Finance & Personnel Committee - Regular Meeting

I'm Chairwoman Marina Dimitrievich, joined by our Vice Chairperson Alderman Peter Bergelis. Alderman Scott Spiker is present. There you go, that sounded nice. Alderwoman Milele Coggs is here, and Alderwoman Sharlyn Moore. That provides us a quorum to conduct our business today on Wednesday, September 16th, 2026. We will begin with item number one, 251682, a substitute ordinance relating to salaries for certain elected officials. Okay, come on up, city attorney. Okay, and the clerk would like us to read item two in as well, because they do correspond. When you take one action, you have to then reflect it in the accompanying salary file. So item two is 260726, communication relating to the salaries of certain elected officials. Let me just start by explaining a little bit here. I did want to bring, Jim, do you mind coming up? This is kind of a three-part fix. Right and so There also may be a mixture of feelings and a mixture of items so Jim would you mind on item one and two we'll start actually Why don't we start with the city attorney and then go to Jim that'd be a little bit easier. So Thank You city attorney. I'll note in the file. There are three items that I'd like to bring your attention to a really a clear memo from the city attorney's office on kind of how we got here and the fix they recommend as well as then kind of a side-by-side chart because we've had to kind of play some catch-up here and then the third part was kind of an older analysis from 2023 you kind of do have to roll back the tape and think into when this council had a lengthy deliberation kind of back then on the executive pay plan to get here. So go ahead, city attorney, then just briefly your recommendation. I'll have Jim explain it and then we'll take the vote.

Thank you, Madam Chair. Just Evan Goike, city attorney. To my right is Deputy City Attorney Robin Pedersen. And to my left is Assistant City Attorney Alex Fondos. As you mentioned, there are materials that we produced in the file that lays out as clear as we could provide a brief history and our recommendations just so that everybody is clear. at the beginning of 2024, but before the election and the new current cohort of alder persons were elected, we advised the council that an ordinance was lawful and enforceable that would tie aldermanic and mayoral salary increases capped at no greater than 3%, but if a raise to general city employees was initiated that that would apply to the council and the mayor as well. That actually was, finally or for the first time enacted in the budget in the fall of 2025 for the current year, 2026, as those mechanics were actually sought to be placed into action and we saw how it was working, we reviewed and revised and frankly reversed our advice about whether the council and the mayor could receive that 3% increase in 2026. And ultimately I advise the council that they could not receive that benefit. Otherwise it would be in violation of a state statute that prohibits the members of the legislative body and the mayor of local governments around the state from basically voting on their own increase and giving themselves an increase during their term. So we have advised that this cohort, the 2024 to 2028, cohort of the Milwaukee Common Council should you elect to increase the position of alder person that that be prospective beginning April of 2028 for the cohort of 15 alders from 2028 to 2032. I would note that's very important here. No alder person, the mayor, or elected officials, including myself, received any not one penny increase of that 3%. And so a debate will ensue. It's the legislative prerogative to set these numbers, but the position of alder person and mayor in the city of Milwaukee is effectively frozen and not receiving salary increases that general city employees would receive and it would be our opinion that this same mechanics would play out should the 2027 budget include an additional raise for general city employees, that would not be something that this cohort of Alders would be able to receive. So in essence, you're frozen until April of 2028, and there is the substitute in the file today would unfreeze the position of Alder and Mayor, but starting in April of 2028 and moving forward. We've also included in the memo that in January, no elected position, including the comptroller, the treasurer, the city attorney, and the three branches of municipal court received a raise. The state law bars those individuals in a position to vote on their own salaries, and because those other elected officials do not have a vote on their salaries, they should have received the 3% raise starting in January with two exceptions. One, there is a unique state law related to municipal court judges where they may not receive a raise during the first year of their term. So branch one was elected in April of 2025 and so should not be eligible for the 3% until April of 2026. And then the city attorney, the position of city attorney cannot exceed the salary of the mayor and I'm pretty close to the mayor and so I cannot receive the 3% myself because I cannot exceed the mayor. So we've outlined those actions that we would recommend the council take in amending the salary ordinance. I think that kind of covers where we're at, and happy to answer any questions.

Okay, and before I go to Jim, our city clerk, I think three additional takeaways, if we haven't made it totally clear in the file and discussion here, is that this is something that was already deliberated. This is doing what we said we would do, which is attach things to city employee increases if and when they were, and this is not for this term, it is for next term. So I think those are our three takeaways in case someone's just tuning in. So then I take it to our city clerk, so members, because there's a couple moving parts here because we deal with the mayor and council members kind of separately from the other electives in this group.

the vote here now which would be passage on item one um can you just explain you know what we're doing there and then kind of how it correlates to number two sure thank you madam chairman jim mozarski city clerk and members there are actually three files before you that pertain to the salary of elected officials here in the city first is the ordinance that is before you as you described item one that establishes by code the salary of the mayor and the common council members for the period 2028 to 2032 it reflects the two percent annual increase previously described and it is as the city attorney indicated perspective. The second is a communication that pertains to the amendment to the salary ordinance. It does two broad things. The first is it implements the raises for the common council and the mayor already adopted in the ordinance. There has to be a handshake there. It recommends that. And the second is that it speaks to the other elected officials, what their raises would be and make suggestions with respect to that. Again, reflecting a 2%, 2%, 2%, 2%. The final file, and I would be remiss if I didn't mention it, is item 20, which is the actual salary ordinance amendment. As all you members know intimately, there is a rolling salary ordinance for the city that's adopted with the budget but that is amended throughout the year. This would finally, in that ordinance, implement all the foregoing changes for the elected officials. So that's why you have three pieces in front of you.

Yes, and it would be passage placed on file of the communication and then later in the agenda is when we normally do, it's a larger package and that would be passage. So that brings us to item one. Is there any discussion on passage? Alderman Moore is moving passage of file number 251682. Any discussion on item one and passage?

madam chair alderman spiker um so just to clarify from the city attorney so i understand as written the aid is supposed to cover and it doesn't quite because of compound it doesn't factor in the compounding but if what the council and i voted against this item i'll be voting against it again in its new iteration if the council had had its um preference made real, there would have been the increases that were tied to the general city employee increases. Your office said not possible. So the sponsors are thinking the next best thing is to just try to do a catch up in year one of the new term. But your advice going forward is at most this council can say what's gonna happen in the next term. They can't say anything. about this term and take an action whether direct or indirect in this case that would affect the salaries this term. But are you saying also going out one term is the max that a council can really pronounce on?

