This Just In ...

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