Van Zandt County approves resolution to finance new Gradall grader, directs lender to draft contract

Van Zandt County Commissioners Court voted to authorize a financing resolution that will allow Government Capital Corporation to draft a contract to finance a new Gradall XL grader and designate the obligation as a qualified tax-exempt obligation.

The resolution matters because it clears the procedural step the county needs before a formal financing contract is prepared and later signed, enabling the county to complete purchase of heavy equipment the court determined is necessary for road, ditch and debris work.

Commissioner Bobby Phillips introduced the request, saying the unit under consideration is effectively new inventory and comes with a factory warranty. “This is mine. I put it on there,” Phillips said as he explained the county’s need to replace an older machine that he said had repeatedly broken down. The court record shows the unit’s purchase price was discussed in the meeting packet as $528,990; staff corrected a model-year error in the paperwork and said the unit is a 2023 model. The court approved a resolution directing Government Capital to prepare a draft finance contract that the court will review before any final signature.

The resolution, read into the record by the county judge, designated the finance contract as a qualified tax-exempt obligation for purposes of Internal Revenue Code section 265(b)(3) and referenced Treasury Regulation section 1.150-2 concerning reimbursement of expenditures from loan proceeds. The county judge read the resolution language aloud before the court moved to approve it.

Court discussion covered expected contract timing and financing options. Staff said Government Capital will prepare contract language that includes options for a five- or six-year annual payment schedule and allows for early payoff; commissioners discussed a six-year option with the ability to pay off early. Commissioner Phillips and county staff said they had negotiated contract wording with the lender to ensure it complied with applicable law before drafting the final agreement.

During public comment, one attendee urged the county to consider independent inspections or certified equipment reports when buying expensive used or “old-new” inventory; the court noted the comment and indicated procurement and contract review would occur before final execution.

Separately, under the follow-up agenda item the court approved the down-payment terms for the purchase: the court accepted a $25,000 down payment and agreed that annual payments would begin in December, with details to be finalized in the written contract. The motion to accept those terms passed by voice vote.

The county judge is authorized in the resolution, or the judge’s designee, to sign the finance contract and ancillary documents once the contract is finalized and returned to the court for approval. The court did not yet sign a financing contract; it only authorized Government Capital to draft the document and approved the down-payment terms to be reflected in the forthcoming agreement.