District plan would use CFD balances to cut CFD 2 taxes sharply next year, officials say

The Travis Unified finance team presented a debt-management plan that would use cash balances in the community facilities districts (CFD 1 and CFD 2) and Fund 40 to pay down certificate-of-participation (COP) and renewable-energy bond obligations, a move intended to reduce long-term interest costs and relieve taxpayers.

Gabe Molasin, the district’s business-services lead, explained staff modeled scenarios with their financial consultant and proposed applying available cash to eliminate some COPs and partially retire CREB obligations. Under the proposal, CFD 2 has sufficient cash to pay its COPs and would see its parcel tax reduced by about 90% next year and then wind down entirely the following year.

Molasin said CFD 1 is in a different position: its annual debt-service payments approximate the levy receipts and the fund’s balances are not large enough to substantially accelerate retirement without eroding reserves. He said staff will reassess CFD 1 annually and noted the district plans a set of resolutions and agreements next month to implement the timing and temporary cash borrowing needed to align April tax receipts and February payoff dates.

Molasin told the board the strategy is intended to minimize total interest paid by taxpayers across the CFDs while not touching the district’s general fund. He estimated the plan will save taxpayers roughly $3.6 million in interest over time and would reduce interest obligations in CFD 1 by approximately $444,000 across the life of the debt.

Trustees thanked staff for pursuing the plan and noted paying down CFD 2 obligations aligns with prior campaign commitments to reduce burdens on those neighborhoods. Molasin emphasized that any changes to CFD tax rates depend on statutory constraints and the structures of each CFD’s debt instruments.

The board discussed implementation steps; staff will return with required resolutions and agreements for action in an upcoming meeting.