By Shereen Siewert | Wausau Pilot & Review
Wausau Mayor Katie Rosenberg on Monday responded to questions over whether the city will fund employee pay hikes through a water and sewer rate increase by saying she is not dismissing those talks, but needs more information on financing pieces.
A joint meeting of the Human Resources Committee and Water Commission Monday will include a discussion on those financing pieces, with a new pay scale for utility employees that will cost the city an estimated $200,000. The agenda states that the cost will prompt the possibility of future rate hikes, a scenario the mayor has taken pains to sidestep.
Rosenberg in December told WSAU she would rather “light herself on fire” than engage in talks about yet another rate increase for water and sewer customers already angry and frustrated with rising costs. She also dismissed talk of potential rate increases as “rumor,” even as City Finance Director MaryAnne Groat and Public Works Director Eric Lindman confirmed on camera that the employee costs were not accounted for in past rate cases and are typically borne through rate payers.
In an email to Wausau Pilot & Review Monday, Rosenberg said the joint meeting is for “exactly that reason” and suggested city leaders are looking for answers with more involvement from the City Council.
“The council hasn’t been involved in these utility employee pay discussions and they should be,” Rosenberg wrote. “They’ve been asking to be more involved.”
A rate change would have to come before the Public Service Commission, which City Council members previously balked at when Dist. 3 Alder Tom Kilian proposed changing the way water taxes are collected – an effort that could have slashed rates significantly for consumers.
“Due to the statutory math behind these PILOTs, this payment could potentially increase in the future,” Kilian said. “The City then uses this regressive revenue stream and scheme to fund things that generally have nothing to do with your water.”
A 2021 Milwaukee Journal Sentinel piece calls these water utility PILOTs “a hidden tax on water” that makes affordability issues for lower-income families much worse, stating: “A government that collects taxes on revenue collected by its own utilities is playing a shell game and hoping that its citizens don’t notice.”
Kilian proposed the city do away with the PILOT payments as a way to keep water rates down and force Wausau to change its spending priorities. His idea was initially dismissed, but now appears to be gaining some traction, according to a statement Rosenberg made Monday.
“During the budget discussions, MaryAnne [Groat] and I committed to a financial analysis of the utility that would include a few different factors, including that PILOT program – and I’d like things like these requests for more employees included too – to be completed in August,” Rosenberg said, while adding that there cannot be another rate discussion until policymakers have that information.
She also pointed to litigation the city is involved in with regard to PFAS, though legal experts say any settlement could be months or years down the road.
“…the discussion I heard from council was that they want to understand how any settlement could affect rates or debt retirement,” Rosenberg wrote. “I’m not just ‘dismissing talks’ of another water rate increase, I am saying that conversation cannot happen until we have more information on these financing pieces.”
A discussion over pay increases for utility employees has been met with no small amount of criticism from some members of the City Council including President Becky McElhaney, who in September said there is no evidence utility employees are leaving for higher pay elsewhere. She also said a wage study showed Wausau is competitive in its pay scale for those workers.
Despite the budget allotment listed in 2024 for the staffing changes, Lindman last month said he does not expect a water rate increase to go before the PSC until at least 2025.
“Based on the commission’s support of the increased staffing we need to show the staffing in the budget as an expense,” Lindman said. “It is always a good idea for planning to show any possible expenditures within the utility and compare that to our revenues, it keeps us aware of our cash positions. It is just likely that any new staff will not be brought on board until the middle of the year since we still have to go through the hiring process.”
A major rate hike for Wausau water customers went into effect in July, leaving many residents angry and concerned about their finances. The change meant the average Wausau resident saw their water bill ratchet up from about $292 annually to about $448, about a 54 percent increase. In 2021, the average annual bill was about $229 a year – about half of what Wausau citizens are paying today.
Although the recent rate increases covered expenses for the new facilities, they don’t cover additional staff or certain increased operational costs related to the new facility, city officials said.
