Aug. 10, 2026
By Tim Hundt
VIROQUA Wis. – U.S. Department of Agriculture Rural Development Wisconsin State Director Andrew C. Iverson announced Monday, Aug. 10 that the federal agency has approved a $2.5 million loan to help the city of Viroqua install a critical active methane gas extraction system at its closed municipal dump.
Iverson emphasized that the federal funding is designed to provide reliable infrastructure and maintain affordable utility rates for local taxpayers.
“This USDA investment will support the needs of the city of Viroqua in providing safe, reliable solid waste infrastructure and sanitary conditions that every Wisconsinite deserves,” said Iverson. “President Trump and Agriculture Secretary Brooke Rollins recognize the importance of investing in infrastructure, which will help maintain affordable utility rates for taxpayers while providing important sanitary services for rural communities.”
As we reported in a number of previous stories, the closed municipal dump site, which originally operated as a town dump in the 1960s, was expanded to the west side prior to 1982 and officially closed in 1992 with a clay cap and a passive venting system. The site remained quiet for over three decades until routine leak detection testing in early 2025 revealed that methane gas was migrating off site into a nearby church building. City Engineer Sarah Grainger notified the Wisconsin Department of Natural Resources on March 5, 2025, after a utility company discovered high gas readings at the end of Sands Road. After joint soil testing revealed elevated methane concentrations, the state issued a formal Notice of Noncompliance on May 27, 2025, ordering the city to establish an immediate mitigation plan.
Viroqua officials initially attempted to resolve the issue using a passive venting trench. The city council bypassed the normal bidding process to quickly construct a 225 foot trench filled with porous rock near the church property, a phase one project that cost about $230,000. However, testing later revealed that buried waste extended beyond the originally mapped landfill boundaries, and the passive trench was unable to fully halt the horizontal migration of the gas.
Environmental consultant Mike Amstadt of TRC Companies explained that a highly permeable layer of fine sand beneath the landfill acted as a direct pathway for the methane, giving the passive system less than a 30 percent likelihood of long-term success. Amstadt cautioned that attempting a larger passive system before eventually being forced to build an active system would result in a massive waste of city tax dollars.
“A large majority of the $1.5 million investment ends up getting capped off and is not part of the active system,” said Amstadt. “So you have kind of sunk that $1.5 million and you are not using two thirds of it for the active system, and that is kind of the additional, roughly $1 million that you add on to the active system by doing it passive first and then switching over to active, if that makes sense.”
Amstadt recommended that the city move forward with a more robust active gas extraction system to draw a continuous vacuum on the waste.
“We have a fairly large contingency on these numbers that, depending on how things go, it may not all be needed,” said Amstadt. “But as we get further into the design and we can nail down certain things, then we can refine our costs.”
The Viroqua City Council approved the active system design in February 2026, authorizing a $76,300 contract amendment with TRC Companies. On June 16, 2026, the Public Works Committee approved a $235,000 engineering services agreement with TRC to compile the bidding documents and provide on site construction quality assurance. The final design will utilize 43 to 64 vertical extraction wells connected by underground lateral and header pipes to vacuum and safely flare off the gas. The total construction of the active system is projected to cost up to $2.5 million.
To fund the massive undertaking, the city approved a formal loan resolution on June 30, 2026, to secure the $2.518 million loan from the USDA Rural Development program. Financial advisor Sean Lentz of Ehlers and Associates explained that the federal program offers a fixed, highly subsidized interest rate of 2.875 percent over a 20 year term, which is roughly 1 percent lower than open market securities.
“The second part that is often advantageous with using this program is they offer fixed rate low subsidized interest rate financing to pay for your projects, or to have your project be repaid over time,” said Lentz. “Right now the interest rate that they are offering is 2.875 percent and I would say that is probably about 1 percent lower than if we were to go out to what would be called the securities market for financing.”
Lentz noted that because the USDA requires the city to have interim financing in place during the construction phase, Viroqua will temporarily fund the project through an expanded line of credit with People’s State Bank.
“USDA requires generally in almost all cases, interim financing to be in place until the project has been completed, and then they allow you to pay off the interim financing with the proceeds from their loan,” said Lentz. “Sarah (Public Works Director Sarah Grainger) was ahead of the game, credit to her today in asking some questions, and we were able to do some research with the USDA.”
City Clerk and Treasurer Lori Polhamus explained that the loan resolution represents the official commitment required by the federal government before construction can begin. While the low interest federal loan covers the upfront construction, the active system will introduce new, long-term operational expenses of $30,000 to $50,000 annually for blower electricity and regular monitoring.
