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It is no secret that the nation’s water and wastewater utilities are underfunded. With numerous factors at play—infrastructure built with grant dollars in the 1970s nearing the end of life, increased regulatory demands, rising replacement and maintenance costs, and more—McKinsey & Company estimated a $110 billion funding gap in 2024 alone, which is growing!
While the Bipartisan Infrastructure Law (BIL) and other legislation provided much-needed funding, this created a demand that left some states, including Wisconsin, competing for scarce dollars. However, thanks to strong relationships and partners willing to rally together, water and wastewater utilities in Wisconsin secured a funding authorization victory in Summer 2025.
In late 2023, leaders of Wisconsin’s three largest wastewater utilities—Milwaukee, Madison, and Green Bay (NEW Water, the brand of the Green Bay Metropolitan Sewerage District)—heard concerns from the Wisconsin Department of Natural Resources (WDNR) that the Wisconsin Environmental Improvement Fund (EIF) might not have enough money to cover infrastructure project loan requests.
The ripple effect would be significant added costs for Wisconsin families and businesses.
The EIF is a revolving loan program that provides low interest loans to municipalities for water and wastewater infrastructure projects. It comprises two funds: the Clean Water Fund Program (CWFP) for wastewater projects and the Safe Drinking Water Loan Program (SDWLP) for drinking water projects. The EIF is funded by federal grants, revenue obligation (RO) bonds with a state match and additional loan authorization, and debt service payments on municipal loans.
These loans significantly reduce interest costs to municipalities and ratepayers. CWFP and SDWLP loans have an interest rate of 2.585 percent for 2025, compared to the prevailing bond rate of 4.7 percent.
In February 2024, WDNR confirmed that the EIF would be short on funding and projects would be denied. According to Milwaukee Metropolitan Sewerage District Executive Director Kevin Shafer, one primary driver was increased loan demand, partly due to the BIL. For the 2024 loan cycle, the Wisconsin Legislative Fiscal Bureau reported that applications exceeded estimates by $387 million, resulting in a $216.5 million shortfall for the 2023–2025 biennium.
“In my 27 years, that was the first time in memory that had occurred,” says Shafer. “And it was quite the impact.”
Ahead of the official shortfall announcement in February 2024, WDNR reached out to the leadership of Madison, Milwaukee, and Green Bay, recognizing that they faced significant impacts as some of the largest utilities. The three quickly sprang into action.
“We decided to start working together immediately,” said Shafer, “What impacts one of us impacts all of us.”
One of the first steps, says Nathan Qualls, was gaining a technical understanding of the issue and the budget process. Qualls took over as NEW Water’s executive director in December 2024 and credits his predecessor, Tom Sigmund, for his leadership with the group.
“Meeting with the DNR and Department of Administration (WDOA) staff was helpful to understand the mechanisms at work, the intricacies of the program, and what might need to be done to influence change,” says Qualls.
With that foundation, the leaders moved to form what would become known as the Clean Water Fund Coalition. Partners included the League of Wisconsin Municipalities, Municipal Environmental Group– Wastewater and Water Divisions, NEW Water, Madison and Milwaukee metropolitan sewerage districts, and Wisconsin Rural Water Association.
“This was a bipartisan issue and impacted areas throughout the state,” says Shafer. “If Milwaukee pursued this on its own, I don’t know that it would have passed; the politics of it would have been, ‘Oh, it’s a Milwaukee thing.’ We needed to show a statewide problem.”
Coalition members began meeting with their state legislators to raise awareness of the funding issue.
“It became a bit of a mission [for us] to meet with the 11 state elected officials who cover our service area,” says Qualls. “It wasn’t just to tell them about the funding issue, but to share with them the importance of clean water services to a community.”
The coalition also maintained open dialogue with the DNR staff, refining its ask.
As a revolving loan program, the EIF requires no state general purpose revenue (GPR). The coalition, using information from WDNR and WDOA, requested an increase in EIF RO bonding authority by $725.9 million to meet local wastewater and drinking water project needs for the next four fiscal years.
“Increased bonding authority does not require new taxes or revenues,” says Qualls. “It is a self-funding mechanism, which made the ask an easier one to support.”
While the EIF does not use GPR, the ask amount was sizable. In the previous budget cycle, only $46 million in new RO bonding was approved.
“We had an excellent messaging strategy,” said Government Affairs Director Toni Herkert of the League of Wisconsin Municipalities. “While our education and advocacy efforts helped legislators understand the statewide need and beneficial impact of our request, the sticker shock of an ask that’s 16 times larger than the authorization in the last budget was a significant hurdle to overcome.”
While standalone legislation was considered, the coalition and state agency partners opted for the state budget route. Through the work of state partners, Wisconsin Governor Tony Evers included the increase in his 2025–2027 biennial budget proposal.
With a July 1 budget deadline looming, the coalition met frequently in May and June to track progress, address roadblocks, and gauge success. The Friday before Memorial Day, they learned the proposal was headed to the Joint Finance Committee (JFC), the state’s powerful budget writing committee.
The following Thursday, the JFC unanimously voted, 16–0, to increase the EIF RO bonding authority by $732.3 million.
“The fact that it was bipartisan, that it was unanimous, spoke volumes,” said Qualls. “It was gratifying to see so many [JFC members] speak highly of supporting critical water and wastewater services to their constituents.”
Whether it's funding needs, regulatory matters, or other challenges, joining forces is increasingly critical for public utilities. Based on their experience, coalition partners offered some key takeaways for others:
Broaden and diversify the tent. Utilities and public works agencies are often not alone in their challenges. The coalition was successful, says Qualls, because it brought together multiple entities across the state for water and wastewater.
Adds Shafer: “Working together and taking a collaborative approach carries more weight and is the best way to do things on all fronts.”
Build partnerships with regulators and agencies. “[WDNR has] been a partner from the very beginning, even before bond authority, and Tom [Sigmund] gets a lot of the credit for doing that work,” says Shafer.
Engage elected leaders early. Don’t wait for a crisis. Develop a year-round engagement strategy tailored to your organization’s needs and resources.
Cultivate relationships. “Relationships and friendships matter,” says Shafer. “Having those ahead of time allowed us to have a real impact and move quickly on an important matter.”