Milwaukee Biz Blog

Editor’s note: Milwaukee Mayor Tom Barrett delivered the following 2012 city budget address at City Hall this morning.

 

Good morning President Hines, members of the Common Council, City Attorney Langley, Comptroller Morics and City Treasurer Whittow, members of the Cabinet and residents of our great City of Milwaukee.
I’d like to start this morning by recognizing the 2011, National League Central Champions, our Milwaukee Brewers. Please join me in applauding our home town team’s success!
I also want to acknowledge our Comptroller and our Treasurer, Wally Morics and Wayne Whittow. Combined, these two young men have served the citizens of Milwaukee for 86 years – Wally for 35 years; 19 years as Comptroller and Wayne, 51 years; 36 years as Treasurer. Gentlemen, on behalf of the citizens of Milwaukee, I want to thank you for your dedication and service and to wish you both all the best.
As I began to prepare my 2012 executive budget speech, I reflected on the lessons that I have learned from the seven City budgets that I have previously introduced as Mayor. While the details are numerous and varied, one fundamental but important lesson emerged: Milwaukee is capable of responding to very difficult fiscal challenges in an intelligent and responsible manner. The proof of our sound response has been in the results: lower crime, job creation, improved infrastructure, redevelopment success stories, effective delivery of core services, and a Moody’s credit rating superior to that of the County and the State of Wisconsin.
So, before I share with you the key elements of my expenditure and revenue proposals for 2012, I’d like to begin by sharing with you my conclusion regarding why we have responded effectively to fiscal challenges. My conclusion is simple, although it is in stark contrast to the dysfunctional behavior we are witnessing at so many government levels nowadays. Quite simply, it’s your willingness as members of the Common Council under the leadership of President Hines, to join me in embracing difficult changes that has enabled the City to remain effective in its service delivery and sustainable in its finances.
The development of the 2010 City Budget came in the wake of the 2008 financial crisis which contributed to a $1.56 billion loss in the assets of the City’s Employee Retirement System. An employer contribution of more than $100 million, the first contribution since 1995, stared us in the face. The State Budget included significant decreases in Shared Revenue and significant dollar increases to garbage tipping fees.
One path could have been to resort to fiscal gimmicks to balance the 2010 Budget. But instead, we took a different route: we worked with the Pension Board to implement modified, but actuarially responsible, smoothing formulas. We engaged in tough, but fair collective bargaining that produced millions of dollars in savings. We balanced the budget, primarily with $32 million in operating budget reductions and modest use of reserves.
The path we chose in 2010 set the stage for our 2011 budget. The significant reductions we made in the 2010 operating budget reduced the 2011 level of funding needed to deliver baseline, essential services and provided the opportunity to make a voluntary $17.3 million contribution to our Employer Pension Reserve Account.
The results from these politically difficult, yet financially appropriate decisions are obvious as we enter the 2012 budget deliberations. Some of the most important results include:
- Our pension plan is one of the few large public plans with a funded status of more than 100%. And our funded status is projected to remain well above 90% for years to come. We have enjoyed temporary relief from employer contributions for the last two budgets. And with your support, we are building a prudent pension reserve to help us manage future funding obligations.
I want to thank Alderman Michael Murphy and our Comptroller, Wally Morics for their leadership on our pension issues.
- Our debt service levy remained stable in last year’s budget, and we project this stability to continue for the foreseeable future. Controlling our borrowing, combined with the good work of our Public Debt Commission and the over sight provided by the Public Works Committee, Chaired by Alderman Bauman and the Capital Improvements Committee, Chaired by Alderman Dudzik, has paid dividends.
I reference the initiatives we’ve taken in the past to frame the steps we must take not just for 2012, but for 2013 and beyond. Last week’s release of the Census Bureau’s poverty and income numbers was a stark and gut-wrenching reminder that we are far from economic recovery.
Milwaukeeans- our neighbors, our families and our friends are hurting. Some would say that the poverty rate and the drop in real income for working and middle class Milwaukeeans are too much to overcome; present too high a mountain to climb.
I say now is the time to reaffirm our moral commitment to do all we can to lift families out of poverty and to provide necessary and essential services to all of our citizens for years to come – not just 2012. Maintaining essential services, making smart investments in our infrastructure and keeping our debt service levy stable will serve us well when the national economy strengthens.
There is no question that we have fewer resources to work with. Our 2012 State Shared Revenue and Expenditure Restraint Program Aid payments will be more than $80 million less than the inflation adjusted 2003 payment. 2013 won’t be any better. The cuts in state aids are two-year cuts and the state levy limit in effect for 2012 will be in effect in 2013. There are $5 million fewer Community Development Block Grant dollars than in 2010 and there will be fewer federal funds to tackle home foreclosures.
The fiscal constraints are real and that’s why it is so vitally important to plan more than one year ahead.
The fact that we, as a City, are weathering the economic tsunami is owed in large part to our employees. The fact that we deliver high-quality services at a time our revenues have been falling is because our managers and employees have time and again risen to the challenge; not only risen but have excelled.
Our employees deserve our thanks and our gratitude. The last couple of years have not been easy and the next few will be more difficult. Please join me in acknowledging and thanking our employees for their great work and for their pride in our great City. It’s fair to say City of Milwaukee employees have stepped up and are carrying a major load.
The State Budget that was adopted in July hits us hard. It includes $12 million in State Aid reductions, and a $1.1 million reduction to our recycling grant. In addition, we are dealing with a levy limit tied to new construction value, and our property values have declined. And while we weren’t required to make a pension contribution payment in the 2011 and 2012 budgets, the pension contribution forecast for 2013 is $58 million. Pension payments between 2014 and 2022 are expected to be $70 million to $80 million a year. In addition to that, since 2000, we have seen health care costs increases of about $80 million—more than three times the rate of inflation.
In factoring these variables, it was clear that the trend was unsustainable.
We had to implement the heath care benefit changes. I know these changes are difficult to accept and that the increases in health care coverage will have very real financial implications for our employees and their families. These are difficult times.
For the City Government to manage rising costs at a time revenues are being cut and, to meet our service delivery and fiduciary obligations, difficult decisions have to be made.
Because we have made the hard choices, there are no employee lay-offs in my proposed 2012 budget, and we preserve a very high level of services.
The decision to change our health insurance benefits was one of the two contentious propositions given to us by Madison. The second is employee pension contributions.
More than likely, there are very few people here this morning who would award style points to the Governor and the majority party for the way in which they went about their business.
The dust hasn’t settled yet, but we do have Wisconsin Act 10. I believe and, the public believes, that government employees – all public employees, including police and fire personnel, should be making contributions to their pension accounts. It’s financially prudent and the return benefits those paying into the pension fund. And, I believe that through the rough and tumble of negotiations, employee contributions would have been agreed to. After all, we all previously agreed to a two-year pay freeze and that all new general city employees hired after January 1, 2010 would make an employee contribution. In addition, the leadership of the three public safety unions agreed to the health care changes.
But, what I believe and what is now state law, are two very different things.
On February 28th of this year, I sent a letter to Governor Walker requesting that he seek an opinion from the State Attorney General on the provisions of ACT 10 that directly apply to the City of Milwaukee Employee Pension Fund. Attached to my letter was the opinion written by City Attorney Langley. In his opinion, the City Attorney concluded that the State cannot compel the member pension contribution by City of Milwaukee employees who were hired prior to January 1, 2010.
The City Attorney’s opinion and Wisconsin Act 10 are in direct conflict.
Essentially, Act 10 provides that the employer may not pay member contributions for employees unless a collective bargaining agreement otherwise provides. The law applies to employers within the Wisconsin Retirement System, as well as the Milwaukee County Employee Retirement System and the City of Milwaukee Employee Retirement System.
From the day I sent the letter, to mid August of this year – a total of six months- there were 18 total communications between my office – specifically my Chief of Staff – and the Governor’s staff.
On May 16th, Mr. Curley wrote to the Governor’s Legal Counsel asking for his assurances that the legal issues raised by City Attorney Langley were, in fact, vetted, and asked for a formal opinion in response to Mr. Langley’s issues.
On May 23rd, the Governor’s Legal Counsel replied that he anticipated a response to the inquiry within the week.
Never happened. In fact, in August, we received a letter from the Governor’s Legal Counsel that essentially stated, ?We’re not your legal counsel, follow-the-law.?
Of course, many people would read his response as ?We never vetted the Milwaukee issues raised by the City Attorney.
So here’s where we are: I’ve got a City Attorney’s opinion and a State law which are in direct conflict.
I respect the City Attorney. I have not disregarded the opinion and I do not minimize the outstanding work he and his team undertake on our behalf.
But again, the fact is, we have a conflict between a state statute and the City Attorney’s conclusion that this statutory provision is unconstitutional and cannot be enforced. The State Attorney General has refused to issue an opinion regarding whether the statutory provision in question is legal. No court is in the process of resolving this question.
As a result, the 2012 Proposed Budget has been developed under circumstances of legal uncertainty regarding the appropriate method of budgeting for member contributions.
I am proposing a Budget, under our home rule authority, which is consistent with State statutes as enacted by the Legislature. No judge has ruled that the state statute is invalid or illegal as it applies to the City of Milwaukee, or enjoined me from proposing a Budget consistent with state statutes. Please keep in mind, however, that I am not proposing budget brinksmanship.
The Proposed Budget includes $8.2 million in a special purpose account titled ?Compensation and Fringe Benefit Reserves.? If, consistent with the City Attorney’s opinion, it is determined that the City as ?employer? is legally obligated to continue to pay the entire member contribution for all city of Milwaukee employees that were hired prior to January 1, 2010, my Proposed Budget includes adequate funding for this purpose.
On the other hand, if the State statute that mandates employers not to pay the member contribution for city employees, is determined to be legal, all general city employees will pay the member contribution—the same as most other local government non-public safety employees in the State of Wisconsin.
In that event, I propose that the funding in the Compensation and Fringe Benefit Reserves account be used to provide general city employees with compensation adjustments. This account could also be used to provide funds in departmental wage and salary accounts sufficient to eliminate the unpaid mandatory furlough days. If circumstances allow, I look forward to cooperating with the Council on developing adjustments to the salary ordinance for our general city workforce. The future general city pay plan does not need to be zeroes as far as the eye can see.
