The Milwaukee County government is on an unsustainable path of budget deficits and “crumbling finances,” according to a new report released today by the Greater Milwaukee Committee (GMC) and the Public Policy Forum.
According to the executive summary of the report, “The county’s structural deficit - defined as the gap between expenditure needs and anticipated revenues - is projected to grow from $48 million in 2011 to more than $106 million by 2014.”
The report about the county’s financial outlook was titled, “Should it stay or should it go?”
The executive summary states, “Milwaukee County government faces immediate and substantial fiscal and programmatic challenges. A combination of stagnant state and local revenues, skyrocketing pension and health care obligations, and several successive years of severe budgetary stress have left it weakened in virtually all areas. Meanwhile, as its fiscal pressures worsen and its service levels erode, it operates with no long-range plan for digging its way out.”
“The findings of the report indicate the county is on an unsustainable downward financial path,” said Julia Taylor, president of the GMC. “We need time to fully digest the report and its findings to determine the best solutions, but we hope the release of the report creates a sense of urgency that we need to address the problem and seek solutions now.”
The executive summary of the report states, “The urgency of this matter cannot be overstated.”
Despite several successive years of significant expenditure and staff reductions and anticipation of significant wage and benefit concessions in 2010, “This projection is the clearest indication yet that the county’s finances are crumbling and that valued services in areas like parks, transit, mental health and public safety face severe degradation without prompt and concerted action,” the report stated.
“We will work to structure a collaborative initiative as we pursue recommendations that will achieve real and sustainable results,” said Sheldon Lubar, chairman of Lubar & Co. and chair of the GMC’s County Task Force. “I hope the entire community will work together to resolve these issues to preserve the future of Milwaukee County and give our children and their children the opportunity to thrive here.”
Lubar previously called for consideration of eliminating the county government.
Transferring functions such as parks and transit to special districts with a dedicated funding source would enhance funding stability but also would produce new government bodies with their own funding demands, the report said.
The executive summary concludes, “Whether to embark on a lengthy process to streamline and potentially eliminate Milwaukee County government cannot be determined conclusively by research and fiscal analysis alone; that determination also requires value judgments as to the importance of various county services as well as to the leadership abilities of current and future county leaders. In the end, there are no silver bullets that will magically solve the financial problems facing Milwaukee County government and relieve taxpayers from obligations already incurred. The depth of those problems and obligations, however, does create an imperative to consider how government structure influences fiscal health and impacts fiscal management and decision-making.”
To view the complete report, visit http://www.GMCOnline.org.
Milwaukee County Board Chairman Lee Holloway released the following statement in response to the report: “…The report issued by the Public Policy Forum underscores the important role Milwaukee County government plays in our community. These findings show that we need to closely examine all options, and this report has stimulated my interest in going further. It’s time for all elected officials to find the courage to step up and consider consolidating functions at the local level. This is the only route to achieve true economies of scale. For example, a number of municipal health departments within Milwaukee County are actually operated by individual municipalities, while the 71 other counties in Wisconsin save taxpayer dollars by having one central health department to serve all municipalities in the County. This unique duplication within Milwaukee County could easily be eliminated. As this report examines, a number of successful metropolitan governments, including Indianapolis and Louisville, have eliminated smaller municipalities in favor of one metropolitan umbrella. Currently, Milwaukee County is the largest overlying government in southeast Wisconsin. If communities are interested in saving tax dollars, they may want to consider the delicate process of consolidating service at the local municipal level. It just makes good sense if you want to achieve true reform and real savings.”

