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Wausau assigned negative credit outlook

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WAUSAU — Despite affirming the city of Wausau’s existing credit rating, Moody’s Investor Service last month issued the city a “negative outlook,” according to city documents.

The annual report, published June 15, shows Wausau continues to have an Aa2 credit rating, equivalent to a Standard & Poor AA rating. The rating matches many Wisconsin cities including Oak Creek, La Crosse and Green Bay. Unlike those cities, however, the investors service assigned Wausau a negative credit outlook based in part on the city’s mounting debt, according to the report. The purpose of Moody’s ratings is to provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged.

A negative outlook means that the city’s credit rating could be lowered.

The report cited increases to the city’s debt, declines in tax base, deteriorating demographics, narrowed reserves or growth in the city’s outstanding general fund advances as factors that could lead to a credit rating downgrade.

Wausau City Council President Lisa Rasmussen cautioned against interpreting the negative outlook as the sole measure of the city’s success.

“The increased debt mentioned in the projection is also reflective of the intersection of many large development projects coming at the same time, the end result of which is projected to be over $150 million of new taxable property, development of the riverfront and public amenities and construction of some of the largest building projects in Wausau’s history,” Rasmussen told Wausau Pilot and Review. “This emergence of growth and new projects is a positive indicator of overall recovery in the economy as companies and developers are interested in new projects and expansion.”

The report points to Wausau’s large tax base and low unemployment figures as credit strengths.

But the negative outlook “reflects the city’s already elevated debt burden and additional debt issuances planned for 2017,” according to the report. The outlook also “incorporates the ongoing interfund advances to several tax increment districts, further pressuring available reserves.”

The city’s overall tax base in 2015 was $2,533,849, according to the report, slightly below 2014’s reported figure of $2,655,929. Rasmussen said the negative outlook could be due in part to an assessment error in 2016 that is in the process of being corrected. The error, along with the city’s “relatively stagnant” tax base, was noted in the Moody’s report.

Mayor Rob Mielke did not respond to emails and calls seeking comment for this story.

The report will be presented to the city’s finance committee on Tuesday during a meeting that is open to the public. Meeting time is 5:15 p.m. at City Hall.

Moodys Report

31 Comments

  1. I think the debt is a complicated issue. It would be nice if someone in the City Leadership or staff could put together a public event and explain the general vision for the city (strategy) and how the things they are doing support said vision (tactics). By explaining the tactics, and its connection to the vision, the public would have something to either support or reject. But, without a general plan, the stakeholders are simply left wondering. This wonder left alone creates uncertainty, and this uncertainty can result in negativity. Which we see a lot of. If people understood the plan, and the plan to get out of debt, then they would have something to support.

  2. Excellent idea Dino. However, there does not appear to be a solid plan for the city to get out of debt. The only plans we see are the ones that involve the city accumulating additional debt.

    The city has created so many TIDs that it will be decades before the city, and the general fund, see any benefit of the debt we are dealing with at present.

    Do not be swayed by council president Rasmussen’s comments about “The increased debt mentioned in the projection is also reflective of the intersection of many large development projects coming at the same time.” That’s a load of crap.

    The Great Lakes Cheese and the Wausau Chemical projects are nothing more that corporate handouts that will be put upon the backs of Wausau taxpayers for decades.

    Wausau is rushing toward becoming a tax pariah that will be avoided be people moving into the area. They will seek to settle the surrounding cities where the amenities are just as good and the taxes are lower. The only development you will see will be by developers who know the city will be their “sugar daddy” for any plan they submit. This will leave Wausau slowly roasting on a debt fire they created for themselves.

    This insanity will continue until you see a changes to the city council, and possibly the mayor. The free-spenders need to be replaced with a more conservative manners alderpersons. If this does not happen, we are all doomed.

