Milwaukee's Conditions For Selling Water To A City Like Waukesha, WI

People ask me, from time to time, what exactly is in the City of Milwaukee's policy resolution about selling water outside of the Great Lakes basin to a City, like Waukesha, which is pursuing a diversion of Great Lakes water and is considering Racine, Oak Creek and Milwaukee as the possible source.

Milwaukee's resolution, approved unanimously, expresses a complicated but coordinated set of steps and expectations - - all of which support regional development - - and lays them out for potential buyers' negotiators to absorb in advance.

So, from time to time, I post the full content of the City of Milwaukee's resolution, as I will do again below, with what I think are pertinent sections bold-faced:

Number

080457

Version

080457 Resolution 7/1/2008

Version: 1

Substitute resolution establishing terms and conditions by which the City of Milwaukee will provide water service to neighboring communities. ALD. BAUMAN

WATER SALES

Substitute resolution establishing terms and conditions by which the City of Milwaukee will provide water service to neighboring communities. Analysis The City of Milwaukee’s current policy for reviewing potential agreements for water service to other communities is contained in Council Resolution 980871, adopted April, 1999, as amended by Resolution 020459, adopted March 25, 2003.

This resolution rescinds the policy set forth in those resolutions, and creates a new policy for negotiating and reviewing potential agreements for water service to other communities. This new policy differs from the current policy in 3 principal ways:

1) It states that before negotiations may commence regarding an agreement for water service, the following must occur:

The Common Council directs the Milwaukee Water Works, the Legislative Reference Bureau and the Department of City Development to perform analysis and evaluation relating to the proposed agreement; these agencies shall submit their reports via a communication file not less than 7 working days prior to the Common Council committee for which it is scheduled.

The community which has applied for water service shall submit a written response to the aforementioned communication file not less than 7 working days prior to the committee hearing, providing information relating to the community’s comprehensive plan, affordable housing plan and public transportation plan.

The Common Council directs the proper City officials to begin negotiations with a community for a water service agreement. The current policy does not require that these studies be completed before negotiations may occur.

2) It creates a water service negotiating team which shall be responsible for reviewing and negotiating potential water service agreements. The team is authorized to commence negotiations upon Council adoption of a resolution directing negotiations.

3) It states that before an agreement for water service may be executed, the community which has applied for water service from the City of Milwaukee must enter into an intergovernmental agreement that contains a “non-compete” clause and an economic compensation provision.

The policy set forth in this resolution does not apply to agreements referenced in Common Council File Numbers 080011 and 080012.

Body

Whereas, The Water Works currently has significant excess capacity and could readily supply water to new customers; and

Whereas, The City of Milwaukee is widely recognized for its superior quality of drinking water, which may prompt requests for the Water Works to expand its service to new areas; and

Whereas, By providing water to other communities, the City, directly or indirectly, facilitates residential, industrial, retail and commercial growth in other communities; and

Whereas, This growth may result in lost opportunities for additional housing, jobs and tax base in the City of Milwaukee; and

Whereas, It is in the best interest of the City of Milwaukee that the Common Council establish procedures and policy criteria relating to potential agreements for water service to other communities so that such decisions can be based on timely, accurate and complete information; now, therefore, be it

Resolved, By the Common Council of the City of Milwaukee, that the provisions set forth in Resolution File Number 980871, adopted April 20, 1999, and Resolution File Number 020459, adopted March 25, 2003, establishing policy and procedure for potential water service agreements, are rescinded, and a new policy addressing those matters is created; and, be it

Further Resolved, That this policy establishes procedures and policy criteria for potential water service agreements between the City of Milwaukee and other communities, as follows:

Requirements before negotiations of a potential agreement may occur

The following criteria must be met before any negotiation of a potential water service agreement may be authorized:

1) The Water Works shall introduce and receive approval, via Common Council resolution, for the Water Works, the Legislative Reference Bureau (LRB) and the Department of City Development (DCD) to perform analysis, in accord with this policy, relating to a proposed water service agreement.

2) The City Clerk shall introduce a communication file to transmit Water Works, LRB and DCD analyses, and the report from the community which has applied for water service, and the Water Works, LRB, DCD and the community shall submit their analyses to the communication file not less than 7 working days prior to the date on which the file will be heard before the appropriate Council committee.

