By Shereen Siewert
WAUSAU — In response to concern by taxpayers, city leaders on Tuesday discussed a proposal to restructure Wausau’s mounting debt, in part to mitigate credit risk.
Proposed debt activity for 2017, which includes a total of $3.5 million to purchase Great Lakes Cheese and move the facility to Wausau’s Business Campus, is expected to bring Wausau’s overall debt to a record $101.6 million by the end of the year, according to a presentation Tuesday given by Wausau Finance Director MaryAnn Groat. That amount would represent nearly 75 percent of the city’s statutory debt limit, which is typically held to below 50 percent, according to city documents.
The debt projection also includes $7.9 million to move Wausau Chemical, adjacent to Great Lakes Cheese, from the city’s riverfront, but does not include potential cleanup costs for the site. The property is currently restricted for redevelopment due to its classification as a Superfund site by the Environmental Protection Agency.
Groat said the city is negotiating with the Judd S. Alexander Foundation for a mortgage to buy both properties.
If Wausau continues under current borrowing strategies, the city’s debt would increase to just over $105.3 million by the end of 2018 and is projected to exceed $106.8 million by the end of 2019, according to Groat’s presentation. The city has never before carried such debt.
Under a capital finance plan presented Tuesday by consultant Phil Cosson, the city would restructure its debt by converting more than $11 million to revenue bonds and by shifting roughly $16 million to a taxable bond anticipation note, or BAN. Bond anticipation notes are smaller short-term bonds that are issued by corporations and governments, such as local municipalities wishing to generate funds for upcoming projects.
The city’s overall debt would not change, but restructuring would allow for increased borrowing capacity, according to Cosson’s presentation. The new plan does not take into account future city investments that have not yet been specified, such as future riverfront property purchases.
Mayor Rob Mielke said Tuesday that Wausau is in a “better position financially than many of our peers.”
By the end of 2017, debt per capita is projected at $2,047 in Wausau. Debt per capita in La Crosse, by contrast, is projected at $1,263.
Members of the city’s finance committee will discuss the proposal before it goes before the full council in two weeks.
What difference does it make what our financial condition is compared to other cities. We have too much debt. Saying that other cities are worse off than we are is like the guy who was told by the doctor he had only 6 months to live. The doctor then said that’s not so bad, another patient I saw this morning had only 3 months to live.
Instead of having a meeting on how to “cook the books” by restructuring our debt, so we can acquire more debt, we need to have meetings on how to reduce our debt.
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