Not pretty for 2011

If you thought the 2010 Milwaukee city budget was bad, with furloughs, layoffs, fire department service brown-outs and another tax levy increase, 2011 is not shaping up to be much better.

Mayor Tom Barrett was upbeat but serious on Monday night about the situation facing his administration – how to fashion a budget with little to no increase over last year’s $247 million tax levy. Last year the city was hit with a mandatory $49 million payment to the employee pension fund, something not required this year. But that $49 million won’t come out of the 2011 budget and much of it is already spoken for.

More than half, $25 million, will cover a 21-percent increase in employee and retiree health insurance costs. Another chunk of the 2010 pension payment will be used to create a proposed Employer Pension Reserve fund to build towards another legally-required pension payment in 2013.

“That is the bad news,” Barrett said. “But we will maintain the priorities of public safety, public works and debt management. I want this to be the most transparent process there should be in government.”

City Budget Director Mark Nicolini explained that the focus of City Hall will be to meet the needs of the community and not be the employer of last resort. He said the 2011 budget requests from department heads would raise the levy by more than $50 million over last year and that significant cuts to those requests will be needed to keep the budget in check.

With more than $160 million of the 2011 levy already determined by contractual obligations to debt service, pensions, annuities and retiree health benefits, Barrett and the council have about $90 million left to work with if they don’t want to raise the tax burden.

That leaves one area to bear the brunt of cuts – employees. While Barrett said his priority is to maintain public safety and works levels, the salaries and benefits of fire, police and public works employees make up 75 percent of the city’s entire payroll and are funded entirely by the annual tax levy. Another 13 percent of payroll is paid by user fees, leaving 23 percent of employees not in priority departments also solely funded by the levy.

Barrett, Ald. Mike Murphy (who chairs the Council’s finance and personnel committee) and Nicolini acknowledged that structural changes in the way the City does business will be needed in the near future – especially how much it pays towards health insurance for employees – in an effort to lower employment costs.

Murphy also pointed out that less money doesn’t lead to less service, noting the decreasing crime rate even as the police department reduced overtime and implemented cost-saving measures.

As with most government budget hearings, city employees made up the overwhelming majority of the audience. Not surprisingly, employment was the question of the day. Most were concerned about top-heavy managerial staffing at the expense of union positions, unfilled positions due to attrition and the prospect of more furlough days in 2011.

Barrett promised that he would try to avoid furloughs, though if necessary he would not exceed the four days he ordered in 2010. But he could not promise to fill the empty positions and explained how some of the staffing issues are directed by federal grant monies, not city funds.  A library employee was relieved that Barrett would honor the concessions AFSCME had made and not make further cuts to library services.

He also promised to make the neighborhoods subject to flooding in July his top priority for the Department of Public Works. In 2010, $39 million ($16 million from federal stimulus funds) was earmarked for sewer repairs and improvements. But at over $1 million per construction mile of sewers, it’ss barely enough to fix the 2,400 miles of sewers lurking beneath our streets.

“I promise to work tirelessly to find federal funding to fix this problem,” Barrett said, warning that the hidden infrastructure of sewers beneath our streets is at the end of its useful life. Most of the sewers were put in place in waves, beginning in the late 1890s, the 1920s and after WWII. While the older sewers are nearing the end of their 100-year lifespan, the newer pipes were thinner and longer, making them easier to stress and leak. Nicolini said sewer replacement could overwhelm the city within the next decade.

Barrett added that he didn’t want to be running for mayor in 2016 when many of the sewers hit their expiration date.

Exact dollar amounts were absent from this discussion. Instead, this was an opportunity for Barrett to reiterate his budget priorities before sitting down to crunch the numbers with his staff. When his figures are complete, the council gets a stab at it. Then the real fun begins.

If you want to suggest priorities for the budget to Mayor Barrett or the Council, click here or call 414- 286-5060.