The Milwaukee Metropolitan Sewage District is ready to entertain suitors to run the district's wastewater operations for the next decade or so. Its first 10-year contract with United Water to run the facility will end early next year.

MMSD staff decided to offer the opportunity to bid for the job to only two companies, which happen to be the largest sewage plant operators in the world -- United Water and Veolia Water North America -- which are both owned by French conglomerates.

It was only after lobbying by area unions to MMSD board members that a third candidate, EMC, Inc., a Missouri-based operator owned by British interests, will be considered for bidding at an MMSD meeting next week.

United Water got the contract 10 years ago with the promise it would save the district $140 million over the 10 years. It runs the district's two sewage treatment plants and Milorganite facility. According to MMSD spokesperson Bill Graffin the figure is still accurate. United Water was to be paid $298.5 million over the course of the contract, not including incentives and penalties.

But since United Water took over MMSD, the operation has been plagued with high profile gaffes and sewage releases since the deep tunnel came online in the mid-1990s. Sewage flowed into the lake by the billions. Lawsuits were been filed. In once instance, 107 million gallons of untreated sewage was discharged because the company shut off sewer tunnel pumps during peak electricity times to save $515,000. Jobs were cut.

Of course, when you're talking about the world's two biggest in the sewage business, there's bound to be some weird track record. (United Water is owned by the French Firm, Suez.)

Since getting the Milwaukee contract United Water has lost two high-profile deals in Indianapolis and Atlanta. In some cities, the two giants run both sewage and drinking water operations. (The City of Milwaukee controls the drinking water in these parts.)

In Atlanta, bad water forced residents to boil first. After getting the contract it was discovered that United Water treated the city's mayor to a $12,000 Parisian holiday. United Water was also accused of neglecting basic maintenance, violating federal water standards and billed the city for work that was never done. The mayor ended up indicted in federal court.

In New Jersey, United Water failed to warn about high radium levels in the water supply. And in Indianapolis, before getting the Milwaukee contract, United Water flushed bad water into the White River leading to a massive fish kill.

Veolia didn't fair much better in Indianapolis after taking over the contract from Untied Water. It caused its own massive fish kill and was investigated by a federal grand jury after shutting down the wastewater plant there. The company was also accused of falsifying water quality data. That led to that city having to boil water as well. The story goes that 40,000 school kids were given a vacation because they couldn't drink the water. In the first year complaints tripled and it mailed out 15,000 bills to the wrong address.

In New Orleans, Veolia illegally discharged sewage into the Mississippi River dozens of times and the president of the local operation was convicted of bribing local sewer board officials to renew the contract.

At first blush EMC, Inc., seems to lack an infamous public track record for being around 27 years. It was bought by British-based BOC, a long-time maker of industrial gasses. BOC has a track record of leaving contaminated industrial sites behind. The obvious appeal to local unions in pushing for EMC is the company's emphasis that it believes in honoring all local union contracts and a promise from EMC to return union workers to MMSD positions that were eliminated by United Water.

The MMSD board considers EMC's credentials on Monday. The decision the contract could be made in fall.

More Picking on PIC: Gerard Randall did his best version of assuring his troops that "it ain't over 'til the fat lady sings" this week. The beleaguered chief of the Private Industry Council, the job-training arm of Milwaukee County that's facing a takeover bid by Mayor Tom Barrett, gathered PIC staff urging them to lobby local officials to keep the PIC status quo if they truly believed in the cause.

One card Randall is playing is that the staff is desperately worried they'll lose their jobs. The mood in the room, however, was described as "solemn" and it doesn't appear that many will pick up the torch for Randall's version of PIC.

Barrett is lobbying the state to have the city get federal job-training funds that currently go to PIC–some $14 million worth. PIC is a quasi-public operation run by the Republican Randall. The board overseeing PIC is appointed by Republican County Exec Scott Walker.

The change would give Barrett control of the board. Despite several glaring shortcomings in the PIC operation of late, Randall is portraying the move mainly as partisan politics. Gov. Jim Doyle has already said he favors the switch to happen on July 1.

As the decision nears, Randall also sent out a mass mailing to local movers and shakers pointing out PIC's achievements over the years. An e-mail contains 49 pages of attachments, likely not dinner table reading for anyone who gets it. A state board will make its recommendation next week on where the money goes.

The public comment period on the changes ends at the end of this week. Randall has also been on a seemingly endless media tour, making his regular rounds on conservative talk-show television, pitching PIC on Milwaukee's leading black radio station, and doing an appearance on the televised "4th Street Forum."

