The 2017 City Budget:
Improved Sustainability Pays Dividends
The 2017 City Budget capitalizes on the city’s improved structural budget balance to deliver on key priorities to taxpayers. The Budget maintains Police sworn personnel strength, while adding initiatives to improve police-community collaboration. The City will continue its commitments to infrastructure and the Mayor’s Strong Neighborhoods Plan, and initiate a plan to replace lead water service lines. These priorities are consistent with the community’s interest in a safe city, neighborhood quality of life, and public health. Just as importantly, the 2017 Budget continues to manage the City’s finances and long-term obligations in a responsible manner.
The 2017 budget provides a total of $13.8 million, including $7.7 million in capital funding, for the Strong Neighborhoods Plan (SNP). These programs focus on resolving code violations, eliminating blight, generating area redevelopment, and supporting residential and commercial investment. More than 50% of the contract dollars expended by the City during 2015 and 2016 for various home rehab and home improvement loans were awarded to minority contractors.
The Strong Homes Loan and Compliance Loan programs will enable repairs and improvements to approximately 150 privately-owned homes during 2017.Various SNP programs will encourage the purchase of and investment in City-owned properties to revitalize the housing stock and increase home ownership. Since 2014, the City has sold almost 1,400 residential properties taken through foreclosure. Approximately 60% of these sales have been to owner-occupants, and more than $40 million has been returned to the tax rolls.Since 2014, 32 tenants in rental properties taken over by the City have become homeowners through the Lease-to-Own program, and we expect this to increase by another 35 by the end of 2017.
The Budget provides $1.4 million to SNP commercial investment, which results in improved quality of life and locally-based employment. Since 2013, the City has awarded almost 400 grants in support of neighborhood commercial development.
Core infrastructure programs including streets, bridges, street lighting, and sewers total $71.5 million in the 2017 budget. These commitments have improved pavement and bridge conditions, reduced street lighting outages, and protected public health and the environment.
The 2017 budget continues the increased water main replacement program, with funding for 15 miles of replacement. The goal is to replace 101 miles of mains through 2020. The main replacement program has helped reduce main breaks by 61% since 2014. In addition, the Budget initiates an approach to replacing lead water service lines.
During 2017 the city will improve the condition and extend the useful life of 30 miles of local and major commercial and high traffic count street segments in our neighborhoods, at an estimated cost of $16 million. This investment will improve ride quality and support existing and new neighborhood development.Pothole repair requests have trended downward by almost 40% since the High Impact Street Program was implemented.
- The Budget includes $33 million to relay or line 23 miles of local sewers throughout the city, targeting sewer sheds with the greatest risk of sewer backups. Since 2009, the city has averaged replacing or lining 40 miles annually; 48% above the rate needed to sustain an appropriate replacement cycle.
Library facilities and programs provide another important component of neighborhood vitality. The 2017 capital budget includes $1.95 million for several branch library improvements, including $1.6 million for ongoing branch library replacement programs. This includes $500,000 for the last year of funding for the Forest Home and Mill Road mixed use library programs and $1 million for renovation of the Capitol and Martin Luther King libraries. The Budget also enables all neighborhood libraries to offer service 6 days a week.
The 2017 Budget enables a multifaceted approach to the challenge of public safety. Some of the key funding items include:
The 2017 budget funds an average annual sworn strength of 1,888, which maintains the 2016 budgeted average sworn strength.As of August 2016, the department estimates hiring between 126 and 156 new officers during the remainder of 2016 and 2017 to maintain the budgeted average sworn strength.In order to fund new collective bargaining agreements with the Milwaukee Police Association and the Milwaukee Police Supervisors Organization of five and two years, respectively, the 2017 Budget includes an additional $23 million of wage funding.
- In 2016, the department began phasing in the deployment of body worn cameras. The deployment is occurring in phases, ranging from 200 to 400 cameras at a time, with a total of 1,200 being deployed by the end of 2016. A standard operating procedure was developed by the department to ensure proper usage and video storage. The 2017 Budget includes a total of $1,050,000 to fund the contract for body worn cameras.
- The department’s Project Safe Neighborhoods (PSN) initiative utilizes a grant award of $295,000 to reduce the firearm related homicides and non-fatal shootings in Milwaukee, improve the apprehension and prosecution of perpetrators of gun violence, and increase the intelligence available on prolific firearm offenders and associates.
