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$183M Water Pipeline Planned to Oak Creek

Waukesha residents could see their average monthly water bills increase from $26 to $58.26 under the proposal to buy water from Oak Creek.

A pipeline to transport Lake Michigan water to and from Oak Creek will cost Waukesha $183 million to build, according to a water sales letter of intent approved Tuesday night by both the Oak Creek and Waukesha Common Council.

The letter effectively fills a missing piece of the city’s application to divert Great Lakes water past the Subcontinental Divide. The letter of intent outlines the terms for a future 40-year contract followed by four additional 10-year automatic renewals for a total of 80 years, according to a news release from the Waukesha Water Utility. However, even if the contract expires after 80 years, Oak Creek would not be able to discontinue water service to Waukesha without Waukesha’s approval.

The final contract between Waukesha and Oak Creek will not approved until Waukesha receives approval under the Great Lakes Compact, which needs to come from top governmental officials from Great Lakes states.

The original cost estimates for the pipeline to Oak Creek was $261 million, and with the pipeline cost projected to be $183 million, the effort to reduce radium levels in the city's water supply by 2018 could cost significantly less than previously thought under the Oak Creek alternative. 

“This is a great example of the benefits of regional cooperation,” Waukesha Alderman Paul Ybarra said in a news release. “Waukesha will have a sustainable supply of healthy water and Oak Creek will benefit from increased revenues for both the water utility and the city.” 

The capital costs of building the water supply line to Oak Creek is $8 million more than revised estimated costs of $175 million to Milwaukee. Milwaukee cost estimates were increased from the original $164 million estimate because for a $6 million infrastructure upgrade and a $5 million one-time payment to Milwaukee.

However, Waukesha and Milwaukee never started negotiations after Milwaukee decided it would negotiate for Waukesha’s current water service area and not for its future water service area.

Impact to Water Bills

The question in many residents’ minds is the impact to their Waukesha Water Utility bills. Water bills are estimated to increase from a $26 per month average in 2012 to $58.26 by 2022, according to a news release from the water utility. Water rates are subject to approval from the Public Service Commission, which recently approved the first of many water rate increases required for the project.

Water wholesale rates are planned to be $1.90 per 1,000 gallons of water for Oak Creek to provide seven million to 11 million gallons on a daily basis. Oak Creek, Caledonia and Franklin business owners and homeowners could see water rates decreased by 25 percent. The water sale to Waukesha will result in the City of Oak Creek receiving a $300,000 annual payment in lieu of taxes from its water utility – a payment that could increase to $1.2 million by 2030, according to the news release.

Alderman Terry Thieme, who serves on the Waukesha Water Commission, spoke about the need for the city to have a sustainable water source. The Great Lakes project is a necessity for Waukesha, he said.

“It is a costly project,” Thieme said during the Waukesha Common Council meeting. “Nobody enjoys spending this kind of project. … On the other hand, doing nothing is not an option. … This is the least costly option in terms of sustainability.”

Waukesha Still Needs Great Lakes Diversion Application Approval

Waukesha is looking for a Lake Michigan community to supply it with lake water. Waukesha will also have to build a pipeline to return the water to the Great Lakes.

Waukesha spent a year and a half in negotiations with Oak Creek and Racine over getting Lake Michigan water. The votes Tuesday represent a signifcant step, but Waukesha still faces a long climb to get Lake Michigan water, including approval from all Great Lakes states. 

Waukesha is outside of the Great Lakes Basin but is in a community within a county that straddles the Great Lakes Basin, which requires Waukesha to return Lake Michigan water to the Great Lakes.  It also requires approval by all Great Lakes states under the terms of the Great Lakes Compact.

The Waukesha Water Utility and the Waukesha Common Council met in closed session earlier this month to discuss the water sales contract, but information was not made public after that meeting.

The Oak Creek Water and Sewer Utility has said providing Waukesha with Lake Michigan water could result in a rate reduction of as much as 25 percent for Oak Creek residents.

Waukesha is forced to either treat or replace its water supply by 2018 because radium levels have put the city's water supply out of legal compliance. The city's wells also face problems with declining water quality due to arsenic and saltwater and with a limited groundwater supply.

