By Terry Britt, Staff Writer
Van Zandt County is going forward with the purchase of a downtown Canton property, but borrowing the money became a little tougher than expected.
The county commissioners’ court on Tuesday passed a $740,000 tax note series for the county to buy the city block owned by Lonnie and Elvira Browning, located just across Dallas Street (Highway 64) from the county courthouse.
However, finding an investor for the tax notes came down to just minutes before the matter came up for discussion. At that point, Mike Brown of Government Capital Securities said he had received “a verbal agreement” from an unnamed senior loan officer with Spirit Bank of Texas.
Brown said the tax note would be financed at 2.65 percent annually, making the annual debt service about $117,000 for seven years.
“That will take about a half-cent increase on the I and S (Interest and Sinking) side of the county’s tax rate,” he explained.
Van Zandt County Judge Rhita Koches then stated that the range of potential lenders for the tax note thinned out.
“We had other lenders who refused to do it or we were told they wouldn’t unless the county was willing to raise its M&O (Maintenance and Operation tax rate) to the maximum amount…four would not look at it at all and two others backed out on the decision not to raise taxes,” she explained.
Brown stated that finding investors for Van Zandt County’s debt was “becoming increasingly more difficult” and noted that the county’s M and O rate of about 40 cents was considerably lower than most surrounding counties.
As he did in the initial commissioners’ court vote to pursue a tax note two weeks earlier, Precinct 1 Commissioner Bill Rowton cast the lone vote of opposition in the 4-1 final vote.
Koches stated in the discussion that she did receive word of public opposition to the purchase from some in Precinct 1. However, she added that she had received several calls from people stating they understood and supported what she earlier termed “a once-in-a-lifetime opportunity to buy this land.”
Precinct 2 Commissioner Virgil Melton Jr., in stating his support for the purchase, said, “You look at the growth, and growth is coming to Van Zandt County, and consider the future, we’ve got to have a place to put county facilities.
“That block is the future,” he added.
While the county was able to get a lender for the tax note to purchase the Brownings’ property, it was a different story for the proposal to issue $772,000 in tax anticipation notes to shore up the county’s current fund balance in its general fund.
Brown said he was not able to secure a commitment from a lender before Tuesday morning’s court meeting and the item would have to be tabled until the next meeting.
The county is looking at having to issue tax anticipation notes to help cover daily operations through the remainder of 2012. The note would be paid off in early 2013 when the majority of property tax revenues are received.
In another financial matter on Tuesday, the court voted to not propose any salary increases for county employees or elected officials for the upcoming fiscal year starting on Oct. 1.