State Regulators Tell Lawmakers Two-Mile Milwaukee Train Project Could Require $70 Million in Related Utility Work

MacIver News Service | September 26, 2011 | 9:40 am

[Madison, Wisc…] The price tag for a controversial streetcar in Milwaukee continues to grow, with the revelation from Wisconsin’s utility regulators that  costs to move utility lines for the boutique transportation project could exceed $70 million.

Cynthia Smith, general counsel for the Public Service Commission, explained the new figure in a letter to two Republican legislators who want to know if ratepayers outside the City of Milwaukee will be on the hook for paying for the costs.

THE PROJECT

The $64.6 million, 2.1-mile rail line would be funded by $55 million in federal transit aid (previously allocated twenty years ago) and $9.7 million in tax-incremental financing district funds. Supporters assert that rider fares, downtown parking fees and advertising revenue will the $2.65 million annual operating cost.  The Milwaukee Common Council has approved the project although they have withheld the release of funding for the project pending additional information regarding associated costs such as those described by the PSC in their letter to the senators.

THE ASSOCIATED COSTS

As we reported last month, Racine County Republican State Senator Van Wanggaard  sent a letter to Public Service Commission Chairperson Phil Montgomery seeking more information about the proposal.

In their response to Wanggaard and fellow Republican State Senator Leah Vukmir, the PSC confirmed the utility-related costs associated with the project could exceed $70 million.

The PSC broke down the costs.

WEPCO  – $45 million
ATC .5 to 15.4 million
AT&T 10 million

The PSC said the ATC costs will vary depending on the need for corrosion protection for the steel conduit holding the underground transmission lines because of the proximity to DC (direct current) lines powering the proposed streetcars. The Commission further notes that the AT&T estimate is not for costs that would be incurred by other co-located telecommunication providers.

The PSC letter states in part:

“At this time, it does not appear that the City has identified an “adequate health, safety or public welfare justification” for the Streetcar Project and therefore the utility (and its ratepayers) would not be obligated to pay for it. Rather, the project appears to be proposed by the City in its “proprietary” capacity and not in the exercise of its police powers and the costs should likely be borne by the City.”

Wanggaard believes the PSC’s letter alleviates his concerns that Racine utility ratepayers could be responsible for paying the cost of moving telecom and other utility infrastructure to construct the Milwaukee line.

“I am pleased that the Public Service Commission agrees that the costs of this purely local project should be paid for locally,” Wanggaard said. “My interest in this project has been, and continues to be, ensuring Racine residents are not picking up the tab for this Milwaukee transportation desire.”

In 1949 a consulting firm told the city it was time to get rid of its previous streetcars, saying, among other things, Milwaukee lacked the population density to make their operation feasible. March 2, 1958 was the last time a streetcar ran its route in Milwaukee. Since then, the population density of the city has decreased by nearly half.

Smith’s letter to the Senators.


Proposed route, courtesy of milwaukeestreetcar.com

  • Gary H.

    Taking into account past experience with Milwaukee and various projects that tend to have considerable overruns, considering that the base cost of 70 million and then tacking on a 20% overrun would bring the cost up to around 84 million, and that\’s on the low side if there aren\’t any screwup\’s. I don\’t know if the sheeple understand that this is just another word for Light Rail which our city fathers have been trying to push through for ages with no success. Instead they now call it a streetcar line in hopes that our short memories will not put two and two together. It is a proven fact that the motorized streetcars that circle the downtown area of Milwaukee during the summertime has been a colossal failure and is all but extinct. Somehow our city fathers think that this is going to increase ridership, which is not going to happen even in their wildest dreams. Our former County executive now Gov. Scott Walker stated that the city and the state are running dire fiscal deficits. In other words are spending too much money and can\’t cover the costs. Personally I don\’t think this is a good idea at all and I think it should be soundly voted down. Of course that\’s only my humble opinion. As a footnote I think that these funds, federal and otherwise would be better spent on infrastructure such as our roads and bridges rather than the luxury of a streetcar line.