Merger dies quietly

Posted: Nov. 16, 2011

During the course of more than two years, the debate over consolidating the City and Village of Pewaukee became at times heated and acrimonious between public officials and residents.

By early July the merger issue seemed destined to be an ongoing saga between the Village Board and the city Common Council as officials worked through discussions over a potential compromise, giving residents hope that they might yet get a chance to vote on the long-standing issue.

But the merger issue slipped quietly from the limelight over the summer as the board and council became mum on the issue, and it now appears consolidation may be dead.

In the end, city and village taxpayers paid nearly $250,000 for a study that has become partially obsolete as circumstances and political dynamics have drastically changed the landscape since the Merger Advisory Committee first met nearly three years ago.

Longstanding negotiations

The latest effort followed talks in the early 2000s when the communities also seriously considered merging. "I really don't know where it's going," said Mayor Scott Klein on Monday. Klein said the city needs a "willing partner."

"The village is not willing to discuss the issues and move it forward," he said. He said that to get the merger talks moving again, village representatives would need to "understand the concept of sharing and cost savings."

After a four-month silence between the city and village, the City of Pewaukee Common Council last month requested that Administrator Tammy LaBorde ask the Southeastern Wisconsin Regional Planning Commission (SEWRPC) for the city's portion of money left over from the merger study.

LaBorde wrote a letter, dated Oct. 21, to Phil Evenson of SEWRPC, who served as chairman of the merger committee, asking to close out the account that held those funds.

On Nov. 1, Evenson wrote to LaBorde and Village of Pewaukee Administrator Scott Gosse, stating that each community will receive $3,838.50. Evenson also noted that the Facebook presence about the merger whas been as terminated. Information about the study will be archived on SEWRPC's website, he said.

"The commission was pleased to have been of assistance to the city and Village of Pewaukee over the past several years as the possibility of merging the two communities was explored," Evenson wrote.

Potential savings

A main savings for the city in a merger would come from merging the utilities, in particular the water systems.

Consolidating city and village water utilities might have led to infrastructure savings of up to $8.3 million "provided that the assumptions made in the (merger study) are validated over time," Klein said at a March meeting.

Two major water projects in the city would have been avoided with a merger, but one is now nearly complete and a second is moving forward.

Construction crews are finishing work on a pipe that connects the east and west water systems in the city. Under a recommended merger plan, that project would not have been necessary if the communities merged, saving the city the $1.4 million it cost to install.

The second major project is replacing the water tower at City Hall. Plans are moving forward for a new tower, according to LaBorde. That project is estimated at about $2 million.

LaBorde said the projects have been discussed for years but have been put on hold each time merger was brought up.

"We couldn't wait any longer," said LaBorde. "There didn't appear to be any movement. We heard nothing from the village."

Summer impasse

The Village Board last discussed the merger in early July. In a memo to the village, the Common Council wanted to discuss, negotiate and possibly take action on the original merger ordinance, which called for the village to create a street utility district (SUD) and pony up $5.5 million from its utility reserve fund to help pay down the debt of a consolidated city. The council also wanted to set up a joint meeting date.

The SUD and so-called dowry would have led to tax savings for city residents.

The SUD was recommended by the merger committee as a separate taxing district for the village to pay for services the village receives that the city does not, including street lighting, sidewalks and brush pickup. Under the plan, village residents would pay more in taxes than city residents, though they would still see an overall larger drop in the tax rate than city residents.

However, there was opposition by the board to the SUD, and the village has since drawn on its reserve fund, leaving about $1.4 million available from the utility fund for the dowry.

Without the SUD and $5.5 million, city residents would not see a tax decrease, based on the formula created by the consultants to the merger panel, Ruekert & Mielke, an engineering firm in the City of Pewaukee.

The Village Board agreed to get updated numbers in light of changing factors, but there was no consensus on a meeting with the city. Trustees said they would also discuss at a later date a possible advisory referendum for 2012. None of those issues has been discussed since.

On July 19, the Common Council discussed meeting with representatives from the village, ultimately deciding to leave the door open for a later meeting date. But there was no movement on that front either.

Village Trustee Cathy Baumann, long an opponent of the merger, reiterated her belief that city officials only wanted to merge because of the need for utilities.

"All along I firmly believed it was about sewer and water, nothing else," she said. Now that the city is spending the money on the projects "the merger talks went away," she said.

Baumann said those projects, along with the changes mandated by the state, have changed the dynamics for a merger.

Klein said the merger talks "at best, are on hold."

Sticking point

From the time the merger panel suggested an SUD in 2009, village officials questioned the concept, calling it unfair to village residents.

On July 20, 2010, the board rejected forming a SUD. The board then approved a consolidation ordinance without the SUD. On Aug. 2, 2010, the Common Council voted 4-2 to approve a consolidation ordinance with the SUD. At the time, council members said it was not fair for city residents to pay for services only provided to village residents.

The merger dynamics shifted dramatically in November when city residents voted 4,513-2,582 in favor of a merger, although the form of the question raised some eyebrows in the village.

In December, three Common Council members agreed to go along with an ordinance excluding the SUD. A joint meeting with the Village Board in January and a straw poll showed the Village Board would unanimously approve an ordinance without the SUD. But the council was split, and the ordinance requires a two-thirds approval or four of the six aldermen, as the mayor votes only in the case of ties.

A few weeks later the council deadlocked in a formal vote on the matter. The Village Board also voted again, but that too ended in a deadlock, as chances of an April vote slipped away. Olive branches for a joint meeting were made and suggestions made, but by early spring the process seemed to be stuck in neutral.

Questions continued about how much would actually be saved, and village officials continued debating the SUD. What may not have helped convince critics was the merger committee's changing numbers about the potential savings a merger would bring.

During the initial months of the study, the merger committee announced that consolidation would save about $1.9 million annually. That number was eventually reduced to about $300,000. The amount to be raised through the SUD was estimated at $330,000, critics noted.

Where did the money go?

There were also questions about how much startup costs there would be, possibly as much as $1 million in legal fees to formally merge the communities. In addition, questions about the operations of a merged community were raised, as some officials said repeatedly that there were no guarantees and everything would be up to the new board.

Some trustees were concerned that the village Police Department would be replaced by a contract with the Waukesha County Sheriff's Department, which provides police services to the city.

Much of the $250,000 for the study went either to Ruekert & Mielke or the Boardman law firm of Madison. As part of those costs, taxpayers spent $48,000 to seek legislation regarding merging the communities, but the bill never made it to the floor of the Legislature.

Zeppos & Associates, a public relations firm, was paid $38,000 to develop a public education plan about the merger.

History repeating itself?

A decade ago, the city and village talked about merging, and each community paid $39,000 for a consolidation study that was conducted by Ruekert & Mielke. In September 2002, the Common Council voted 4-3 not to merge with the village.

In late 2002, the Village Board hired the Public Policy Forum, a nonpartisan public policy research organization and government watchdog, to study the consolidation study and the process undertaken.

The Forum concluded it was an atmosphere of acrimony, bickering, a lack of leadership and an absence of diplomacy that led to the downfall of that merger study.