PFAS lawsuits, water rates and some unusual expenses

The City of Wausau announced on Friday it is suing the manufacturing companies it claims are responsible for contaminating the city’s drinking water with PFAS.

A lawsuit filed Thursday in Marathon County Court by law firm Napoli Shkolnik on behalf of the City of Wausau names 14 manufacturers and 59 insurance companies as defendants in the complaint.

PFAS (Perfluoroalkyl and polyfluoroalkyl substances) are a group of manufactured chemicals that have been used in industry and consumer products since the 1940s, according to the EPA. They are known as “forever chemicals” because they do not degrade easily.

EPA studies indicate that too much exposure to PFAS can result in a number of health effects. These include developmental issues in fetuses and infants, cancers, liver damage, immune issues, and thyroid diseases.

A press release from the mayor’s office states that as a result of the use of PFAS by the named defendants and other companies in the area, all six of Wausau’s groundwater wells were contaminated. These wells are the source of the city’s drinking water.

Wausau has spent millions of dollars on cleanup of the contamination, including filters for the new water treatment plant to filter down PFAS to near zero levels. As the Wausonian previously reported, Wausau even spent $30,000 on messaging during the PFAS crisis.

The 59 insurance companies named in the suit had sold policies to the manufacturers that cover liability related to Wausau’s water contamination and are thus, the lawsuit argues, liable to be sued as well.

Strangely, the lawsuit includes a number of “John Doe” defendants who are not yet known.

For Defendants 1-20 are unidentified entities or persons whose names are presently unknown and whose actions, activities, omissions a) may have permitted, caused or contributed to the contamination of plaintiff's wells; or b) may be vicariously responsible for entities or persons who did the same; or c) may be successors in interest to entities or persons who did the same,” according to the suit’s summons and complaint.

“Local government taxpayers and water district ratepayers should not be responsible for PFAS drinking water contamination,” said attorney Paul J. Napoli in the city’s press release. “The extent of the City of Wausau’s PFAS is well documented, and we will vigorously pursue justice for the city and its taxpayers.”

The lawsuit did not name a specific amount of damage sought, but instead seeks “Costs and expenses related to the past, present, and future investigation, sampling, testing, and assessment of the extent to which plaintiff's property and water system have been contaminated with PFAS.”

But could the lawsuits decrease rates?

At first blush, it kind of makes some sense. If PFAS-mitigation measures increased water rates that people are paying, suing the PFAS manufacturers ought to help decrease those rates.

As we found out from the city council’s recent battle over the water utility’s payment in lieu of taxes, it’s not that simple. (As a refresher, some council members wanted to eliminated the $1.59 million payment the utility makes to the city — what City Council Member Tom Kilian calls a slush fund — in order to lower skyrocketing water rates.)

Water rate changes are a lengthy and expensive process. They usually require the hiring of an expensive consultant firm such as Ehlers and Associates.

Is it possible? Maybe. Much of the expense came from the debt service on two items — the city’s new water plants, and additional filtration to filter out all the PFAS in the city’s wells. Theoretically, PFAS lawsuit money could be used to pay back the borrowing, eliminating some of the interest (assuming there are no early payment penalties) and lead to much lower rates.

But the other element is time. These lawsuits take quite some time to play out. Marathon County in 2017 joined a class action lawsuit against Purdue Pharma (which led to the company’s bankruptcy. The first payments from those lawsuits came last year.

Though the city’s lawsuit includes only the city has a defendant, and was filed in Marathon County Court and not federal court, with so many defendants it’s entirely possible the case will still take some time to sort out.

The money could, however, stave off the need for future rate hikes by helping balance the books a bit. But while we’re on the subject of water expenses…

Unusually high salary increase

Something in the 2024 budget that hasn’t yet been reported on but that a reader pointed out recently: Salaries in the water utility have increased dramatically in the past three years.

How much? In a four-year period, salaries and benefits have increased roughly 50%, going from roughly $2.4 million to $3.7 million. Yet, according to city data, headcount only increased from 31 FTE to 33 FTE - or in other words, two more full-time employees. (Those are figures for both the wastewater and drinking water facilities combined.)

I reached out to Public Works Director Eric Lindman to ask about the salary increase. It doesn’t make a lot of sense - those would be some pretty serious raises if there isn’t another explanation. As of Tuesday evening, The Wausonian received no response.

The Wausonian has written before about the Great Resignation, in which everyone from private companies to the jail to city hall have had trouble recruiting and retaining workers. As a result, many of those companies and municipalities have had to increase wages and be creative in how employment is structured.

That might be starting to abate. In a meeting with Deputy Chief William Millhausen yesterday, Millhausen said they’re not having as much trouble with jail recruiting as they had been.

What’s the reason for the increase? The Wausonian will continue asking until we find out.

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