I understand that this is a difficult decision for all of you. I have wrestled with this decision for months. However, I cannot in good conscience propose a budget that conflicts with state law. Unless a court has determined that in fact the relevant provisions are unconstitutional, there may be very negative consequences for the City to adopt a budget that conflicts with the statutes. This issue must be resolved.
If you adopt this change, it will also enhance the long-term sustainability of our retirement plan and the security of pension benefits for our employees. This change in no way alters any retirement or disability benefit. In addition, by making our pension plan more sustainable and member benefits more secure, it will improve the long-term employment security and wage progression for general city employees.
The ultimate rationale for our decisions is the delivery of services to our residents. I am proud to say that my Proposed Budget continues our current service levels, and in some cases will enhance them.
First and foremost, this Budget provides the capacity to enable the Milwaukee Police Department to lead our effort to provide safe neighborhoods.
The Police Department’s application of analysis-driven deployment, staffing and service delivery alternatives, and constructive community relations have contributed to a 33.5% decline in violent crime and a 25% decline in property crime for the first six months of 2011 compared to the first six months of 2007.
The 2012 proposed budget ensures that adequate resources are available to continue these successful strategies. The department will draw on its overtime budget for the Neighborhood Task Force and other initiatives, without compromising district based operations. The Department’s productive use of Police Aides and Police Service Specialists has acted as a force multiplier, allowing a greater proportion of our police officers to be assigned to street duty.
The Fire Department will continue to deploy resources sufficient to achieve fire suppression and emergency medical response that are superior to national standards. The 2012 Proposed Budget includes a staffing innovation designed to enhance the Department’s capacity to provide medical response, which comprise more than 80% of the calls for service. Two two-person squads will be located in stations that are in the center of the City’s highest volume Emergency Medical Service (EMS) call areas. The squads will also have the ability to transport patients, but their primary role will be to be in-service, responding to EMS calls. This innovation will support the continuation of the department’s high survival rates in a cost-effective manner.
I’m also pleased to include a fire cadet program in my 2012 budget. Through this program we are going to accomplish two of my goals for the department. We will ensure that incoming firefighters are well trained and we will work to increase diversity in the Fire Department. I look forward to introducing the proud profession of firefighting to well-deserving Milwaukee youth.
Since the 2008 financial crisis, unemployment has been the number one economic concern facing the United States. We all know that getting more people to work remains job number one.
Worldwide economic conditions continue to be a drag on the Milwaukee economy. There are too few jobs, less business activity than we want, and continuing fiscal pressures on just about everyone in our city. We have an obligation to our citizens to take every reasonable step to improve our economic condition.
We need to continue our efforts to attract and retain good, private sector jobs. Our Department of City Development is making a compelling case for companies to grow here in Milwaukee. Look at some of the successes in recent months – Palermo’s, Ingeteam, Suzy’s Cheesecakes, and J.F. Ahern have added – or are going to add – jobs in the Menomonee Valley. Companies like Diamond Precision and Pferd have grown on the northwest side. In Bay View, near the airport, along Historic Highway 41, in Riverwest, and on the west side, businesses are discovering opportunities.
Alderman Wade has joined me in making a commitment to set the stage for new industrial business growth in the 30th Street Corridor including at Century City. There is great potential along this corridor. Most importantly, there are great Milwaukee workers who are ready to step in to new opportunities here.
We continue to fight for stable neighborhoods with aggressive efforts to mitigate the impacts of home foreclosures. We are working to preserve quality housing, organize neighbors, and strengthen the quality of life in residential neighborhoods across the city.
Businesses and developers are looking at city neighborhoods and the downtown area as they contemplate growth. They recognize our advantages. My 2012 city budget continues our work to improve the economy of Milwaukee.
Success in the economy of the 21st century requires a well-educated work force. Many of Milwaukee’s families face enormous challenges in enabling their children’s ability to compete in the future and to prepare for educational challenges beyond high school. My funding proposals help our families take on these challenges without duplicating the efforts of other governmental entities.
My proposed budget includes a commitment to improving reading. An important initiative will retain and expand youth literacy programs by providing property tax funding to replace decreased grant funding. The Teacher in the Library program began in 2010 and brings teachers to the public library during after school hours. Teachers help children complete homework assignments, assist students in becoming more focused on their studies, and assist librarians in promoting and developing reading as a lifelong skill and habit. Teachers also provide support, counseling, and advocacy for the parents and caregivers of participating children. In 2012, Teacher in the Library will expand to six library locations.
In addition, we are also increasing Central and neighborhood library service hours, and providing sustainable funding for the Center Street Library. That means our residents have more opportunities each week to learn new computer skills, get help creating resumes and finding a job, do their homework, research a new business venture, meet an author, and of course read a good book!
My budget also expands both outreach for the Summer Reading Program and the First Grade Library Card Campaign. In 2012, we will send out literacy experts to 80 early childhood classrooms to provide enriching story time sessions to some of the most at-risk children, those living in poverty.
These proposals will help solidify the libraries’ role in neighborhood quality of life. Thank you to Alderman Hamilton for his leadership as Library Board of Trustees president as well as the very important work you’re doing on the Milwaukee Promise.
Healthy early childhood development contributes to success in school. The Milwaukee Health Department understands the vital importance of early childhood development. It has been working hard to address infant mortality. The Health Department offers free cribs to families who cannot afford them, and provides home visits to at-risk pregnant women and their families. We have conducted public education campaigns about safe sleep, proper prenatal care, and the importance of breastfeeding and childhood immunizations. And we examine each infant death and stillbirth, to see what might have been done to prevent it.
These programs have been shown to improve prenatal health and birth outcomes. Development results after birth have also been promising. Based on these results, the Department will reallocate a larger share of its nursing resources to proactive, evidence-based home visitation services.
Last month we announced a new partnership with the United Way of Greater Milwaukee. Using our very successful partnership to prevent teen pregnancy as a model, together we are building a community-wide infant mortality coalition with stakeholders from across the public, private and non-profit sector. Every child in our city deserves to be born strong with a good start and a great chance at a healthy and productive life.
This Budget continues our commitment to improving our core infrastructure. My proposal for the Paving Program, combined with funding from the Local Roads Improvement program, will enable DPW to complete almost 16 miles of reconstruction and resurfacing work on local streets. This budget also increases the amount available for capital maintenance by 7%. My proposed 6-year Capital Improvements Program includes a reduction to the replacement cycle for local streets to 50 years by 2017.
Recent flooding events have heightened the public’s attention on the performance of the local and regional sewer systems. The findings of the City’s Flooding Task Force have made it clear that the problems of basement backups and sewer overflows have an important private property, as well as a public infrastructure, dimension. My proposed budget for the Sewer Maintenance Fund addresses both of these issues.
The 2012 capital budget includes $39.1 million for sewer replacement and infiltration and inflow reduction projects. In 2012, this plan allows the city to replace approximately 15 miles of sewers, and to reline another 14 miles. This combined level of sewer replacement and relining effort will enable us to meet the optimal 90-year replacement cycle for local sewers. This funding includes a projected $2.64 million in grant funding, which we plan to combine with City funds, to perform a second project to reduce I & I from private property. I want to thank the Commissioners of Milwaukee Metropolitan Sewerage District for their leadership in enabling member communities to take on innovative solutions to waste water and storm water management.
As Council members, you understand very well the importance that solid waste management plays in the everyday lives of Milwaukeeans and the quality of our neighborhoods. And you also understand how reductions to State recycling grants and increases to State tipping fees affect the wallets of our constituents. Now, more than ever before, effective solid waste management is needed to produce financial as well as environmental sustainability.
I am pleased to announce that this proposed budget includes initiatives from the Department of Public Works to increase recycling and lower the costs of our solid waste program. Based on an amendment to our recycling contract, the City will initiate single-stream recycling and continue the assignment of additional recycling carts as necessary at no charge. As a result, 2012 estimated recycling revenue will increase $740,000.
This Budget also responds to legitimate community concerns about new State laws that require voter identification. Many citizens in need of identification will pursue a State identification card from WiDOT. Possession of a valid birth certificate facilitates obtaining such an ID. My proposed budget includes funding to help process requests for birth certificates through the Milwaukee Health Department. The Department of Administration has initiated discussions with potential grantors to help reimburse citizens for all or part of the $20 cost of a birth certificate. It’s important that the City do what it can to protect our citizens’ right to vote without financial penalty. I’d like to recognize the leadership of Alderwoman Coggs on this issue.
My proposed 2012 Budget also promotes financial sustainability. The proposed tax levy will increase by less than 2/3 of 1%, bringing the three-year average trend to less than 1.5% a year. If the Council approves the proposed level of municipal service charges, the typical residential property owner will experience a 1.4% increase ($20) from the impact of the tax levy and municipal charges.
The Budget reduces the use of the Tax Stabilization Fund, Public Debt Amortization Fund, and the transfer from the Parking Fund reserves. New borrowing remains at sustainable levels. Most importantly, my Budget prepares for a very difficult future by adding $25 million to the Employers’ Pension Reserve. The reserve will help us address the challenge of future employer pension contributions, which are currently projected to average more than $65 million a year for the foreseeable future, beginning in 2013. I thank the Council for its responsible and unanimous support that it demonstrated for my 2011 Employers’ Reserve contribution proposal. I ask for your support once again for 2012. And as I cautioned last year, I will veto any diversion of my proposed level of Employer Reserve funding to any other purpose, regardless of its importance or political support.
In closing, I want to thank you in joining me in the very difficult, but appropriate budget decisions of the past that have helped keep the City on solid footing. As the recent Census numbers show, we have a lot of work ahead of us. Let’s keep moving Milwaukee forward.

