Public Policy Forum Blog

An Opportunity for Service Sharing on the Milwaukee County Grounds

When most Wisconsin citizens think about water utilities, they typically think about municipal entities.  In fact, the Wisconsin Public Service Commission (PSC) regulates 577 municipal-owned water utilities in the State of Wisconsin.

Few people realize, however, that Milwaukee County also owns a water utility, which supplies about 50 million gallons per year to approximately 20 customers on the Milwaukee County Grounds in Wauwatosa.  The county utility traces back to the days when the County Grounds were occupied solely by county institutions, such as the County Hospital, a poor farm, an orphanage, and a tuberculosis asylum.  The county also once owned an electric utility on the County Grounds, but sold it to We Energies in 1995. 

Over the past 100 years, several of the county functions at the site have been privatized, phased out, or moved to other locations.  They have been replaced by major institutions like Froedtert and Children’s hospitals, the Medical College of Wisconsin, and the Milwaukee County Research Park, which serves as an incubator for high technology businesses.  Significant parcels of the County Grounds also have been sold to private sector occupants such as GE Healthcare and, more recently, the University of Wisconsin-Milwaukee for the development of Innovation Park Campus. 

Today, the major county functions remaining on the County Grounds are the Mental Health Complex (which itself has been reduced by more than 600 beds since the 1990s); the Children’s Court/Juvenile Detention Center complex; and the Parks Department’s administration building.  Together, the county-owned facilities only consume about 7% of the water supplied by the county water utility. 

So why does Milwaukee County still own and operate a water utility, and might it make more sense to transfer the service to the City of Wauwatosa utility? That is the question the Public Policy Forum seeks to answer in a research project commissioned by the county’s Department of Administrative Services and the City of Wauwatosa.  The study will provide an independent assessment for the two governments of the pros and cons of Milwaukee County’s continued ownership of the County Grounds water utility, and explore the financial and technical considerations surrounding a possible shift in ownership to the City of Wauwatosa.   

This morning, we release a preliminary analysis that considers the possible transfer of water service solely for seven users primarily west of Highway 45 and adjacent to Innovation Park.  A lengthier report will be produced this summer that will consider the possible transfer of the entire service area to the Wauwatosa utility. 

The need for a preliminary analysis of the smaller service area is dictated by the timing of the Zoo Interchange project.  In order for the county to continue to serve the seven customers adjacent to the highway, the county and state would need to pay for new water main crossings of the new highway at three points.  A decision regarding service to these customers must be made in the near future to accommodate a construction schedule that is likely to begin early next year.

Our report finds that it would cost the county and state more than $2 million to fund the new water main crossings.  Conversely, if the seven impacted properties were instead served by the City water utility, the total construction cost would be $362,000.  There also could be savings to customers of both utilities and possible benefits in terms of service and reliability.  

We also find, however, that the transfer of service would need to include a shift in ownership of one of three County Grounds water towers, which would be complicated by more than $750,000 of outstanding debt on the tower, as well as its cell phone antenna revenue-generating potential.  That does not mean a deal is unworkable, but it does mean it will require some detailed negotiation.

Given the looming deadlines and potential cost savings involved, it is important for those negotiations to commence immediately.  Because the initial two areas are (or will be) served both by city and county water mains, this would appear to be an attractive opportunity for the two governments to work jointly to eliminate redundant infrastructure and improve water service, while reducing its cost. 

The Forum’s preliminary analysis of water service on the Milwaukee County Grounds can be downloaded here.  We expect the issue to surface before a County Board committee next month.

Author: 
Rob Henken