Finance committee approves taxable G.O. notes to cover 2024 lead service-line work, faces $251,004 gap

The Wausau City Council Finance Committee on May 13, 2025 authorized the issuance and sale of up to $2,172,756 in taxable general obligation water-system promissory notes to provide local financing for lead service-line work completed in 2024.

City staff told the committee the financing complements a state financial-assistance agreement valued at $4,922,001.91 that includes $2,700,000 in principal forgiveness and roughly $2,000,000 in a 10-year loan at 0.25% interest. “So this is funding the 2024 Lehi service line projects,” said Mary Anne, a city staff member, adding that the city has paid contractors for the work and needs the financing to reimburse those costs.

The agreement does not cover every expense. Mary Anne said state reviewers disallowed certain costs totaling $251,004.07 and that staff will return to a future finance agenda with options to cover that shortfall, including using general-fund reserves or rolling the shortfall into the city’s 2025 general-obligation promissory note.

Committee member McElhinney asked why the city had not known earlier about the disallowed charges and whether those costs could be challenged. Mary Anne replied that some disallowed items were legal fees incurred by contractors and consultants, which the state (DNR/CIP reviewers) chose not to reimburse. “We just don’t see those fees,” Mary Anne said, describing them as part of the contractor’s internal professional-service charges. She said staff has discussed the issue with Community Infrastructure Partners (CIP) and would follow up with them and the state as needed.

Committee member Henke moved to authorize the notes; McElhinney seconded. The motion passed unanimously.

The authorization provides the city the local borrowing capacity to match the state package and close the financing for the lead-service-line work while staff determines how to address the disallowed expenses.