Wausau Council votes down mayor’s attempt to suspend rules on PILOT reduction

Editor’s note: This story has been updated to correct the headline and add additional context from Mayor Doug Diny. The mayor asked the council to suspend rules, not bypass them. Wausau Pilot regrets any confusion.

Damakant Jayshi

By a slim majority, the Wausau City Council on Tuesday rejected Mayor Doug Diny’s attempt to suspend rules for a resolution that would potentially change the way Wausau funds its water utility.

Suspending rules is a routine parliamentary procedure that requires a two-thirds majority from the City Council. Six other items on the agenda for Tuesday’s meeting also required suspending the rules, which was accomplished without controversy.

Diny on Tuesday tried to introduce a resolution that would limit a so-called “hidden tax” on residents, a change that advocates say could reduce Wausau’s skyrocketing water bills. Wausau’s water utility is legally exempt from property taxes, but Wausau, like many Wisconsin municipalities, collects Payments In Lieu of Taxes — or PILOT payments, which are then used to fund other areas of city government.

City Council President Lisa Rasmussen asked to have Diny’s resolution considered separately from other items listed under the rule suspension.

The proposal to reduce the city’s reliance on PILOT will now come to the council only after the Finance Committee and the city’s financial consultant, Ehlers Public Finance Advisors, analyze its impact. Last year, city leaders directed the Finance Committee and the Water Commission to report to the council in August this year on the matter. Every year, the City of Wausau collects roughly $1.6 million from Wausau Water Works as a property tax equivalent.

By a vote 6-5, the council voted not to suspend the rules, which would have enabled the group to discuss the guidance resolution that Diny placed on the agenda. Some alders objected on procedural grounds.

The resolution, if approved, would direct the mayor “to prepare a 2025 budget that reduces water rates by 10% by reducing the PILOT payment.”

The mayor defended his move by saying he was looking for more specific guidance as president of the water commission. He also said he was not seeking any specific policy direction.

When the council returned to the PILOT item after other discussions, Rasmussen and some alders wanted to vote on the rules, citing due process, rather than the resolution’s merit.

Initially, the mayor asked City Attorney Anne Jacobson whether they should suspend the rules or vote directly on the resolution. Jacobson said either option was possible. However, after some alders pointed to the objection raised earlier, she decided they should first vote on suspending the rules.

Rasmussen said the rules require that resolutions put before the council for action be vetted by their standing committees.

“For a reason, there’s research that’s required,” she said. “You need facts, you need figures, you need data. None of that exists here.”

Rasmussen told her colleagues that they had agreed to study the impact of PILOT and consider options for reducing its rates. She said the city’s staff and Ehlers are working on figures for a joint session of the Finance Committee and Water Commission in August, so the item should wait until they can analyze the overall impact.

“It has had no financial analysis, and so for us to just throw a dart and say, boom, 10 percent, that is irresponsible of us,” she said. While discussing the fate of the water utility commission in February, she backed the idea of reducing PILOT but said it should be done gradually.

Rasmussen also pointed out that the budget draft belongs to the mayor and he can make adjustments to any part of that budget in terms of cuts, additions, and revenue reductions if he so desires. She asked her colleagues not to consider the PILOT item at all.

During public comments, some speakers wanted the council to address the PILOT system and urged the council to work to reduce water rates, which have risen sharply in recent years. In late last year, the rate for an average Wausau resident went up from $292 to $448, an increase of 54 percent.