Editor’s note: Every 10 years, the state redraws its district boundaries. In the past, municipalities conducted open hearings to gather public input for how the cities could be fairly divided to effectively represent the population, and the state then incorporated those local decisions into the statewide redistricting plan. This year, the Republican-controlled Legislature bypassed that local feedback and devised its own plan, which was unveiled at a hearing by the Senate Committee on Judiciary, Utilities, Commerce & State Operations at the Capitol in Madison Wednesday. Milwaukee Mayor Tom Barrett and Alderman Ashanti Hamilton, chairman of the city’s Judiciary and Legislation Committee sent a letter to members of that committee Wednesday, urging them to give consideration to the Milwaukee plan before proceeding with the state plan. The following is the text of that letter.

Dear Members:
Due to the short notice of this public hearing, we were unable to change previous commitments and appear before you in person. That being stated, we believe that Senate Bill 150 has profound and negative impacts on local governments and the redistricting process we have followed since 1971.
We oppose the proposed changes to the current state law.
As prescribed by state statute since 1971, the City of Milwaukee began its redistricting process in February, 2011 and completed that process Friday, July 8, 2011. During that process the city held four public hearings, participated in three public listening sessions, held two full-day public workshops for citizens to produce their own maps, and conducted countless informal briefings to individuals and interested citizen groups. The city cost of the dedicated labor hours and administrative expense total over $40,000. Passage of Senate Bill 150 would cost the city an additional $10,000 or more to make the retroactive changes mandated after the process by the state negating local authority to establish its boundaries.
Senate Bill 150 negates months of work, outright dismisses our open and transparent public hearing process, and wastes our taxpayer dollars. While the city has had little time for an in-depth analysis of the state’s legislative district lines and the impacts it will have on communities of interests and our neighborhoods, we have identified widespread ward splitting that will force the Common Council and Mayor to initiate a second redistricting process – only a few short weeks after we completed a legal and comprehensive ward and aldermanic district mapping process.
The proposed legislative districts fail to incorporate the city’s ward lines and therefore split 17% of all City of Milwaukee wards (55 wards) and mandate the
City of Milwaukee to redraw the boundaries of nine aldermanic districts. Please see attached map.
By excluding local governments and ignoring natural boundaries and local factors that bind communities of interest, you have arrogantly mandated artificial ward lines without regard to local concerns. You have intentionally done this in order to gain extreme partisan advantage at the expense of equal and fair representation.
Current law properly ensures that local governments – the unit of government that is closest to its electors - have a strong voice in the redistricting process. The very fact that you need to pass a new state law that allows you to circumvent a process that has been in place since 1971 displays your raw intentions to grab more partisan advantage at the expense of local input.
Furthermore, voters in up to six Milwaukee County Assembly seats will significantly lose their influence in choosing who represents them to voters outside of Milwaukee County. For the largest county in Wisconsin and, the economic engine for the entire state, that is a significant loss of representation.
Senate Bill 150 is a power grab that allows this to occur without the proper public disclosure, debate and discourse that was followed in the City of Milwaukee.
The people of Wisconsin do not want a strong, central, State Government. Yet, that is what the Senate and Assembly leadership are forcing on the residents of our great State.
Today we call on you to slow this process down. You must hold more public hearings, allow more citizen participation and provide opportunities for the submission of alternative maps that will be seriously considered. And, you must respect the work being done by local units of government. No legislative vote should be taken until these provisions are fulfilled.

