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Wausau finance committee delays vote after WDNR change leaves $709,000 gap in lead line project
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Summary
Committee postponed action on a $709,006.72 funding gap for the Wausau Water Works lead service line replacement after staff said a WDNR August letter narrowed loan eligibility; members asked staff for more detail on borrowing, reserves and PFAS settlement timing before deciding.
The City of Wausau Finance Committee on March 24 postponed a budget amendment addressing a $709,006.72 shortfall in the city’s 2025 lead service line replacement project after staff said the Wisconsin Department of Natural Resources changed which costs were eligible for a subsidized loan.
Public works director Eric told the committee that earlier conversations in Madison had indicated non-construction costs would be 25% of the funded amount, but “the letter we received in August was 25% of the construction amount,” creating a material funding gap that the subsidized loan will not cover. Finance staff said the ineligible portion was $709,006.72 and broke that into about $284,000 attributable to homeowner-side work and $426,000 to the water-utility side.
The split matters for how the city could pay the balance. Finance staff outlined options: issue general obligation borrowing and spread the cost across the city’s debt program, pursue a revenue bond that would be repaid from utility fees (and which staff warned carries higher rates and greater compliance), use general-fund reserves or surplus, or tap other one-time sources including PFAS settlement proceeds. The finance director cautioned that revenue bonds typically have higher rates because “the bondholder is relying on fees to pay the debt,” while a GO note would be amortized with city borrowing.
At least one member expressed reluctance to add debt. A committee member said, “Personally, I wouldn't be in favor of adding more debt,” and urged using reserves or waiting for clearer PFAS disbursement timing before committing to borrowing.
Members voted to postpone the item to the next meeting so staff can provide more information on borrowing options, the homeowner versus utility split of the ineligible costs, and the expected timing and amounts of any PFAS settlement payments that could be used for the public-side work. The committee’s action was procedural only; no funds were approved at the March 24 session.
Next steps: staff will return with clarified estimates and funding scenarios at a future meeting so the committee can decide whether to borrow, use reserves, or allocate other one-time funds.