Well, state law is silent about whether it could be projected into greater terms than that. I think the practice has historically been that the council makes clear, you know, picks numbers in years in advance and kind of limits that to one term. And I think. there's some sound wisdom there because it's hard to project the future fiscal picture too far in advance, and then a separate request and a discussion, though it can get a bit into the weeds about whether or not and how future council action could change, basically to repeal raises in future years. So I would advise that you just take it one term at a time to avoid the potential mess that you would have in the future of trying to undo what you do. You get a sense of the picture, the comptroller gives you forecasts, you have some sense of where the city will be for that term and to not project it too far into the future.

And that advice wasn't given, and I know you weren't the giver of the advice, but it wasn't given when the council did seem to try to tie it in perpetuity to general city raises. So your advice going forward is look at the next term. So if that's what's happening, then this isn't, there is some new policy being made here then because the 8% is to basically cover what the council voted on the first time, but then there is a proposal to do 2-2-2 for the remainder, so that is basically going into the next term. So there is some new policy there. If we're in keeping with your recommendation to just look one term ahead at most, we're doing that in this legislation.

Yeah, I think it's the most defensible action the council could take is to set an amount and set the year that that amount is triggered, the date that that is triggered, and in so doing ensure that that salary increase is enacted with absolute no action of the future 15 members of the Common Council. That that is set in the ordinance and it is enacted and there are instructions of how much and when without the council members that will be in the position from 2028 to 2032 and that way it avoids any uncertainty. It is the cleanest and clearest way that we would advise that the council do this.

Okay, and yeah, just I know each person has to vote their conscience in their district and I don't think my constituents right now given Economic times that we're in would would look to favorably on this So I voted against the first iteration. I'll have to do so again But just want to make sure I had a clear view of of what the recommendation was from the office moving ahead So, thank you for that

Okay, thank you. That objection is noted then. Alderman Bergelis.

Thank you, Madam Chair. And I'll also be voting no on this, although I think it would be worthwhile to have the full council weigh in and have everyone vote. But I do appreciate the approach. of automatic schedules of increases. And just like the US House of Representatives that has a automatic 4.6% annual increase, they can certainly and have consistently voted to decline that and refuse that automatic increase since I believe 2009. And if we follow that model of the future councils, we'll have that same opportunity. State law, just for clarification, doesn't forbid, state law restricts legislators from voting on their own increase, but it does not restrict any legislature in the state of Wisconsin from voting to decrease or decline their automatic increase.

Thank you.

That was a question for the city attorney just to confirm.

The council does have the ability to repeal the future council has the ability to repeal, say, and this has happened in the past, in the early 2010s when we were in the Great Recession, and as a response to a major revenue change, city leaders voted to repeal their own increases for certain years that were in the same ordinance. So that has been done before based on the economic conditions that were pretty swift and surprising that took place. after the council enacted their scheduled raises for the term and before the expiration of that term. So should the council decide in 2030 that the 2032% that's in the draft would not be appropriate that year, you could do that. What we would advise is that you just repeal that line and that raise for that year rather than redoing this architecture during your term. But you do have the power to do that.

future councils do have the ability to undo what it appears that this body is about to do.

Only in the direction down.

Correct. Only in the direction down. Thank you, Madam Chair.

Exactly. So reminder, the council that voted on this last term with the advice we were given wanted to attach it to city employees. There could be a year in the future where city employees and the economy is better. I actually hope it is for the best of our city, and we would still be at two. So if there's a freeze, then that body and the people that are here might undo it. But this is two. Two is what was in the last couple years. Last year, this year, actual, that we're living in right now was a three with an incentive for residency. So...

just trying the most important thing here is that the council did and their actions today will reflect what city employees general city employees are getting and one final caveat madam chair with the incentive for city city residency the elected officials are not eligible for that that is a condition of your candidacy and holding office as it is for me and so that is not applicable across the board

Okay, two objections were noted on item one. Madam Chair.

Yes, Alderman. Thank you so much. Just for our listening audience, can someone sort of give us just a short historical context as to, you know, again, I'm new, And so it was shared that there was a freeze for quite some time, that there were no increases. Can somebody just give us a synopsis as to why that was? Which is, again, I think lays some context as to where we are today.

Madam Chair.

Yes.

Yes, I can. I was not making this story up. I was in the parking lot of Mayfirm Hall. And I received a phone call from the Common Council President, and it would have been the summer of 2008, actually. And the economy was becoming very, very difficult. We were starting to see the collapse of what the city attorney described as the Great Recession. And as time progressed, it was eventually decided that the increase for that year, and it was just for that year, would be deleted. It was eventually subsequently decided to delete each of the other twos. We're talking the period 2008, nine, 10, and 11. And for each of those years, the Common Council chose, eventually decided to get rid of all of it, but it chose individual years and then it wiped out the balance. The Common Council then did not give itself raises using this exact procedure until the process that we saw in 2023 to get us where we are today in 2024. So there was a gap between 2000, the last raise the Common Council received was in 2008 and it received none further until what would have been prospectively 2024. because of the other actions that have taken place. It will now not receive one until 2028.

Thank you. Madam Chair? Yes, Allerman Cox. As one of only two of the 15 of us who was actually here when we made that choice, the budget director remembers it well because we were the two that came in new in 2008. And we made that very hard decision given one, what we were asking of city employees to take a freeze. And we just thought it was fiscally responsible plus in solidarity with what we were asking of employees to expect it of ourselves. But I think what got lost in retrospect was as we found opportunities as the financial situation improved, and we found opportunities to give raises here and there to staff, we still did not give ourselves one. I jokingly used to tell people before 23, before we voted on the raise that we had that I was actually taking home less money. you know, 15 years later than I was when we started. If you take, you know, inflation and healthcare increases and all that stuff.

Well, also the pension contribution.

And the pension contributions.

Which came about from a lawsuit, not immediately, but yeah.

Yeah, it's like all these years later, we would end up making less because of that long-term freeze. And I also say jokingly, if my memory serves me, based on those raises that we were supposed to get, by what we make now, we would have been making in the ballpark of it in 2012. Correct. If we would have not frozen ourselves. So while I know that finances continue to be a challenge, I think it's right for whoever those next 15 members are because it may not be us. That's right. That there be at least some effort to bring up a bit what that pay is to quite honestly make up for the years of sacrifice that we had in this with us not voting for a raid.

Madam Chair. I have memories of that from being on the other side of the table. I don't remember which parking lot I was in when he called me, but I do remember something he said to me that summer, which I think has proved mostly prescient. He said this will be the worst budget ever and the best budget you'll ever see. And that was the 2009 budget, which would have been our first budget. We both started in the spring of 2008. And so there was the recession to the attorney's right. So when we started in spring of 08, the prior council from 04 to 08, um we had voted for i don't remember what the numbers were but there was a series of annual increases all for all four years scheduled and we eventually turned them all down at first because of global financial crisis but then after act 12 which would have been at 10 sorry yeah 10 in the spring of 2011. So by then, actually, my memory of this is not vivid, but there were multiple reasons why it wasn't even really discussed in a serious way to not turn them down, is my memory. And I think all the votes were unanimous, and I don't even remember there being much hallway conversation about any other option. The circumstances at that time, both the state law changes and the overall budget situation kind of made our decision for us, is my memory.

