District outlines plan to under-levy, defease debt and borrow for recreation projects; advisors say it could save taxpayers about $15 million in interest

District staff and financial advisors from Baird outlined a multi-step financial-stabilization plan that links funding for recreation projects (the pool and Frank Lloyd Wright commons) with a strategy to under-levy operating authority and defease portions of outstanding bond debt. Presenter Aaron (district finance) said the board could under-levy the full fund-10 portion (illustrated in the presentation at about $41 million) and use a fund-38/fund-39 borrowing to replace those operating dollars so the district can defease portions of the $70 million capital bond; Baird projected taxpayer interest savings "north of $15,000,000" depending on the defeasance amount.

Advisors explained mechanics and trade-offs: an operating (taxable) borrowing would be needed to cover cashflow if the district under-levied, tax-exempt borrowing might pay for the recreation projects placed into fund 39 or fund 80 transfers, and debt-defeasance is effectively a pre-funding of future bond payments via escrow. Presenters used illustrations (e.g., a $45 million defeasance scenario), interest-rate assumptions (an illustrative 5.25% for tax-exempt examples; 6% for taxable operational borrowing), and cautioned that state-aid assumptions and voucher counts could materially affect outcomes. The team also flagged legal and political constraints: an August 10 board resolution window would allow the board to begin the petition period; if a petition obtains sufficient signatures the under-levy/borrowing approach could be forced to a public ballot. Staff recommended committee refinement and DPI communication before finalizing steps.