The proposed state budget for the next two years is bad news for Milwaukee. We all understand state fiscal challenges require shared sacrifice, but Gov. Scott Walker’s proposal disproportionately hurts our city.

It undermines the long-standing partnership between the state and the city by cutting shared revenue and slashing payments for city services to state facilities. While spending on interstate highways balloons in the proposed budget, support for local roads -  the money that helps pay for fixing potholes and maintaining busy city streets - is cut by 10 percent.

It eliminates recycling grants, threatening that popular municipal service.

Also, significantly, the governor’s budget lacks fairness. City residents will feel service cuts and some hard working city employees will pay much more for benefits. But police union members and fire union members will waltz along without sharing the load.

That decision by the governor reeks of political favoritism. Despite his claims, Governor Walker neither proposed nor provided the necessary tools for municipalities like Milwaukee to manage the budget cuts.

The rhetoric surrounding the budget perpetuates the myth that city governments are bloated with excess and inefficiency. That is certainly not true of Milwaukee. We have made dramatic cuts in recent years and dealt with previous state budgets that froze shared revenue.

We have negotiated concessions from unions and kept taxes in line. When a huge, unexpected pension payment was required two years ago, we cinched our belts even tighter.

The budget does not acknowledge Milwaukee’s unique challenges. We are a community with a disproportionate concentration of poverty and a disproportionate demand for municipal health services, police response and fire service.

We are a city in which K-12 education needs additional help, tainted industrial land needs redevelopment and older housing needs rehabilitation.

The budget does nothing to correct the egregious funding flaw in the school choice formula - a flaw that can cost Milwaukee homeowners hundreds of dollars each year.

And it includes a policy change that has nothing to do with the budget: eliminating teacher residency requirements. There is no evidence that this will have even a marginal positive effect on educational outcomes, but it will hurt the city’s tax base.

Milwaukee’s fiscal health and the strength of our business community are important to everyone in the state.
That’s why we need a partnership with Madison that respects local concerns and shares the cutbacks equitably. This proposed budget fails to accomplish that.

 

Tom Barrett is the mayor of Milwaukee.

In Wisconsin, our state motto is "Forward" because our state has a proud tradition of working together to solve problems.

After our campaign ended in November, I was hopeful that Scott Walker would rise above divisive politics to unite Wisconsinites from across our state to create jobs and fix the budget mess in Madison.

Unfortunately, that is not what has happened. Instead of bringing all stakeholders to the table to find solutions, Scott Walker has declared an ideological war.

Instead of talking with teachers, nurses, and law enforcement personnel to work together on a solution to our budget crisis, Scott Walker is dividing Wisconsinites by attempting to end the collective bargaining rights Wisconsin public employees have had since 1959.

Help me show the entire country that Wisconsin still moves forward together by donating $19.59 and by standing with the thousands of hard-working Wisconsinites who want their voices in the work place heard.

It didn't have to be this way.

As the Chief Executive of our state's largest city, I know that Wisconsin is facing tough economic choices and is in a dire financial situation. Members of all the major unions know this too -- and they have already agreed to make the financial concessions Scott Walker has asked of them.

I also know that Scott Walker is more interested in playing politics than solving the states budget problems. He deliberately packaged these public employee concessions with a push to strip workers of most bargaining rights because he has put his political agenda ahead of the needs of the people he serves.

Tell Scott Walker to end his ideological war now by donating $19.59 and show that you stand for a compromise that allows Wisconsin's hard-working teachers, nurses and law enforcement personnel to retain their right to a voice in the workplace.

As Mayor of Milwaukee, I faced a budget crisis similar to the one that Scott Walker is facing as Governor. After the stock market collapsed in 2008, Milwaukee was faced with an unexpected $49 million payment to the city pension fund. Instead of attacking others, I tackled the problem head on by bringing everyone to the table -- unions, workers, budget directors, business leaders, and department heads -- to find solutions to the problem.

The result? By working together we cut spending and the city didn't have to borrow a penny. Now the city pension is funded at over 100% and has zero debt.

But we were only able to achieve the spending cuts that the City of Milwaukee needed to solve our pension crisis by working together with everyone.

The issues that face our state are too important for us to face them divided. It's time to stand up and make our voices heard so we can go forward together and get Wisconsin moving again.

Tom Barrett is the mayor of Milwaukee.

Editor’s note: This is the text of Milwaukee Mayor Tom Barrett’s State of the City Address, which he delivered this morning at the Milwaukee Job Corps Center.

Good Morning Milwaukee! I am delighted to welcome you to the beautiful campus of the Milwaukee Job Corps Center. This is a great place for young people to complete their high school education in a campus-like setting, learn a marketable trade, make lifetime friends, and graduate with a good job in hand. And, it’s in Alderman Bob Puente’s district. Thank you, Bob.

And I also want to thank the young men from the Wisconsin Conservatory of Music Jazz Ensemble for their entertainment this morning.

We are joined today by some of the first students who enrolled in Job Corps and who have committed themselves to learning the life skills they need to graduate and succeed in the world of work. To the young people involved in Job Corps, I want you to know we believe in you and we believe in the mission of Job Corps. By the end of June, this center will be the home to 300 students.

I’m proud of the role I played to bring Job Corps to Milwaukee. I like to call it my “17-year-overnight sensation!”
I was a new Congressman in 1993 when the planning began. Despite a great local partnership and high marks from the U.S. Department of Labor, Milwaukee’s first application for a center failed. The proposal scored 10th in the nation, but only nine sites were chosen.

But, we weren’t ready to quit. Just a couple of years later, with renewed commitment, we again brought local and state partners together and began a second application process. With strong support from City of Milwaukee officials, unanimous Congressional support, and leadership from the City’s Housing Authority, Milwaukee was awarded the Job Corps site and its multi-million dollar investment in youth development.

As a result, our community will reap tremendous benefits. I especially want to thank Congresswoman Gwen Moore whose passion for this project was matched by her incredible hard work in seeing it through. And to our United States Senator, Herb Kohl, thank you. Senator Kohl’s support never wavered.

The Milwaukee Job Corps Center is a symbol of what we can achieve when commitment and perseverance prevail.

Today, as we take stock of our wonderful City, I say we must renew and revive our commitment to our City, to our home, Our Milwaukee, and we must do so with a new level of enthusiasm and energy.

We all know we are living in tumultuous economic times. We are the children and grandchildren of the generation that experienced the Great Depression. We have been through our share of downturns and we have weathered recessions. But we have never experienced the likes of the
crash of 2008 and its continuing aftershocks.

The very foundation of the middle class - job security, home ownership, the financial wherewithal to support and raise a family and the hopes for a secure retirement - have been rocked.

The slow economic recovery and consistently high unemployment rates have fueled levels of uncertainty, fear and anger that I have not witnessed in more than 25 years of public service.

These feelings are very real and run very, very deep. Today, the middle-class is navigating unchartered territory. The rhetoric is boiling in the cauldron of conquer and divide politics. Middle-class teachers are being pitted against middle-class sales managers. Middle-class truck drivers, who plow snow and pick up our garbage, are being pitted against middle- class police officers and firefighters. Parents who have lost their jobs and are now toiling at ten-dollar-an-hour jobs, with no benefits to keep their heads above water are just plain mad. And I don't blame them.

So there is a need for shared sacrifice that includes our city workers.