A group of 10 attorneys in the labor and employment practice at Milwaukee-based Davis & Kuelthau S.C. plans to leave the law firm to start their own boutique law firm.
The lawyers leaving Davis & Kuelthau are: Clifford Buelow, Mark Vetter, Robert Buikema, Mark Olson, Daniel Vliet, Matthew Flanary, Nancy Pirkey, Joel Aziere, Mary Hubacher and Susan Love.
Their new law firm will be called Buelow Vetter LLC and it will be based in Brookfield. Buelow will serve as the firm’s chairman and Buikema will serve as its president.
Buelow Vetter will be one of the largest labor, employment, school and benefits law firms the state, according to the lawyers forming the firm.
“We expect to continue to represent hundreds of public and private employers throughout Wisconsin and across the country,” they said in a news release. “While we are still working to ensure an orderly transition from our current firm, we expect to complete that transition no later than April 5.”
Michelle Friedman, director of marketing and business development for Davis & Kuelthau, told BizTimes Milwaukee this morning that five of the outgoing attorneys work in the firm’s Brookfield office and the other five work in the company’s downtown Milwaukee office.
The firm also has offices in Madison, Green Bay, Sheboygan and Oshkosh.
The departure of the 10 lawyers will leave Davis & Kuelthau with 65 attorneys, including 13 in its labor and employment practice, Friedman said. The firm will still have enough attorneys to continue serving its existing clients, including those served by the labor and employment practice, she said.
“For Davis & Kuelthau, it’s business as usual,” Friedman said. “We’re going to miss our colleagues, but the firm will move on. We’re going to continue to grow and progress.”
Davis & Kuelthau is planning to launch a new high-tech, informational service for its labor and employment practice clients, Friedman said. Called a virtual panel, the interactive service will be able to provide legal information and updates for clients using a panel of experts, in multiple locations, that clients will be able to see on their computer screens.
“By having a v-panel we will be able to have an interactive discussion and answer questions from our clients immediately,” Friedman said.
The new service will not be delayed by the loss of the 10 attorneys in the labor and employment practice, she said.

Employers and human resource managers interested in starting or improving an employee wellness program are invited to attend the first-ever BizTimes Media Wellness Summit on Thursday, Feb. 25.
The program will feature a strong lineup of employee wellness experts, as well as employers who will share their insights about how they have implemented wellness programs.
The Wellness Summit is designed for company owners, human resource managers and other executives interested in forming workplace wellness programs.

The program will be divided into three consecutive sessions, each to be led by a wellness expert:

Session #1: How to Start an Employee Wellness Program.
Expert: Nick Neitzel, community wellness director, Wisconsin Athletic Club.
Panelists:
Linda Hogan, vice president and account group leader at Bader-Rutter in Brookfield.
Jesse Spraggins, corporate manager of compensation, benefits and wellness, Goodwill Industries of Southeastern Wisconsin Inc.

Session #2: How to Build a Robust, Effective Employee Wellness Program.
Expert: Jo Steinberg, president of Midland Health, Butler.
Panelists:
Janis Slowey, manager of the Council of Small Business Executives (COSBE) at the Metropolitan Milwaukee Association of Commerce (MMAC).
Lisa Mrozinski, benefits manager, Robert W. Baird & Co. Inc., Milwaukee.
Julie Herschleb, director of health and wellness, Johnsonville Sausage LLC., Sheboygan Falls.

Session #3: How to Document the ROI (Return On Investment) of an Employee Wellness Program.
Expert: Connie Roethel, R.N., wellness expert and president of Core Health Group, Mequon.
Panelists:
Monica Baker, senior vice president of marketing and human resources, PyraMax Bank, Greenfield.
Paul Casper, general manager of Helwig Carbon Products, Milwaukee.
Dr. Van Gilder, QuadMed Inc.

The program will be moderated by BizTimes Milwaukee executive editor Steve Jagler.
“In one morning, this program will help employers go from zero to 60 in getting an employee wellness program off the ground,” said BizTimes Milwaukee publisher Dan Meyer. “This program will be a great resource and a catalyst for employers of all sizes who have wanted to start a wellness program, but didn’t know how to begin, or employers who want to take their wellness program to the next level by learning from the best. This program will shine a light on all of the best practices for wellness. It also will help employers learn how to document the ROI for employee wellness.”
The BizTimes Wellness Summit will take place Thursday, Feb. 25, from 7:30 to 11 a.m., at the Hilton Milwaukee City Center, 509 W. Wisconsin Ave., in downtown Milwaukee.
BizTimes Media is partnering with the Wellness Council of Wisconsin to present the program.
The cost to attend is $45 per person. Corporate tables of 10 are available for $450.
To register or obtain more information about the event, visit www.biztimes.com/wellness.