Meanwhile, the Milwaukee Labor Press released this week an extensive investigative report on what Randall's been up to at PIC and whether he's earning his $159,000 annual salary (up from $98,000 since 1998).

The newspaper found: PIC overspending and underperforming in youth job programs, spending about $31,000 per person in one case; a bloated travel budget for staff; a top-heavy administration making substantial salaries for an agency that is supposed to be devoted to getting people out of poverty; and the questionable purchase of a building on North Avenue which has tied up job training funds in mortgage payments.

Purchasing the North Avenue building ironically came at a time when Randall and PIC were under fire for having office space in a high-rent Schlitz Park building. Randall also was rapped for his frequent office remodeling, according to a PIC insider. PIC also lost a key federal youth training grant in the millions of dollars, because it didn't do the work to keep it. Staff layoffs and a severe scaling back of the program were the result.

The Labor Press reported that union representatives on the board have stopped going to meetings because they were frustrated by the performance of the front office. The board has lacked a quorum at its meetings more than half the time, but not just because union reps stopped showing.

The takeover bid comes at a time when PIC resembles more of a crumbling entity than a vibrant source of job training. As was reported in part here last week (with certain clarifications):

• The agency has no money left for the last quarter of its fiscal year for job training, meaning certain programs will be stagnant from April through June with possible staff lay-offs.
• As of March 5, all new job training was cut off. The order affects only adults.
• An order came down early this month that free bus tickets–desperately needed by job seekers to get to either training or their job -- were not to be issued, leaving willing workers stranded. Within the past week, however, Randall changed the policy, telling staff that money was reallocated to allow PIC to supply a limited number of tickets. The tickets will now only go to clients involved in job training and not for people needing transportation for job interviews and job placement.
• Orientation continues, but occupation and basic skills training -- to help people apply and obtain jobs -- have been cut off.

Reports are that PIC vendors are also getting nervous and in some cases have put a low priority on fulfilling PIC contracts.
 Page 1 of 2 (view all on one page)

Next >>

3 comments about this article. Post a comment / write a review.

Recent Talkbacks ...

Posted by AnnhouserBush2000 on Dec. 8, 2007 at 8:06 p.m. (report)

After WWII, the Milwaukee Sewerage Commission was formed by the Socialist Party and they discovered that they could sell reactivated high nitrogen content sewage sludge as a fertilizer. It was called Milorganite and was a huge success and money maker for the City of Milwaukee. During the '50's hardly any other large city did this and Milwaukee had a virtual monopoly on municipal sewage fertilizer. As usual, politics screwed things up and divestiture from a "Commission" to a stand alone District was created in 1983. The FLOW lawsuit dragged on and finally after a stupid Waukesha County judge ruled against FLOW, the system started falling apart. Politics again screwed things up because Milwaukee did not want to separate sanitary and storm sewers because it would inconvenience their residents. So another Political boondoggle, the Deep Tunnel was funded by bonding and as usual, the taxpayer got the bill! The stupid Republicans wanted accountability and they got it! Huge out of control spending with a private contractor, and out of control dumping because of the fear of basement backups in the City of Milwaukee and hence political pressure if that occurred. Therefore, they didn't wait for the deep tunnel to get to 90% fill, they prematurely dumped the raw sewage into the Lake. I blame POLITICS and big GUVMINT for the mess. If the City of Milwaukee would have replaced the single sewer system with separate conventional sanitary and storm sewers, the problem would never have occurred and the taxpayer would not have been fleeced. Blame Norquist first, then Judge Snyder, FLOW, and the attorneys. If the engineers were running things instead of screwy politicians, judges, and attorneys, the world would be a better place.

Posted by Troy on Nov. 19, 2007 at 11:09 p.m. (report)

The City would be silly not to privatize, it would save the City and Taxpayers tons of money and not to mention A company like Veolia Water has a excellent technical program set in place to minimize SSOs tremendously and is known for great customer service. That is probably why they are the biggest Environmental Company in the world. I dont think Old union tradition will help the City you need qualified professional individuals to run a project like that. You say profit margin. Of course there is! There also are stipulations in a contract that companies have to meet, such as minimize SSOs. I Vote Veolia Water hands down!

Posted by Sura on March 28, 2007 at 5:09 p.m. (report)

All of these private water companies have a record of making profit a priority over delivering clean, affordable water to their customers. Water shouldn't be a privatized enterprise. Providing clean water and dealing with sewage should be a socially structured project that doesn't operate on a for-profit basis, but operates on what is best for the public that it serves.