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Baird presents 2025 financial management plan highlighting bond rating, debt capacity and TID options
Summary
Financial advisors from Baird presented a draft 2025 Financial Management Plan that summarized the city's debt profile, Standard & Poor's A- rating, recommended general-fund balance targets, long-term capital planning and options for tax-increment financing (TIF) districts including one-year extensions to create affordable-housing funds.
Financial-advisory firm Baird presented the draft 2025 Financial Management Plan to the Waupaca Common Council on Sept. 16, summarizing the city's debt profile, credit factors, long-range capital needs and options for managing tax-increment financing districts.
Adam Richel and Justin Fisher (Baird) told the council the city currently holds a Standard & Poor's rating of A-minus (double A minus referenced in the presentation) and that the plan is a living document to be updated annually. The plan lays out municipal debt types and limits, describes how rating agencies weigh factors (debt and pension liabilities, economic base, management policies and operating history), and recommended general-fund balance targets. Baird noted that rating agencies now prefer higher unassigned fund balances than before: while 25% has been a common threshold, Baird's presentation said agencies increasingly expect 35% to 40% of general-fund expenditures to be maintained.
Baird provided long-range equalized value projections (an average historic growth rate of about 3.38% was cited) and modeled long-term capital borrowing scenarios. The presentation included a district-by-district review of the city's five active TIFs, noting that combined incremental value is about $92 million and that the state cap is 12% of equalized value; the city's TIFs collectively are above that cap for the first time this year. Advisors described the one-year TIF extension option for affordable housing: if a district is extended for one year, the increment that year can be placed into a dedicated affordable-housing fund (25% usable for housing generally; 75% must be used for affordable-housing purposes under current guidance), to be used anywhere inside city limits.
Baird and staff recommended continued monitoring; councilors asked questions about comparables, debt capacity, the city's current policy limit (3.75% of the 5% statutory equalized valuation cap) and whether the city should revisit assumptions for two-year borrowing amounts used in the CIP modeling.
Why it matters: the financial management plan frames borrowing capacity, capital priorities and the city's positioning with rating agencies. The S&P rating and fund-balance guidance affect future borrowing costs; the TIF analysis affects redevelopment decisions and potential revenue available for affordable-housing programs.
The presentation was informational; Baird will supply follow-up modeling at the staff's request and the plan will be updated as new data and council direction are provided.