When did we start furlough days?

It would have been that budget Things have changed in the past couple years there have been raises for employees as I stated and so this mirrors that In fact the budget going forward is looking at it In the last couple years we have not been frozen. We've been able to offer it So again, we're just looking at getting exactly what everyone else got. I don't know. You know why we wouldn't we feel that we're what we've offered to others should be spread evenly. Passage has been moved by Alderwoman Moore on item one.

Madam Chair, one quick question. Yes, question. So I know AFSCME asked for the $2 rather than the percentage increase for General City employees. Is that something, you know, if this council decides to go that direction or a different direction, is that gonna affect with the merits of this legislation. What the council decides to do for general city employees would not affect? Right, I guess it was more a question for the sponsors. Are we by, if this goes forward, are we basically saying, well, we expect a 2% from here on out? Yes. And kind of tabling that? AFSCME proposal which is a little different than the 2% proposal. The AFSCME proposal kind of gives a bigger percent to the lower and less of a percent to the upper kind of like I proposed last year by focusing on the dollar increase of a percentage increase. So I'm just wondering if we're kind of jettisoning that approach by looking at 2% for years ahead or is it just a simplicity thing like this is more straightforward than that proposal?

We're not attaching this, this is by the chair, we're not attaching this to any proposal. It's actually based on what were real final actions of the council and mayor. I mean, the mayor's pretty much talked about what his budget's gonna be for 2027, but that could change. But there's a huge democratic process. So 2%, there was a two, as the chart clearly lays out in this last term, then there was a three and there's a two being introduced for next year. So because we can't go above two, there could be in the next term for the people that occupy these seats, there could be a great year and employees get three. We would still get two. And if they got zero, that those future older people could consider moving it to zero. But to be really precise, this is not attached to any proposal because there's a long lengthy process that we're about to embark in that could result in one, two, three, it could change. So it's based on two was really the point that was the most normal on the chart that we had seen in recent years.

Yeah, and I'm thinking for 29, 30, and 31. I understand the 8% is to reflect what happened already, but there might, I don't know if the council would move in this direction if what I proposed last year were more to the council's liking than what the mayor's proposed for this year. It would focus on giving more to those making less in percentage terms and giving less to those making more. And it seems like by going for the 222 in 29, 30, and 31, we've kind of settled on on the mayor's approach as opposed to the more, I guess, progressive approach that gives more to those earning less. So just flagging that as something, you know, if for some reason we go with AFSCME's proposal instead of the mayor's proposal this year, then it'll kind of be odd then that we, in future, those 29, 30, and 31 years go to, back to the mayor's proposal. So just something that came to mind when I was reading the SME letter again yesterday.

Thank you. Any other questions or comments on item one? Passage has been moved by Alderman Moore and two objections have been noted. An objection by Alderman Spiker, an objection by Alderman Bergelis. Any other discussion? President Perez?

I just want to thank everyone for coming to the table and explaining how we needed to fix the actions we've already taken and just to add on that The cost of living, every employee should be compensated fairly and that includes us too. And cost of living hits us, inflation hits us. We're remotely nowhere near the highest paid employees in the city and we're just doing this in a fair process. So I wanted to thank everyone that's made this possible to correct our previous actions and move this forward.

Thank you so much, President Perez. Any other discussion on passage of one? There were two objections noted. Madam Chair.

Alderman Moore. Thank you so much. I just wanted to say, number one, thank you to our LRB staff for doing the research on this. It was really, really meaningful, particularly for me. understanding not only the historical context for what our body has gone through, but also looking at comparable stats to other cities. That was probably more eye-opening for me. I just want to say that seeing that this is for a future body, and if you look to hold the seat, fantastic, but I want our listening audience to know this is not something that's being enacted in next year budget or the year after. It is for the future body of representatives that will hold these seats. When I look at The work, and I must speak only for myself, when I look at the work that I do, it is unfortunately not a nine to five. We're representing almost 40,000 constituents in our districts. When people call me after five, they're like, oh my gosh, I'm so sorry. I say, honey, listen, my time unfortunately doesn't end at 5 o'clock like all of my colleagues. Our time doesn't end. For me, I put in a lot of work every single day and being able to be supported for that is absolutely meaningful, especially looking at some of the part-timer positions. I'm just like, whoa, what they're getting paid. compared to what we do on a more than full-time basis. I just wanted to let folks know that you get to vote. For our constituents, you get to use your vote. There's a lot of us that work really hard every single day. For those constituents that are not happy, we live in a democracy. you know use your vote to cast your ballot to make sure that you're also holding your elected officials accountable so i just had to you know just say that that you know we put in a lot of work um and you know i see you know why this has been you know proposed thank you okay

Thank you so much, Alderman Moore. Alderman Moore moves passage as I stated on file number 251682, objection by Bergelis, objection by Spiker. Any other discussion? Any other objections? Hearing none, item one is approved. We're on item two, 260726, communication relating to salaries of certain elected officials. This is the part that we discussed why this is a three-part fix that the city attorney has recommended. This item, is 260726, so it's a communication file, and it's relating to the salaries of certain elected officials. It discusses the possibility of the 2% annual pay increase for the city attorney, there's a cap situation there, city comptroller, city treasurer, and the municipal judges for the term of 2028-2032. Implementing these increases requires an amendment to the salary ordinance that will be taken up in item 20. I feel that we succinctly explained that. It's in the memo. I just want to make sure it's crystal clear because the motion before us by Alderwoman Moore is to place on file any discussions on item two. Even though we're all electeds, we're dealt with differently in the salary ordinance and had to learn that in an interesting way. Questions on this? Any objections to placing this on file?

Madam Chair, I don't have an objection obviously to placing the communication file on file, but later on the salary ordinance changes, I guess I'd like to record my objection there.

Yes, and I figured that would be the case, which is why I wanted to make sure everybody knew every step of the way, and we'll make sure we note that, and we'll discuss it properly on item 20. So if you were to make that type of an objection, it would be on item 20. Two is the communication file that's relating to that. Any other questions or discussions on item two? It's just placing on file. If you seek to demonstrate that type of an objection, the proper place for it would be in item 20. Okay, hearing no objections, item two is placed on file. I would like to go to 20 since everybody's here. Sorry, see what I mean? I knew you were. Oh, right, we can't actually go to 20 because there's other files that take place during the meeting that will be implemented in 20. So if someone at least can hang out, if we have a question.