Wellpoint Inc., the Indianapolis-based parent company of Anthem Blue Cross & Blue Shield in Wisconsin, today reported 2009 fiscal year net income of $4.7 billion, or $9.88 per share, which was up from $2.5 billion, or $4.76 per share, in 2008.
The company’s annual net revenues climbed to $65.0 billion from $61.3 billion a year earlier.
For the fourth quarter, Wellpoint reported net income of $2.7 billion, or $5.95 per share.
The results included net after-tax income of approximately $2.2 billion, or $4.79 per share, resulting from a gain on the sale of the NextRx pharmacy benefit management subsidiaries, partially offset by costs for restructuring activities and intangible asset impairments.
"We performed well during 2009 in a challenging environment. Despite the impact of the recession on our Commercial enrollment levels and medical cost trends, earnings per share increased as we significantly improved results in the Consumer segment, controlled administrative costs and implemented successful capital management initiatives," said Angela Braly, president and chief executive officer. "We are off to a good start in 2010, with more than 400,000 net new national account members effective Jan. 1. Throughout the year, we will be making important investments in our businesses to create the best health care value for our customers and capitalize on opportunities to drive future growth."
"WellPoint is in a strong financial position as of year-end 2009. Our insurance subsidiaries remain well-capitalized and we continue to generate substantial operating cash flow. We intend to utilize our capital to enhance customer and shareholder value," said Wayne DeVeydt, executive vice president and chief financial officer. "We continue to maintain a strong and conservative balance sheet, and are comfortable with our outlook for earnings per share of at least $6.00 in 2010."

AirTran Holdings, Inc., the parent company of AirTran Airways Inc., today reported net income of $134.7 million, or 95 cents per share for the full-year 2009.
The company also reported net income of $17.1 million or 11 cents per share, for the fourth quarter.
The results represent an all-time company record for annual net income with an improvement of more than $400 million over last year. Operating income was $177.0 million and is also a record for the company.
"Both our operating and financial numbers clearly illustrate the hard work and dedication of each of our 8,500 crew members," said Bob Fornaro, AirTran Airways chairman, president and chief executive officer. "Posting these results during one of the most trying economic times in decades also shows that customers are very attracted to our unique combination of high-quality, low-cost service."
The company established a hub in Milwaukee in 2009.
AirTran continued to diversify its coast-to-coast network and has increased its traffic to record levels in the Milwaukee and Orlando markets. AirTran now offers flights to more cities from Orlando than any other airline and serves 18 of the top 20 markets from Milwaukee.
The company partnered with the Milwaukee Brewers to establish the AirTran Airways Landing Zone at Miller Park and by signing Milwaukee Brewers slugger Ryan Braun as a pitchman.
"Further diversifying our network strengthens our Company and allows us to maximize revenue opportunities," said Kevin Healy, AirTran Airways' senior vice president, marketing and planning. "Expanding our presence in key markets like Baltimore, Milwaukee, and Orlando has been very successful and has allowed us to bring more of our award-winning service to these markets and surrounding communities. We have established a strong platform for future growth."

Rockwell Automation Inc. today reported fiscal first quarter net income of $76.6 million, or 53 cents per share, down from $118.4 million, or 83 cents per share, in the same period a year ago.
The Milwaukee-based manufacturer’s quarterly revenue fell to $1.07 billion from $1.12 million a year earlier.
Keith Nosbusch, chairman and chief executive officer of Rockwell, said, "I am pleased by our solid performance in the first quarter. Product revenues in the quarter exceeded our expectations, and the resulting favorable revenue mix contributed to sequential margin improvement in the quarter. On a year-over-year basis, organic revenue declined in the quarter, but the rate of decline has moderated considerably, and we saw strong growth in emerging Asia. We also delivered another strong quarter of free cash flow."
Outlook
Commenting on the company’s outlook, Nosbusch added, "Our first quarter performance and continued improvement in the global economy seem to indicate that we are at the early stage of a recovery. However, high unemployment, historically low levels of capacity utilization and a very cautious capital spending outlook create uncertainty as to the shape of the recovery in manufacturing. Given our improved revenue baseline, we are revising our full year fiscal 2010 earnings per share guidance to $2.00 to $2.40 on a revenue range of $4.4 billion to $4.6 billion. We will continue to effectively manage our cost structure while appropriately investing in key technologies and growth opportunities. We are well positioned to take advantage of the recovery and we are ready to serve our customers' needs when their automation spending increases."

