Committee Recommends New Operator for Sewerage District

Jones Island Reclamation Facility. Photo by Urban Milwaukee staff.

A committee of former sewerage district commissioners is recommending the Milwaukee Metropolitan Sewerage District (MMSD) change the private operator running its two wastewater plants.

The current operator, Veolia Water Milwaukee, is embroiled in a public battle over its handling of the district’s two water treatment plants: Jones Island and South Shore Water Reclamation Facilities. In April, the community organization Common Ground went public with allegations from anonymous whistleblowers that Veolia was intentionally mismanaging the sewage treatment plants to save money, causing the systems to run below capacity and increasing the risk of sewer overflows and basement backups.

Veolia has held the contract to run the facilities since 2008. It is one of two firms bidding on a new 10-year contract valued at approximately $700 million. The other firm is Jacobs, a Dallas-based engineering consultant with experience across multiple sectors including public infrastructure and advanced manufacturing.

Both companies have proven controversial bidders on the public utility, as local activists and organizations have demanded the MMSD commission refuse a contract with Jacobs over its partnership with a U.S. Immigration and Customs Enforcement (ICE) contractor.

The ad hoc committee was appointed by the MMSD commission to review the competitive bids and it announced on Monday that it is recommending Jacobs for the next 10-year contract. It is the final step in a two-year public bidding process before the MMSD commission makes a final decision, which is expected in September. A majority of MMSD commissioners are appointed by the mayor of the city of Milwaukee.

The ad hoc committee is composed of five former MMSD commissioners with a combined 57 years of commission experience. They are serving the district as unpaid volunteers and have no past or present professional connection to the two firms, according to MMSD. The commission reached its decision using a scoring matrix that heavily weighted the price of their services and their approach to running the facilities.

“Effective wastewater management is an essential service for people in our region, and we thank both Veolia and Jacobs for their detailed and thoughtful proposals,” said Dennis Grzezinski, chair of the ad hoc committee and former MMSD commissioner. “While our fact-based scoring system ultimately led to our recommendation in favor of the bid submitted by Jacobs, it also should be noted that Veolia has delivered strong results for residents of the Milwaukee area since 2008.”

Jacobs outscored Veolia in pricing, approach, staffing and corporate culture. The Jacobs bid came in $54 million lower than the Veolia bid. Jacobs also impressed the commission with its knowledge of district operations. Like other companies in the field, including Veolia, Jacobs has merged with and acquired other smaller firms, including a company that worked on the Deep Tunnel project and upgrades to the wastewater plants.

Veolia scored better for regional partnership, which only accounted for 5% of the total score. The committee pointed to Veolia’s Hubgrade Center, its support for renewable energy and public amenities. The committee also liked that Veolia hired former city of Milwaukee Department of Public Works Commissioner Ghassan Korban and former Common Council President Ashanti Hamilton. “Veolia’s team, with Ghassan Korban and Ashanti Hamilton, is strong,” the committee said.

Veolia’s 20 years of experience operating the plants ultimately acted against them. The next operator will need to use new tools and technologies and collaborate with the district more. “Time and time again, it seemed to the committee that, while Veolia would need a change of thought process in order to successfully implement the changes contained in the next contract, Veolia was not ready to do so,” according to the ad hoc committee report.

The allegations against Veolia were not considered as a factor, according to the committee. After going public with allegations from anonymous whistleblowers, Common Ground pushed for a third-party independent audit of Veolia’s operations. In July, MMSD contracted with a utility consultant to conduct the audit. The results have not yet been released.

Common Ground has not taken a position on the contracting process. But Common Ground Executive Director Jennifer O’Hear said, “We are not surprised that Veolia was not recommended. Our investigation with 21 whistleblowers has revealed serious problems with the way Veolia operates the plants.”

However, Jacobs is not without controversy. The company has been criticized by local community organizations and political activists for working with Palantir, a tech company that uses big data to help ICE track and target immigrants. Palantir has reportedly used public data from non-law enforcement databases to track people for arrest, according to the Electronic Frontier Foundation.

Jacobs partners with Palantir Foundry to analyze utility data and optimize energy and efficiency across a system, according to information the company provided to MMSD. The firm did allow the possibility of not contracting with Palantir for the MMSD job, saying, “Jacobs remains platform-agnostic and we can explore other providers with MMSD.”

The Wisconsin Democracy Campaign, one of the organizations organizing against Jacobs, released a statement Monday demanding the MMSD commission reject the Jacobs proposal.

“If Jacobs now recognizes that its relationship with Palantir is a problem for Milwaukee, then the public deserves to know how on earth we should be expected to trust the company’s promise that Palantir will be kept away from this contract,” said Nick Ramos, executive director of the Wisconsin Democracy Campaign. “Trust is not a substitute for transparency. And when hundreds of millions of public dollars and critical public infrastructure are at stake, Milwaukee should not be asked to take a corporation at its word. The people of our community are not idiots.”