B. Guenther October 03, 2012 at 03:39 AM
A small price to pay, over a long period of time, for clean and safe water.
Louise October 03, 2012 at 04:18 AM
Maybe people will actually want to stay in Waukesha with decent water. The water is disgusting. Clean and safe water is a basic human need.
Steve Edlund October 03, 2012 at 04:41 AM
The devil is in the details. Let's see the funding matrix for this unaffordable and unnecessary white elephant that's about to sit on Waukesha. I might point out, Duck and Louise that Oak Creek has what you want, but at a 25% discount if this project passes. I bet that this price tag is doctored and heavily dependent on federal funding assistance. Mitt, Paul, Scott, Jim, and Scott will make Barrack look like a truth teller in chief if this boondoggle is funded with 1 federal buck. If the feds are broke don't scream that the sky is falling. Putting the 25% rate decrease out there for Waukesha residents to see and also waving the PILOT stipulation smells. Something tells me that Waukesha isn't done negotiating with Milwaukee. Hey, if the council is willing to crush Waukesha financially, they probably wrote the MOU with disappearing ink.
Steve Edlund October 03, 2012 at 04:45 AM
And the Town of Waukesha leadership now has 30 days to Armageddon.
the 'sha guy October 03, 2012 at 12:31 PM
1. Does this $184 million cost assume a return flow to Underwood Creek? 2. Does Underwood Creek meet the terms of the compact as being the closest point to where the water was taken? 3. How much will the cost increase if Waukesha has to return the water to a point further inland such as Oak Creek? 4. I would agree with Mr. Edlund in that Milwaukee will still be involved in this. Either through negotiations for sale, or through Barrett lobbying the Democratic Great Lakes governors to deny the diversion. This is a $3000 debt for every resident (man, women and children) living in the city of Waukesha. This will cost a family of four $12,000.
the 'sha guy October 03, 2012 at 12:32 PM
Actually, you would be better off to leave before this starts if you are concerned with your property values vs. surrounding city property values.
Sarah Millard (Editor) October 03, 2012 at 03:07 PM
Yes, this cost assumes the return flow.
Rick Tortomasi October 03, 2012 at 04:26 PM
It has has been a long haul to reach this point. Thanks to the Waukesha Water Utility, Water Commisioners and Steve Crandel for their extensive work to get us this far. It's far from over and there is more work ahead.
Chris B October 03, 2012 at 04:53 PM
Hi Steve, It appears that you have concerns regarding the costs. I am also concerned with costs. I am curious, what would your solution be to this whole water situation?
the 'sha guy October 03, 2012 at 05:26 PM
It assumes the return flow to which point, Underwood Creek, Root River or somewhere else in Oak Creek?
Steve Edlund October 03, 2012 at 06:36 PM
Hi Chris, To take a perspective that the Council of Great Lakes Governors must view the diversion exception application by the rules of the compact, you need to segregate 2 issues - the court ordered radium compliance date and what can be done to satisfy that - and future potential water shortages. The water utility wants them considered as one issue, one solution. Not so. Therefore I believe, as I petitioned the PSC, that we're feeding oats to a dead horse. We could have already satisfied the court order and taken our dear sweet time...say the next 20 years to address a potential water shortage. My guess is that at least one state will sit on the application until it's dead. Therefore, the question should be, what's the water utility's plan "B"?
B. Guenther October 03, 2012 at 06:46 PM
Steve, Saw your last post about "Plan B". If I am correct I believe Plan B is to drill new wells. The issue at hand there is that, and don't hold me to exact wording, they would be drilled at the same level and aquifer as the Town of Waukesha. The water in and level of my well was tested a few weeks back by a company that was contracted by the City of Waukesha.
Chris B October 03, 2012 at 07:21 PM
Hi Steve, I think you have some great questions. No one knows for sure what the Great Lakes Governors will say. I think that the Common Council 's approval of Oak Creek as a water supplier is one more step in a cumbersome process to find a long term sustainable solution to the city's water issue. What would you do differently ?
Kyle Gorman October 03, 2012 at 07:32 PM
We don't need their water ours is fine
Steve Edlund October 04, 2012 at 11:21 AM
@Chris B I keep waiting for the water utility to tells what plan B is. I know you've read the modeling studies paid for by the utility but here's one released 2 weeks ago by an independent creditable source, the USGS that was dismissed with preconceived and preliminary conclusions by the Water Utility in it's application.It has minimal impact on shallow wells, to ease Mr. Duck's concerns. Interestingly, I've observed in the application documents that the deep aquifer will recover by 50% in 7 years if we suddenly stopped withdrawl (sorry if my numbers aren't exactly correct Dan and feel free to correct me). I'd be curious to see the rate of recovery with a partial, say 50% reduction in withdrawl by supplementing from another source such as the Fox River Alluvium. http://pubs.usgs.gov/sir/2012/5108/ Also, why does the Common Council continue to aprove more and more apartment complexes in Waukesha with a supposed water shortage? They violated their own recommendation on a housing mix study done less than a decade ago. Bottom line is, Chris, science and technology improve every day. In Waukesha we are blessed to have more water that we need - if we live within our needs. If Waukeha someday needs more water than it has, the free market will dictate where people will live. In this case, those wanting Lake Michigan water are asking the federal government to solve Waukesha's problems with another handout while China finances our national debt.
Steve Edlund October 04, 2012 at 11:23 AM
28 days and counting.
Chris B October 04, 2012 at 12:28 PM
Hi Steve, I actually looked at this study. You had it as a link in anothr post. No doubt technology continues to change, I agree that this study is prelimanry. It only studied the upper fox river basin and not the basin that extends into Illinois. A person that I lalked to about this (that I would consider a subject matter expert in the area) pretty much indicated it is testing a new mathematical formula. While this model may be promising for the future , further study needs to be completed. This individual also cited that if it this is a viable option , what would the cost be for 27 shallow wells?
Steve Edlund October 04, 2012 at 05:07 PM
Chris, you bring up some very good questions and that's what's important. There is no deadline to address all potential solution to any potential water shortage. I agree that the utility should determine the cost benefit analysis before committing to what I see a as dead horse. To take your concern about cost a step further lets consider reducing our dependance on the deep aquifer 50% by creating enough usable water from the alluvium ( which has the capability to produce 9 million gallons per day based on the USGS report) and model the rate of recovery of the deep aquifer. We might even be in a radium compliance level of depth in the deep aquifer. The side benefit is that we don't have to return flow anything to Lake Michigan (saving construction costs and keeping the flow up on the Fox). Keep in mind that 7 other states are going to be asking the same questions you and I are..

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