Gonzales County approves 7-year tax note to finance annex renovation

County officials voted to authorize the issuance of a seven-year tax note to finance renovation of the Gonzales County annex, a roughly $11.5 million project, in order to keep the construction schedule and limit long-term borrowing costs.

The county’s retained project advisor, CPM senior principal Dave Stout, told the Commissioners Court the tax‑note option was the fastest and least expensive overall compared with certificates of obligation or general obligation bonds. Stout and Chris Allen of RBC Capital Markets briefed the court on financing alternatives, tax-rate impacts and a construction timeline that calls for selective demolition in early April, construction beginning in June and substantial completion by early summer 2026.

CPM’s analysis estimated borrowing about $11.5 million under a seven-year tax note would raise the county’s interest & sinking (I&S) tax rate by about three cents; that change equates to roughly $28 per year on a $100,000 taxable home value. By contrast, the consultant’s illustrative 25-year certificate of obligation or general obligation scenarios increased I&S by about one cent — roughly $12 per year on a $100,000 home — but would carry higher total interest over time. Stout also said a 9‑month delay could add roughly $300,000 to the project budget because of projected construction escalation.

Commissioners and members of the public pressed contractors and staff about construction details and site logistics. Questions included whether cutting the existing slab could expose unforeseen conditions (the presenter acknowledged contingencies and a construction change-order allowance), how many parking spaces the site will support during construction and whether employees might be shifted to rear parking areas to ease public access. The court heard that pre-bid meetings for selective demolition and renovation had already been held and that contractor proposals were due late March and early April.

After discussion, a commissioner moved, and another seconded, that Gonzales County issue the seven-year tax note for the annex renovation and authorize county staff to work with bond counsel and financial advisors to finalize the financing structure. The motion passed; the court directed staff to proceed with the tax-note approach so funds align with the construction schedule.

The county’s consultant noted preliminary market assumptions included an illustrative interest rate near 3.33 percent for the tax-note scenario and advised commissioners that shorter-term tax notes increase annual payments but reduce total interest paid versus longer-term debt. The court record shows the commissioners weighed the tradeoffs between short-term higher annual payments and long-term interest costs before approving the tax-note financing.

Implementation steps the court authorized include finalizing sale timing and working with bond counsel and the county treasurer to place the tax note; the court also heard that delay could increase overall project cost. Bidders will be selected through the county’s advertised competitive process for demolition and construction work, and county staff will present financing details as they are finalized.