Code. In addition to other provisions of the Act
designed to promote liquidity and safety of principal, the Act requires Pools to: 1) have an advisory board
composed of participants, in the Pool and other persons who do not have a business relationship with the Pool
and' are qualified to advise the Pool; 2) maintain a continuous rating of no lower than AAA or AAArn or an
equivalent rating by at least one nationally recognized rating service; 3) maintain the market value of its
underlying investment portfolio within one-half of one percent of the values of its shares.
The Texas Class Investment Pool and Lone Star Investment Pool (Pools) have a credit rating of AAAm from
Standard & Poor's, Financial Services, Local government investment pools in this, rating category meet the
highest standard for extremely strong capacity to maintain principal stability and to limit exposure to, principal
losses, due to credit risk. The pools invest in a high quality portfolio of debt securities investments legally
permissible for municipalities and school districts in the state.
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
11. Detailed Notes, on All Activities wd Fund's (Continued)
B. Investments (Continued)
As of September 30, 2017, PEDC had the following investments:
Weighted Average:
InvestmentType Fair Value Maturi!X (DMs)
Texas Class Investment Pool $ 576,986 54
Lone Star Investment Pool 376,357 21
Total Fair Value $ _._953,343
Investments in the Lone Star investment pool and Texas Class investment pool are: not insured or guaranteed
by the FDIC or any other governmental agency. The Pools are measured at amortized cost, and are not
required to be replotted by levels.
Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an
investment. Investments with interest rates that are fixed for longer periods of time are more likely to be
subject to increased variability, in their fair values due to changes in the market interest rates. P,EDC manages
its exposure to market price: changes by avoiding over -concentration of assets in a specific maturity sector,
limitation of average maturity of operating funds investments to less than eighteen months, and avoidance of
over -concentration of assets in specific instruments other than U.S. Treasury Securities and authorized
investment pools.
PEDC's investment policy, in conjunction with state law, specifies the type of credit rating of all authorized
investments.
Credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the
investment. This type of risk is typically expressed in terms of the credit ratings issued by a nationally
recognized statistical rating organization. PEDC reduces the risk of issuer default by limiting investments to
those instruments allowed by the Public Funds Investment Act, Chapter 2256, Texas Government Code.
PEDC's investments in pools carried a credit rating of AAAm by Standard & Poor's as of September 30,
2017.
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's, investment in a
single issuer.PEDC's investment balance consists of only pooled accounts as described above.
The custodial credit risk for investments is the risk that, in the event of failure of the counterparty to a
transaction, a government will not be able to recover the value of investment or collateral securities that are
in the possession of an outside party. PEDC's investment policy minimizes, custodial credit risk by requiring
pledged securities to the in the name of PEDC.
C. Receivables
PEDC reports Taxes Receivable for sales tax collected by the State Comptroller,
D. Pension Plan
PEDC contributes to a simplified employee pension plan for the Director'administered by Edward Jones.
� September 30, 2017.
The contribution rate is 10% and amounted to $11,496during the year ende
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
II. Detailed Notes on All Activities AvAFunds (Continued)
E. Commitments
PEDC has extended several incentive agreements to various companies and other commitments:
I . Daisy Dairy — In 2009, the Board of Directors reached an incentive agreement with Daisy Dairy
providing, that upon the creation and retention of jobs, PEDC will reimburse Daisy Dairy for the
difference between Daisy Dairy's annual potable water bill from the City of Paris and Daisy Dairy's
fixed annual water bill (calculated at a rate of $1,20/1,000 gallons) multiplied by the actual usage
for the year. The remaining balance is estimated to be $569,400.
2. Potters Industries — In September 2015, the Board of Directors reached an incentive agreement with
a producer of engineered glass materials for training reimbursement and cash for capital investment
in manufacturing space and new equipment and new jobs, for $45,000, of which $9,000 remains
outstanding at September 30,, 2017.
3. in connection with a first lien: loan by a bank to Paris Warehouse Southwest LLC in the: amount of
$5,800,000, PEDC has entered into a Guaranty of Collection agreement. The loan payment is
guaranteed by an individual (and a related company), and in addition, PEDC has guaranteed the full
and prompt collection of the principal and interest due under the note together with limited cost of
collection. If the lender makes demand under the Guaranty of Collection agreement, the lender will
allow PEDC to satisfy its liability in monthly installments as specified in the original note. The
agreement is dated September 23, 2010, and will terminate when the note is paid or the expiration
of ten years.
4. Retail and Office Structure - Incentive is to participate in reimbursement of sewer line construction
to the extent of $250,000. The agreement will expire May 31, 2018.