Yeah, I just have a speaking engagement, so I'm gonna run.

So can people kind of just still be present on item 20 because we might have to separate something out. Yeah. Well, cause there's other items though. Yeah. Good note though. Okay.

Item three. Thank you so much.

Please hang around. We might need a little help on 20, but we're almost there. Item three, 260606 communication from the city comptroller relating to the five year city fiscal forecast. This was sponsored by President Perez. I'll give you the floor and then we'll hear from Comptroller Christensen. Yeah, thank you, Madam Chair. President Perez.

Madam Chair, committee members, as you know, per the legislation I authored and the Comptroller Christensen has now executed, we have this framework, a clear snapshot of revenues and expenditures up until 2031. I'd like to thank the Comptroller for providing this budget forecast and this is probably the first of many that will grow in scope over time, eventually including capital items as well. But this file and report as needed is indeed in a good place to start some of these conversations and as you know and many of the members here of this committee know that the hard work now begins to deliver services while balancing this budget and without trying to raid the, or utilizing all our reserves. So I just look forward to the presentation and so the rest of the community watching can hear it and working with all of you to achieve the goals and to continue lobbying the state to return more of our shared revenue and tax dollars that we send to Madison. So I just wanted to put that on the record and thank everyone for all their hard work and moving forward in this direction, thank you.

Thank you, President Perez. Okay, Comptroller Christensen. Yes, good morning.

Good morning. Thank you, Madam Chair, committee members, Bill Christensen, City Comptroller. I'd also like to thank President Perez as well as the numerous council sponsors of the file that directed my office to prepare this financial forecast. I'd also like to thank the administration, in particular the Budget Office, for assistance with providing data and providing perspective on certain aspects of the forecast. And I'd also like to recognize some members of the Comptroller's Office who participated in the preparation of this report, Deputy Comptroller Charlie Radel, Senior Financial Analyst Jesse Hagan, Zach Rilling of the Audit Division, and our former Capital Finance Manager Joshua Benson, who has since left us to take a role with MMSD. So this forecast, it's 24 pages, it contains a lot of content, but I won't try to cover everything, but I'm happy to answer questions on any aspect of the report. The report's been added to the file, And I'd encourage everybody on the committee, the council, and any stakeholder, any interested person to take a look at it because I think there's a lot of perspective that it might be known to a lot of us, some of the circumstances and limitations that the city's facing in terms of its financial future. But I don't think it's always sunk in with members of the public and some of the external stakeholders. So I'd really encourage anybody that has a chance to take a look. So let's start with what this is. So this five-year financial forecast and what it's not. So what it is is it's a forecast of what the city's financial future holds if we continue to stay the course without major policy changes in terms of revenues, expenditures, and service levels. So this is if we continue on the path we're going, where does that take us? What it isn't is a prescription or a roadmap for how to solve the challenges that are identified in the report. Let's start with why we do a five-year financial forecast. I would note that this is the first time that this has been done for the city of Milwaukee, but it's something that we will do as directed by ordinance. We will update this every year and we hope that that will continue each year. So why do we do a financial forecast? Well, besides obviously being directed by you all to do so, it's a best practice for municipalities for a number of different reasons. One, it brings visibility to the city's financial outlook. I think you've heard a lot of us, myself, the Wisconsin Policy Forum, the budget director, talk about some of the city's upcoming financial challenges, but this just kind of shines a light in a really tangible and hopefully easy to read and understand way, shines a light on the scale and the timing of those challenges. Two, it's trying to bring the issues to your attention early. The report notes, as you all are aware, of the limitations that the city faces, both in terms of revenues and expenditures to address this structural deficit. Brings awareness to any reader, including the public at large and key external stakeholders of what those limitations are. Three, it tests resilience. So in addition to our baseline scenario, which is our kind of best projection of what we think future budget deficits are going to look like, we explored scenarios that involved assumptions, some which were more favorable to the city on the revenue side in particular, and then some which were less favorable to the city. And we did that to kind of see the impact of, okay, if things are better than we forecast, how does our structural deficit look? If things are worse, Worse, how does that look? And finally, to support disciplined choices. So you all have an extremely tough task ahead of you in balancing the needs of residents with what is fiscally sustainable. So this report is intended to serve as a reference for you all as policymakers as you make decisions related to not just the upcoming budget, but how those decisions will play out in future years. So the situation that we're facing in the city of Milwaukee is an ongoing structural deficit. So what that means is recurring expenditures are more than recurring revenues. And the rate at which revenues are, the rate at which expenditures are growing is faster than the rate at which revenues are growing. So that structural deficit year over year is forecasted to grow. Budgeted deficits are forecasted to grow from $52.5 million in 2027 to $104.5 million in 2031. You might ask, well, how did you develop this forecast? What are the assumptions you used to get here? What we did is we broke down revenues and expenditures into about two dozen or so different categories, and then for each of those categories, we looked at historical trends. So on the expenditure side, we looked at whether it was, in some cases, a three-year look back made the most sense, in some cases, five, seven, or 10 years, and then we would average that and project that forward. The same thing for revenues that aren't directly under the city's control, but for revenues that you all do have control over, so things like the property tax levy, charges for service like the solid waste fee, the snow and ice fee, the street lighting fee. We looked at a history of approved increases and averaged those and projected them forward. And in some cases we have authoritative sources to rely on. So for the ERS employer contribution, ERS provided the actuarial estimates of what the employer contribution is forecasted to be over the next several years so we use that. My office prepares a debt service forecast so that informs what the debt levy estimate was for the forecast. As the city is self-insured for healthcare, we looked at both national and regional forecasts of growth in healthcare expenditures and use that to inform the forecast. One key assumption that I really want to make clear when you're looking at these deficits, a key assumption is that aside from What we believe is a sustainable $6 million withdrawal annually from the public debt amortization fund, this forecast does not assume any use of reserves. This does not assume tapping into the tax stabilization fund, the pension reserve, or any greater withdrawals from the public debt amortization fund than that $6 million sustainable withdrawal. One of the strategies that's been deployed to close budget gaps is use of reserves. We don't consider those to be recurring revenues. As I'll get into later in the presentation, we have experienced growth in all three of our key reserves, in particular the tax stabilization fund, despite planned withdrawals. We don't forecast that that's going to continue indefinitely, so we don't consider the tax stabilization fund withdrawals to be a recurring revenue. And a key conclusion of the report is that relying primarily on reserves to address budget gaps, it can work as a short-term measure, but it's certainly not going to be a viable long-term solution. So I try to be efficient with my slides. The left side covers a little bit different topic from the right side, but I'll cover the left side first. So a few key points here.

