Tolleson Union High School District defends $25M lease‑leaseback, land deals and large cash reserves amid criticism

Tolleson Union High School District Superintendent Jeremy Kais told the Joint Legislative Audit Committee that the district has deliberately built large cash reserves and pursued real‑estate transactions — including a controversial $25 million lease‑leaseback with the Isaac School District — to preserve services and finance capital projects while state and federal funding remains uncertain.

Kais described the Isaac transaction to the committee as a $25 million, five‑year lease‑leaseback at 6% interest, with no prepayment penalty and no title transfer. “If Isaac wanted to, they could go out to a bank today, talk to a bank within 6 weeks, they'd have a deal and they could pay Tolleson off in its entirety,” Kais said, adding the district and the receiver vetted the transaction with counsel. Kais said the structure was intended to deliver cash quickly to prevent Isaac from missing payroll while still allowing Isaac to refinance later.

Kais said the district used a portion of its cash carryforward to fund the transaction and described reserve and cash‑management reasons for maintaining large balances. He cited a $73 million budget balance carryforward (presented as the most recent figure) and told the…