Milwaukee Mayor Tom Barrett is calling on City of Waukesha leaders to revise its future water service area so Milwaukee can enter into a water deal with the city following Oak Creek's uncertainty in moving forward.
“The Milwaukee Water Works could provide your residents with a healthy and sustainable supply of drinking water at a rate that our competitors cannot even come close to matching,” Barrett said in a letter Wednesday to Mayor Jeff Scrima and Alderman Paul Ybarra. “Our current comparable wholesale rate, for the City of West Allis, is $1.16 per thousand gallons.
"In comparison, the wholesale rate contemplated in the Letter of Intent is $1.90 per thousand gallons, or 64.5 percent higher. My staff estimates that our lower cost would translate into an estimated annual savings of $1.9 million citywide. If that amount is passed on to users, it could save the average Waukesha residence up to $95 per year.”
But for now, Waukesha leaders are sticking with Oak Creek.
“Waukesha’s agreement with Oak Creek requires us to negotiate exclusively with Oak Creek,” said Community Development Director Steve Crandell, who is on the city’s negotiating team. “Because the terms provide such tremendous financial and legal benefits to the City of Oak Creek, we expect that they will sign the letter of intent in the very near future.
“If that does not happen, we will be free to negotiate with other suppliers.”
Even if the Oak Creek deal falls through, Waukesha and Milwaukee would still have to settle its differences over the city’s future water service area. 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, which includes portions of the Town of Delafield, Town of Genesee, Town of Waukesha and City of Pewaukee.
Waukesha has argued that its future water service area is set by the Southeastern Wisconsin Regional Planning Commission. The Wisconsin Department of Natural Resources informed Milwaukee in in August that Waukesha’s future water service supplier is required to serve the entire water service area.
Milwaukee is apparently not budging from its position, if Barrett’s letter is any indication.
“Taking action to revise the proposed service area now is likely to relieve you from the expense and time spent on challenges to your diversion request down the road,” Barrett wrote. “For the sake of your ratepayers and your timeline, I ask that you reconsider your position on the service area so that we can commence negotiations to serve Waukesha city residents with high quality water at the lowest possible cost.”
Water bills in Waukesha are estimated to increase from a $26-per-month average in 2012 to $58.26 by 2022 from the deal with Oak Creek. 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.
The water sale to Waukesha would 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.
But a ruling Oct. 3 from the Public Service Commission has put that agreement in jeopardy. Just one day after Waukesha and Oak Creek approved moving forward with the deal, a Public Service Commission decision in a separate case shifted costs-of-service from Franklin to Oak Creek. If the decision stands, it will result in an average quarterly increase for Oak Creek of $17.06, compared to an $8.14 increase for Franklin, according to Oak Creek Water and Sewer Utility figures.
While the Waukesha contract and Franklin cost-sharing are two separate issues, Oak Creek Water and Sewer Utility General Manager Steve Yttri believes "they're intertwined because the Franklin situation sends a signal about how the PSC is going to judge wholesale service." Yttri says the ruling would not allow Oak Creek to take on another wholesale customer.
Waukesha spent about a year and a half negotiating with Racine and Oak Creek for Lake Michigan water due to radium levels that put the city's water supply out of legal compliance. That forced Waukesha to either treat or replace its water supply by 2018. The city's wells also face problems with declining water quality due to arsenic and saltwater and with a limited groundwater supply.
- READ IT: Milwaukee Mayor Tom Barrett's letter is attached to this article.