Reporting requirements

A. Milwaukee Water Works reporting requirements

The Milwaukee Water Works shall submit to the communication file a written evaluation of the water service request including a feasibility analysis of the proposed sale of water, which shall include, but not be limited to, increased revenue, cost of production, effect on the City's water rates, impact on capacity utilization and any required capital costs, and other information the Water Works deems relevant to the Council's consideration.

B. Legislative Reference Bureau reporting requirements

The LRB shall submit to the communication file a written report that analyzes and evaluates the following:

B-1. The reason for the request for water (e.g. is the request for water the result of a water shortage, water contamination, public health concerns, drought or some other conditions).

B-2. The economic profile of the community, including tax rate, assessed valuation per capita, median household income, per capita income and median home value.

B-3. Poverty rates, minority representation and other demographic and community characteristic data it finds to be pertinent.

B-4. The current status and an analysis of past and future trends relating to the availability of public transportation and affordable housing.

B-5. The environmental impact of the proposed sale.

B-6. Other information that the bureau finds pertinent to the Common Council’s consideration of the proposed water service request.

C. Department of City Development reporting requirements

The DCD shall submit to the communication file a written report that analyzes and evaluates the following:

C-1. Whether the water can be used directly or indirectly to facilitate new residential, industrial, retail or commercial development in the community which has applied for water service, and the value of such development and the number of new jobs and residents that such development will generate.

C-2. Potential negative social and economic impacts on the City due to lost opportunities for attracting new businesses and jobs to Milwaukee, and the loss of businesses and jobs that exist in Milwaukee.

C-3. The current land use patterns in the community which has applied for water service and expected trends in land use if Milwaukee provides water to the community.

D. Reporting requirements for the community which has applied for water service

In addition, for purposes of Common Council review, the community which has applied for water service from the City of Milwaukee shall submit a written report to the aforementioned communication file indicating that the community has adopted and implemented:

D-1. A comprehensive plan pursuant to s. 66.1001, Wis. Stats., and, if the plan has not been completed, indicate the status of the community’s compliance with each of the 9 requirements which comprise s. 66.1001 (2), Wis. Stats.

D-2. A comprehensive housing plan and can demonstrate that such plan has resulted in the creation of affordable housing opportunities that have resulted in racial, age and income diversification, with data on the percentage of population in assisted and affordable housing that is age 30 or less, above age 30 and below 65, and age 65 and above.

D-3. A comprehensive public transportation plan and can demonstrate that such plan has resulted in the expansion and improvement of public transportation links between persons living in the City of Milwaukee and job opportunities in the community which has applied for water service. Such plan may include, but is not limited to, participation and inclusion in the Southeast Wisconsin Regional Transportation Authority or an equivalent entity.

3) The Water Works shall introduce and receive approval, via Common Council resolution directing the City negotiating team to begin negotiations with a community for a water service agreement, and any negotiations with a community which has applied for water service from the City of Milwaukee shall consider the analyses provided in the aforementioned communication file.

The negotiating team shall be composed of the Mayor, or the Mayor’s designee; the City Attorney, or the City Attorney’s designee; the Superintendent of the Milwaukee Water Works; the Common Council President, or the President’s designee; the Comptroller, or the Comptroller’s designee; the Director of the Budget and Management Division, or designee; and one representative from the Legislative Reference Bureau.

Before an agreement for water service may be executed the community which has applied for water service must enter into an intergovernmental agreement that contains a “non-compete” clause and an economic compensation provision that is substantially similar to the “Cleveland Agreement” which is attached to this file; provided, however, the precise amount of economic compensation shall depend on the particular circumstances of the community which has applied for water service.

; and, be it

Further Resolved, That the Common Council directs all City departments and agencies to cooperate with the Milwaukee Water Works, Legislative Reference Bureau and the Department of City Development in providing all necessary information for studies of proposed water service agreements pursuant to this resolution; and, be it

Further Resolved, That the policy set forth in this resolution does not apply to agreements referenced in Common Council File Numbers 080011 and 080012.