Bill, do you prefer us asking questions because it is so deep and rich in information? Do you want us to wait to the end or as they pop up? What do you prefer?

I may answer them later on in the presentation. So if it's okay with you... Okay, so a few key points. As I mentioned earlier, expenditures are forecasted to grow faster than revenues, so that structural deficit is forecasted to grow each year. The deficit is ongoing or structural in nature, so I think that any discussions on addressing the structural deficit should really be focused on sustainable or ongoing revenue or expenditure measures, not necessarily one-time measures. I know we talked earlier about furlough days. Those were brought up and furlough days, unless the intent is to continue that level of furlough indefinitely, that would be considered kind of a one-time measure as opposed to a recurring measure. As you all are aware, state statutes place restrictions on the city's ability to raise revenue and certainly the ability to raise revenue sufficient to close the structural deficit simply through revenue increases. And also Act 12 requires the city to not only maintain a level of effort in police and fire, but to actually expand or grow those two, our two largest departments. So that really limits our flexibility to control expenditures. So on the right side, moving to the right side, so this bar chart looks at what the 2031, the final year of the forecast, structural deficit is under our baseline scenario in the middle, which is our kind of, that's our, what the forecast, our best estimate of the forecast shows. We also looked at a number of different scenarios that involved, as I mentioned earlier, less favorable or more favorable assumptions on revenues and expenditures. In the baseline scenario, in 2031, we're looking at a $104.5 million structural deficit. In a favorable revenues scenario, that 2031 structural deficit, it drops a little bit to $87.3 million. But in a scenario in which we experience revenue shortfall and expenditure inflation above what we forecasted in our baseline model, the forecasted deficit in 2031 jumps to $160.8 million. demonstrates that a favorable scenario or a favorable change in assumptions, it helps reduce the deficit, but only slightly. Whereas a situation in which inflation is greater than what's forecasted in the baseline scenario and revenues fall below what we forecast in our baseline scenario, it creates a much more, a much greater scale of the structural deficit we're facing in 2031. So this slide demonstrates what is a hypothetical and admittedly unrealistic scenario, but I think it helps illustrate a point. So this is a scenario in which only reserves are used to close forecasted deficits. So instead of making expenditure reductions or above track, revenue increases, you simply close the gap through using nothing but reserves. So at the end of 2025, the city's three key reserves, the tax stabilization fund, the pension reserve, and the public debt amortization fund total $281 million. Now, this exercise or this scenario assumes that all of the restrictions and limitations on eligible uses of those three funds have been removed, and the entire $281 million balance can be applied to address annual budget deficits simply as they arise. So as you can see, under this scenario, in 2027, 28, and 29, the budget gap can be closed through the use of reserves. But by 2030, you can only partially close the gap through the use of reserves with the remaining $35 million or so needing to be addressed through other means. And by 2031, you are left without any reserves to help you close the gap. I know this is an overly simplistic and I'll admit unrealistic model, but I think it really helps illustrate the point about why reliance on reserves to close budget gaps is a temporary and not necessarily a long-term solution. Now I don't want this to be all doom and gloom here, so I do have a little bit of good news. So our three key reserve funds that I mentioned, the tax stabilization fund, the public debt amortization fund, and the pension reserve, have all grown each year over the last three years. The PDAF and the pension reserve have seen consistent incremental growth. Whereas the tax stabilization fund saw really significant growth and that's despite planned withdrawals in the 2025 and 2026 budgets. Now the tax stabilization fund grows when expenditures come in under budget and revenues come in over budget. The city has been fortunate to experience both of those in recent years. But we don't anticipate that this favorable experience with expenditures coming in under budget and revenues coming in over budget is going to continue indefinitely. It's highly unlikely that that's the case. One of the main drivers of the growth in the tax stabilization fund was the overperformance of sales tax relative to estimates. admittedly we were uh... conservative with our sales tax estimates early on and that was because we simply didn't have good data on which to base our estimates so as we get more data and as we have more experience with estimating the sales tax the the gap between what we're forecasting and what we actually receive is likely to to be smaller and uh... sixteen million dollars of favorable experience that we've seen in in each of the last two years is is unlikely to to continue at at that level and also you know as budgets get more challenging it's it's unlikely that we're going to see the levels of under spending relative to budget that we've seen uh... in recent years And I'll just note that the tax stabilization fund, it's the most flexible in terms of its use of the three reserves, but all of them have restrictions and limitations on their use that prevent the city from using reserves in the manner that they were used in that hypothetical, unrealistic scenario that I talked about on the last slide. So in conclusion, the challenges that the city's facing financially is not something that's going to resolve itself if we just simply stay the course. The budget gap is recurring and it's structural. So three things I'd like you to take away from this are one, carefully evaluate annual budget decisions in light of the longer term financial challenges that are facing the city. Two, and I know you all are very aware of this, but I think this is more for the public, is to know what our limitations are. Our ability to increase revenues unilaterally is very tightly restricted. The ability that we do have, it's insufficient to close the budget gap simply through revenue increases. On the expenditure side, our two largest departments, from a size of their budget perspective, are mandated to grow in size. And our third largest department, the Department of Public Works, is largely funded through user fees, which if you reduce a service that is funded by one of those user fees, that reduction in expenditures requires a corresponding reduction in revenues for those user fees, so it really doesn't help you close that budget gap. So it makes closing the budget gap by, you know, by expenditure reductions is challenging. So finally, I'll say this, we can and we should do everything that is currently within our power as a city to control or to help address this budget gap. But the ultimate solution I believe is going to require collaboration and coordination with our partners at the state of Wisconsin. And that concludes my presentation. I'm happy to take questions.

Thank you so much. This timing has really worked out really well, too, as we begin our budget discussion and deliberations. Alderman Peter Vergalis.

Thank you, Madam Chair. The report mentions historically volatile... In order for a fair representation or for a fair perspective, you used a historically volatile average or used a historically, used a historic average because a lot of these revenue sources have been volatile, including COVID. How long back did you go and did you account for ARPA dollars? Did you account for diminished, like you said, DPW activity during COVID?

That's an excellent question. On both the revenue side and the expenditure side, COVID, the pandemic measures, the measures that were put in place to control the pandemic really took some of the patterns that we had seen that were relatively consistent in the years prior and threw them out of whack, both on... the timing of when revenues would come in. I know that there was a lot of activity that was pulled forward, like construction activity, for example, that was pulled forward in 2020 because the streets were largely empty because people were staying home. So permit activity increased. So we had to take things like that into account when we were building our forecast. The introduction of CARES Act and ARPA dollars, that was something that we had to very carefully consider because we, When you look at our financial system, because those were grant dollars, they were recorded separately. It's hard to distinguish in our financial system those grant dollars that were intended to just take the place of what would otherwise be funded by our property tax levy. It's hard to distinguish those dollars from the enhancements that were made to certain departments or the additional programs or services that were funded by ARPA dollars. So that's why in a lot of instances, we would take a seven year look back or a 10 year look back and use the historical growth over a longer period to sort of drown out some of the noise that we saw during the 2020 to 2024, really into 2025.

