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Committee debates who pays for water and sewer upgrades as staff cites DNR funds and principal forgiveness
Summary
Wausau alderpersons questioned shifting public-side infrastructure costs to water-rate payers and discussed alternatives—TID increment, revenue bonds, or general-obligation debt—after staff said 2025 DNR funds are available and principal forgiveness makes the current program advantageous.
Wausau alderpersons on Jan. 28 pressed staff on how the city will pay for a wave of water and sewer upgrades included in the 2025 capital budget, focusing on whether costs should fall to water-rate payers, taxpayers via general-obligation debt, or be funded using tax increment district (TID) increment.
The discussion followed staff remarks that the Wisconsin Department of Natural Resources has confirmed funding for 2025 and that current programs include significant principal forgiveness. “Right now we’re doing basically $20,000,000 worth of work for $8,000,000 in loans,” Staff member Eric said, citing staff estimates. Eric and other staff told the committee that, under current assumptions and with Ehlers’ analysis, the water utility could make annual debt payments without an immediate rate increase, though consultant Brian Romer of Ehlers noted the city might plan for a 5% increase in 2026 if necessary.
Why it matters: Committee members said shifting more of the public-side cost onto water users could impose an added burden on households already facing higher water bills and property taxes. Several alderpersons asked staff to provide more precise counts and cost estimates for lead service-line replacements before committing 2026 funding inside TID project plans.
Key points of debate
- DNR and principal forgiveness: Staff said 2025 funds from the DNR are available and that principal forgiveness is making the current package advantageous. Staff cautioned that 2026 funding remains uncertain.
- Rate impacts: Brian Romer of Ehlers, the city’s municipal-finance consultant, discussed debt-service capacity and suggested a possible 5% water-rate increase in 2026 as a planning scenario. "If we went in for a rate increase...we could also look at maybe a 5 percent increase in 2026," Romer said as summarized by staff.
- Equity concerns: Alder Kearney and Alder Gisselman voiced concern about raising water rates. "I am not in favor of that at all," one alder said when discussing the prospect of a 2026 rate increase. Gisselman said he was worried about the size of obligations being placed on taxpayers and ratepayers but did not register a formal dissent on the motion to move forward with funding now.
- Lead service-line replacements: Multiple alderpersons said the committee lacked a clear count and cost estimate for lead-service-line replacement by TID and urged staff to return with an allocation by district. The committee removed 2026 lead-service-line replacements from several TID project plans for now and asked staff to supply district-level allocations and cost estimates.
Funding options discussed
- Tax Increment Districts: Staff presented TID 3 project-plan amendments that would add underground water and sewer work into the TID project plan so costs could be paid from increment rather than utility fees. The committee approved adding many projects to the TID plan but explicitly excluded McIndoe Street parking improvements and 2026 lead-service-line replacements pending further review.
- Revenue bonds: The committee also authorized a sewer system revenue bond of up to $922,476 (Series 2025) to support utility projects included in the 2025 budget.
- General-obligation (GO) debt: Staff noted some portions of the capital program (for example, certain projects in 2024) are proposed as GO debt and would be paid by the city more broadly.
Staff follow-up requested
Committee members requested that staff: - Provide counts and estimated costs of lead service-line replacements by TID/district before any 2026 commitment. - Present plan A and plan B versions of TID project-plan amendments (with and without 2026 lead-service-line work) to allow the committee and council to choose between options. - Clarify funding before signing construction contracts that are currently out for bid.
Ending
Members emphasized the need to weigh capturing current principal forgiveness and grants against where the city places ongoing obligations. Staff said they would return with the requested district-level details and with the statutory schedule for plan-commission and joint-review-board review of any project-plan amendments.
