In just three years, city debt will increase by over $30 million, nearly 60% more than anything we saw in the twelve years under the former administration.

By Keene Winters, for Wausau Pilot & Review

By almost any standard, $10 million is a lot of money. So, when the City of Wausau’s outstanding debt surges by roughly $10 million in back-to-back years, a person might think that council members would be up-in-arms, and the matter would be front-page news. But, I guess we take our numbers with a grain of salt here in Wausau.

Keene Winters
Keene Winters served two terms on the Wausau City Council from April 2012 to April 2016. (Photo credit: Life Touch)

Here is a quick summary of the growth in total outstanding city debt:

  • 12/31/2014: $47.9 million
  • 12/31/2015: $56.4 million
  • 12/31/2016: $66.7 million
  • 12/31/2017: $78.3 million (2017 City Budget)

Perhaps a little more context for the debt numbers would be useful.  For the ten years ending on December 31, 2014, the City of Wausau had an average annual outstanding debt of $51.1 million. It was as high as $55.1 million in 2008 and as low as $47.9 million in 2014. However, it generally stayed withing a narrow range around the average with retirements roughly equal to new debt issues on a yearly basis. Clearly, running the debt load up to $78.3 million is a significant departure from our past.

For the ten years ending in 2014, the city also managed the structure of  its debt in a way that lowered interest expense. Year after year, the city took the opportunity to replace 15- and 20-year bonds with 10-year notes. Shorter term debt has lower interest rates and also accumulates less interest cost over the shorter term. By the end of 2014, 88% of the city’s debt was 10-year notes. With regard to its debt, the city was setting and achieving prudent financial targets.

But, in the blink of an eye, all of that has changed.  In just three years, city debt will increase by over $30 million. That means that in his first year in office Mayor Robert Mielke has increased the city’s level of indebtedness by nearly 60% more than anything we saw in the twelve years under former Mayor James Tipple. That is a big change that should be big news.

Moreover, the majority of the increase has been achieved by selling new 20-year bonds and replacing retiring 10-year notes with 20-year bonds. Those 20-year bonds  may have a lower annual payment, but they will be hanging over our heads longer, and citizens will end up paying a lot more in interest costs. The lifetime interest on the current $66.7 million in debt is estimated to exceed $10 million. Yet, to date, no one has questioned the  wisdom of the mayor’s new city debt policy. Maybe that threat to sue critics of the city is working—especially with the council.

Much of the debt is being generated by Tax Incremental Financing Districts (TIDs).  It is not free money as some policymakers tend to act, but rather is borrowed money. So, where are we going to get the cash to pay off this debt?

Adding to worries is the fact that budgeting in the city’s TIDs is notoriously loose. Let me give you one example. For 2015, that budget started the year with 30 enumerated projects estimated to cost a total of $13.5 million. Work was done on only 17 of the projects, totaling $4.9 million. During the course of the year, the council approved $4 million in spending in new projects not listed in the 2015 budget. In the end, 13 projects showed no financial activity for the year. That’s not a very meaningful one-year plan, so how can we expect well-thought-out 10- and 20-year plans.

The vast majority of spending in the city’s TIDs goes for infrastructure, and that does not generate future revenue to repay the bonds. For instance, on Thomas Street, we are buying up a swath of tax-paying properties and paving over them so that they never pay taxes again. Calling that project “economic development” is debatable.

A large portion of the borrowing is in TID #3, covering the downtown. That TID already failed to cash flow once and had to have its life extended from 27 to 37 years. Does piling on more debt in this TID make sense?

This is a huge change in policy that has been handled in a very stealthy way.  Unfortunately, the city does not have the best reputation for good long-term planning, so it is hard to find comfort on that score. It has also cultivated a reputation for letting developers who take city money and do not deliver the promised tax base “off the hook”  at taxpayer expense. Now the debt numbers are getting big and scary. Before we go any further the public deserves to see a robust plan for paying off the debt that does not depend on ever higher taxes.

Editor’s note: Wausau Pilot & Review welcomes thoughtful letters and guest columns from residents, government officials and others who wish to express their point of view. The opinions of guest columnists do not necessarily reflect those of the Wausau Pilot & Review board. To submit a letter or column for publication, email Our editorial policy can be found here.

6 replies on “GUEST COLUMN: Wausau’s debt is surging. This is why you should care.”

  1. I find it amazing that the very same people that said ” if we just didnt have the unions to contend with our budgets would work out ” are going even deeper in debt. Goes to show you where the real problems were and are !

  2. The number one reason local debt is growing is because the republican’s in Madison have reduced the amount our state tax dollars that return to us. We pay in the same amount but since we get less back we have to make it up either with local increase in fee and taxes or putting it on credit.

    1. The 2010 Act 10 meant funding cuts from the state for cities, counties, and school districts and the UW system… billions of dollars cut and it has included limits in property taxes… if the country had not experienced a recovery, then Wisconsin would be lagging further behind… so we play the cards we are dealt and move on… we have issues that go way beyond the current administration… the change in buy habits and the viability of brick and mortar stores, the big box stores, decline in malls and the need to repurpose the the mall, revitalization of the river front, dealing with pollution, moving a chemical plant away from our river and lake, the false representation by developers for River Life, at least we have put the Winter’s Lawsuits behind us and are moving on… we are investing in our city and the money will be paid back and the budgets must balance in the county and city…

  3. The so called fiscally responsible officials. Use to complain that it was the “unions” fault that they couldnt balance a budget. That “act 10 ” would be a godsend for them. Well guess what. It didnt, they destroyed their labor force and spent all their so called savings. They dont have any problems spending money on their executives. But roadblock any kind of increases for the rank and file employees.

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