Budget committee directs administrators to pursue debt restructuring to lower 2024 tax levy to about 6%

The Waunakee School District budget committee on Sept. 4 directed district administrators and financial advisors to pursue a refinancing strategy aimed at lowering the district’s near-term debt levy to about 6 percent. The committee’s decision follows a presentation by Eric Cass, a financial advisor with PMA, who outlined a plan to restructure a June 2015 bond issue now amortized over 15 years. Cass said pushing some principal payments further into the future could reduce the district’s Fund 39 debt levy by about $2 million — roughly a 16.4 percent decrease — bringing the levy closer to the committee’s target and down from a preliminary projection that would have produced a 10.4 percent increase. The nut of the plan, Cass said, is to “push out some of the principals” on callable issues to smooth near‑term levy pressure. He warned the board of tradeoffs: the restructuring would increase projected long‑term interest expense by about $1.1 million and, on current projections, could raise annual levy growth to roughly 5 percent for 15–16 years after an initial period of smaller increases. Board members and administrators discussed how that short‑term relief compares with long‑term costs and how other tools could reduce the tradeoffs. Steve Summers, a budget committee member, said administration and the financial advisor should produce a concrete plan and timelines. Eric Cass told the committee the June 2015 issue is callable and that the district can restructure the amortization now or at later refinancing dates, but that extending amortization will increase total interest costs. Administrators also offered alternatives to limit long‑term cost, including using referendum savings or one‑time district funds to reduce principal, and emphasized that the final schedule will depend on market interest rates and future refinancing opportunities. The committee asked administration to return with a plan that would achieve a 6 percent levy target (or lower), combining refinancing steps and other available resources. Following discussion, a committee member moved to direct administration to target returning the levy to about 6 percent; a second was recorded and the motion passed on a voice vote. The district noted uncertainties that could affect outcomes: market interest rates at the time of refinancing, the final structure of any refinancing, and the district’s net new construction (property growth) that historically covers about 3 percent of levy growth. Cass said the proposed restructuring assumes conservative interest‑rate estimates and that some of the long‑term levy pressure could be mitigated later if the board chooses additional principal reductions. The committee approved the direction in time for administration to use the target while preparing the next budget draft and before the levy‑setting deadlines later in the month. Administration also committed to hold a community information session on Nov. 19 to explain the levy, the refinancing proposal and the district’s budget choices to residents.