Public Works Committee member AJ Bergum agreed that the safety of the community must take priority in the budget even if it means playing a more conservative route with other municipal services.
The sudden multi-million dollar price tag of the landfill cleanup has squeezed the city’s broader budget, halting a planned five year capital improvement plan in favor of a two-year stopgap plan. Outgoing City Administrator Nate Torres explained that the sudden emergence of the methane leak completely upended the city’s long-term financial projections.
“The capital improvement plan should have been approved over a year ago,” said Torres. “Things kind of came to a screeching halt because we had no concept of what that was going to end up costing us, and probably rightfully so, because it went from being not on the capital improvement plan at all to potentially costing us somewhere in the range of $3 million.”
Torres noted that the city will have to continue to look for external grants and carefully reallocate unspent funds from previous projects to keep other critical municipal purchases moving forward.
Torres has since left the city to take on the administrative coordinator position with Vernon County and the city is in the process of hiring a new administrator just in time for the city budget process as they formulate a plan for the 2027 budget and capital improvement plan.
Why the USDA Loan is Crucial for Viroqua
When asked about what securing the loan means for Viroqua, Grainger explained that the funding is absolutely necessary to allow the city to proceed with the mandated cleanup. Although she admitted she “really wanted it to be a grant and loan combo,” she noted that a grant was unfortunately not available for Viroqua in this instance.
Despite the lack of free grant dollars, Grainger emphasized that the USDA loan remains the city’s most favorable and cost-effective financing route because of its unique built-in flexibility. Unlike standard market securities, the federal program allows Viroqua to adapt to changing financial conditions over time.
“The USDA loan is flexible for us,” Grainger explained. “So if there was better funding that came in the future, you know, we can refinance it. We can pay it back earlier than planned, like there’s a lot of flexibility with USDA loans”. She also noted that the interest rate—locked in at a highly competitive rate—is “better than we would get on the market”.
Bidding and Construction Timeline for Fall 2026
Addressing the urgent timeline to install the active gas extraction system, Grainger confirmed that the city remains on track to get the infrastructure built this year.
Now that the federal loan resolution has been approved, Viroqua officials are waiting on final administrative approval to formally open the project to contractors. “Hopefully, once all this USDA stuff is finalized, they’ll give us the okay to bid the project, and hopefully we can turn that around pretty quickly,” Grainger said.
According to Grainger, local residents can expect to see physical activity starting at the closed Sands Road site this fall. However, she cautioned that the installation is a multi-step process that will take some time to complete.
“It’s going to take a while to get all the wells up,” Grainger noted. “And then once that happens, we’ll also sort of be coinciding with working on getting the blower system operational”. She estimates that the active methane extraction system will be fully operational by the winter time.
Regarding who will actually perform the highly specialized work, Grainger indicated that it will likely require a collaborative effort between regional experts and local builders. The project features two distinct phases: drilling vertical extraction wells into the garbage, and executing the mechanical setup—which includes fusing together the underground lateral pipes and constructing the small building to house the blowers.
“There’s definitely specific kind of work,” Grainger said. “We’re aware of some firms in the Madison area that specialize in it. I’ve also had some local firms or companies ask about it”. Because of these different project elements, she explained that the final contract “could be a combination of a local and somebody from the Madison area or somewhere eastern part of the state”.
The Best-Case Scenario: Letting the Waste Break Down
When asked if there is a point in the future where the city can permanently turn off the energy-consuming blowers, Grainger explained the scientific reality of managing a closed town dump. Because the landfill is capped and no new trash is being added, there is a fixed amount of organic waste underground.
The best-case scenario is that the city draws a vacuum on the landfill to pull back the migrating gas, allowing the remaining organic matter to completely decompose over time. Once the biological decay is finished, the dump will naturally stop producing high concentrations of methane, allowing the city to safely shut down the active blower system.
However, Grainger admitted that this presents a difficult dilemma for municipal planners. Because every landfill decays at a different rate depending on local moisture and temperatures, the city cannot guarantee exactly when the methane will be fully abated.
“We hope we don’t need it for very long,” Grainger stated. “But at the same time, we’re investing in this so obviously wanting to make sure we’re doing what we need to do”.
To protect local taxpayers, Grainger noted that the city has established very conservative operational estimates to prevent any budget surprises. “We are making an assumption of what the costs are going to be operational,” Grainger explained. “But until we actually put it into use, we don’t know for sure, so we’re trying to be really conservative about it. So it hopefully won’t be as bad as we’re planning for, but we won’t know how we see it in action”.
Add comment