Every day, as thousands of commuters drive south on Highway 45 towards the zoo interchange, it's likely that very few of them notice the newer water tower on the County Grounds proudly advertising the location of the Milwaukee Regional Medical Center (MRMC). Even fewer know that the water tower, and the entire water system serving the MRMC, is owned and operated by Milwaukee County.
In a report released in March, the Forum explored whether the county should remain in the water utility business and the issues that would surround the utility's possible transfer to the City of Wauwatosa.
"Originally, the utility was put in place to serve large public institutions on the Milwaukee County Grounds such as the County Poor Farm, Doyne Hospital, and others, but these institutions have faded away over time," says Forum Researcher Davida Amenta, the report's lead author. "In their place is an impressive regional medical center made up of private non-profit hospitals, a few remaining County operations, and private development, and even those remaining County operations may be downsized or relocated in the next 10 years."
In light of the diminished county presence on the County Grounds and Wauwatosa's ongoing interest in economic development there, the City and County jointly commissioned the Forum to study the feasibility of transferring the county water utility to the City.
The report finds that while there are many compelling reason for both parties to consider a transfer, there are also several financial and policy considerations that would complicate an agreement. For example, the water utility passes along its expenses to customers through water charges. These include about $900,000 in county expenses, most of which is labor costs. If the County no longer owned the utility, that labor could be diverted to other county maintenance needs. However, all of the county expenses that are charged to the water utility would need to be allocated to other parts of the county budget, increasing property tax levy by close to $700,000.
On the City side, annexing the county utility is projected to increase net revenue to the utility. That could produce a benefit for city ratepayers, but further analysis of the value of utility assets is needed before the City could consider any proposed rate changes. Additionally, there are a number of capital improvements that likely would need to be made before the City could take ownership of the utility, and how much they would cost and how they would be funded is unclear at this point.
"One group that would see a clear benefit from a transfer is the private customers of the Milwaukee County water utility," says Amenta. "Since the county utility is not regulated by the PSC, there is no upper limit to county water rates, while city rates need to be approved by the PSC. Our report estimates that water utility customers would save between 35% and 45% in water charges."
The report concludes that the question of which government entity should operate the water utility should be linked to the broader question of the County's future role at the County Grounds. It notes that the opportunity for the County, City, and private occupants to discuss a possible shift in the utility's ownership also represents an opportunity to consider general public service provision on the Grounds, as well as the possibility of developing a new governance framework that will meet the 21st century economic development needs and objectives of the respective governments, tenants, and taxpayers.
