CHICAGO - Wisconsin's new capital finance director David Erdman is a familiar name to the public finance community that does business with the state.
Department of Administration Secretary Scott Neitzel said Monday that the state had turned to within and tapped Erdman to head the office that manages state borrowing. Erdman has worked there two decades and had been serving as acting director since the prior director's sudden resignation earlier this year.
Erdman had served as deputy capital finance director since 2010, working under longtime director Frank Hoadley. The state conducted a national search after Hoadley announced his plans to retire and hired Kevin Taylor in April 2013. Taylor resigned this spring.
"The Capital Finance Office has worked hard to inform the markets about the positive effects of Wisconsin's reforms," Neitzel said in a statement.
"Dave has done great work in the Capital Finance Office, and I am confident that with his leadership we will continue to acquire safe and secure financing for Wisconsin taxpayers for years to come."
The budget office and capital finance fall under the DOA.
Erdman, a lifelong Wisconsinite who grew up in Westfield and received his public administration degree from the University of Wisconsin at La Crosse. He took his first state job in 1990 with the Department of Natural Resources. Erdman spent four years working with municipalities on the state's clean water program. He then moved over capital finance.
"Dave has been responsible for the preparation, disclosure, and sale of over 200 different bond and note issues," the statement said.
"During this time he has been involved in refinancing outstanding state debt resulting in nearly $400 million of debt service savings to the state." The office handles disclosure, manages all state debt issuance, and recommends debt policy and legislation to the State Building Commission and governor, and administers finances for the clean water revolving loan fund program. In addition to routine borrowing plans, the office along with the Milwaukee Comptroller is expected to help guide borrowing plans for a new $500 million Milwaukee Bucks area. About $200 million of borrowing will be done through the Wisconsin Center District.
Ahead of recent general obligation sales, Fitch Ratings and Standard & Poor's affirmed the state's AA rating and Moody's Investors Service affirmed its Aa2 on $8 billion of debt. Moody's assigns a positive outlook while the other two assign a stable view. Kroll Bond Rating Agency also affirmed its AA rating and stable outlook.
The rating "reflects our view of the state's governmental framework supportive of credit quality with a constitutional balanced-budget requirement and a statutory provision that gives [general obligation] debt service the first claim on state revenue," said analyst Gabriel Petek.
The rating further reflects low general fund balances and moderate to moderately high debt burden, offset by a fully funded pension system.
Moody's said its rating is supported by the state's fully funded pensions, limited other-post employment benefits' liabilities, and moderate economic growth, as well as governance constraints evidenced by limited executive authority to reduce mid-year appropriations.
"The rating also acknowledges recent revenue volatility and a fund balance position that remains below average," Moody's wrote.
