Wednesday, September 19, 2012

Drip, Drip. Tick, Tick...Waukesha Water Deal Still On The Slow Track

Time might have been on The Rolling Stones side, but is it on Waukesha's?

Before we discuss the continuing delays in Waukesha's disclosure of diverted water sale offers from Oak Creek and Racine (Waukesha wants to supply four neighboring communities with diverted water; Milwaukee declined to negotiate on those terms), and delays in signing a firm contract with a seller, and delays in the DNR's environmental review of and potential approval of the whole shebang - - let's ask this question:

What is the status and credibility of the 18-month planning "buffer" Waukesha said it had incorporated into its application for a Lake Michigan diversion more than two years ago - -  as a hard June, 2018 legal deadline looms for the city to provide a new, radium-free water supply for its users?

The planning buffer was an internal benchmark, but it also served as a lever on public opinion and on communities that might be considered sellers - - presumed in the plan's $164 million projected cost to be Milwaukee, closest of the three potential sellers to Waukesha - - and was a pressure point also on the DNR and eventually on the other seven Great Lakes required under a controlling multi-state Compact to give unanimous consent to Waukesha's application.

This is how it the buffer was described by the Waukesha Patch in November, 2011:

When the Common Council first approved submitting the application [in the spring of 2010], an 18-month buffer was put into the application to allow for any snags. Because of delays, that buffer has been cut down, allowing for no more significant delays as construction needs to be completed by June 2018.

“By the end of next year, we will need a decision,” said Duchniak during the meeting.

The DNR does not expect to have the technical review and environmental impact statement finished before December, according to its website. A second round of public comment on the application will occur after the documents are drafted.
The multiple delays, as well as the evaporating buffer, prompted me to write this for context last month:
I remember when Waukesha said it was moving forward with its application in May, 2009, but canceled a special Council meeting about it later that year. 

And changed consultants late in the game.

Then got its final, final application to the DNR in May, 2010.

Keep these self-inflicted delays in mind when Waukesha goes back to hurry-up mode and jams the DNR, and the Great Lakes Council of Governors (all eight must approve the application if and when the DNR gives a final OK, perhaps next year after environmental review, hearings, etc.), for quick action on the application because Waukesha agreed with the US EPA to meet a legal deadline and provide higher-quality water service by June, 2018.

Then chose the difficult path of qualifying for a Lake Michigan diversion under the new Great Lakes Compact of 2008 with a precedent-setting application after ruling out all other alternatives.
And I had noted that in the spring of 2010, after earlier delays, Waukesha indicated it hoped the DNR could finish its review of the application in 90-120 days, which might have kept the buffer in place.

Fast forward to last night, where the Waukesha Water Utility Commission and the Common Council heard closed-door presentations on negotiations for a water deal with the cities of Oak Creek and Racine, but as Don Behm of the Journal Sentinel indicates, paper work about a potential deal with a preferred seller could be in hand by the end of October.

But note the qualifiers:
The timetable calls for the Waukesha Common Council and the preferred supplier's city council to approve by the end of October a formal memorandum of understanding that summarizes details of an eventual water agreement.
That's one step above a handshake, but way below a signed contract.

In other words, a crucial piece of a complete diversion application - - an identified seller - - is still some time and several hearing and approval steps away.

And since the location of the water seller will determine where the water's return flow discharge point will be - - yet another key piece of a completed application because the Great Lakes Compact requires the return point be as close as possible to the point of the diversion's origin - - the DNR's review and completion of an Environmental Impact Statement is still some time away, too.

If the origin point is Oak Creek, does returning the water as treated discharge through Wauwatosa's Underwood Creek, and a stretch of the Menomonee River through Milwaukee to the lakefront comply with the Compact?

And the inevitable questions or objections from Wauwatosa, and Milwaukee?

All of which waters down, or defeats, the buffer period, let alone the June, 2018 completion deadline.


Anonymous said...

How can Waukesha possibly afford this? The common council would be signing off on the financial death certificate of the city. The water utility already said they're implementing monthly water bills because many people won't be able to pay quarterly. Compound that to the highest property taxes in Waukesha County and the city will enter into a financial tailspin from dropping property values from which the city will never recover.

Lake Michigan is THE MOST EXPENSIVE OPTION and is NOT the only long term solution.

Boxer said...

