Senator Seeks Answers on True Cost of Milwaukee Streetcar Project

MacIver News Service | August 23, 2011

[Milwaukee, Wisconsin]  A controversial Milwaukee streetcar project, thought to be funded primarily with federal funds, could have fiscal implications throughout Wisconsin, a state lawmaker warns.

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

“While I recognize that the Milwaukee City Council believes it is acting in the best interest of its citizens, this proposal could have implications that extend far beyond the City of Milwaukee,” Wanggaard wrote. “According to the Milwaukee Journal Sentinel, utilities have warned that the cost of moving utility lines along the proposed route could exceed $50 million.”

Utility ratepayers may be on the hook for such expenses, thereby making this a state issue, according to Wanggaard.

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.

“Since many of my constituents are customers to these same utility companies, I am worried that these costs could be passed on to Racine County ratepayers.” Wanggaard’s letter to the PSC continued. “Taxpayers of Racine should not be required to pay for the local transportation desires of the city of Milwaukee.”

Wanggaard, who said in the letter he was working ‘on behalf of the ratepayers of southeastern Wisconsin,” asked for answers to four specific questions.

  1. What infrastructure could potentially be affected by this project?  Specifically, what kinds of infrastructure would have to be moved or modified in some fashion, and who owns the affected infrastructure?
  2. What is the approximate cost for moving the utility facilities and equipment?  Most importantly, who would pay for the costs:  ratepayers, Milwaukee property taxpayers, or another party?
  3. What jurisdiction does the PSC have over this project?  Specifically, what aspects of the proposed streetcar line would have to come to the PSC for approval, and what is the process for that approval?
  4. Does the PSC have the authority and means to prevent non-Milwaukee residents from financing the proposed Milwaukee streetcar line? If not, what legislation would be required? If so, what steps must be taken to ensure that my constituents are not picking up the tab for a transportation system that few, if any, of them will ever use?

Sen. Wanggaard

Even before ground is broken on the 2.1-mile route, Milwaukee officials are seeking additional federal aid for proposed route extensions to add 1.5 miles to the line. These expansions would boost the construction cost past $100 million nearly double the annual operating costs.

AT&T and American Transmission Company, the firm that owns the electric transmission lines, have indicated to city officials the cost of relocating utility infrastructure in the area will be tens of millions of dollars.

“Preliminary estimates we have received from utility providers suggest that the cost of modifying, rerouting, or removing this infrastructure along Broadway to accommodate the proposed streetcar project could run in the tens of millions,” said Metropolitan Milwaukee Association of Commerce’s Steve Baas in testimony before a city committee prior to the vote. “Presumably, these costs would have to be recovered from additional city funding or from businesses, residents and property owners of the city in the form of higher taxes.  The magnitude of the infrastructure modifications required along the Broadway route could also likely have an impact on the proposed timeline for the streetcar project, delaying its implementation and operation.”

Despite Baas’ concerns, the committee–and later the full Milwaukee City Council–voted to move forward with the project, although they with withhold releasing funds for construction pending getting answers about the utility costs from the city comptroller.

Similarly, Senator Wanggaard hopes to get answers on the potential utility-related costs from the PSC before the project advances much further.

In 1949 a consulting firm told the city it was time to get rid of its 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.