Council Members Push for MMSD Audit

Milwaukee City Hall. Photo by Urban Milwaukee staff.

Some members of the Milwaukee Common Council pushed for an independent audit of the Milwaukee Metropolitan Sewerage District (MMSD) amid public allegations that Veolia, a private water contractor, is mismanaging the district’s wastewater facilities.

They even tried to block the reappointment of MMSD commission members, including the chair of the MMSD board, but later backpedaled following a heated discussion in a closed-door meeting.

Members of the MMSD Commission were appearing before the Public Works Committee seeking reappointment to the sewerage district’s oversight body, a reappointment that members of the committee initially moved to hold until action was taken to investigate the public claims against Veolia and MMSD.

MMSD Commission Chair Corey Zetts and other commissioners, including Common Council members Mark Chambers and Milele A. Coggs, state Rep. Kalan Haywood II and Julia Taylor, former president of the Greater Milwaukee Committee, are all up for reappointment. A majority of commissioners are appointed by the mayor and confirmed by the council. All are paid a $10,000 annual stipend.

Ald. Robert Bauman made the motion to hold consideration of their reappointment to the board in light of the allegations from Common Ground and more than two dozen whistleblowers, including two who have come forward publicly. It is alleged that Veolia is mismanaging the sewerage systems to save money, letting equipment fall into disrepair to increase profits on replacements and running the facilities under capacity during heavy rainfall, increasing the risk of sewer overflows and basement backups.

Common Ground is calling for an independent, third-party performance audit of the operations and conditions at the sewerage district’s two wastewater facilities: Jones Island and South Shore.

Veolia has held the contract to operate the MMSD facilities since 2008. The sewerage district is in the middle of a public procurement process for the next 10-year contract, which begins in 2028 and is valued at about $700 million. The contract is scheduled to be awarded in September. Veolia is up against Jacobs Solutions, a Dallas-based engineering services company.

On Monday, Milwaukee County Supervisors released a statement calling for an audit by the state’s Legislative Audit Bureau. Later, Zetts announced her intention to push for an independent audit overseen by the MMSD Commission. Common Ground responded, saying MMSD had already violated public trust with its initial response to their campaign, which included attacking the credibility of the first whistleblower Steve Jacquart. The group is backing a call for an audit by the state Legislative Audit Bureau.

“I apologize for maybe reacting a little emotionally to a friend coming forward with those allegations, rather than to the commission,” Zetts said. “But now that we have seen those details, we have initiated steps to begin an independent, third-party performance audit that will be overseen by the commission.” 

The allegations against the sewerage district are serious issues, including flooding and the release of raw sewage into waterways, that have directly affected the local community in recent years, Bauman said.

“I think it’s important that there is an independent review, and even more important, that it appears to be independent to the court of public opinion,” Bauman said.

Council President José Pérez echoed Bauman, saying the audit needed to be free from even the appearance of MMSD influence.

“In the end, if MMSD is overseeing this audit, it isn’t an independent audit,” Perez said. “It has to be completely removed from MMSD in order to put everyone’s kind of fears or questions or doubt, to put them to rest, it has to be completely independent.”

Perez, who served on the MMSD Commission in the past, also said it was unlikely an audit could be completed before the scheduled contract approval in September.

Zetts told the committee she has discussed the audit with MMSD Executive Director Kevin Shafer. There are firms that work in wastewater who could conduct an audit, and the executive director has the budget authority within his office to execute a contract.

“The audit should be paid for by MMSD,” Zetts said. “It will need to be paid, but overseen by the commission, which is an independent body.”

Perez asked whether the Legislative Audit Bureau could conduct an audit. Zetts replied that MMSD wants an audit completed before September. An audit by the state Legislative Audit Bureau is “unreasonable right now, when we have a timeline,” Chambers said.

“What’s the magic of September? Is there a contract expiration date here?” Bauman asked.

Finalizing a contract in September will give the next operator time to take over and implement everything included in the extensive contract, Zetts said.

In response to questions from Ald. Alex Brower, Zetts conceded the commission could delay approval of a new contract, “but at this point we’re still feeling optimistic about being able to make an informed decision by September.”

The committee voted to hold consideration of the commissioners’ reappointments. But then, due to issues with the virtual meeting technology, the committee took a recess. Coggs then pulled Bauman into a side room with Perez and Chambers, and a heated discussion ensued. When they exited the room and the meeting resumed, Bauman moved to reconsider the appointments one by one.

The committee approved all five, but not without some protest. Bauman objected to the reappointment for the three commissioners that are not members of the Common Council: Haywood, Taylor and Zetts.