Racine Unified staff outline plan to issue up to $57.61 million in short-term notes for capital projects

At the Sept. 8 work session, district finance staff presented a parameters plan to issue note anticipation notes (NANs) not to exceed $57,610,000 under Wisconsin statutory authority to bridge cash flow for multiple capital projects. District finance staff explained the district will use a higher proportion of cash for projects than previously anticipated, which will reduce the total long-term borrowing need, but cash-flow timing creates a short window in lower-revenue years. To smooth payments the district plans to issue a five-year NAN that can later be refinanced into a 20-year instrument and will include capitalized interest to cover near-term interest payments. The presenter said capitalizing interest is not common for the district but is necessary to match revenue timing and pay bills as projects proceed. Projects identified to receive proceeds in the near term include Apple Steam, Case, Gifford and Goodland (as named in the presentation). The district reported having used defeasances and other actions previously to reduce outstanding debt by about $19,000,000. Municipal advisor Mike Clark of Baird participated in the discussion and the district noted that Moody’s treats a five‑year NAN in this context as a long‑term rated instrument, which can aid market reception. The board was told the district will present a parameters resolution for action at the Sept. 22 meeting, with a targeted sale date on or shortly after Sept. 25 and a closing likely in mid‑ to late October. No formal vote occurred at the work session. Board members asked clarifying questions about timing, interest‑rate expectations and whether the overall borrowing would exceed prior estimates; staff responded that the total borrowing need is expected to be less than anticipated and that the five‑year instrument helps manage a tight revenue window in the mid‑2020s.