Ya gotta love it. Milwaukee is arguing before the Public Service Commission that it needs a significant — averaging 27% in the city — water rate increase. The argument has been going on so long and is so heated that the Milwaukee Water Works has to cut back a bit to make up for the lost projected revenue.

Cut to the 2011 city budget, slated for adoption today. Ald. Robert Donovan has proposed a 1% across-the-board cut for all departments, a budget amendment that has virtually no chance of adoption. But in its analysis, the council’s own Legislative Reference Bureau writes in response to the amendment that

“It should be noted, because of delays in its rate increase petition, the Water Works will cut operating expenses — including salary and overtime expense — just over 4% without compromising service. No one is suggesting this is a model for the City as a whole, but it does seem to indicate significant cuts can be made, at least in the short-run, without jeopardizing service levels if properly motivated.”

So why does the Water Works need such a big rate increase again?