Just wait until the real numbers of an Oak Creek or Racine deal hit the public. People will (NOT!) be lining up to buy big, expensive houses in the next cornfield just so's they can drink Lake Michigan water. Less well-off people in smaller homes in the city will further struggle to pay their mortgages and the new, incredibly higher water rates (as Duckniak drives by in his SUV and waves 'hi'). Even if the housing market turns around statewide or nationally, the city of Waukesha will continue to suffer as more people go into foreclosure. Waukesha will become a hollowed-out place with fewer people to carry the burden that the Water Utility has stuck it with. And what new businesses will be eager to locate there?
The Water Follies of Waukesha: stay tuned.

Anonymous said...


Do you get the impression that those who would consider buying in Waukesha might consider greater value in another development with less taxes and much lower water water bills such as perhaps, Pabst Farms in Oconomowac?

Re said...

And who is the development manager at Pabst Farms? None other than Dan Warren, the chairman of the Waukesha Water Utility.

I wonder why it is so hard for everyone in Waukesha to connect the dots. I'm sure the Great Lakes governors won't have such a difficult time.

Anonymous said...

I'm betting there will be a number of lawsuits filed that will only further delay any chance federal legislators would be foolish enough to support this honey bucket.

If one federal lawsuit were filed it could mean a successful application for federal funding from the US Army Corp of Engineers would be very unlikely.

Boxer said...

@ Anon 6:26 am:

Right now very few are buying and development at least around Waukesha is next to halted. It's hard to say where buyers of new construction might be coming from, much less where they'd choose to build/live. But it's a certainty that with many communities offering open space for residential developments and country-type living, buyers are going to choose areas with less troubling characteristics than Waukesha's high city taxes, high and going higher water rates, struggling schools, political infighting and uncertain future. And that's just if the prospective buyers are paying attention to the media. If they are not, the awareness is likely to be: doesn't Waukesha have radon (they always say radon instead of radium) problem. Why not just buy somewhere else without these black clouds hanging over it? There are cornfields just begging for housing in Racine, Walworth,
Washington, Ozaukee and Kenosha counties, to say nothing of elsewhere in Waukesha County. I personally think that the
documented failures of Pabst farm development has hung some black clouds over it as well.
Time will tell, but I highly doubt we'll ever return to the days of record-high real estate prices, competing offers over asking price, and real pressure to build new construction any- and everywhere. For these reasons: Wisconsin population isn't supporting that kind of growth, a good portion of the buying market can no longer afford the homes they currently live in, much less a second or investment home or a move-up home, today's young parents are part of the baby bust generation so there aren't that many of them, good middle-management jobs have all but disappeared, and today's college grads have huge debt and there are few well-paying jobs for them. (They're putting off marriage and the idea that they'll step onto the escalator of their parent's lives is iffy: whether they'll be able to or even want to.) It will be DECADES before they are even ready to think about buying homes.

This is somewhat the fault of the poor economy, but mostly the fallout from the housing market excesses and crash of 2007. For those paying attention to housing market conditions, many saw the signs of this crash as early as 2004-2005 and predicted it.

So it wasn't caused by Obama or even by poor people lapping up houses they couldn't afford. Upper middle class people were buying up real estate for investment and predatory lenders were hounding people whom they knew couldn't afford it into mortgages beyond their means to repay.

Anonymous said...

The real estate market crash was caused by the final bottoming out of interest rates.
Everyone gives false credit to Bill Clinton for the good economy under his administration. B.S. It was falling mortgage rates that allowed refinancing and creating more disposable income that created economic stimulas. With rates at rock bottom and increasing government debt, the future for Waukesha, should it go the most expensive route of this made-up issue of a water shortage, is certain economic disaster.

Boxer said...

Waukesha's future is certain economic disaster, true that, but you're way off on the cause of the housing mortgage crisis. Try predatory lending by mortgage brokers and banks who then bundled and sold those mortgages as 'mortgage-backed securities' to investors who were falsely reassured that the mortgages were rated AAA. The originating banks had no incentive to make good loans because they knew their banks wouldn't be holding the paper anyway. Bundlers sold the securities without divulging their shakiness, Wall Street bet on it, everyone collected their fees and profits along the way, while AIG insured it all. Read anything by Matt Taibbi in Rolling Stone or Bethany McClean. They've well-documented the scam and written the story in a way that's understandable to the average layman.

Anonymous said...

I know the story, Boxer. It was the fault of the rating agencies, not the banks.

All the flim-flam took place after interest rates bottomed out and then Barney Frank tried to put every American in a house whether they could afford it, or not.