Milwaukee-based HarQen, a developer of asynchronous voice applications, announced today it has completed its Series A financing of $2.7 million.
The company lists as its investors Phenomenelle Angels Fund, Silicon Pastures, Golden Seeds Angel Fund, Midwest Capital Fund, Wisconsin Investment Partners and several prominent individuals.
The investment follows a $750,000 seed funding round completed in December 2007.
"This financing allows us expand our technical and sales teams," said E. Kelly Fitzsimmons, co-founder and chief executive officer of HarQen. "Our goal is to grow market share for our asynchronous voice applications and expand the reach of our platform via strategic partnerships."
"The Phenomenelle Angels Fund is pleased to lead the Series A and Seed investments in HarQen," said Lauren Flanagan, managing director, Phenomenelle Angels Fund and HarQen chairman. "By capturing, sharing, and organizing dynamic voice assets, such as interviews, HarQen's platform preserves and monetizes person-to-person communications while allowing them to scale dramatically."
HarQen's application, VoiceScreener, is a human resources solution that enables busy professionals to use their phone and a web-based dashboard to create and distribute custom, recorded phone interviews. With VoiceScreener, recruiters are able to interview three times their normal volume of candidates per day while increasing the quality of the review process.

Although Wall Street was abuzz in anticipation of today’s new product announcement by Apple today and President Barack Obama’s first State of the Union address tonight, the stock market dipped slightly this morning.
The largest local decliners in the BizTimes Stock Index this morning were Bucyrus International Inc. (down $1.75 to $56.42) and Snap-on Inc. (down $1.07 to $41.57). The largest local advancers this morning were Rockwell Automation Inc. (up $3.84 to $50.04) and A.O. Smith Corp. (up $1.41 to $43.25).

In his eighth and final State of the State speech in the Assembly Chambers on Tuesday, Gov Jim Doyle offered few new initiatives, focusing on modest plans for creating jobs and existing but controversial proposals such as one to fight climate change. "I will do everything I can to help our businesses create jobs and give our workers the opportunities to get those jobs. Nothing is more important," Doyle said in the roughly 45-minute speech. But Republicans in the Legislature are blaming tax increases by Doyle and Democrats for adding to job losses in the state. "I think it was a work of fiction tonight and Jim Doyle was trying to reinvent himself," said Assembly Minority Leader Jeff Fitzgerald, R-Horicon. Read more in BizTimes Milwaukee's headlines from around the state at http://www.biztimes.com/#news.

The Redevelopment Authority of the City of Milwaukee (RACM) approved about $25 million in revenue bonds for Oak Park, Ill.-based RSC & Associates’ Park East corridor apartment building development, called Park East Square. Read more in the new edition of the BizTimes Real Estate Weekly bulletin.

Three large banks are responsible for a lion’s share of foreclosed, abandoned properties in Milwaukee and should step forward to help the city address the problem, which is destroying neighborhoods, according to Bob Connolly, author of today’s Milwaukee Biz Blog.

Wisconsin will receive $810 million in federal stimulus funding to build a high-speed rail route between Milwaukee and Madison.
President Barack Obama will announce the recipients of the high-speed rail grants on Thursday at an event in Tampa, Fla.
In total, 31 states are receiving some of the high-speed rail funds, including projects on 13 major corridors, as well as smaller awards to  improve parts of existing lines.
The grants are part of the federal economic stimulus package and are part of the Obama administration's planned $13 billion investment in high speed rail. The remaining funds will be issued through the annual budget process.
In his State of the State speech Tuesday night, Gov. Jim Doyle said Wisconsin was "poised to be the nation's leader" in high-speed rail manufacturing.
The state will purchase two, 14-car train sets from Spanish train manufacturer Talgo Inc. for two train sets. The company plans to build the trains in Wisconsin. The trains will be put into service on the Amtrak
Hiawatha Service, between Milwaukee and Chicago, and for the planned service expansion to Madison.