5. The Results Company — On January 19, 2016, the Board of Directors approved an incentive
agreement to offer up to $50,000 to The Results Company for training reimbursement to help retain
existing jobs and to create additional full-time equivalent jobs.
F. Risk Management
PEDC is exposed to various risks of loss and has obtained insurance related to general liability, loan
enforcement liability, errors and omissions liability, and automobile liability,
G. Long -Tenn Liabilities
Bonds Payable
PEDC has outstanding Paris Economic Development Corporation Sales Tax Revenue Refunding Bonds,
Series 2010, originally issued at 52,685,000, bearing interest at 4.1% to 4.39%. The final principal payment
is due September 1, 2018', in the amount of $340,000.
Sales and Use Taxes (one-quarter of one percent) levied by the City of Paris, Texas, within its boundaries
under the Development Corporation Act of 1979, are pledged for payment of bonds, and interest. The:
resolution authorizing the issuance of the bonds requires that monthly deposits be made to the Debt Service
Fund in an amount sufficient to pay the next maturing bonds and interest.
A Reserve Fund is required to be maintained with a balance of at least $354,926, the average annual principal
and interest requirements of the bonds. At September 30, 2017, the balances in the Debt Service Fund and
Reserve Fund are $34,498 and $378,048, respectively.
10
07M, -MIT07
(A Component Unit of the City of Paris, Texas)
Notes to the Financial Statements (Continued)
September 30, 2017
It. Detailed Notes gLi.ALI Activities and Funds (Continued)
G, Long -Term Liabilities (Continued)
Debt Service requirements related to the bonds are as follows, for, the years ended September 30:
, Bonded Debt Reg2irements
Years Principal Interest Total
2018 $ 340,000 $ 14,926 —$ 354,926
S ===240,000 14,926 $ 354,926
A summary of long-term liability transactions for the year ended September 3101, 2017, is as follows:
Due
Balance Balance Within
9/30/16 Additions Reductions 9/30/17 One Year
665;000 S S 325,000 S 340,000 $ 3401,000
H, Interfund Transfers
During the year, transfers are used to move revenues from the fund with collection authorization to the Debt
Service Fund as debt service principal: and interest payments become due. The interfund transfers are
reported as Other Financing Sources (Uses).
Subsequent Events
On November 1, 2017, the Board of Directors reached an incentive agreement with J. Skinner Bakery and its
planned expansion of its facilities. PEDC will invest up to 5400,000 in connection with a new product line,
job creation, and employment retention.
On October 20, 2017, the Board of Directors approved a $400,000 forgivable loan tied to capital investment
and employment levels for Campbell Soup's new plum organics line,
PARIS ECf3NOMIC D:EVELO�PMENT CORPORATION
(A► Component Unit of the City of Paris, Texas)
Required Supplementary Information
Budgetary Comparison. Schedule - General Fund
Year Ended September 30, 2017
Revenues
Sales Taxes
Investment Earnings
Total Revenues
Expenditures
Current:.
Personnel
Administration
Job Training
Marketing and Promotion
Direct Business Incentives
Total Expenditures
Excess of Revenues Over Expenditures
Other Financing Sources (Uses)
Cain on Return of Capital Asset
Reimbursement of SRMMA Project.
Transfers to Debt Service Fund!
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
$ 1,383,000 $ 1,383,000 S 1,446,706 S 63,706
- - 12,203 12,203
1,383,000 1,383,000 1,458,909 75,909
173,176
208,676
214,678
(6,002)
134,400
107,400
78,111
29,289
98,371
98,371
51,236
47,135
107,000
107,000
80,501
26,499
352,900
422,177
74,199
347,978
865,847
943,62.4
498,725
444,899
517,153
439,376
960,1.84
520,808
- 33,999 33,949
- - 533,778 533,778
(354,761) (354,761) 361,520 (6,7590
�354,761�1 X354,761) 206,,257 561,018
162,392 84,615 1,166,4411 1,081,826
4,67'3,616 4,673,616 4,673,616 -
$ 4,836,008 $$ 4,758,,231 , $ 5,840057 $ 1,081,826 -
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris, Texas)
Notes to the Required Supplementary Information
September 30, 2017
PEDC's fiscal year commences October Ist and ends September 30th. A budget for the forthcoming fiscal year shall
be submitted to, and approved by, the Board of Directors in June and delivered to the City of Paris on or before June
30th. After Board approval, the budget on appropriate forms is submitted to the City Manager for inclusion in the
annual budget of the City of Paris. The budget is to include projected operating expenses and such other budgetary
information as shall be: useful to or appropriate for the Board and the City of Paris.
