Damakant Jayshi
The Wausau City Council on Tuesday approved the final contract agreement with Community Infrastructure Partners LLC to replace lead service lines after a vigorous debate that lasted more than an hour.
The five-year contract will be reviewed annually for performance and renewed if the parties to the contract agree. The partnership also includes the Wausau Water Works Commission.
Additions to the final agreement, first passed in December, include adherence to Wisconsin open meetings law requirements, public meetings and preservation of public records, City Attorney Anne Jacobson told the council.
“The resolution before you is to seek approval for the final form of the agreement this evening,” she said. While CIP is obligated to preserve all public records involving the city and produce them when asked to do so, its “records and other documents produced in the ordinary course of its business are not subject to such disclosure.”
The vote was 7-4, with Alders Carol Lukens, Michael Martens, Lisa Rasmussen, Sarah Watson, Dawn Herbst, Lou Larson and Chad Henke voting to approve the contract. Alders Tom Kilian, Dough Diny, Gary Gisselman and Becky McElhaney voted no.
Some alders raised questions over the past work history of the top executives of the company.
At the time when CIP was trying to secure the contract for LSL replacement with the city, its CEO Shawn Kerachsky was fighting a lawsuit, subsequently dismissed, alleging that he and others violated the Rhode Island Uniform Trade Secrets Act, breached his fiduciary duty and stole confidential and proprietary information from his prior employer, Corvias.
While CIP was not required to make such a disclosure or even specify the name of its parent company, AbTech Water Holdings, under Wausau’s process, those details – and financial implications of the deal – emerged only after the City Council already approved the partnership in December unanimously. CIP was the only company to submit qualifications for the project, leading to questions about the way city sought its partner and its vetting process.
Alder Kilian questioned the finances of CIP’s parent company, AbTech, and criticized the contract’s termination fee of 12.5 percent as very high. Wausau can terminate the agreement for cause or convenience but must pay the company all costs incurred by then plus the termination fee.
Alder Gisselman sought a guarantee that the residents in the city will not have to pay for replacing the lead service lines in their homes nor for any related construction and landscaping outside. He wanted that guarantee inserted in the contract draft. Both Wausau Mayor Katie Rosenberg and Kerachsky insist residents will not have to pay, as long as the project is funded through a grant. Unclear is what will happen if grant funding is not secured or if a portion of the funding will come through a loan.
Gisselman also raised questions about the duration of the contract, which has a Dec. 31, 2029 end date. City Attorney Jacobson explained the contract is for five years but the council was approving only the first year’s work now. The document says the contract would end in 2029 “unless extended by mutual written agreement of the Parties or terminated earlier pursuant to the terms of this Agreement.”
Alder Diny complained about the short time they were given to examine the final draft of the contract, saying they barely had 24 hours. “Why don’t we follow the six-day rule?” referring to the regular time that alders are given before they are asked to vote on a resolution or agreement. He also wanted to know how much the city has paid to outside legal counsel.
Jacobson pointed out that the six-day rule is not always followed and that’s why the council suspends rules to discuss some items. She also noted that the item was properly agendized. Nearly all City Council meetings have agenda items for which rules are suspended. If the alders want more time, Jacobson, said, they could postpone the discussion and discuss it contract at the next council meeting in two weeks. Regarding expenses incurred for outside counsel, she said she spoke with an outside attorney for an hour but has not yet received a bill.
Alder Carol Lukens said questions have been raised about the local participation in the project and said she remembered that the company has committed to 50% local participation but she remembered it was statewide. The CIP CEO said they wanted to ensure at least 50% of the work was done locally, so they expanded the area.
The Dist. 1 alder was likely referring to questions about the local partnership raised by resident Catherine Kronenwetter, who is running against Lukens in the City Council Dist. 1 race. Speaking during the public comments period on Tuesday, Kronenwetter said the local participation was actually not so local, but is state-wide. She also asked the alders if they knew enough about the company and the contents of the agreement they were being asked to approve and where the money for it would come.
During the debate, Alder Rasmussen said the council should approve the contract since the task they had assigned to the city attorney – doing a legal review and adding transparency component, among others – has been done. Rasmussen’s suggestion of reviewing the progress on the project after the last City Council meeting in each October before the next work cycle began was adopted by consent but no formal vote was taken.
Wausau is currently looking to replace 500 LSLs in 2024, compared to the prior replacement average of 30-50 LSLs per year, a huge jump in number of the lines targeted to be replaced.
According to Environmental Protection Agency figures, there are still an estimated 9.2 million lead service lines in cities and towns across the country, many of which are in low-income neighborhoods and communities of color. While the federal government wants all of these lead pipes that supply drinking water to homes replaced in 10 years, Wausau Mayor Rosenberg has pursued an ambitious plan to replace the lines in half that time.
