City, GMC Kick Off Study of City Operations

Are there opportunities to save money or improve service delivery within the City of Milwaukee’s operations? A new study, commissioned by the nonprofit Greater Milwaukee Committee with city support, will attempt to identify any opportunities.

The partners, who are relying on an unnamed national consulting firm to conduct the study, announced the effort Wednesday. The study is expected to be finished in time for the city’s fall deliberations of the 2024 budget, which will need to wrestle with a fiscal crisis that could result in the layoff of 25% of city workers.

“There is no greater challenge in our community or our state than the crisis in local government and the looming inability to meet basic service needs,” said GMC president Joel Brennan in a statement. “The GMC and its community partners are committed to the future of our city and focused on generating additional operating efficiency while pushing for the additional funding the city needs from the state of Wisconsin.”

The GMC has already held multiple programs on a potential sales tax or shared revenue increase that could loosen the city’s fiscal straitjacket.

“Milwaukee’s challenges are not unique among local units of government in Wisconsin,” said Mayor Cavalier Johnson. “But the ‘perfect storm’ of rising service and personnel costs, limited state support and pension obligations have created an imminent crisis that requires an ‘all hands-on deck’ approach. The city has enacted reform over the course of the last 20 years, and we will do even more to face the fiscal challenges ahead, even as we work with the state Legislature to solve our fundamental revenue problems.”

Due to state restrictions on raising new revenue, long-frozen state aid, the expiration of a COVID-era federal grant and an anticipated increase in costs to fully fund the pension system, the city faces a looming need to begin laying off one in four workers in 2025, including police and firefighters.

The study is expected to identify short-term and longer-term opportunities.

The leaders of the Republican-controlled Legislature were invited to participate in the effort. Letters sent by Johnson and Brennan ask Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu to join the effort or assign a designee by Friday.

The letters highlight some of the city’s reform measures to date, including eliminating more than 1,000 full-time-equivalent positions since 2000 ($80 million annual savings), eliminating a salary step program in 2011, but not being able to apply it to fire and police employees because of the state’s Act 10 reform (total savings $40 million), requiring employee pension contributions ($23 million in 2021), requiring employee contributions and reconfiguring health care offerings ($39 million) and improving worker’s compensation avoidance efforts ($5 million).

The request for participation also highlights that a separate study, conducted by the Wisconsin Policy Forum, is underway to explore collaboration with Milwaukee County on operations. The council approved allocating $20,000 to the study Tuesday, but Alderman Mark Borkowski voted no and Milele A. Coggs and Mark Chambers, Jr., who previously raised concerns that it could be a precursor to a merger, abstained from voting.

The GMC is covering the cost of the larger study. “The Milwaukee business and philanthropic community will invest hundreds of thousands of dollars into the effort because they know how important it is to find a long-term solution to the fiscal challenges faced by the City of Milwaukee,” says the invitations to the legislative leaders. “They also know that the clock is ticking, and the need is urgent — the fiscal situation in Milwaukee will get significantly worse before the state undertakes its next biennial budget process two years from now, so we need to make progress now.”

Vos previously said he wouldn’t consider granting the city or county new revenue sources unless they consider privatizing or sharing services.

Who is the mystery firm conducting the study? A spokesperson for the GMC says the firm didn’t want to be named in the announcement, but it is one of the “big four” accounting firms: Deloitte, KPMG, PricewaterhouseCoopers and Ernest & Young.