  3. Stan, you might be right. I do not know that though. There appears to be a lot of money moving out the door. I have only a passing sense of it though, so I do not know if we are within a normal range our outside of a normal range. I do not know. I remember that years back there was the Wausau Century Project or something similarly titled. It was a document put together by the city, a sort of plan I believe. If we had something like that now, it would be possible to point back to the document as support for the direction that we are going. I might be wrong, there might be something, but it does in fact feel like this is become a case by case request sort of thing, and the public would be better served if there was a communication of a plan.

    • Yup. Great ideas, but being my usual “Negative Nelly” self, I honestly don’t see ANY of that coming to fruition. It’s kind of like a toll road. I’ve lived in areas where new toll roads were constructed and the pols always said “oh, once it’s paid off, the toll booths will be removed!”. Yeah, right. In other words, hell will freeze over first. Once you expose that taxpayer teat, the government (whether local, state or fed) will NEVER allow it to be put away.
      I vaguely remember that Wausau Century Project you speak of Dino, but there’s a perfect case in point. What happened to it? Well, the answer is kinda obvious. When a new mayor and/or city council comes along, or more likely, with the passing of two or three years, the memory of the general public goes stagnant and it’s all forgotten. In the meantime, the city continues to spend like a drunken sailor (with no disrespect to drunken sailors) and spending other people’s money just continues to get easier and easier.
      Stan, Wausau is already a tax pariah in regards to property taxes. It’s been long known that Wausau has much higher property tax rates than the surrounding areas/”suburbs”. I’ve often heard people talk about buying a house in Wausau, only to have the bejesus scared out of ’em once they find out the property tax cost(s). I have a not so good feeling it’ll only continue to get worse before it even remotely gets any better.

      • Call1911

        Keep in mind that at least drunken sailors are spending their own money, not like some members of our dear city council.

      • 1911, I think over time plans change, situations change. I think it is a normal course of events that strategies change. We as voters elect new people to Mayors jobs, and coucil jobs, and they lead our city. So, we own this to some extent.

        I do not believe that debt is a real problem. Many municipalities have taken it on. But, my awareness of the Mayorship in Wausau goes back to John Robinson. Since then, I do not think it is outrageous statement to say that few of them have communicated with the public.

        Now, with the advent of social media, inexpensive broadband, we are coming to expect transparency and communication. That is where I hope the City increases their skills, in this area.

        There are great things a foot. But, there are challenges as well. And I think social media allows us to amplify the challenges, and many choose to ignore the great things. Rightly so, because the challenges are in areas that many people are concerned about. Debt, environment, etc. But, there is a lot of good happening.

  4. So what is the city doing to improve the demographic/socio-economic status of it’s inhabitants? i.e. drug addicted scumbags and other low life’s who are on disability and don’t work? Train library workers to give them Narcan? Are you freaking kidding me????? Just keep giving them Narcan! That’s the solution!

  5. Glitter girl

    Not to fear, the city is doing it best to drive anyone who can possibly sell their home to our neighboring cities so soon all we will have left in Wausau will be scumbags who either sell or use drugs. So we had better stock up on Narcan as we will be needing it. But we can always walk along our magnificent waterfront to forget our troubles.

  6. Dino, if you do not think the debt is a real problem, exactly what do you feel is the problem… lack of communication?

    My friend, lack of communication will not raise your property taxes, it will not make it difficult to sell your home, and it will not drive people to relocate to other cities.

    If the problem is lack of communication it is bacause the city does not want the curtain pulled back so the taxpayers can actually see what is happening.

    • Thanks Stan. I think I failed to hit my point. I am in no way an expert in municipal finance, so I am not sure we are inside or outside of a normal spectrum. I am rather well versed at communication strategy, and I am sure we outside of the normal spectrum on that. There are people arguing on both sides, I assume, that the debt is bad or the debt is normal, and for me personally, I do not know who is winning said argument.

  7. “Lisa Rasmussen cautioned against interpreting the negative outlook as the sole measure of the city’s success”
    She did good turning “negative outlook” is “measure of success”.
    Moody is wrong and our city is always right! Keep spending.