I believe at this difficult time, public employees need to pay more for their benefits. We began addressing this issue in earnest in our last round of contract negotiations and we will continue to do so.

But there is a very important point to be made here; we have made significant progress without attacking the fundamental right to organize.

Most of us agree that shared sacrifices are necessary. The problem, of course, is that sacrifices are not always equally shared. All employees, including police and fire, are going to have to be part of the solution. No one should be given a pass based on who they supported during a political campaign.

With a high degree of certainty, I can unfortunately tell you that the cuts coming from Madison are going to disproportionally impact the City of Milwaukee. The fact that we have been responsible stewards of your tax dollars will not matter. The fact that we are home to 73% of the region’s poor won’t matter.

The fact that we bargained a two-year, zero percent pay increase with our largest City union won’t matter or, the fact that we made a $47 million dollar payment to the City’s pension fund without borrowing a penny won't matter.

Despite having absorbed an inflation adjusted loss of $60 million dollars in state shared revenue since 2003, we have maintained services and budgeted strategically.

I want to be very clear here today. Governor Walker is planning to cut shared revenue to the City. With close to two thirds of our operating budget costs for salaries and benefits going to police and fire, we're going to have a very difficult time preserving all current services.

A cut to shared revenue is a cut to public safety.

I know he's trying to wash his hands of the public safety impacts of his decision by excluding Milwaukee police and fire from his proposals, but that just pushes the decision to the City level. There will be an impact.
The pending cuts will challenge us all. My priorities are to protect the essential services we provide to working families, to all families, and jobs, jobs, jobs. There are going to be changes. We’re going to have to continue the innovations that we’ve initiated and we’re going to have to be even more creative, more cooperative and more committed in our efforts to continue the growth of our great City.

In fact, we've already begun. This morning, I’m pleased to report a cost-saving, cooperative arrangement between governments. We are finalizing an agreement with Milwaukee County that will designate the City’s Public Safety Communications Center as the central answering point for all incoming 911 cell calls. This agreement will eliminate the need to transfer emergency cell calls from the County to the City and will improve the quality and efficiency of 911 services we provide to our residents.

I've begun working with the Public Policy Forum and Greater Milwaukee Committee about examining consolidation of County Public Work services with the City’s Department of Public Works.

I'm also asking members of the Milwaukee Intergovernmental Cooperation Council – the Council of all Milwaukee County municipalities – to take a hard look at consolidating municipal health department functions.

This is not a Milwaukee versus suburbs political battle. The City of Milwaukee already provides fire service to the Village of West Milwaukee. There already exists a consolidated North Shore Fire Department. These are real world, working examples that benefit taxpayers. They can serve as the launching pad for further study and consolidation of services. We owe it to middle class taxpayers to provide essential services at reasonable costs. I look forward to discussing these ideas with other leaders as well as with the various City unions.

To those of you who know me, you know that I strongly believe that we have a moral obligation to create hope in the lives of our young people. One way to do this is to provide our young people a summer job. Since 2005, I'm proud to report that 7,000 Milwaukee students have benefitted from a summer job through my Earn and Learn Program. Placements have been as varied as cleaning up at Summerfest, to working with Giacomo and Angelo Falluca at Palermos Pizza, to interning in a City department, to joining the Johnson Controls’ Conservation Leadership Corps.

This summer, the public funds for this program will fall far short of meeting the goal we set for 2011 – 3,000 jobs. We have public and private commitments –both in funding and job placements – for 1,200 teens.

I will not settle for that. We must do better.

With the help of Manpower’s Jeff Joerres, Tim Sullivan from Bucyrus International, WE Energies’ Gale Klappa and Ellen Gilligan from the Greater Milwaukee Foundation, we are going to initiate the Mayor’s Earn and Learn Summer Jobs Fund. My staff has a lot of legwork to do and I know that economic times are tough, but let’s get going. Let’s put a few thousand Milwaukee young people to work this summer and build for future summers and future careers.

Stay tuned because we will be knocking on your doors. Our ask will be simple. It costs $1,500 to place a Milwaukee teen in a seven-week summer job. So, yes, we will be asking for a tax-deductible contribution to the fund. If that doesn’t work, we’ll be asking you to hire a Milwaukee teen. I want to extend my thanks to Jeff, Tim, Gale and Ellen for their commitment. We share a commitment to Milwaukee and I sincerely appreciate your willingness to work with me.

I can’t talk about hope and young people without addressing the Milwaukee Public Schools. And, I can’t talk about strengthening our middle-class without talking about our schools.

Superintendent Gregory Thornton has already had an impact – winning the $20 million GE grant to improve science and math education. I’m committed to working with him to secure the next round of Race to the Top Dollars that are designed to go directly to school districts. I want Superintendent Thornton to succeed and I want him to have the tools necessary to move this district forward.

The state legislature should give him the power to close and reorganize failing schools and to immediately implement financial measures that would direct more resources into the classroom and provide him with the flexibility to deal with the pending cuts in school aids.

The fact is The Milwaukee Public Schools have to become a more attractive option. The days that the district was the only publicly-funded option are long gone - and whether you like it or not, they’re not coming back anytime soon.

I want to take a moment now to talk about downtown and the need for a new approach to what was once the City’s major shopping district. West Wisconsin Avenue –from the river to the Marquette campus – is a stretch that needs a major jolt of new ideas and, more importantly, new investment.

West Wisconsin Avenue generates no shortage of opinions and comments. I think we have heard them all – from constructing a pedestrian mall to selling everything on the stretch to a theme park developer.

But we don’t have a magic wand. The City has invested tens of millions of dollars in the Grand Avenue. And while Development Commissioner Rocky Marcoux has a talented team, we can’t – and we shouldn’t- throw a disproportionate share of City resources at this one project.

A few months ago, I was having a conversation with my friend Steve Chernof about West Wisconsin Avenue and the Grand Avenue Mall. I asked him, “Why should the City be solely responsible for this?” That’s when I invited Steve to engage the West Wisconsin Avenue Stakeholders and have them take a run at a viable redevelopment plan that breathes new life into this area.

Steve agreed to take on the project and we're pulling together a working team that will include the stakeholders- business people, developers, retail experts, architects and academics.

City staff will offer background information. But, this will not be driven by City Hall. I want a fresh set of eyes on the Avenue. Injecting new life into West Wisconsin Avenue will only add to the attractiveness of Milwaukee.
And while we're on the subject of downtown, I want everyone here to know we're committed to removing unnecessary impediments to development. As part of that, we are reviewing ordinances regarding historic preservation to make sure we protect our history without impeding
investment.

As City leaders, we’ll continue our efforts to grow our economy and capitalize on our strengths so that jobs exist for those who want to live in Milwaukee and raise their families here. We have right here an industry that sets us apart. We are the creative hub of the Midwest and one of the top five creative clusters in this entire nation.
From artists to architects….from photographers to product designers….This Region’s creative community is important to our economic well being as well as to our quality of life.

And so I am happy to announce today that the Milwaukee Economic Development Corporation – itself a very creative financial agency – along with its financial partners, will be re-tooling one of its products to help provide “Creative Capital” to the Creative Industries of our region. With this capital support, we hope to build and expand our newly-recognized Creative assets.

While I’m on the subject of new and exciting ideas, let's talk about trains. High speed trains and high speed rail money. Most of you probably know that Governor Walker and I disagree about the value of President Obama’s high-speed rail initiative. I worked hard to get train manufacturer Talgo to locate in Milwaukee, in a neighborhood that cries out for middle-class jobs. I’d like to thank Talgo for choosing Milwaukee.

I believe that the Midwest high-speed rail line would have given Milwaukee and our region a huge financial boost as well as an advantage in recruiting businesses and middle class families. But just as I never quit on Job Corps, I'm not willing to give up on improving rail service to Milwaukee.