- The Budget includes $150,000 to work with community partners to develop a neighborhood block watch program. The goal is to increase grass roots capacity and involvement with the police to reduce automobile-based drug trafficking.
The City of Milwaukee has been a national leader in lead abatement. In 2017, the Health department will abate almost 400 housing units. The department has been a leader in developing proactive and preventive approaches to childhood lead poisoning, including primary prevention lead abatement subsidies to property owners, citizen training in safe lead hazard reduction practices, and integration of lead abatement into residential rehabilitation of abandoned and foreclosed properties prior to resale. These efforts along with continued rapid investigation into reported cases of elevated blood lead in young children and enforcement of both state and municipal codes have resulted in a sustained reduction of lead poisoning prevalence in children. Due to this multi-faceted strategy, the percentage of children less than six years of age with elevated blood lead levels declined dramatically between 2000 and 2016.
Milwaukee’s economy has been rebounding from the Global Financial Crisis, which has generated increased unemployment as well as significant challenges to the local housing market. The City is taking aggressive action to generate redevelopment and tax base growth by collaborating with private sector partners on projects such as the Menomonee Valley Business Park, the Brewery, Reed Street Yards, and the expansion of the Northwestern Mutual Life Insurance headquarters.
- The Budget also includes targeted efforts to improve employment of city residents. Compete Milwaukee will build on efforts that the city initiated during 2014 to place persons facing significant barriers to employment in transitional jobs. The program includes transitional job placements and a Police Ambassador program. The city expects to make 80 job placements as part of Compete Milwaukee in 2017.
The Budget includes accelerated efforts to enable city-based small firms to become more competitive. This includes allocating $192,000 to the Business Capacity Building Program (BCBP). The goals of the BCBP are to prepare small businesses for sustainable growth measured by increased business revenues, new contracting opportunities, and job creation. The program will include business and personal coaching, business solidification assistance, development and growth workshops, networking events, and action learning development sessions. Grant funds will be provided to SBE’s to help address capital needs.
- The Mayor’s Earn & Learn program will continue to provide summer jobs for Milwaukee teens, helping these youth to develop beneficial work habits and confidence by providing critical employment experience.
- The city’s Resident Preference Program (RPP) helps build a stronger workforce while providing skilled employment and training opportunities to city residents. In 2017 it is estimated that RPP will result in approximately $4.5 million of wages for target area residents and the equivalent of approximately 90 full-time positions. Property maintenance as part of the Strong Neighborhoods Plan added an additional 20 FTE jobs in 2016.
The 2017 budget continues to improve the city’s structural budget balance while managing the impacts on taxpayers. The restructuring of health care benefits and pension finance has generated a stabilizing influence on the annual budget. The city’s stable employer pension contribution policy and prepayment strategy began in 2013. The pre-payment strategy will save approximately $20 million through 2018. General obligation debt per capita has declined 15.5% since 2011.
The 2017 budget provides for a tax levy increase of 2.7%, $7 million over 2016. The proposed tax rate will increase 14 cents, or 1.3%. The 2017 municipal service fees will increase by $10.76 for the typical residential owner.
The 2017 levy and municipal service charge combined changes result in an estimated increased cost of approximately $37.26, or 3.1%, to the typical residential property owner with one garbage cart, compared with 2016. The increases enable departments to provide mission critical services and continue new initiatives. The Budget also continues responsible pension funding and use of reserves, while reducing levy-supported borrowing by $4 million compared to last year. These actions improve the prospects for future budget sustainability.
Despite the City’s progress, considerable fiscal challenges remain. State policy, including Shared Revenue reductions, levy limits, and unfunded mandates, contributes to a persistent imbalance between ongoing revenues and service costs. Impending increases to employer pension contributions, anticipated increases in debt service and health care costs and minimal growth in revenues require continuing reevaluation of City services. It is likely that the 2018 Budget will include significant adjustments in order to achieve budget balance and finance long-term obligations. Fortunately, the 2017 Budget promotes a responsible approach to these adjustments through prudent reserve use, full financing of pension obligations, and decreasing new borrowing levels.