City chooses streetcar operator; supporters defiant as Republicans aim to limit funding

MILWAUKEE -- Supporters of the Milwaukee Streetcar said that a Republican budget deal that limits funding for the project will have no impact on the system, which now has an operator in place.

The city has signed a $3.6 million per year deal with Transdev Services Inc. to run the streetcar. The Lombard, Illinois-based company operates rail systems in Detroit, Cincinnati and New Orleans.

City officials made the Transdev agreement public on the same day that legislative Republicans reached a budget deal that puts limits on how the city can pay for the streetcar.  Milwaukee could not use money from its tax-incremental financing districts or state transit aid to operate the system, and Milwaukee County would be prohibited from spending money on the streetcar's operations.

Alderman Bob Bauman

Milwaukee Ald. Bob Bauman, a longtime supporter of the project, said the restrictions would have no effect.

"They stopped us from doing something we had no intention of ever doing," Bauman said. "They seem to have a real hard spot for anything to do with rail. I don't understand it -- it's almost a religious zeal."

Bauman said supporters had never considered using tax-incremental financing to pay for operating costs. The city had not relied on state transit aids for the project either, he said.

Mayor Tom Barrett also appeared to blame the GOP's move on politics.

"Despite the fact that the state is not funding the Milwaukee Streetcar, there are members of the legislature who don’t like the project," Barrett said in an emailed statement. He said he had asked the city attorney to review the restrictions.

Work underway on Milwaukee streetcar

The Legislature's budget committee approved the transportation agreement on a 12-4 vote late Tuesday, with all Republicans voting in favor and all Democrats against it. The budget still needs approval in the full Assembly and Senate.

While construction of the streetcar's initial phase and a second Lakefront line are fully funded through a combination of federal TIGER grants and local tax-incremental financing, proposed expansions face an uncertain future.

The city failed to get a $20 million federal grant last summer for the planned Fourth Street expansion. Milwaukee is less likely to get federal grants under President Donald Trump's administration, which has proposed cutting the TIGER program.

Alderman Mark Borkowski

Critics, including Ald. Mark Borkowski, point out that the streetcar's $3.5 million annual operating budget will hit as the city struggles to pay for police and firefighters.

"This ship has sailed, but I don't know where more revenue is going to come for supposedly, extensions," Borkowski said. "The future does not bode well."

Construction of the initial two phases is estimated to cost $128.1 million. The first line, which will take riders from the Milwaukee Intermodal Station to the Lower East Side, is scheduled to be operational in fall 2018. A line running to Milwaukee's Lakefront is scheduled to start running in 2019.