But those additional dollars in the budget and the additional, we'll call it vacancies, contributed to a larger than expected tax stabilization fund or a contribution at the end of the year when the books are closed out, right? Yes. So our TSF is bigger now than it probably otherwise would be. Yes. Yeah. So it was that also considered that our source of reserves that we've been consistently using for the last couple of years is also going to be diminished without those other factors.

Yeah. And I think that's the, the idea behind that, that sort of reserve only draw down or using reserves only to address the budget gap scenario is, is it assumes that those reserves are finite because yes, we've seen, uh, growth in the tax stabilization fund despite those withdrawals. But for the reasons I cited and for the reasons you just cited, I think that the likelihood of significant growth or growth period in the tax stabilization fund is significantly diminished moving forward.

Where in this chart in the revenue forecast is a transportation fund contribution or parking ticket revenue?

I do not assume any transfer to the general fund from the transportation fund. That is due to the ongoing cash deficit situation in the transportation fund. We'll talk about later when the annual comprehensive financial report is discussed later on in the agenda. the scale of the advance to the general fund, the size of it grew actually from 2024 to 2025. So the position slightly worsened. So in the forecast, I felt like it wouldn't be a sustainable recurring revenue to count on a transfer from the transportation fund to the general fund as part of this forecast.

12 15 years ago parking ticket revenue was north of 20 million dollars 21 21 22 23 Almost 24 million dollars a year and now we're still we're still barely half of that All right, so are you taking into account an effort to collect on parking tickets Well, what I will say is that... Because we had a pretty substantial conversation about that in last year's budget, and because that number was overinflated for the 2025 budget, severely overinflated, and it was rationalized back to $14 million last year, but... If we have a goal and we're working towards collecting that additional revenue, why wouldn't we consider that in the forecast?

Well, so one, this forecast looks only at the general fund. It doesn't focus on the enterprise funds of which the transportation fund is one.

Yeah, but that's one of the significant sources of revenue for the city.

So when you're looking at it from this perspective of the health of the general fund, which this forecast is focused on, really the interaction that the general fund has with the transportation fund is largely based on whether there is a transfer to the general fund or not. And this forecast takes the position that given the cash position of the transportation fund, it wouldn't be... it wouldn't be strategically wise to make transfers to the general fund when there is this significant cash deficit in the transportation fund.

I think you can anticipate my next question. Has your office taken a look and done a forecast for the transportation fund similar to this one?

So, I mean, it's... part of the ACFR, the backward-looking reporting, kind of what has occurred. And in fact, I shared an analysis of recent revenues, expenditures, transfers, et cetera. I shared that with Alderman Spiker, and I'd be happy to share that with you as well. But a forecast, a forward-looking forecast, my office has not done that. And I think it's something that we could look into for future iterations of the the financial forecast.

All right. Stay tuned, folks. Thanks so much. Thank you, Madam Chair.

Thank you. On the tax stabilization fund, I see what you're saying about... being kind of conservative on the sales tax projections. And actually, even going forward, they could change, you know, they could kind of reflect the economy, too, and people's spending habits. So it's a tough one. I guess what I'm trying to understand is, I get your word of caution. I usually ask that every year when we get the budget as well. But... Since the tax stabilization fund has increased in the past few years, partially because of the sales tax projection volatility, if you will, I guess proportionately, though, can you remind us your – because this would be helpful two weeks from now when we're going over the budget – You're not saying zero reserve withdrawal from the tax stabilization. What would you say generally? I thought there was a percentage that we shouldn't go over.

So that percentage refers to the balance that you'd like to maintain in the tax stabilization fund, which best practice would state that to be about 16, 16.7% of your annual operating revenues. So, and, you know, I've been in discussions with the city attorney's office as I was asked to do about a fund balance policy, which relates to kind of minimum balance in the tax stabilization fund. And I'll have more to report probably maybe either next F&P cycle or as part of the tax stabilization fund budget hearing.

Right, it just kind of seems like an exhibit to this or something like an add-on because this is such a great foundation, but... I think the percentage is really important because even though it's grown, it's more like how are we using it each year in a percentage base.

You mean the percentage of the withdrawals? Withdrawals. Not how it relates to the overall size.

Right. Have we been, and I guess I just don't know, it feels like it anecdotally that because there's been more, I think we've been withdrawing more. So if you cannot predict that there will be more, we should certainly slowly begin withdrawing less percentage. And I'm not sure what this 2027 budget does, but that's what I'm trying to take away from this.

Yeah, I think that would be a good takeaway, is that despite the fact that we've seen this significant growth in the tax stabilization fund, that growth combined with, in light of the withdrawals, and I don't know what the 2027... budget holds, but I'm assuming that there is some use of reserves in the 2027 budget. That use of reserves on the level of what we saw in 2025 and 2026, that's not likely to be sustainable indefinitely.

Okay. And for reference, in the 24 budget, it was the last year of ARPA on the first year of sales tax, we did no TSF withdrawal. Then 25 and 26, we've done a $32.3 million TSF withdrawal both years. But there is... there's a bit of a lag because we're, you base, it's 2025 actuals that determine the amount you can withdraw or not for the city charter in 27 budget. So there's, it can get confusing, which year are you talking about? Because there's a two year difference between year end closeout and the next year's budget withdrawal.

Is it, I should have this memorized, state law that sales tax overages must go directly into tax stabilization?

So sales tax overages, I mean, they are spent on allowable uses. Right. So what it does is it essentially allows the tax levy dollars that would otherwise have been spent on those public safety uses to lapse to the tax stabilization fund.

There's a couple different state laws in play here. I think one is that revenue that comes in higher than predicted or budgeted, that automatically lapses to this, or the sum total of revenues that come in short or low, combined with the sum total of expenditures that are short or low, lapses to the general fund, but the existing budgeted expenditure allocations are in effect, with a few exceptions, which I think we've talked about before. Separately, and Act 12 is new, but separately, Act 12 says all sales tax money must be spent in various ways which I won't get into details, but they're all public safety and pension related. So separately, we'll provide a report to the state, Act 12 mandates that we do, describing that all sales tax revenue was spent in the appropriate way. So to some extent, that two-year lag on actuals versus budget, Act 12 puts us in a somewhat precarious, it uh... what's the right way to put this uh... and we've got we've got to take a close look at what the actual czar both on what comes in and what the expenditures were and so you you hope your budget is a spot you always hope you but it's as close as possible but in the case of act twelve you gotta take careful look at these particular revenue sources in terms of your reporting to the state specific act twelve but the general principle that of what happens to revenues and the general fund is a general principle.

