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Council approves redemption of Forney EDC bonds after sales-tax covenant issue
Summary
Council approved a resolution to redeem outstanding Forney Economic Development Corporation taxable sales tax revenue bonds (series 2013) after continuing disclosure reporting found the sales-tax reduction tied to a CCDB violated bond covenants; the sale date was set for June 17.
At the June 2 meeting staff reported that continuing disclosure this year revealed a reduction in sales tax tied to the creation of the CCDB had violated covenants on the Forney Economic Development Corporation’s Series 2013 taxable sales-tax revenue bonds. The EDC board met May 7 and determined the best remedy was to redeem the bonds.
Ms. Witham briefed council: "Best option was to redeem the bonds and the Board held a special meeting on May 7 and that was their determination," and staff told the council the sale date is scheduled for June 17. Council moved to approve the resolution authorizing redemption; the motion passed.
Councilmember Weatherford asked how the issue was missed; staff said the financial advisors were not involved in the sales tax election and the reduction was missed in the process. No public speakers were signed up on the item. Staff and the EDC will proceed with the redemption process and finalize sale logistics and legal compliance.
The resolution was recorded as passed during the June 2 meeting.