    “City mulls funding options for $66.7 million in redevelopment”
    https://wausaupilotandreview.com/2017/06/20/city-mulls-funding-options/

    That useless “river district” is going to bankrupt the city and tax payers.

    • Ron, What about the River District is useless to you? I think that our shorelines have the chance to become valuable resources. Economic Engines. But, i would like to see what you think, maybe say something more about this.

      • I’m not Ron, but I slept at a Holiday Inn Express last night…..
        Anyhoo, Dino, how about the novel concept of letting private business(es) decide if the “River District” is a valuable resource? If it was THAT freaking valuable, don’t you think that some big money organization would purchase the property and develop it? Whether it be another game joint or office space, or condo’s (like the current city admin. seems to be infatuated with), I find it hard to believe that some sharp, business-minded company or individual wouldn’t have already pursued this. But no. Our illustrious city brain trust feels THEY have to move current businesses and “develop” it to be exactly what? That word “develop” seems like it’s crack to Wausau city admin. They’re looking to spend MILLIONS of taxpayer dollars to “develop” that area…….again, to WHAT? Empty freaking buildings? Like we don’t already have enough of Chuck Ghidorzi’s buildings sitting vacant in the city?
        “Ecomonic Engines”? What exactly is that? Nice verbage, but it’s empty.

  8. Dino,

    The riverfront is exactly the problem. The city spent tons of the taxpayers money to purchase the riverfront property only to then spend even more taxpayer money to clean it up and then they gave it away to the supposed developers. But that’s not the worst it it. They then gave the developers grants (free money) to develop the property the city gave them. If that is not insanity I do not know what is.

    I would like you to explain to all of us how the riverfront will become a “economic engine” for the city. Th current plans are for upper end apartments, maybe some upscale condos and some retail space and some office space. Just whet we need. More retail space when the retail business in the mall is imploding, more office space where a glut of such space now exists, and some part time minimum wage jobs.

    Economic Engine! I think not.

    • 1911, let me give it a try. You posed a lot of questions.

      “Anyhoo, Dino, how about the novel concept of letting private business(es) decide if the “River District” is a valuable resource?”

      I am not a property developer. But, it seems like the river is a public resource, meaning I cannot own it. I can own shoreline. But, maybe it is cost prohibitive to own, and to develop for a private company. As a result, a municipality can and would offer incentives to a develop to take on that project. That seems reasonable to me.

      “If it was THAT freaking valuable, don’t you think that some big money organization would purchase the property and develop it?”

      I have no idea.

      “Whether it be another game joint or office space, or condo’s (like the current city admin. seems to be infatuated with), I find it hard to believe that some sharp, business-minded company or individual wouldn’t have already pursued this. But no. Our illustrious city brain trust feels THEY have to move current businesses and “develop” it to be exactly what?”

      I am not sure what businesses were moved against there will. Were there?

      “That word “develop” seems like it’s crack to Wausau city admin. They’re looking to spend MILLIONS of taxpayer dollars to “develop” that area…….again, to WHAT?”

      If you go down there now, it is beautiful. The path is tremendous, and people are walking on it almost any time the weather bears itself out. We go to WoW regularly, and the last three time there have been people using the water way for kayaking. Those people were not using it before. If you look at how the Village of Weston has put in boat launches along the river, and how this has increased usage, you can see a plan.

      “Empty freaking buildings?”

      I only know of one empty building that could be said to be on the water right now, and it is that large factory near WOW, and it is my understanding that developer bought that building and is going to rehab it.

      “Like we don’t already have enough of Chuck Ghidorzi’s buildings sitting vacant in the city?”

      I am not sure what that means. Does Chuck have a lot of vacant buildings in Wausau. I have no idea.

      “Ecomonic Engines”? What exactly is that? Nice verbage, but it’s empty.

      In my estimation an economic engine is something that is invested in, and things come to bear around it. For example, something as simple as the baloons by Washington Square, those were an engine if you will. By that I mean, it pulled people to a place, and when in that place they spent money. Or, something like the events on the 400 block. Those pull people to downtown and as a result people are more likely (simply by proximity) to buy something downtown.

