City must pay streetcar utility relocation costs, judge rules

A judge has ruled that the City of Milwaukee is responsible for the cost of utility relocation for its planned downtown streetcar system.

The ruling could increase the cost of construction by more than $20 million, depending on how much the city is able to save by tweaking streetcar routes to minimize the number of utilities that need to be moved.

“Right now, our City Attorney is still reviewing the ruling,” said Department of Public Works spokesperson Sandy Rusch. A representative from the City Attorney’s office was not immediately available for comment.

The city filed a lawsuit in November 2014 to challenge a Public Service Commission of Wisconsin ruling that the city, and not private utility companies, should bear the cost of utility relocation related to the streetcar project.

On Thursday, Milwaukee Circuit Court Judge William Sosnay upheld the PSC’s 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,” wrote Elise Nelson, a Public Service Commission spokesperson, in an email this morning.

Rusch said the ruling will not derail the streetcar project and DPW engineers are working to reduce the utility relocation costs.

A plan was released by the city in November 2014, after the PSC’s ruling, to pay for an estimated $22.7 million in utility relocation costs with tax incremental financing. Construction work for the streetcar system is expected to begin in the spring.

The Milwaukee Common Council approved the $124 million downtown streetcar project in 2015. The cost to build the system will be paid for with about $65 million in federal funds and about $59 million from tax incremental financing districts.