Friday, July 25, 2008

Milwaukee Committee Will Delay New Berlin Water Sale Decision

Citing the issue's complexity, Milwaukee aldermen will take public testimony next Tuesday at its Public Works committee on a proposed water sale to New Berlin, but delay action until September, according to the Milwaukee Journal Sentinel.

This blog has carried items the last few days on the proposed deal - - example here - - which includes a $1.5 million, one-time payment by New Berlin in addition to wholesale purchases of water estimated at $966,000 in the first year of the agreement.

The two communities also have agreed to a yearly meeting to discuss employment issues, and will sign a pledge not to raid each other's industries.

My position on the agreement is that it is a good first step, but does not address the full value of water, or its full relationship to development that New Berlin estimates at 1,119 new housing units and 5,668 new jobs.

New Berlin's median home value, according to the 2000 census, was $162,000, so 1,119 new housing units translates eventually to about $180,000,000 in new tax base - - maybe more, maybe less, depending on the housing mix, and, of course, the market.

Another ballpark number: 5,668 jobs in the area where water is headed. At, say, $12 per hour, that means about $24,000 per year in salary per job, or an eventual total annual payroll of $136,000,000.

Since I'm not throwing in overtime or benefits, or big management salaries, I'd say that's a pretty conservative number, and I know it will take some years to reach the maximum number of jobs.

And I know that not all those employees will live in New Berlin, but a decent percentage might.

And I have no idea how to calculate the potential value of expanded or new business or commercial properties to house those new employees, or the retail and other taxable spin-off developments and employment that will occur nearby.

Suffice it to say there will be some of that kind of spin-off for New Berlin.

My point is that the diverted Lake Michigan water is aimed at an area in New Berlin where that citysays there will be substantial development.

The question is: is the water-supplying community getting adequate compensation in return, both financially and socially?

Take affordable housing and transportation infrastructure - - two huge expenses that fall heavily on Milwaukee, where most of the region's lower-income residents live.

There is no direct Milwaukee County transit service to the heart of this area in New Berlin - - its Industrial Park.

Also; New Berlin also only has 80 units of so-called "affordable housing," nearly of which is for seniors, not low-income families or single persons - - the very Milwaukee workers who face a more-than-two-hour bus and charter coach ride to the Industrial Park, and who might benefit from more affordable housing in New Berlin if there were more units.

Affordable housing and transit improvements are among the areas of sprawl development mitigation that the city wants addressed in potential water sales to communities outside of the Great Lakes basin now allowed by the Great Lakes Compact.

The portion of New Berlin that the proposed water sale will serve is outside of the basin.

Much of the discussion on the 29th at the Common Council hearing will turn on these economic, social and regional policy issues.

A delay in consideration until September will give aldermen and city staff time to ask more questions and gather more information; infrastructure at the Milwaukee Water Works to move water to New Berlin would not be completed until 2009 at the earliest, so there is ample time to make sure the right questions are framed, researched and answered before deals are signed and money is spent.

It's not an 11th-hour time frame. More like hour nine or 10.

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