MMSD user fees to rise 11.5% in 2018

Proposed projects include gas processing, rehabilitating old pipe after removing sludge

Building a processing plant to remove contaminants from landfill gas, and scraping gooey, toxic chemicals out of a regional sewer are among major projects included in a Milwaukee Metropolitan Sewerage District $301.4 million spending proposal for next year.

Total MMSD spending would decline 2.6%, or nearly $8.2 million, from this year, under proposed 2018 operating and capital budgets.

The plan for reaching that goal includes a 12.8% increase in costs of operating and maintaining district facilities that is offset by a 9% drop in costs of major construction and equipment replacement projects. The residential cost for district service does not drop in tandem with overall spending, however.

A family living in a Milwaukee County home valued at $200,000 as of Jan. 1, 2017, would pay about $13.85 more to the district for 2018 than this year, or a total of $483.39, MMSD Finance Director and Treasurer Mark Kaminski said.

The estimated payment is a combination of $345.13 in property taxes, up 1 cent from this year, and $138.26 in user charges, up $13.84 from this year.

There would be no increase for 2018 in the district’s property tax levy of $98.3 million collected from Milwaukee County property owners. But the district would collect 1.3% more in tax equivalent billings from communities outside Milwaukee County.

Those are two of the largest revenue sources available to help pay for a proposed $199.5 million capital budget, down more than $19.7 million from this year.

A tax rate of $1.73 per $1,000 of equalized property value for county property owners would be needed to generate the levy, MMSD Deputy Director of Finance Mickie Pearsall said. The proposed rate would be 2 cents less than a year ago.

Ten communities outside the county that are in the district’s service area would contribute an estimated $31.25 million in tax equivalent payments, up $387,000 from this year.

Payment on debt, including state clean water fund loans and general obligation bonds, is the largest expense in the capital budget.

For 2018, debt payments would amount to $108.9 million, or 54.5% of all capital spending. That figure is $17.7 million less than in 2017.

The second largest piece of capital spending next year, more than $48.2 million, targets the district’s aging sewage treatment plants and the Milorganite sewage sludge fertilizer factory on Jones Island, MMSD Executive Director Kevin Shafer said in his annual budget message.

MMSD will design and construct a landfill gas processing plant, compressors and meters at the Metro landfill in Franklin in 2018 at an estimated cost of $11.3 million, Pearsall said. The facility will remove water vapor, hydrogen sulfide and silicon particles in the gas before it is piped to the Jones Island sewage treatment plant.

Landfill gas from the Emerald Park landfill in Muskego, across S. 124th St. from Metro, already is burned at Jones Island to power the plant and dry Milorganite fertilizer.

Removing a few hundred cubic yards of thick and oily, toxic sediment in a major regional sewer on the north side of Milwaukee, and rehabilitating the aging pipe, will cost an estimated $9.6 million, Pearsall said.

Sediment contaminated with hazardous chemicals known as PCBs clings to the bottom of 8,000 feet of a metropolitan interceptor sewer. The pipe runs underground along the west bank of the Milwaukee River from Lincoln Park south to Auer Ave.

The former Milwaukee Die Casting Co. was the source of the PCBs. The company had used hydraulic fluids containing the chemicals.

Total customer user charges — fees collected from industries, businesses and households in the regional system — would rise 11.5% for 2018, up to $83.7 million. This is the largest revenue source to help pay for an estimated $101.9 million operating and maintenance budget in 2018.

The primary reason for the fee increase is the new 10-year contract with Veolia Water Milwaukee LLC, Shafer said.

Veolia Water has operated and maintained the district’s Jones Island and South Shore sewage treatment plants, regional sewers, deep tunnel and Milorganite fertilizer factory since March 2008.

Veolia Water will be paid a base fee of $46.3 million in 2018, Pearsall said.