McKinney Council approves short-term interfund loan to help MEDC close land purchase

The McKinney City Council approved a one-month interfund loan from the city general fund to the McKinney Economic Development Corporation to cover a land purchase closing March 31, city finance staff said.

Chief Financial Officer Mark Holloway told the council the MEDC and council approved a debt sale on March 18 and pricing is scheduled for April 9 with bond closing expected April 30, leaving roughly a one-month gap between the land closing and receipt of bond proceeds. Holloway said the interfund loan would charge the city’s investment pool rate (about 4.2% at the time of the meeting) and the ordinance authorizes up to $10 million; Holloway said he expects the principal to be about $5 million. At that estimate, one month of interest at 4.2% would be about $17,500, making a total repayment of roughly $5,017,500 when bonds close.

Council members described the proposed loan as a routine bridge measure to ensure the MEDC can timely close on property near the airport. Council member Reimer moved to approve the item “as presented by Mr. Holloway.” The motion was seconded and later the mayor announced the motion passed; a formal roll-call tally was not recorded in the public remarks on the transcript.

Council discussion included confirmation that the funds to be loaned were not otherwise planned for near-term use and that interest paid to the city would reflect what the funds would have earned in the investment pool. Council members also discussed the land’s status in the extraterritorial jurisdiction and that a change of use likely would require annexation.

The council did not provide additional conditions on the loan during the public discussion; Holloway said the loan duration was expected to be one month with repayment timed to the bond closing.