PFAS settlement money could ease Wausau water rate hikes

By Shereen Siewert | Wausau Pilot & Review

Roughly $5 million in PFAS settlement money could help Wausau hold down future water rate increases under a spending plan the Wausau Water Works Commission will weigh Tuesday.

The water utility has received about $5 million in settlement funds so far. More payments of unknown size are expected in the coming year or so, according to a memo from Eric Lindman, the city’s director of public works and utilities.

Lindman’s proposed 2027-2031 capital budget for the utility would put nearly $5.3 million in settlement money toward six projects:

• $633,000 toward a new orthophosphate treatment system
• water main replacements on Ethel Street ($911,000) and South 11th Avenue ($562,000) in 2027
• a Brown Street water main replacement ($974,000) in 2028
• the utility’s share of the East Wausau Avenue reconstruction between Sixth and 18th streets ($986,000) in 2029
• work on Grand Avenue between Kent and Thomas streets ($1.2 million) in 2031

Applying the money to those projects would reduce the utility’s planned borrowing by the same amount over five years. Lindman wrote that spending settlement dollars on day-to-day operations would not help reduce future rate increases. He cited a discussion at the commission’s September meeting with Ehlers, the utility’s financial adviser. Using the money to cut capital borrowing “may have an impact on reducing future rate increases,” he wrote.

City staff told commissioners Sept. 1 that a small rate increase in 2027 appears prudent, with larger adjustments likely in 2028 and 2029, according to minutes of that meeting. The minutes also note that settlement funds should come to the utility. They add that the Wausau City Council can overturn commission decisions, though the commission holds authority to set rates.

One open question could reshape the plan. The state Department of Natural Resources told utilities with DNR loans for PFAS-related projects and Emerging Contaminant grant funding that they would need to use a portion of settlement money to pay down those loans, according to Lindman’s memo. The city has heard nothing more since May, and whether the requirement applies remains unknown, he wrote.

The orthophosphate project traces to a state mandate. A July 9 letter in the meeting packet shows the DNR approved the treatment recommended in Wausau’s corrosion control study. The letter gives the utility until July 9, 2028, to begin adding orthophosphate at 1.0 milligram per liter at all entry points to the system. Orthophosphate helps form a protective coating inside pipes, reducing the amount of lead that leaches into drinking water.

Wausau’s system serves about 40,000 people. The utility has reported 3,518 known lead service lines, 62 galvanized lines requiring replacement and 4,377 lines of unknown material, according to the DNR. Wausau exceeded the federal lead action level in 1992 and again in 2014, when the 90th percentile of samples reached 16 parts per billion.

Pipe loop testing for the study found the 1.0 mg/L dose cut median lead release from lead pipes by roughly 11% to 32%. A 3.0 mg/L dose cut lead release by 32% to 57%. The DNR backed the lower dose, noting the higher concentration may increase particulate lead and cloudiness in copper pipes joined with lead solder. According to the letter, Wausau plans to design the system so the dose can be raised if needed.

The DNR required the study in 2021, citing upcoming changes to the utility’s treatment process along with historical lead and copper results. The report was originally due in March 2023. The state granted three extensions, and consultant CDM Smith submitted the final study March 31, 2026.

The capital plan lists the orthophosphate system at $2.3 million in 2027. Of that, $1.67 million comes from a federal EPA grant through congressionally directed spending and the remaining $633,000 from settlement funds. Once treatment begins, the utility must complete two consecutive six-month rounds of lead and copper sampling by June 9, 2029.

The plan also carries $36.9 million for lead service line replacement in 2027 and 2028. That work is paid for through state principal forgiveness and Safe Drinking Water loans at 0.25% interest. Including about $37.7 million budgeted before 2027, the lead line program totals $74.5 million.

Commissioners will also consider an ongoing sole-source purchase of magnesium hydroxide for the wastewater treatment plant. The supplier is Midwest Chemical & Equipment of De Pere, at 28 cents per pound, delivered, for 2027. The utility budgeted $210,000 for the chemical next year. City policy requires Wausau Water Works Commission or Finance Committee approval for sole-source purchases above $50,000.

The plant uses magnesium hydroxide to control pH in treated wastewater discharged to the Wisconsin River, as required under the plant’s state discharge permit. The chemical also supports production of biogas that fuels micro-turbines at the facility. Wastewater Superintendent Ben Brooks wrote that competing products gel when water is added, clogging the piping that carries the chemical. He added that the plant has reported no pH violations to the DNR in about five years of using the Midwest product.

The city’s justification form asked Brooks to describe efforts to identify other vendors. In response, he wrote that Midwest’s product contains trace minerals beneficial to the plant’s biological system that other products lack. The form states the price was judged reasonable based on historical data.

Brooks will also update commissioners on two wastewater projects. The headworks screening project is scheduled for substantial completion Oct. 15 and final completion Nov. 15. Work on the Crocker Street lift station began Sept. 22, with final completion set for May 21, 2027.

The five-member commission, led by Mayor Doug Diny, meets at 11:30 a.m. Tuesday in the Council Chambers at City Hall, 407 Grant St. The meeting will stream on YouTube and air on cable Channel 981.