The proposed budget shall contain such classifications and shall be in such form as may be prescribed from time to
time by the City Council of the City of Paris. The budget shall not be effective until it has been approved by, the City
Council.
The Budgetary Comparison Schedule presented as Required Supplementary Information for the General Fund is
presented to provide a meaningful comparison of actual results with the budget. For the year ended September 30,
2017, expenditures exceeded appropriations (budget) for personnel expenditures by $6,002.
M
PARIS ECONOMIC DEVELOPMENT CORPORATION
(A Component Unit of the City of Paris,. Texas)
Continuing [.disclosure Information
(Unaudited)
September 30, 2017
Sales Tax Collections
The following table shoes Sales Tax Collections for the Paris Economic Development Corporation's 1!4% sales tax for the five years
ended September 30:
Pro Forma Bonded debt Service Coverage
Maximum Annual Debt Service Requirement (2018)'
$ 354,926
Fiscal Year Ended September' 30,
S 1,320,000
(Pledged Revenues are Gross 1/4 Gent Sales Tax)
2017
2017
2016
2015
2014
2013'
October
S 1.11,563.76
109,886'.41
S 102„247..58 $
97,701.57
$ 97,310.53
November
132,824.67
130,424.24
126,651.61
114,348.83'
112,362.90
December
110,441.01
104,932.82
271,091.93
100,022.29
87,692.97
January
11.5,178.75
102,686.14
109,169.19
99,144.63
93,398.77
February
172,476.30
149,309.76
146,289.70
133,3'28.22
135,537.65
March
100;451.85
96,097.44
107,72 1.75
83,304.86
87„514.04
April
102,0711',26
104,000.13
911„699'.77
94,682.24
92,'1141.95
May
132,723'.1.4
135,580.28
123,770.44
127,251.18
123,708.09
June
108,141.29
1'07,853.86
106,900.07
99,797.86
38,039.23
July
116,196.60
1!04,464.42
106,493.68
100,455.16
106,267.35
August
126,713.05
137,823.65
129,212.16
116',746.73
11.4,731.18
September
114,744.34
1''.19',.744.32
97,0.54.93
103,766.17
10+6,635.71
Totals
$ 1,443,.525.02.
$ 1,402,'803.'47
$ 1,517,302.81 S
1,276,549.74
$ 1,256,040.37
Pro Forma Bonded debt Service Coverage
Maximum Annual Debt Service Requirement (2018)'
$ 354,926
Projected Annual S'al'es Tax Receipts 2017-18
S 1,320,000
(Pledged Revenues are Gross 1/4 Gent Sales Tax)
2017
Estimated. Pro Forma Coverage
3.72 x
Avenge Annual Remaining Debt. Service at September 30, 2017
$ 354,926
Projected Annual Sales Tax Receipts 2017-18
$ 1,320,000
(Pledged Revenues are Gross 1/4 Cent Sales Tax)
S 1,446,706
Estimated Pro Forma !Coverage
3.72 x
Condensed Corporation Operating Statement
Operating Expenses:
Projects
Adminis'tratio'n, Personnel„
and Promotion
Total Expenses
Net Available for Additional
Economic Incentive's or
Debt Service
125,434 102,528 79,071 2,450,244 194,883
3'74,040 267,519 197,7919 348,893 602,356
499,474 370,047 2.76,870 2,799,137 797,239
$ 959,4135 $ 1,008,122 S 1,242,042 $ (1,475,362) S 470¢298
Source. Information received from the Issuer..
(1) The net of interest income, interest expense, and gain or loss on the sale of assets.
14
Fiscal Year Ended September 30,
2017
2016 2015
20'14 2013
Operating Revenues;.
Sales Taxes
S 1,446,706
S 1,410,415 S 1,,536,827 $
1,282,550! S 1,261,040
Other Income (Loss')(1)
12,203
(32,246)' (17,915)
41,225 6',.497
Total Revenues
1,458,909
1,378,169 1,51.8,91.2
1,3231,775 1,267,537
Operating Expenses:
Projects
Adminis'tratio'n, Personnel„
and Promotion
Total Expenses
Net Available for Additional
Economic Incentive's or
Debt Service
125,434 102,528 79,071 2,450,244 194,883
3'74,040 267,519 197,7919 348,893 602,356
499,474 370,047 2.76,870 2,799,137 797,239
$ 959,4135 $ 1,008,122 S 1,242,042 $ (1,475,362) S 470¢298
Source. Information received from the Issuer..
(1) The net of interest income, interest expense, and gain or loss on the sale of assets.
14