By Keene Winters for Wausau Pilot & Review
On May 12, 2023, the Department of Natural Resources published a list of projects to receive funding from the Bipartisan Infrastructure Law, and Wausau is on the list.
The funding is in the form of low interest loans, monies for lead service line replacement. Wausau will receive a $5.3 million loan, according to the DNR’s list. So, why hire Community Infrastructure Partners (CIP) for 7.5% of that figure to help us get money that was already award? That seems like a $400,000 mistake.
However, the bigger mistake is likely to be committing to a massive rolling infrastructure project when the city is already deeply in debt. The 2024 city budget listed total debt obligation as $232 million in outstanding principal and $42 million in future interest. Together that is $274 million–more that double what we had four years ago.
To put that number into perspective, it is $6,850 for every man, women and child in town. The city’s total annual tax levy is just $36 million.
The plan is for this first $5.3 million installment to replace about 500 customer-owned lead service lines at an average cost of $10,000 apiece. In her October 12, 2023, press released, the mayor set a goal of replacing some 8,000 water lines in a five-year period. At $10,000 per line, that is $80 million dollars.
Each line has a portion that belongs to the city and a portion that belongs to the property owner. What is rarely mentioned is that the city still has about 2,500 lead service lines. As a matter of Wisconsin law, if the customer replaces his or her water line, the city is obligated to replace its side. That, of course, means digging up a street. Assuming those cost also average $10,000 per line, that is another $25 million in borrowing. All told, we are looking to finance an additional $105 million.
Will we get all the money we ask for? This is an open question. The DNR webpage says they have been swamped with requests asking for twice as much as BIL has provided.
Could we get ahead of our skis on this? The answer is yes. The city’s contract with CIP has a provision that allows them to start spending and incur costs prior to the city having its funding in place. If we have an outstanding balance, CIP will simply charge us 8% interest on it.
Your property tax bill insert identifies the top four things the city spends money on as follows:
- # 1 – Police Department at 24.3%
- # 2 – Debt Service (i..e., payments on debt) at 22.7%
- # 3 – Public Works Department at 16.2%
- # 4 – Fire Department at 13.8%
This likely will catapult debt service to the number one position. After that, who is going to lend money to a city that is already so far in debt?
Then, if the city can no longer sell bonds in the bond market, it might not be able pay its bills. That’s called bankruptcy.
Editor’s note: Wausau Pilot & Review gladly publishes commentary from readers, residents and candidates for local offices. The views of readers and columnists are independent of this newspaper and do not necessarily reflect the views of Wausau Pilot & Review. To submit, email [email protected] or mail to 500 N. Third St., Suite 208-8, Wausau, Wis. 54403.