Just last month, I met with U.S. transportation Secretary Ray LaHood to discuss the viability of financing the improvements on the Milwaukee to Chicago Hiawatha Line through the second round of High Speed Rail funding.
For 2010, Amtrak reported record ridership between Milwaukee and Chicago; an increase of 6% to 783-thousand riders in 2010. The increase over the last five years has been 49%. This in more than a commuter train line; it’s a valuable and necessary economic life line, connecting two large regional economies, arts and culture and residents to work.

Within the next few years, we will need additional trains on the Milwaukee-Chicago run. That would increase our daily trains from seven to nine and further strengthen Milwaukee’s economy.

We should not let this opportunity to strengthen our region’s economy slip away. Let’s make this happen. And I’m asking that we pull together---Democrats, Republicans, the business community and get it done.

Home foreclosures continue to affect Milwaukee’s residents and neighborhoods. This city has been a national leader in addressing the problem through partnerships and action.

The Milwaukee Homeownership Consortium actively works to preserve and promote homeownership in the City. At an event on a snowy Saturday in December, more than 600 people turned out to learn about opportunities for homeownership and purchasing foreclosed homes.

There are many people with stable employment and good credit, who could be homeowners.

We are extending an invitation to them to look at available homes in neighborhoods all across Milwaukee.
So, who are these potential homeowners? They are people like Leslie Edwards, who purchased her home on North 39th Street last month. The house had been a bank-foreclosed property, acquired by the City. The City invested in repairs on the home, and Leslie agreed to buy it. She’s a homeowner now; her neighborhood is better off because she is there; and the city is stronger thanks to her investment. Leslie is here and I want to thank her for investing in Milwaukee and congratulate her on being a homeowner.

Our nonprofit homeownership counseling agencies are key partners in these efforts as they work with families who are facing foreclosure, as well as those who are interested in pursuing homeownership.

Today I’m pleased to announce a new initiative, the Block Stabilization Program, to improve the appearance of city blocks where two or more homes have gone into foreclosure. I want to thank the Common Council for working with me on this. We are offering modest incentives to homeowners who make visible exterior improvements to their homes. In neighborhoods that look good, foreclosed homes are more likely to sell to new owners.

Access to financing continues to be a challenge to addressing the foreclosure issue. I would like to recognize and thank US Bank, for its commitment in providing mortgages to homeowners participating in the City’s Neighborhood Stabilization Program, and Pyramax Bank which recently made a $1 million financing commitment to provide mortgages to homeowners purchasing foreclosed properties.

Our efforts have also been aided by developers both large and small. Walnut Way Conservation Corporation and Layton Boulevard West Neighbors are working with the City to address foreclosures in their neighborhoods by renovating foreclosed properties and making them available for homeownership. Thank you to Sharon Adams, Fran Dawson and Charlotte John-Gomez for your assistance.

Earlier this year, Police Chief Edward Flynn and I were extremely pleased to announce that crime has decreased for the third straight year. The numbers speak for themselves, but equally compelling are the stories I hear from residents who talk about neighborhood groups working with the police to take their neighborhoods back.
Chief Flynn and the great men and women who work for the Milwaukee Police Department are implementing a common sense and innovative approach to crime fighting. They understand that safe Milwaukee neighborhoods are key to maintaining and attracting middle-class families. They also get that the police can’t do it alone. District officers are working directly with neighborhood residents; opening the lines of communication and restoring trust. In the last year, more than 200 neighborhood watch groups were jointly formed.

Chief Flynn and this great department continue to build upon data-driven police response, and while crime is down, there were too many people killed in Milwaukee last year.

Unfortunately, we’re seeing an increase in homicides stemming from domestic violence. We have to and we will drive that number down.

I also want to thank Fire Chief Mark Rohlfing and the brave men and women of the Fire Department for their hard work and commitment to protect the residents of our City. Last year, the City of Milwaukee had the lowest number of fire fatalities since the Department started keeping records. In fact, I think this is the lowest number of fire deaths in over 100 years.

People in this room and people throughout this City share my love for Milwaukee and my commitment to our future. I anticipate some difficult decisions are ahead for me and for other Milwaukee policy makers. We will be fighting hard to create jobs and protect the middle class. I’m also asking for more from Milwaukee’s business community – ideas, financial support for good causes, and investments in growing companies and jobs, right here in this City. The challenges we face are serious. But, if we stand together – if we make a commitment to Milwaukee – we can and will keep our City on the path to success.

Two Milwaukee development opportunities, the use of vacant MPS buildings and the proposed downtown Marriott hotel, generated media interest last week. I continue to support City control of vacant MPS buildings. In fact, I introduced the measure in my 2011 City Legislative Package which was presented to and passed by the Common Council on November 23rd. When I met with Governor Walker in mid-December, we discussed empty MPS buildings and charter schools. I also laid the groundwork with legislative leaders during meetings that same day.

The City can manage the disposition of the buildings. It’s a real estate management and disposition approach. MPS will have ample time to determine the school system’s needs for any particular building.
The sale to either charter or choice interests will be permissive, not mandatory. The City may have an interest in a specific property for neighborhood development and/or redevelopment purposes. I want vacant MPS buildings to be neighborhood assets.

Since 1989, the City has provided $182 million to MPS in borrowing authority for school building improvements. Our City tax levy cost for this in 2011 alone is $12.2 million. In an effort to balance our capital needs and priorities, I eliminated this program a few years back.

If the City gains control over building sales via legislation, I would advocate for sales proceeds to be used to help pay down the levy-supported debt we have incurred on MPS’ behalf.

Last Thursday, developers introduced a new, compromise design for the proposed downtown hotel that they will present to the Historic Preservation Commission for review today. I urge commission members to act on this matter and keep the process moving. We need to send the message to developers that reasonable ideas move forward in Milwaukee.

I support this project because it’s about jobs, economic development, the future of Wisconsin Avenue, and a better environment for people to come downtown and to do business.

Five years from now, I do not want to be on the corner of Wisconsin Avenue and Milwaukee Street looking at the same underutilized storefronts. Five years from now, I want to stand at that intersection and say look at all the people who work here.

This project is consistent with my vision for a vibrant and exciting downtown Milwaukee where we are making a successful effort to bring new energy and new private-sector investment to our major commercial area so that we can grow and thrive as a community. This is a big shot in the arm for downtown Milwaukee, and it is a project that should move forward.

This is the type of project that I want to see more of for Milwaukee. City government will continue to work with the private sector to attract these types of developments to our community.  

Regrettably, not all old buildings can be saved, and we have to make way for the future. When buildings have significant historic value and it is practical and affordable to redevelop them, historic preservation should be pursued. That's not the case here, and we should move forward so we enhance downtown, grow the tax base and generate jobs. It's certainly a better alternative than leaving empty buildings that contribute very little to our community.

I can respect that some others may have a different point of view. That's OK, because that's what democracy is all about. But this is a great project for Milwaukee, and I thank Dean Greenstreet of UWM’s School of Architecture and Urban Planning for working with the developers on this compromise design.  

Tom Barrett is mayor of Milwaukee.

Editor’s note: The following is the text of a letter sent from Milwaukee Mayor Tom Barrett on Wednesday to Wisconsin Transportation Secretary Frank Busalacchi and Mark Miller and Mark Pocan, co-chairs of the Legislative Joint Committee on Finance in Madison, regarding the deterioration of the Hoan Bridge.

 

Dear Secretary Busalacchi, Senator Miller, and Representative Pocan:

News today that Wisconsin is set to receive an unexpected $105 million in additional federal highway aid for road projects presents a timely and commonsense solution to repairing the Hoan Bridge.