The chicken and the egg both crossed the road yesterday.

Could be, yeah. Now I'm confused, but yes.

My last point on this is the 16.7, that was what you said, kind of roughly percentage-wise of the annual operating budget for TSF? Correct. Okay. And I think I know the answer, but I think in the last few years, we haven't stayed within that 16.7 or have we?

No, we haven't achieved that, but I would have to go back and I don't know that I've run that again for the 2025 ACFER, but I'd be happy to do that for you.

I would like to see the two years that we did the withdrawals, which were about 32 million, right? 32.3 million in 25 and six. How far off were they from 16.7? And then when we do get the budget next week from the mayor, where we are in relation to the 16.7? Well, hold on.

The 16.7 would be the total size of the general fund. The withdrawals would bring that down. And it's roughly out of $800 million, right? The general city purposes budget?

Yeah, $900 or so.

It's a best practice, right?

Yeah, but the 16.7% refers to the percent. That's the... guideline for what the minimum balance of the tax stabilization fund should be, not necessarily the size of the withdrawal. The size of the withdrawal, you might be able to only take a smaller withdrawal if you want to maintain above that prescribed level.

So you'll look at the last few years and then what we're gonna receive for 2027 to see if that's maintained, right? You're saying that it has to be the amount in the tax stabilization fund should represent about 16.7% of the budget.

That's what best practice would recommend.

I would just like to see that in a paper.

Sure.

And that's what I was saying about the 30, I don't know if the 32.5 represents, if that withdrawal represents that balance. Probably not.

I mean, you've got the, or you don't have it up, that chart, you were talking about 16.7% of whether it's eight or 900 million, your general city purposes budget, roughly, right? Or what else are you putting, what are you taking the 16.7 off of, general city?

Yeah, general city operating revenues.

Revenues, right. So you're looking at general city operating revenues, you're taking 16.7% of that, so it's a little under a billion. Let's say 100, so 10% is 800. It's north of, it's closer to 150 than 100. I don't know, we could get a calculator. But anyway, so I mean, roughly speaking, the tax stabilization funds at this pace were almost getting there, which we weren't expecting. And that's a national best practice, and it's an open question whether we should make it a firm, Rule, I think if you consult the rest of the report, you can see the immediate service operational danger of making it a firm rule because it's hard to imagine how you could possibly get through the next five years unless the state intervenes without using reserves. So is your priority to actually provide services in the here and now or to meet a national best practice based on what GFOA and accountants say you should do? I'm not discounting that that's a really important best practice, but when you're weighing, real service cuts that will affect people in the here and now. You've gotta always make that, you gotta weigh those two things.

It appears the best practice is directly correlated to the rating that we get when we bond, so it has a correlation to that financing as well, right? Doesn't it?

In every report that we get from rating agencies that looks at our ability to repay debt, they say that a cause for a bond rating upgrade would be increases in our fund balance, and a cause for a bond rating downgrade would be a decrease in our fund balance.

Thank you. Thank you very much. Yeah, I'll just have to see it. I'll have to look. You're right. And you're right. Director Kovac, we balance all those just like you do. Questions on this fiscal forecast? Spiker, Moore, President Perez, anything else? We'll just go in that order because it's easier. So I'll go Spiker, Moore, and then Perez to probably close it out.

Yeah, Alder Burgels asked some questions I had about the transportation fund. I've been in conversations with budget and comptroller about that, so I'll save that for maybe when we look at the, Later file. But with respect to, so I know on slide five, I guess it is, reserves can bridge a transition, not fund the full forecast. We kind of discussed this extreme scenario where we basically try to cover the gap with our reserves as long as we can until we run out and then see what happens. Do you have anything, more informative, I guess, as policy makers on what a sustainable glide path would be for the use of reserves? Or is that too dependent on yearly factors? Because from a policy standpoint, it would, you know, each year we judge what's too much and what, to the budget director's point, what kind of service cuts or reductions in expenditures, growth, we're willing to count on. But it would be helpful to know from a policy standpoint what sustainable uh use of reserve funds might look like um and the extreme scenario isn't designed for that so is there anything more meaningful that can be given that was a light bulb that when you looked at the five-year forecast you said hey uh this is roughly what we should be doing in terms of drawing down reserves if we want to make it through that five-year period.

So sorry, long question, but do you want to just... No, but I understand the thrust of the question and pages 23 and 24 of the report, it's in appendix B, so it's a little bit buried, but this does explore a scenario of a One involves a $25 million annual TSF withdrawal, which essentially takes the $125 million balance available at the end of 2025, spreads it over five years. The second scenario is $14.8 million each year, and that's essentially just the average TSF withdrawal over the last 10 years. So it projects that forward. And what that does, I mean, you talk about a glide path, right? I think that's what this... lays out is it's demonstrating that if you wanted to, as opposed to addressing the entire structural deficit in one year or two years, this demonstrates that the so if you're looking at the the first scenario i apologize for not having this on the presentation but the the gold section of that first bar the the new revenue growth or expenditure reductions those are essentially those those ongoing sustainable budget measures that you would have to implement in that year's budget The next year, presumably, those are ongoing savings or revenue increases. So that's already been addressed. So then the gold bar on the next year is just the new budget deficit that you would have to address, and so on and so forth. So what those show is essentially how you could... spread the pain a little bit over a number of years as opposed to either taking it all at once or relying on reserves and piling up the difficult choices in 2030 or 2031.

Okay, that's helpful and I remember that from the original report but. didn't remember it and when I didn't see it on the slide. So thanks for pointing in that direction.

I had to make some tough calls on what to include and not include. I know that there's a lot in here and I really encourage everybody to read the whole thing. Okay. Thanks. That's it for now.

Okay, thank you Alderman. Alderwoman Moore. Thank you so much.

