Milwaukee Replaces Oak Creek in Waukesha Water Deal

Oct 30, 2017

Oak Creek had been on tap sell Waukesha Lake Michigan water to replace its contaminated well water. But Monday Waukesha announced that instead, it will purchase the supply from Milwaukee.

Before he toasted over glasses of water with Waukesha Mayor Shawn Reilly on Monday, Milwaukee Mayor Tom Barrett acknowledged the road to their agreement had been a bumpy one.

“What you had was a policy disagreement, and it was an honest policy disagreement, that fortunately the leaders of Waukesha and of Milwaukee never allowed to cloud our main focus. And our focus was how can we do right by our residents,” Barrett said.

Back in 2010, Waukesha submitted its first request to draw Lake Michigan water and planned to purchase it from Milwaukee. Because Waukesha is located within a county that straddles the Great Lakes basin, it could apply to draw water, under the Great Lakes Compact, which was designed to protect the massive water resource.

Over time, Waukesha’s plan morphed and expanded. The city proposed folding neighboring communities into its service area and that caused negotiations to break down with Milwaukee. The compact council ordered Waukesha to scale back its plans. Then, the city signed a letter of intent to purchase water from Oak Creek.

At the time, its water utility general manager Michael Sullivan said Oak Creek had plenty of extra capacity. The city estimated that by selling water to Waukesha, Oak Creek could cut water rates to its residents by as much as 20 percent.

Waukesha Water Utiility general manager Dan Duchniak and Milwaukee Water Works superintendent Jennifer Gonda at Monday's announcement.
Credit Susan Bence / Milwaukee Public Radio

On Monday, Waukesha Water Utility’s Dan Duchniak acknowledged that he had to let Oak Creek officials down, after Waukesha's recent decision to buy water from Milwaukee. “I have been keeping Mike Sullivan and the Oak Creek Common Council up to date. The mayor spoke with the mayor of Oak Creek several times over the weekend and we appreciate everything that they have done for us,” he said.

Duchniak said Waukesha began negotiating with the City of Milwaukee last June and the decision to change water providers was financial. “It would have been $325 million for the total cost of the project, compared to $285 million with Milwaukee, so it’s $40 million less going with Milwaukee." Because Milwaukee is closer, crews will lay a pipeline that’s “shortened” by 10 miles.

That alone carves off millions of construction dollars, and will save Waukesha households an estimated $200 each year, Duchniak said. “You just can’t overcome that distance and that savings for the ratepayers of Waukesha… We need to be fiscally responsible and that’s what we did. We have an agreement with the City of Milwaukee and we look forward to implementing that and hopefully having water to our customers hopefully by 2023."

Under the deal, when water starts flowing, Waukesha would initially pay Milwaukee $3 million a year, gradually increasing to more than $4.5 million. Milwaukee officials say the Waukesha water sale will result in lower water bills for Milwaukee residents.

Waukesha also will pay a one-time fee of $2.5 million and that sum will help Milwaukee with its own water crisis. The city has tens of thousands of older homes with lead pipes that feed water into them.

>> WUWM Coverage on Milwaukee's Lead Pipes

Milwaukee is trying to figure out how to replace many of those old lead laterals, in order to reduce the chance of lead poisoning. Public works commissioner Ghassan Korban said the city could use the one-time fee that Waukesha will pay to cover some of that work. “The mayor’s plan is to take one the one-time payment and apply it strictly to the lead service line replacement. That’s $2.5 million. You can do the math, but at least 250 of them at least."

The deal for Milwaukee to sell water to Waukesha is not yet sealed. Both city’s common councils must approve the plan.

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