Barrett Tells Waukesha Less-Costly Water Is Readily Available From Milwaukee

Millwaukee Mayor Tom Barrett tells Waukesha directly there is a better, smoother deal out there. His letter text is below:

October 11, 2012

Mayor Jeff Scrima Common Council
President Paul Ybarra

City of Waukesha 201 Delafield Street Waukesha, WI 53188Dear Mayor Scrima and President Ybarra:

I have been watching with interest the publicity regarding last week’s Public Service Commission decision to disallow the recovery of certain wholesale costs by the Oak Creek Water Utility. Given the implications for Oak Creek ratepayers, I am not surprised to see Tuesday’s statement by the Oak Creek Water Utility’s General Manager that he will not execute the Letter of Intent for the provision of Lake Michigan water that was authorized by the Common Councils of both Oak Creek and Waukesha until this matter is resolved.

On Wednesday the Department of Natural Resources (DNR) made it clear that Oak Creek’s appeal of the PSC action will delay state approval of the City of Waukesha’s diversion request under the Great Lakes Compact. Given this delay, I am writing to remind you of my continued willingness to enter into negotiations for the sale of water within your existing water service planning area.

Based on our communications with the Southeast Wisconsin Regional Planning Commission (SEWRPC) and the DNR, it is clear that the City of Waukesha could ask for the proposed sewer and water service areas to be amended. Now that your ability to use Oak Creek as a supplier faces uncertainty, this would be a good time for you to re- evaluate your decision not to seek such an amendment.

It would be in the best interest of Waukesha city residents for you to reconsider such a request to SEWRPC. If one of the Great Lakes states vetoes your application over this issue, rewriting the diversion request to limit it to the existing service area will push your timeline well beyond your 2018 deadline for providing a non-radium tainted water source.

A veto of a diversion request using the proposed expanded service area is a real possibility based on the requirements set forth in the Great Lakes Compact. Alternatively, one or more the Great Lakes governors may send it back with instructions to revise the service area. Either way it will encroach on your timeline.

The Compact clearly indicates that a diversion request must demonstrate that the community is without adequate supplies of potable water, that no reasonable alternative supply exists and that the area to which the water is to be diverted and volume thereof should be minimized. The proposed expanded service area is in direct contradiction to those requirements.

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.

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% 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.

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. 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.

Sincerely,

Tom Barrett
Mayor