Donovan Lies About Streetcar Suit
City loses challenge to state law making it pay for utilities, Donovan lies about impact.
According to mayoral candidate Bob Donovan, the cost of the Milwaukee Streetcar just went up by $25 million. Donovan made the claim on Facebook following a ruling by Milwaukee County Circuit Court William Sosnay that the city must pay to relocate utilities for the streetcar project. Donovan’s Facebook post notes that the $128 million project “[has risen] to nearly $150 million with the City’s added responsibility to cover utility relocation costs.” Is he correct?
Despite the ruling from Sosnay, the cost of the Milwaukee Streetcar didn’t go up. The approved budget for the project already included the utility relocation being paid for by the city. The reality for the Milwaukee Streetcar project is business as usual. Groundbreaking is still scheduled for this spring and the project budget for the first two phases plus lakefront spur is still $128.1 million.
It should come as no surprise that Donovan would seize on this information less than 48 hours before a primary election. The south side alderman has been a long-time opponent of the Milwaukee Streetcar and its champion Mayor Tom Barrett and has attempted for years to use the project as a wedge issue in his campaign for mayor. Donovan was a vocal supporter of a failed attempt to require a referendum to approve the project. Will he succeed at the ballot box? We’ll find out tomorrow when election results are announced.
The lawsuit was originally filed in November 2014 by the City of Milwaukee. The case dealt with legal authority issues between local governments and utilities, and the city’s ability to use what are known as “police powers” to regulate the utilities. The lawsuit also dealt with a 2013 state law, passed as part of the budget, that requires cities to pay for utility relocation costs specifically for streetcar projects. For other transportation and street projects, utilities must pay relocation costs.
Assistant city attorney Thomas D. Miller noted that the city is reviewing their options for any future legal action. Jodie Tabak, spokesperson for mayor’s office, told Mary Spicuzza of the Milwaukee Journal Sentinel that “the decision is not a surprise. We have been working collaboratively with We Energies to decrease the cost as much as possible. The project is on budget, and this decision will not have any impact on property taxes.”
The Public Service Commission praised the ruling. “We applaud the circuit court in upholding the PSC’s decision and stand by the fact that Wisconsin’s utilities should not be required to bear the cost of relocating or modifying their infrastructure for the streetcar project,” PSC spokeswoman Elise Nelson said in a statement.
City officials and project consultants continue to work with We Energies and other affected utilities to reduce the need for utility relocations. These changes have included relocating the planned tracks from E. Wells St. to E. Kilbourn Ave. and consolidating the line to N. Jackson St., instead of being splitting over N. Jackson St. and N. Van Buren St.
Adjustments are normal for large public works projects. The Marquette Interchange, an $800 million-plus, project saw an estimated utility relocation fee of $120 million reduced to $23 million by design changes. As the ruling confirms, the streetcar project is unique in that it requires the city to pay for the relocations, not the utilities. Streetcar projects across the country have faced similar challenges, with Atlanta winning their case against AT&T over who should pay for relocation.
The streetcar project was originally approved by the Milwaukee Common Council on February 10th, 2015. At the time the project had a budget of $123.9 million, including an estimated $10 million federal grant for the lakefront spur. In October of last year the city received a $14.2 million Transportation Investment Generating Economic Recovery (TIGER) grant, which increased the project budget to $128.1 million. The added costs will go towards double-tracking a segment of track to the maintenance facility, as well as other improvements.
- Maintenance facility: $7.5 million
- 4 Vehicles: $17.6 million
- Phase 1 route: $73.8 million
- Phase 2 route (Lakefront extension): $29.2 million
- Federal ISTEA funding : $54.9 million
- Federal TIGER grant: $14.2 million
- Cathedral Place #49 TIF: $9.7 million
- Erie/Jefferson Riverwalk TIF #56: $18.3 million
- East Michigan St. TIF #82: $31.0 million
A federal congestion mitigation and air quality grant will pay for 80 percent of the operating costs for the first 18 months, with a possible 18-month extension. Operating costs will be covered by farebox revenue, advertising, corporate sponsors and the parking fund. Operating costs are estimated at $2.65 million annually. Service on the first phase of the system is on-track to begin in early 2018.
The Man Behind Bob Donovan
Is Donovan writing all of this himself? It seems unlikely. As I reported last July, Donovan has hired Steve Schumacher to manage his campaign on social media. Schumacher continues to be the highest paid member of Donovan’s campaign staff, making nearly $30,000, about 20 percent of the $124,000 Donovan has raised in campaign funds since January of last year.
“Barrett’s Trolley Folly Steams On!
A judge’s decision last week makes $25 million in utility relocation cost related to Mayor Tom Barrett’s downtown streetcar project the responsibility of City of Milwaukee property taxpayers.
A Barrett administration spokesperson tells the Milwaukee Journal Sentinel, “this decision will not have any impact on property taxes.”
The truth is the additional $25 million will come from the streetcar’s TIF (tax incremental financing). TIF money is generated by diverting property tax revenues that would otherwise go to MPS and other governmental agencies and departments.
Mayor Barrett sold his downtown streetcar to nine members of the Common Council (I and fellow mayoral candidate Alderman Joe Davis have long opposed the streetcar) at a cost of $124 million—the price tag rises to nearly $150 million with the City’s added responsibility to cover utility relocation costs.
This nonsense will not continue if I am elected the next Mayor of Milwaukee—I will stop Mayor Barrett’s stupid, wasteful streetcar dead in its tracks!
For more project details, including the project timeline, financing, route and possible extensions, see our extensive past coverage.
- Plats and Parcels: Lakefront Streetcar Extension Scheduled for June 2022 Opening - Jeramey Jannene - Dec 6th, 2020
- Transportation: Should Milwaukee Stop The Hop? - Jeramey Jannene - Oct 13th, 2020
- Transportation: The Hop Now Wears a Mask - Jeramey Jannene - Aug 18th, 2020
- Eyes on Milwaukee: Is A Couture Deal Finally Coming? - Jeramey Jannene - May 13th, 2020
- Transportation: SUV Driver Runs Into The Hop - Jeramey Jannene - Feb 28th, 2020
- Transportation: Streetcar Kiosks Could Bring In $500,000 Annually - Jeramey Jannene - Feb 20th, 2020
- Thanks A Million, Hop Riders! - The Hop - Feb 19th, 2020
- Transportation: We Energies Will Sponsor Streetcar - Jeramey Jannene - Feb 10th, 2020
- Transportation: Streetcar Ridership Up in January Versus 2019 - Jeramey Jannene - Feb 7th, 2020
- Transportation: Streetcar Ridership Up in December - Jeramey Jannene - Jan 14th, 2020
Read more about Milwaukee Streetcar here