      Hope I hit everything.

    • Stan, that is fair that you do not think it will turn into anything.

      I think that the resources that have been developed down there already have been of benefit. Like I said in that other comment, we got to WoW regularly. Each time, weather permitting, people are riding their bikes passed, people are using the river for kayaking. When that space is completed down there, it will be a multiuse space in which lots of things can happen.

      I do not think comparing the mall to storefronts along the riverfront is fair, but I get it.

  9. Dino,

    It is apparent that we will never agree as to how the city is spending our tax money. However, I feel that the city has lost its way and is making a terrible mistake in just focusing on the downtown and the riverfront. While those projects maybe flashy and get a great deal of pres, but they really do not help improve the overall economic health of the city as a whole.

    You can give the people all of the “bread and circuses” you want but that doesn’t put any real money in the pockets of the people who need it the most. The new cinema will produce low paying jobs at best. The retail jobs in the mall and along the riverfront will also be low paying. What do you think the people who served you during your last trip to WOW make an hour?

    One can only wonder if the city could just step away from the riverfront for a second and look to possibly bringing some good paying manufacturing jobs to our community. But yet the city focuses on spending millions of tax dollars just moving our city existing businesses around and creating very few new jobs.

    Amenities are great if you have the money in your pocket to enjoy them. If not they are meaningless. Ask any person who is struggling to provide a decent life for their spouse and children which he would rather have, a riverfront to walk along, or a decent well paying job to give his family the things that all families want and need.

    • Stan,

      What do you think the City could have done with the Riverfront space to create well paying jobs? What do you consider a well paying job?

      The City cannot directly create jobs, it can create the condition in which employers can add jobs. The way this is done is some sort of strategy enacted by people who work for the city. You can say that they are doing it wrong, and that is totally fine. But, what do you offer up instead, as a course of action instead?

      So, the waterfront was horrible just a few years ago. Now it is lovely. WoW is an anchor business down there that employs dozens of people. Sure, you can decry those jobs as not good. But, those are jobs that literally did not exist 2 years ago. Combine that with the construction jobs that went into the building of the building, those I assume are high paying jobs like you want to see.

      Families go there, young and old go there. Quality of life.

      Now, you couple that with the cost of the rebuilding of that space, and you have something.

      A few blocks away, a mulimillion dollar facility in the Eye Clinic of Wisconsin. Those are good paying jobs I assume. Right next to that the Dudley tower. Which I believe was an 11 million dollar project that requested very little support.

      Move down the trail further, and there is the new apartments, there is the boys and girls club, then Bridge Clinic, then places like Thrive Foodery and Athletic Park.

      You can literally go from the Thomas Street Bridge, all the way to Athletic park, and see progress.

      These seem like good things.

      I question what role you see for a municipality in creating jobs. Or rather well paying jobs. Which, I assume are manufacturing or something of that sort, which thousands of municipalities are having trouble supporting in the changing American economy.

      Look, I do not have a lot of confidence in the City Leaders either. But, pointing to a development like the Riverfront, something that floundered for decades, and saying it is not good, simply does not make sense to me.

      But, I will agree to disagree.

  10. As if we don’t have enough empty waterfronts or parks in the city. Why don’t we move all the businesses on the West riverfront and create more parks and low paying jobs for giveaway businesses?

    Offer the $66.7 million to large IT companies (with conditions) and let the city develop itself based on supply and demand. You cannot attract IT jobs with a “Valley Fair” in a metal building on the river.

    With all the rentals and low income housing on the river, accompanied with parks and “Valley fair” like business is a recipe for disaster. The place will soon be drug users/distribution crime heaven.

  11. [Dino wrote, “I think the debt is a complicated issue. It would be nice if someone in the City Leadership or staff could put together a public event and explain the general vision for the city (strategy) and how the things they are doing support said vision (tactics).”]

    It would be impossible to discuss Wausau’s debt without lying to the public. I have to chuckle as I read down through the comments at claims of how monies have squandered by The City.

