Milwaukee is negotiating from a position of strength after the state forced Waukesha to reveal the costs of buying water from other communities.
Waukesha officials plan to buy Lake Michigan water from Milwaukee, Oak Creek or Racine, but so far have not committed to a community. The Waukesha Water Utility also has not revealed how much it will cost to build pipes to connect to any of the three communities.
That will change now that the Wisconsin Department of Natural Resources has asked the utility to include those details in its application for approval to use Lake Michigan water.
The higher the cost of building pipes to other communities, the better Milwaukee’s chances of getting Waukesha officials to accept other provisions in a water deal, said Milwaukee Alderman Michael Murphy.
Those provisions could include agreeing not to try to lure Milwaukee companies to Waukesha.
“I think if the numbers are laid out and they’re accurate, my gut feeling is Oak Creek or Racine will be much more expensive,” Murphy said. “So I do think Milwaukee would be the option to pursue.”
Dan Duchniak, general manager of the Waukesha Water Utility, said the utility has calculated the construction costs for all three communities, but he said he does not know what those costs are. He confirmed it would cost more to build pipes to Oak Creek or Racine than to Milwaukee, but Waukesha could request rate concessions from Oak Creek and Racine to offset the higher construction costs.
“There’s a number of different ways that can be addressed,” he said, “and those are all part of the negotiations, and I’m not at liberty to discuss negotiations right now.”
Duchniak said the utility will supply the cost estimates to the DNR, but he would not speculate on whether such disclosure would harm the city’s position to negotiate a good deal with Milwaukee or the other communities.
“I’m sure that those points would come up,” he said.
It will cost $164 million to build a pipeline, pump stations and other infrastructure to buy Lake Michigan water and pump it to Waukesha and then return treated water from the city’s wastewater plant to Underwood Creek in Wauwatosa, according estimates in Waukesha’s application to the DNR. But those figures do not specify whether Waukesha will buy water from Milwaukee, Oak Creek or Racine.
Bruce Baker, administrator of the DNR water division, said the agency must know the costs for each of the three communities before considering the application.
After Waukesha chose not to release cost estimates for Oak Creek and Racine, Murphy this year sponsored a city resolution to hire a consultant to estimate the cost of building pipelines. He said Milwaukee then rejected the consultant proposals and turned to Milwaukee staff members to estimate the costs.
The point of knowing those numbers, he said, is to improve the city’s bargaining position. Murphy said he heard estimates that it would be two to three times more expensive to build to Racine and Oak Creek.
“I think we will be in a good bargaining position,” Murphy said. “But we’re not going to gouge people to the point where we turn them away.”