Committee Backs Kovac For Budget Director

Alderman Nik Kovac‘s bid to become the city’s budget director received a unanimous endorsement from his colleagues Wednesday.

“I think this is definitely up your alley when it comes to your interests,” said Alderman Ashanti Hamilton during a meeting of the Finance & Personnel Committee. “You have a special relationship with numbers.”

A special council meeting is scheduled for May 9 to confirm Kovac, allowing him to resign his aldermanic seat in time for a special election to replace him to occur alongside the already scheduled fall election.

Kovac, 44, was first elected to the Common Council in 2008. Mayor Cavalier Johnson is nominating him for the position.

“I am acutely aware I have big shoes to fill,” said Kovac. He would replace Dennis Yaccarino, who has served in the role since 2017. Yaccarino started with the city in 1985, steadily rising through the ranks in the budget office. He has now retired, drawing praise from Ald. Michael Murphy for being a “quintessential public servant.”

Kovac has been a longtime member of the finance committee. He would now regularly report to the committee, leading a team of analysts.

“I quickly learned that these analysts are the go-to people if you want to know what is going on in city government,” said Kovac, naming Thomas J. Bell, Bill Christianson, Molly King, Mason Lavey, Eric Pearson and Bryan J. Rynders. “It would be an honor for me to work with and get to lead this team.”

Kovac said more communication between the budget office and council would make addressing problems easier. Citing an example of an unnamed Department of Public Works staffer who pitched him an idea in 2008 to tweak a fee to avoid a service cut but said he wasn’t authorized to discuss it publicly or with the council, Kovac said it was important to get ideas from everyone.

He applied a similar principle to his time at Harvard, from which he earned a math degree. “Well there, I learned the only way to get through seemingly impossible problem sets each week was to ask my peers for help,” said the alderman.

He will inherit a $1.7 billion city budget with serious issues. The budget and management division is projecting a $95 million structural deficit for 2023 and into the future.

“If we do not get new help from the state or federal government, we have to make sure the money we do have is used wisely,” said Kovac. That includes the remaining $197.1 million from the American Rescue Plan Act. Kovac’s predecessor proposed using $160 million, the maximum available for this, to plug budget holes over the next two years.

Without action, the city will hit its pension cliff and need to begin drastic layoffs.

“I would much rather delay that than commit to it,” said the nominee.

Kovac said the city’s budget issues are caused by the need to fully fund the pension, the cost of which will jump by $50 million annually next year, and a sustained reduction in state shared revenue, a loss of more than $100 million annually versus 2003. He was the council representative on a task force that studied potential solutions to the issue in 2021.

“The elephant in the room is public safety,” said Murphy.

Kovac said he would continue to work to identify opportunities and advance existing initiatives, like merging the police and fire 911 call centers into a civilian operation.

In response to questions from Hamilton and Alderwoman Milele A. Coggs, Kovac said he was committed to advancing equity and inclusion efforts in how the city establishes its budget. Hamilton noted this needed to be not just with establishing new programs, but when a budget is cut.

Kovac also committed to appearing at public meetings when requested by a council member. “Explaining complicated budget matters to the public… should be a core part of our mission,” he said.

Ald. Scott Spiker asked if Kovac would be able to make the jump from being a policy maker.

“I know who I am. I am not suddenly going to change,” said Kovac. But he said his critiques of things like police funding have often been on the margins and he supports the majority of the department’s funding. “As budget director, all I would do is tell you ‘this is how much this class will cost.'” He said his perspective as a former alderman would be valuable in communicating with the council.

The alderman will gain a significant raise by making the jump from the council to the administration. Yaccarino was paid $141,748 in 2020, the last year for which figures were published. Kovac made the standard council member rate of $77,614.

The budget division is located within the Department of Administration and has an eight-member staff. In recent years, high-profile issues the office has been tasked with include crafting conceptual proposals to model a 10% reduction in police staffing levels and identifying potential solutions to the city’s pension crisis. The office is responsible for day-to-day oversight of the city’s budget implementation and preparing necessary adjustments as well as crafting the annual budget.

Assuming he resigns before May 10 and a special election is promptly called, a special election would occur alongside the fall partisan election. If three or more candidates qualify for the ballot, a primary would be held Aug. 9. A general election for the non-partisan position would occur Nov. 8.

State Rep. Jonathan Brostoff has already declared he will run for the seat.