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Finance committee approves parameters to issue 2025 general obligation promissory notes, chooses amortization that smooths levy impact
Summary
The committee voted to pursue 2025 general obligation promissory notes using an amortization schedule that front-loads principal in 2026 to smooth levy fluctuations and save an estimated $200,000 in interest over the life of the issue.
The Wausau Common Council finance committee on July 22 voted to advance a 2025 general obligation promissory note package and selected an amortization option that increases principal repayment in the first year to smooth levy changes tied to expiring tax incremental financing (TID) districts.
Financial adviser Phil Costins of Ehlers told the committee the proposed debt would fund multiple capital projects and include separate amortization schedules for projects financed by different revenue sources. “We have 1 debt issue with multiple purposes behind it,” Costins said, noting TID-3 projects would be amortized over six years, TID-8 over nine years and the city-funded portion over 10 years.
Why it matters: TID 6 is scheduled to close and that closure will reduce the city’s levy capacity by about $1.6 million. The committee weighed two amortization options: Option 1 followed the city’s typical retirement schedule and would raise the debt-service levy by roughly $675,000; Option 2 pushes more principal into the 2026 payment, raising the 2025 debt-service levy but smoothing the city tax rate across 2026–2027 and saving an estimated $200,000 in interest over the life of the issue.
Timing and costs: Costins and staff said the presale report will be updated; Moody’s will perform a rating, bids are planned for Sept. 3 and the predicted closing date is Sept. 18. The financing package covers about $14.7 million in project costs after removing several TID-funded projects from the borrowing schedule.
Committee action and procedure: Alder Henke moved to proceed with the promissory note issuance using the second amortization option; Alder Tierney seconded the motion. The committee voted in favor.
Follow-up and constraints: City staff said any levy increase related to funding new ongoing operations (notably firefighter and community resource positions) will require a voter referendum because levy limits restrict operations funding. Staff also noted that construction on many projects is already underway and timing of the sale should not be delayed excessively to preserve cash flow for those projects.