I am requesting that you take the necessary action to allocate, from the $105 million, the funds necessary to engineer and re-deck the Hoan Bridge. I ask that this be done immediately to ensure that the bridge does not continue to deteriorate.

This is the perfect opportunity to commit the necessary resources, estimated to be $50 million, to repair and maintain this vital traffic connection between downtown Milwaukee, Mitchell International Airport and Milwaukee’s southern suburbs.

I look forward to working with you to ensure the reconstruction of the Hoan Bridge receives the resources and attention it deserves.

Sincerely,

Tom Barrett
Mayor

(To view Wednesday’s Milwaukee Biz Blog about the Hoan Bridge by BizTimes Milwaukee executive editor Steve Jagler, click here.)

With the passing of Joe Zilber, we have lost one of our finest champions, a kind and generous man and a long-time friend.

Over the years, Joe never passed on the opportunity to share stories about his loving wife, Vera, his children or his grandchildren and great grandchildren.

His devotion and commitment to family and community will serve as a living legacy to us all.

Joe was a philanthropic giant who worked tirelessly to improve our community.

Milwaukeeans of all ages have been and will continue to be beneficiaries of his spirited generosity, his hopeful vision and his strength and will to make life better for so many.

There are dreamers and there are doers, but seldom come along those with a grand vision and the resources and dedication to make that vision reality.

Joe Zilber was such a man, and his presence will be long felt and sorely missed in our community and in our world.

Joe was more than from Milwaukee - he was Milwaukee. Joe Zilber embodies the best that Milwaukee can be - entrepreneurial, compassionate and generous.

Young people in Milwaukee neighborhoods will benefit from Joe’s commitment for generations. Joe Zilber’s love of Milwaukee will be seen as new developments borne of grassroots ideas take flight in the Clarke Square and Lindsay Heights neighborhoods.

As infants grow up healthier and the elderly have the opportunity to live out their final days in dignity and grace, Joe Zilber’s impact will be felt. As young people have access to better, stronger programs through the Boys & Girls Clubs, Joe’s lifelong commitment to our city will be celebrated.

As future lawyers pore over cases and law books at Marquette University while being constantly reminded that they are duty-bound to serve their community, Joe’s philosophy will be celebrated.
And as thousands of residents, employers and workers once again breathe life into the Pabst Brewery site, Joe Zilber’s deep belief in the strength and power of Milwaukee residents will be felt by all of us.

These are but a few of the projects and commitments that Joe has made that will bring new opportunity and a stronger sense of community to Milwaukee for generations to come.
Joe Zilber leaves a great legacy, but he also leaves behind a challenge to the rest of us. We need to heed his call to action and his deep belief that every single individual has a responsibility to leave this world stronger than we found it. Joe Zilber did just that. I am deeply saddened by the passing of my friend Joe.

On behalf of the City of Milwaukee, I extend to the Zilber family our deepest sympathies and our warmest regards. It’s an honor to have known Joe and a privilege to have had his friendship.

 

Tom Barrett is the mayor of Milwaukee.

Editor's note: Milwaukee Mayor Tom Barrett delivered his proposed 2010 city budget to the Milwaukee Common Council. The following is the text of his address.

Good morning President Hines, members of the Common Council, City Attorney Langley, Comptroller Morics, City Treasurer Whittow, members of the Cabinet, honored guests and residents of our great City.
The 2010 Budget presents all of us with a new set of challenges. As with all budgets, we will struggle to find the right mix of revenues and services. I'm confident that you will continue to apply the serious consideration that you have demonstrated during my first five budgets.
However, focusing solely on the traditional budget questions this year simply won't cut the mustard. The 2010 Budget needs to include a serious examination of all our assumptions about what services are really essential and how we can deliver those services.
Less than one month ago the Public Policy Forum issued an independent analysis about City government finances. The good news is that the Forum concluded that City government is well managed and that we have avoided the level of distress that many other large cities have experienced.
Take Cincinnati for example, where the City is planning to cut 319 jobs and may have to close 20 libraries. Or, Denver where budget plans call for 176 city workers to lose their jobs. In Detroit, there has been talk of laying off 1,200 city employees with remaining employees being required to take 26 unpaid furlough days.
The bad news is that the Forum also stated that without major changes to our mix of revenue options, Milwaukee's fiscal condition will continue to deteriorate.
All of us understand the sources of our challenges. Increasingly, Milwaukee's City Budget is forced to absorb the consequences of policies that others impose without the tools needed to adjust those policies.
For example, the breakdown of the State's Shared Revenue program, which once equalized fiscal capacity throughout Wisconsin, has left communities like Milwaukee increasingly on our own. In just seven years the value of our state aids payments has fallen $60 million dollars in inflation-adjusted terms. The dysfunctional nature of the United States health care system shifts costs to responsible employers like us, while contributing to the burden of poverty that schools, social services, and public health agencies must manage. The State's labor relations mandates ignore differences in fiscal capacity and community economic conditions. And world financial turmoil has thrown our pension fund investments into a tailspin.
Let's consider how some of these recent events will shape this year and future years. By 2012, City pension contributions could be as much as $80 million dollars higher than they were in 2009. Our pension plan remains well-funded and well-managed, but we can no longer expect our pensions to be a free ride. In 2010 alone, the City's employer contribution will include almost $48 million dollars in funding for Plan benefits, including $24 million dollars and $14 million dollars, respectively, for police and fire sworn employees.
I want to thank Alderman Murphy for his leadership role in the Pension Board's adoption of a new funding policy, which lowered our contributions in an actuarially-responsible manner. Taxpayers, city employees, and retirees alike are very fortunate that the Board made this change. I also want everyone to be aware of the fact that had those changes not occurred, an additional $43 million dollars would have been necessary to balance this budget, which could not have been achieved without significant layoffs in the police and fire departments.
Health care benefits pose another structural concern for City finances. Since 1999 these expenses have increased from less than $50 million dollars annually to almost $120 million dollars in 2010. That's more than double in just ten years.
The pressure is especially intense for benefits to retirees under age 65. The rating agency Moody's has estimated that the City of Milwaukee allocates the 11th highest operating budget proportion of the 45 largest cities to retiree health care costs.
So, what do I propose that the City do about these circumstances? I will take the lead on multiple fronts to improve the City's finances so that our long-term prospects improve.

First, I will continue my efforts to diversify the City's revenues so that we can deliver services with less reliance on the property tax. My diversification proposals will insist on, at the very least, maintenance of the State's existing Shared Revenue appropriation. My specific proposals include:

• A City share of a County-wide sales tax to help address the continuing decline in the State's commitment to Shared Revenue.
• A new approach to the state's Transportation Aid formula that recognizes the importance of local streets and infrastructure in the regional economy and prioritizes the maintenance of existing infrastructure.
• Authorization of the Council's proposal to initiate a red light running traffic enforcement program, to provide for safer City intersections and enabling a non-property tax revenue source for enforcing traffic laws and regulations.