    [Stan wrote: “The Great Lakes Cheese and the Wausau Chemical projects are nothing more that corporate handouts that will be put upon the backs of Wausau taxpayers for decades.”]

    Yes! But this is the same behavior that has led to tearing down Horace Mann Jr. High, giving away Wausau East, tearing down Washington Central and giving away our public hospital just to name a few public/private “partnerships.” It has also led to the destruction of Wausau’s downtown, at taxpayer expense, so that commercial concerns could promote development in areas where they could reap maximum profit. Sheesh so many parking spaces.

    The game here in Wausau has not changed one bit in the last 50 years.

  12. Let me start by noting it is always interesting that people who do not pay property taxes in Wausau always seem to have an opinion about how our Wausau taxpayers’ dollars should be spent.

    Let’s address specifically the downtown, since that is where Council wnts to spend $67 million taxpayer dollars, which will cause the taxpayers of Wausau, and our children, to be indebted for decades to come, and could virtually single-handedly negatively affect Wausau’sfuture future credit rating.

    A healthy downtown requires four things:
    1) good paying jobs being available within, and immediatley adjacent to, the downtown;
    2) people (with good paying jobs) who LIVE, work and shop downtown, in a safe environment;
    3) shops, events and activities that appeal to a broad range of people year-round, and attracts tourists; and
    4) a grocery store that is within walking distance of downtown area residents. (As an aside, looking forward to Downtown Grocery’s re-opening on Third Street
    later this year!.)

    Points 3 and 4 are already happening, in spades.
    Hoever, let’s talk about points 1 and 2:
    – Point 1 – Good paying jobs in downtown area
    Retail and restaurant jobs, which seem to be much of the companies doing business downtown, generally pay not much more than minimum wage. That cannot
    fully support an individual (particularly with any dependents) who works those jobs. A person making minimum wage grosses only $15,080/year. Overall,
    Wausau’s per capita income is just over $25,679 for a average family of 2.2 persons. Most people at this income level, and the many earning less, will probably
    not be able to affored to live, shop or patronize the downtown and places like WOW.. That’s why it’s critical that there be an aggressive, long-term plan immediately
    put into action by the Economic and Development Committee along with City staff, of which Council must consistently and regularly champion, while holding the
    Committee and staff accountable, for significant and measurable progress in this area within a reasonable timeframe.

    This seems to be a ongoing weak spot for the City :for instance, 200+ downtown jobs from one company alone – Graebel – have been lost from the downtown in
    less than 2 years, with 70 of those jobs moving to the west side Those were “good paying” jobs.

    – Point 2 – People (with good paying jobs) who LIVE and shop downtown
    That requires reasonably priced housing that people with good-paying jobs can afford. Wausau must be judicious in regard to future develpers’ proposals of
    downtown HUD projects, as the brutal economic reality is that people who need assistance for their rental costs are most likely not the people who will have
    extra money to spend on frequenting downtown restaurants, etcetera. And there are ALOT of people who rent in Wausau, according to census.gov: owner-
    occupied housing (2015 figures) is a startlingly low 59.2%.

    To live downtown, or anywhere, responsible people want housing that is in a safe area. This is a huge quality of life issue with which Wausau is struggling in all
    neighborhoods, with the core of the city the hardest hit. Go to trulia.com, type in any address near the core, then scroll down to the section that has color-coding
    of crimes that have been reported throughout the city. Part of the downward sllide of Wausau’s core, on both sides of the river, is due to the declining
    condition, and questionable tenants allowed by landlords, of those property rentals, coupled with the stunning drug problems that is crippling this city.

