It’s not such a bad bet. By the time they have to start servicing the loan twenty years hence, there one or both of two things will likely have occurred:
(1) Hyperinflation. They will be able to pay off the loan in worthless “dollars”.
(2) Everything falls to pieces—the economy, the social structure, the nation. There won’t be anybody to repay or to be repaid, and no rule of law to enforce it anyway.
As a long time homeowner in the Poway School District I decided to look at their current budget to see how this would inflate over 20 years. They have revenues of about $80M with interest expenses of $5.6M. The ratio is 11.4%. The payments on the new loan would amount to $49.1M over 20 years beginning in 2031. To maintain the same ratio their revenue in 2031 would need to be about $430M. This would require annual revenue growth of 8.8%. Since long term inflation growth alone is 5-7% and property in Poway has appreciated much more than that over the years it doesn’t seem like such a crazy scheme.