The city of Waukesha, Wisconsin, recently secured a $ 137.1 million loan from the federal government for its construction project to transfer the city’s municipal water source to Lake Michigan. Andrew Wheeler, administrator of the US Environmental Protection Agency, announced the loan on August 12 in Waukesha alongside Mayor Shawn Reilly.
The Lake Michigan Water Supply Project is a response to high radium levels and depleted water levels in the aquifer that currently supplies Waukesha’s drinking water.
The city is currently under a court order to meet radium standards by September 1, 2023. To achieve this compliance, Waukesha is building a pipe system to get an average of 8.2 million gallons of Lake Michigan water per day from Milwaukee and return the waters waste treated to the lake through the River root.
Former opposition to the project
The plan to divert water from Lake Michigan to Waukesha was initially controversial.
Waukesha is in a county that straddles the Great Lakes Basin and the Mississippi River Basin, and under the terms of the 2008 Great Lakes Pact, those cities can apply to withdraw water from the Great Lakes. Waukesha was the first city to do so, and its proposal sparked opposition in the region.
All eight Great Lakes states unanimously approved Waukesha’s withdrawal in 2016, but members of the Great Lakes-St. Lawrence Cities Initiative, a group of US and Canadian mayors, opposed the move. decision. They argued that the Governors and Waukesha had not sufficiently considered water sources other than Lake Michigan and had tried to “fit” Waukesha’s demand into the terms of the pact. Mayors were also concerned that Waukesha was using the bypass to expand its water service area, although Waukesha subsequently reduced the proposed size of the service area.
In April 2017, the Compact Council of eight representatives of the governors voted unanimously that there was no reason for the governors to reopen or change their 2016 decision to allow the Waukesha diversion, and the mayors planned to sue the Compact Council in response.
They chose not to continue in August 2017 in exchange for working with an advisory committee to update review procedures for future water divisions. The Compact Council in the end rejected updates proposed in December 2018.
In 2019, another controversy erupted when the city of New Berlin objected to the construction of reservoirs and a pumping station for the project. The original plan was to build on part of a county park that came under New Berlin, and early approvals received unanimous support.
However, the public’s refusal to build in the park persuaded New Berlin officials to deny the conditional use permit. Waukesha first filed a complaint but ended up negotiate a settlement whereby New Berlin would pay $ 2 million to move the proposed facilities to Waukesha.
Less costly loan terms for taxpayers
Waukesha applied over two years ago for the Law on the financing and innovation of hydraulic infrastructures loan, a federal loan program established in 2014 and administered by the EPA for water and sanitation infrastructure projects.
“The politicians in this region, Senator Baldwin, Senator Johnson, Congressman Sensenbrenner, have really helped us – putting us in the right people, providing the letters of support, making sure the federal government understands our case and how important it was to the residents, given that we had to solve this public health problem that we had in the town of Waukesha, ”said Dan Duchniak, General Manager of Waukesha Water Utility.
To comply with the 2008 Great Lakes Pact, Waukesha must return 100% of the water it withdraws to the lake. Compliance with this term requires the construction of the return line system in addition to the new water supply line. The whole project is expensive – the current estimate is $ 286 million – and water prices will have to rise to pay for it.
The loan offers significant savings for residents of Waukesha, explained Duchniak. The interest rate of 1.16% is well below the 3% that the utility had expected when the first loan application, which will benefit taxpayers.
“The end result is that residents will save interest charges of around $ 1 million per year,” Duchniak said.
The exact impact of the loan on rate hikes is not yet known. The utility has yet to award three construction contracts, and the final cost of these will affect the price increase.
But the alternative, if the WIFIA loan had not been granted, would have been to borrow money through a combination of general debt and drinking water loans, low rate loans. ‘interest subsidized by the federal government and repaid over 30 years.
“Interest rates for drinking water loans are hovering around 2%,” Duchniak said. “The difference is therefore significant in terms of interest rates.”
Waukesha taxpayers will benefit from the 38-year repayment term. The WIFIA program allows the utility to negotiate repayment terms to work with any existing debt repayment plans. Waukesha can make lower payments for the WIFIA loan while the utility is still repaying loans for other infrastructure improvements, so the collective repayment costs are more consistent over time.
The project stays on schedule
In December 2019, Wisconsin Ministry of Natural Resources has completed its environmental impact assessment for the proposed project and has determined that it complies with the Wisconsin Environmental Policy Act. MNR also issued a waterway and wetland permit for the construction of the pipeline and reissued the city’s sewage treatment permit with requirements for the discharge of the treatment sewage into the Root River.
Almost all state and federal permits have been issued, according to Duchniak.
“We are awaiting construction approval for the reservoirs and booster station in Waukesha from the Public Service Commission, which is our water regulatory agency in the state of Wisconsin,” said Duchniak. The need to change the site from New Berlin to Waukesha is the reason this permit is still pending, but Waukesha is currently holding public hearings, including a virtual open house on August 26 for residents of the neighborhood in which the station will be built, as part of the approval process.
A number of standard local building permits must also be applied for by contractors, but the utility does not foresee any problems in obtaining these permits quickly.
On June 2, the town of Waukesha awarded two bids for the construction of the return pipeline and one for the return pumping station, which totaled $ 20 million below budget. The return pipeline construction process began in August – the pipeline is not yet buried, but supplies are being procured.
Construction bids for the Milwaukee to Waukesha water supply pipeline were due on August 25 and will be awarded by the Waukesha Common Council on August 27 and the county on September 1. Construction of these parts of the project is expected to begin in late 2020 or early 2021. The water supply pumping station will be tendered by the City of Milwaukee in October or November and awarded in late 2020 or early 2021. The construction of the reservoirs and the booster station and the construction of the water tower will be the subject of a call for tenders towards the beginning of 2021. as well as.
Although the transition to virtual meetings during the pandemic made public engagement and pre-tender meetings more difficult and resulted in delays in regulatory approvals, overall, COVID-19 n has not slowed down the construction schedule.
“We are also addressing a public health issue here in the town of Waukesha,” Duchniak said. “We are under a court order to fix the radium problem in our water. We must therefore move forward with all the tools at our disposal. We’re pretty much on schedule, and we’re going to be able to go ahead and meet the deadline for our court order. “
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Featured Image: Congressman Bryan Steil, EPA Administrator Andrew Wheeler and Waukesha Mayor Shawn Reilly answer questions from the public during the press conference announcing the WIFIA loan for the WIFIA Remediation Project Waukesha water. (Photo courtesy of Great Water Alliance)