    While it appears that the city tathers’ focus is on increasing the quality of life for the downtown area by doing things such as developing WOW, the reality is that taxpayer money must be instead spent finding ways to address the jobs, safe housing, and crime issues throughout Wausau. Not throwing millions of taxpayer money at a company like Great Lakes Cheese, whose parent company has annual revenue of $2.3 BILLION. Why in the world does this company need any financial help from the taxpayers of Wausau? And the city fathers want to increase the financial liability of the city by spending millions more of taxpayer money on a SuperFund site for which the EPA says is not able to be fully remediated??

    it is folly for the city fathers to continue to do so, it is simply mortgaging the financial future of the entire city’s taxpayers and citizens. Clearly, the current property tax base cannot support these ambitous, misguided plans, or such drastic use of TID/TiF would not be necessary. Homeownership has gone down in the city over the decades due, in large part, to the ridiculous level of property taxes which – in turn – is due primarily to the loss of the industrial and commercial tax base, accompanied bythe city’s dramatic expansion of its “footprint” causing city services to have to be stretched over a much larger geogrphical area. Indeed, in the last 35+ years Wausau’s population has grown by only about 7,000 people and much of that was the influx of immigrants back in the 80’s.

    As an aside, folly in spending taxpayer dollars seems to be Council’s modus operandi. For instance, expanding Thomas Street – which was determed by the City’s own report in 2014 NOT to be necessary, yet going ahead. Compounded by failing to get secure millions in funding, by buying properties at market value and taking them off the property tax role, and then the actual costs. How many millions has that cost the taxpayers? and for what – for people to get out to Rib Mountain more quickly to spend their money from which Wausau gets NO benefit at all? and now the city is wasting yet more taxpayer money considering changes to Thomas Street eastward? What about spending $1,700,000 to buy a city block, demolish the structures, then have it sit as a gravel parking lot because there are no firm plans for it? And the lawsuit regarding Brokaw?? The list goes on….

    The negative outlook rating given the city by Moody’s cites “…increases to the city’s debt, declines in tax base, deteriorating demographics, narrowed reserves or growth in the city’s outstanding general fund advances….” means that they are telling Wausau that these factors MUST be addressed NOW to avoid the peril of having Wausau’s credit rating downgraded. And there is nothing, nothing, in any of the plans that Council has for the downtown that will address nor improve any of these issues cited by Moody’s.

    Taxpayers of Wausau should not be penalized for decades to come because Council, some City staff, and cronies with a vested interest have some grandiose, pie-in-the-sky pipe plans that are poorly thought out, and poorly vetted.

    This is a warning to all taxpayers, a wake up call.
    Seriously, Council, just stop.

    • [Max Progress wrote: “Overall, Wausau’s per capita income is just over $25,679 for a average family of 2.2 persons.”]

      Max, do you have a source for the per-capita-income figure that you cited, is it current? Unless I’m mistaken your number is about 1/2 of the national household income. If true, Wausau is in pretty sad shape.

  13. As a suggestion for improvement of the downtown:
    Instead of throwing millions more of taxpayer dollars at the two businesses and area along remote-ish north First Street, why not partner with developers to buy the VFW building, the old Hadley building and the United Way building on River Drive to use as housing and businesses, including an east side incubator for small business start-ups? Fronted by a well-traveled road, with great visibility, all three properties are within 3-4 blocks, easy walking distance, of the very best quality-of-life that downtown has to offer: tennis courts, ball diamonds, walking paths, concerts on Fern Island, the whitewater course, farmers market, the library, the mall, the new movie theater, a grocery store, the new contemporary art museum in the old Wausau Club, the 400 block, the Grand, restaurants and shops galore with the entire downtown within 6 blocks. And all offer public access to the water for people who want to boat, fish, kayak, canoe.

    • And, all of these terrific quality of life amenities are currently available for use without taxpayers having to lay out millions of dollars to develop them. 🙂

  14. Thank you Max Progress. Your insight is to be complimented and factual. And, financially sound for the City. You have my vote for City Council, Mayor,
    City Administrator –which we so dearly need.

  15. You go Max.

    Unless we can get more people like You on the city council we are doomed.

    I suggest that You conduct a seminar for specific members of the city council on fiscal responsibility. It would do them a great deal of good and perhaps save Wausau from bankruptcy.

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