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Great Lakes Article:

Revenue in water deal estimated at $608,000

Milwaukee panel backs sale to New Berlin

Milwaukee Journal Sentinel
June 15 2002

A deal to sell Lake Michigan water to New Berlin would generate $608,000 a year for the Milwaukee Water Works and help ward off future rate increases for existing customers, Water Works Superintendent Carrie Lewis said Friday.

"That's clearly a substantial amount of revenue for the Water Works," Lewis told the Milwaukee Common Council's Utilities and Licenses Committee.

Listing the advantages of selling what Chairman Jeff Pawlinski called an "excellent product," the committee Friday recommended that the Common Council grant Milwaukee Water Works the authority to negotiate a water service agreement with the Waukesha County suburb.

The Milwaukee council is scheduled to vote on the matter June 25.

As demand for water has begun to outpace supply in the suburb of 38,000, New Berlin officials entered talks with the Milwaukee Water Works in April 1999 for water service in an eastern section of New Berlin that lies in the Great Lakes basin.

Water quality is also an issue for New Berlin, which relies entirely on groundwater sources for its water supply. As radium and iron levels in New Berlin water begin exceeding federal standards, Mayor Ted Wysocki said the city would have to make a "significant capital investment" to continue solely using its deep and shallow aquifers.

"We owe it to our utility rate payers to look into viable options," Wysocki said.

In 2001, the city of New Berlin pumped an average of 3.4 million gallons of water per day, roughly a 36% increase from the 2.5 million gallons per day pumped in 1990. During that same period, the number of metered water customers increased by 2,298, according to an analysis by the city of Milwaukee's Legislative Reference Bureau.

If New Berlin were to purchase 1.7 million gallons of water per day from Milwaukee, the Water Works expects to generate $608,000 in additional annual revenue. This year, the Water Works expects to receive a total of $74.1 million from all of its customers.

Lewis told the council committee that the Milwaukee Water Works has "ample opportunity" to accommodate New Berlin. On a typical day, the Water Works treats about 130 million gallons - well under its maximum design capacity of about 380 gallons per day.

The Water Works already sells Lake Michigan water to all or part of more than a dozen suburbs that previously relied on well water.

Wysocki said Friday that New Berlin is still considering all of its options and has not locked itself into entering a deal for Lake Michigan water, even if the Milwaukee Common Council votes to pursue negotiations.

Pawlinski said he has always been an advocate of water sales, though he noted that the issue has sparked debate on the Milwaukee Common Council floor in the past.

"We ought to take advantage of selling our product when we can," Pawlinski said.

However, Milwaukee Ald. Michael Murphy said he opposes selling water to suburbs because it promotes urban sprawl and gives those communities a leg up on Milwaukee in the competition for job-creating businesses. But in tight budget times, Murphy said he thinks the majority of the council will support such a sale.

"We're in dire straits - we need every penny we can get right now," Murphy said. "But it fails to look at the big picture in terms of the larger issues of urban sprawl and smart growth planning."

This isn't the first time New Berlin has sought Milwaukee water. When rapid growth in the 1970s contributed to well levels dropping by 8 feet per year, Milwaukee studied and rejected a number of New Berlin's requests, according to the Legislative Reference Bureau report.

The Milwaukee Common Council had been concerned about competition with New Berlin for industrial development, as dozens of firms had left the city in the 1970s and moved to New Berlin's industrial park.

There is no industrial development planned in the New Berlin area currently under discussion, which is already 95% developed.

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