Second, I will continue to prioritize creative approaches to collective bargaining that reduce the City's ongoing structural costs. I want to thank District Council 48 for agreeing to collective bargaining settlements that can reduce our ongoing annual budget costs by almost $10 million dollars.
It is now time for all City government stakeholders - employees, who provide the services as well as residents who expect the services, to realize that we no longer can insulate ourselves from the economic forces that have battered this City. We need to be creative about service delivery, whether it's fighting crime, preventing fires, disposing solid waste, or engaging Library users.
Third, our budgets must focus on areas where duplication can be reduced, excess capacity eliminated, and new service delivery methods initiated. My 2010 Proposed Operating Budget initiates this process by reducing full-time equivalent position strength by 380 and by eliminating approximately $35 million dollars from the operating budget baseline.
Although these reductions have been difficult and certainly will have an impact, they have been made carefully and with strategic priorities and organizational efficiencies in mind The Budget does not simply “cut”; there are several examples of how changes in service delivery, investments in technology, and improved management enable us to reduce spending without compromising results.
Finally, the City will continue to do all we can to access new grant resources and to use them to improve our City's sustainability. Our recent effort with respect to President Obama's stimulus initiative is a case in point. The City of Milwaukee was one of the few applicant cities to win the maximum award of 50 police officers from the Community Oriented Policing grant program. I thank all those involved in that effort. We battled tirelessly to gain approximately $25 million dollars of state highway money for our major streets program and I want to thank President Hines and members of the Council for helping me fight that fight.
We will apply our one-time additional CDBG funding to increased local street preventive maintenance and to innovative efforts like the Diversity in Urban Forestry initiative.
Our Energy Block Grant award will be used to initiate a $1.2 million dollar Milwaukee Energy Efficiency Program, to improve energy efficiency and lower resident utility bills.
City employees not surprisingly have played an essential role in the City's necessary organizational makeover. I've been happy to see many examples of front-line employees taking the lead in helping the City save money. Just recently the Port of Milwaukee, through the leadership of Harbor Master Joe Di Giorgio, undertook a complete overhaul and reconstruction of one of the Port's cranes. Their success saved the Port more than $1 million dollars and has enabled better operations. I challenge and invite all City employees to contribute to our ongoing sustainability by creating better ways of service delivery.

 

The 2010 Budget will address our critical priorities. Examples include:

• $215.7 million dollars in the Milwaukee Police Department, which will allow for continuation of its data driven deployment strategies and operation of the Neighborhood Task Force. The budget also reflects the city's successful Community Oriented Policing grant, which will allow for a new class of 50 police recruits in mid-year.
• $99.8 million dollars in the Milwaukee Fire Department to enable response to fire suppression, Advanced Life Support and funding of a Fire Department recruit class next year.
• A $1.7 million dollar increase to the Department of Public Works local streets program, which will enable a 61-year replacement cycle - less than half the replacement cycle that existed when I took office.
• Funding for the Milwaukee Public Library to allow the continued operation of all neighborhood libraries, including public service hours on three of four weekday school nights and continuation of the popular Sunday hours at three libraries during winter time. I want to especially thank our City Librarian Paula Kiely for working creatively with us.
• New initiatives in the Department of Neighborhood Services operating budget and the Department of City Development capital budget to preserve the city's housing stock from the threats posed by foreclosures.
• Development of a new Unified Call Center to improve customer response, enhance management reporting of problem resolution, and replace outdated technology applications.

And let's not forget that despite our fiscal challenges, we maintain several competitive advantages.

These include:

• A world class Water Works that provides the highest quality water of any place in the world at an extremely competitive price. The economy of the future will belong to those regions, like Milwaukee, that can supply their own water in a sustainable fashion.
• A high credit rating, superior to that of the State or Milwaukee County, that helps us manage our debt in a responsible manner.
• An excellent work force that delivers services of value to all city neighborhoods;
  Strategies that are bringing down crime and improving the safety of people throughout Milwaukee. There's nothing I like more than the headline of last week: Crime down statewide, led by Milwaukee. I thank Chief Flynn and the brave men and women of the Milwaukee Police Department.
  Housing and neighborhood amenities that most communities would find to be a true bargain.

And that's just to name a few.
There is no doubt that this Proposed Budget will be the most difficult you will have had to deal with in the last six years. It is absolutely essential we keep a multi-year perspective in mind. Compromising our pension obligations, overreliance on limited reserves, or one-time borrowing for recurring operations will only postpone our necessary transformation.
As I've mentioned on numerous occasions, this budget was by far the most difficult budget I've had since taking office. It is a budget of shared sacrifice. I am pleased with our efforts to preserve City services and our efforts to be fair to our constituents who are also experiencing hardships. We asked everyone to give a little and in doing so, we have achieved a lot.
Thank you and I look forward to working with you as we move forward.

My vision for Milwaukee Public Schools is one of strong leadership, clear accountability, and successful outcomes. I see an MPS:

• That sets high world-class standards for all schools and all students and, under the leadership of a visionary superintendent, holds schools accountable for achieving those standards.
• Where the leader is empowered to focus on those goals and is not distracted by politics or unclear accountability.
• Where high quality teachers are eager to start and finish their careers, because they have the professional and classroom resources they need to support their instructional expertise; clear stable expectations; and additional incentives to tackle challenging problems
• Where parents, students, the community and taxpayers know exactly who to hold accountable.
• Where parents are guaranteed a voice in their children's education and have someone they can contact directly who can address their concerns.
• Where decisions are driven by high quality research and the district is supported by an external research entity focused solely on tracking and supporting MPS.
• Where more dollars are directed into the classroom by implementing fiscal efficiencies and consolidating non-instructional operations such as facilities and purchasing. That does not need to be compelled to improve by corrective action plans and threats of withheld funds, but is compelled by a shared goal to make every child reach their potential.
• Where more students graduate with the skills and desire to pursue post-secondary opportunities which will ensure the quality workforce we need for this city to thrive.

To achieve this vision, it is imperative that we hire a strong, effective superintendent, establish clear and high expectations, provide that superintendent with the fiscal and political support he or she needs to achieve those goals, and hold the superintendent accountable for success.

 

Unfortunately, it is next to impossible to achieve these steps under the current system, as the current outcomes in MPS demonstrate. Under the current system there isn't any clear accountability - and blame is shifted among the board, administration, superintendent and other external entities.

A strong, reform-minded superintendent - of the caliber that D.C. Mayor Fenty found in Michelle Rhee, New York Mayor Bloomberg identified in Joel Klein and Chicago Mayor Daley (and ultimately President Obama) landed in Arne Duncan - that is looking to come to a district where they can implement real reform.

Such leaders would be frustrated under the current system where they have to cater to the changing directives of board leadership. And they would certainly be frustrated by recent actions by the current school board such as redirecting $300,000 for an office of accountability that shifts key powers away from the administration to an elected board, or redirecting $250,000 to pay private lawyers to support the status quo and resist reform efforts.

It's clear, we need to create an environment where a visionary leader has the stability and support he or she needs to get the job done. As mayor, I would empower the next MPS superintendent to apply his or her expertise to develop specific strategies. In New York, Joel Klein released his Children First reform plan details several months after being hired by Mayor Bloomberg - and our community would similarly give our next leader an opportunity to fashion a plan specific to our community needs and challenges.

I will encourage our new leader to include successful reform strategies such as:

• Identifying consistently low performing schools (based on comprehensive, clear data) and implementing significant turnaround reforms or closing them so they do not continue to fail future students.
• Creating incentives to attract high-quality teachers - particularly to low-performing schools or hard-to-staff subjects and providing teachers with the professional development and classroom resources that research shows can improve teacher effectiveness.
• Partnering with an external research entity that will be established to focus on MPS to help drive important policy decisions and track key initiatives.

I will also continue to call upon other community stakeholders to support our parents and students within and outside the classroom. The specifics of these education reform strategies will continue to be refined as we engage stakeholders in this conversation and as the MPS Innovation and Improvement Council continues its work with DPI and MPS.

 

Some may argue that the reforms I have laid out could be implemented under the current system - however, the key is not in just laying out reforms but actually having a system in place where they will be implemented successfully.

The current system has been given too many chances to do so and has failed repeatedly. I haven't seen a compelling case that positive changes are sustainable. Keeping the status quo is the path of least resistance, but it is also the path that is failing our students. The stakes are too high and I am determined to do the right thing for our children and community.

Tom Barrett is the mayor of Milwaukee.