The Gonzales Independent School District Board of Trustees approved on a 6-0 vote the creation of a reinvestment zone for Duke Energy’s proposed Cannon Solar project near Harwood in Gonzales County.
The vote only established the zone.
Approval of the 2,000-acre, 152.5- megawatt solar farm project, as well as the details and terms of the zone, will require another public hearing and a majority vote of the board.
Even if the board grants final approval, the zone and project would have to be approved by the other taxing entities with an interest in the zone, including Gonzales County, Gonzales County Hospital District, and Gonzales County Emergency Services.
Members voting for establishing the zone were: Gloria Torres, District 1; Josie Smith-Wright, District 2; Justin Schwausch, District 3; Glenn Menking, District 4; Sue Gottwald, District 6; and Sandra Gorden, District 7.
GISD Board President Ross Hendershot, III, who represents District 5, abstained from the vote citing a potential conflict of interest as he owns land within the proposed district.
The properties that make up the zone were designated by Duke Energy in its application to the state. The owners of the properties within the zone were not required to be notified of the inclusion of their property. Inclusion does not mandate the owners to lease or sell land to Duke Energy.
The GISD collects taxes into two buckets: the maintenance and operations (M&O) tax rate, which is currently 1.0092; and an interest and sinking (I&S) tax rate, which is currently 0.0899 – for a total district tax of 1.0991.
According to the TEA Texas Education Agency, the M&O tax rate provides funds for maintenance and operations, while the I&S tax rate provides funds for payments on the debt that finances a district’s facilities – namely bonds.
If granted, Duke Energy would pay full M&O and I&S taxes in 2022 through 2024, and be required to compete constructed in this window. During the 10-year period between 2024 and 2033, it would pay full I&O taxes, but be limited to paying no more than a total of $30 million for M&O taxes . Duke Energy would pay full takes on both in years 2034 to 2038 – a window of time that it would be required to maintain operation of the solar farm.
I&O funds are not subject to recapture by the state, meaning that the district will not be penalized for increased revenue by having the state take money to give to another district. However, M&O funds are subject to recapture.
The state has statutes for reinvestment zones, so the district doesn’t negotiate the terms.
The district’s attorney, McKenzie Walker, told the board that under the zone, Duke Energy would become the district’s 6th largest tax-payer. She also said that project would generate $20 million in tax revenue over 30 years – $19 million more than if the land remained in its current state.
She did not present the projected revenue over the 15-year window used in the outline of the zone proposal.
A request for 15-year tax revenue projects, as well as the reinvestment zone guidelines for years 16 to 30, was requested by The Inquirer, but not provided as of press deadline.
The vote followed a public hearing in which two residents voiced opposition to the plan, while the owner of land included within the zone that has been leased to Duke Energy, voiced his support.
Per GISD board policy, the individual members of the board are not permitted to speak to the media regarding the district or the board. The media is not allowed a time on the agenda to ask questions specific to the meeting.
Per district policy, The Inquirer reached out to Hendershot, who, as board president, is allowed to comment on behalf of the board.
He was asked if the board has received comments from the community beyond Monday’s public hearing.
“Myself, I have,” Hendershot said. “Various other board members did comment to me that they did have some input and communications with community members.”
While Hendershot did abstain from the vote, he was asked about the board’s view in approving the zone.
“The board’s view was 6-0 to move forward,” he said. “That was the board’s view. I don’t know what more to say.”
In other action, the board:
• approved minutes and budget amendments,
• approved teachers appraisal calendar and appraisers for 2021-22.
• approved ESL certification reimbursement.
• approved ESSER III application.
• approved the state’s update to local school policies.
• heard a presentation on HB 4545, which requires specific instruction, coaching and tutoring of students who failed the STARR test in 2020-21. The Inquirer has requested information on how many students this will impact and will report in more detail in the future.
• heard a presentation on the high school’s plan for a dress code and more consistent enforcement. The Inquirer has requested information on the policy will report in more detail in the future. The policy is available on the district’s web site.