First, I would like to thank President Perez for just bringing this communication file in front of us. I think it's so important as we look at long-term what that simply looks like. And so Comptroller Christensen, thank you for putting this presentation together. That is just, it's It's meaningful, so thank you so much. Thank you. I think the question that I have is in, you know, the current presentation slide at the end of it, if we don't have, you know, as far as, hey, here's some solutions, right? If we, let's say the state, hypothetically, let's say the state doesn't intervene, we still have Act 12, things move forward the way that it is. Is it just more of a likelihood that, you know what, we will have to tap more and more into our reserves versus perhaps doing other things like cutting services, et cetera? Would that be a pathway?

well i think what i would say about that is if there is no possibility of state action for structural solutions i think there there are things that probably could and should be explored for um you know some belt tightening um you know some expenditure reductions some above trend above the the historical trend revenue increases, but those alone don't close the deficit. So how that deficit gets closed, reserves is sort of the default. If nothing else, that's your, best option but um but yeah absent some kind of outside assistance i don't know that through the means that are available to the city there's a a viable way of getting there through expenditure reductions and and revenue increases based on what we what our current menu of options is

yeah thank you yeah no if you look at it yes the comptroller alluded to this in his remarks just now and it's alluded to in the report but it's something i tried really hard to emphasize in the pie charts i showed the public and this council you know in july which is that you know it looks easy i don't say it looks easy but you know all you see is a number on a pie chart this expenditure reduction in the context of 900 million in total revenues and you might think oh it doesn't seem like that much i'd say a couple things to that one is because of various state laws most especially act 12 around public safety but then also existing state laws about cost recovery with fees there's very limited actual structural gap relief that can be gained from our three biggest departments police fire and public works and police and fire because of act 12 and and restrictions on or the fact that act 12 mandates you spend more money in those departments and then public works because If you make significant reductions there, you have to give up revenue so you get no guy relief. So really, those factors right there really limit, as a practical matter, our ability to make substantial cuts. And then the other thing I'd say about these charts, which are excellent, and I do, I think, point to the scale of what's gonna likely happen in the next four or five years. You might say, well, the budget office said the gap was 100 million, but Comptroller's starting out at 50, and I think that can be explained really as a point in time. We're describing the same animal, but at a different point in time. because what the comptroller did here was look at historical trends. And there was a lot of noise, as Vice Chair Bergelis pointed out, so he tried to figure out to really get those trends as accurate as possible. But what those trends reflect is several years really several decades of every year the city finding ways to increase revenue, whether it's inventing new fees, raising old fees, using old fees to cover new things, and raising taxes, and cutting services. We have a thousand less city employees than we did 25 years ago. So if you just look at the history of what's happened, every year there's cuts and there's revenue increases, so every year the new cost to continue gap keeps getting adjusted. And every year now the last three years we've started out with a gap of about $100 million the last three years. That's in May. In September it's zero. And then in November it's zero again because both the mayor and the council have to propose balanced budgets per state law. So it's sort of like what's the different aspects of that gap? Because what the analysis the councilor did by using prior actual is just assuming, well, all the cuts you've already made, the scale of them, and all the revenue increases you've made. Let's just assume you're going to continue that. Well, that's the work of the budget office to do that and the departments and the comptroller with the revenue recognition to figure that out. So the starting initial gap is the, hey, whatever you were doing last year, just keep doing it. But the reality is you're going to get cut. And that's been every year. So if that makes sense. To some extent, what I'm trying to say is the gap that's in this report has already pre-baked in an expectation that cuts will continue. And then, so if you're seeing more cuts on this graph, it's cuts above and beyond the historical average.

And one other thing I would add just to kind of help illustrate the scale of what in 2028, the $81 million gap, just to put it in a little bit of perspective. So if you would add up all of the departments and offices that are housed within the city hall building. So starting at the bottom, you got treasurer, you've got common council, city clerk, you've got the mayor's office, you've got my office, so on and so forth, all the way up to DER, and you were to eliminate all of them, not give them a haircut, not cut them back, but eliminate all of them, that would net something like 58 or so million dollars. So you could, I mean, obviously you can't function without a common council, a mayor's office, controller's office, et cetera. So I think that just kind of helps put in perspective, the scale of the challenge when, you know, some of the largest departments, like I said, police and fire and DPW for different reasons are more or less off limits for, you know, expenditure control measures. So just a, a piece that hopefully helps put it in perspective.

Absolutely, and I really, really appreciate that. I'm definitely gonna have to cut this segment to share with my constituents because as people are talking about, oh, why can't the streetlights stay on, right? And the infrastructure to update and replace our streetlights on just a city level. We're talking about hundreds of millions of dollars, right? And so as you all are both eloquently sort of laying out for us, you know, we could cut all the departments and still we're, you know, in this conundrum of figuring out still how do we, you know, reduce this deficit and, you know, create this sort of balanced budget. And so, you know, when looking at that last slide, looking at our solutions and just something that's sustainable for me, you know, yes, we'll still do our due diligence and looking at, how do we make the appropriate budget decisions to still make sure that we're providing quality services, but also look at the surplus that our state continues to have and the support that our city needs. I want our constituents to know that I want them to take also their advocacy just like they email us and they call us and they yell at us for the lights being out or this not being done as fire and police continues to go up. There's going to be some significant decisions if nothing changes. Again, talking to our public, I want them to take that same energy to our state legislature to really fight for the support that we need because we need those shared revenue, we need those dollars so that we can provide adequate services to our constituents. Thank you both so much for just outlining this really plainly for our constituents to understand and for us to understand as well. Thank you.

Thank you Alderman. Anything else from Alderman Coggs, otherwise we're gonna go to President Perez to wrap this up.

Alderman?

No. Okay, President Perez, if you'll give us a conclusion here.

I just wanna thank everyone who helped Bill prepare the report and just look forward to the discussion and you being your own elected position in office, this was a document that was just done with facts without any kind of political influence from anyone and appreciate that being a framework moving us forward, so thank you.

And Madam Chair, if I may, Alderman Spiker raised a good point about the tax stabilization fund and what an appropriate level of withdrawal is. And I'd just like to make the point that the tax stabilization fund, its purpose is to be withdrawn from. I mean, that's its purpose. When it was initially set out, it was to stabilize the tax rate. Now levy limits sort of do that for us, but you can almost call it a service level stabilization fund. And it's intended to be withdrawn on. So I wouldn't say that the correct answer to what the TSF withdrawal should be every year is zero. I mean, I'd like to find us in a position where we don't need a TSF withdrawal because our revenues match our expenditures, but obviously we don't see that in the forecast. So I, I think striking that balance of what is a sustainable level of withdrawal and talking about a glide path where you can use the tax stabilization fund strategically over a number of years to kind of limit the impact on services and on residents in any one year is the best way to go. So thank you for allowing me to.

Thank you.

Great. We've had a very robust conversation and a perfectly timed and important item. Thank you for your great work on this. And independent work, as President Perez said, like that's just really helpful and we appreciate it. That is item three. Alderman Spiker moves to place it on file. Any discussion to place this communication item on file? Any objections? Hearing none, so ordered. Before we go to item four, I wanna actually go to item six. There's been a number of requests on this. First to bump it up and now there's a request I hear from the mayor's office. 260550, a substitute resolution authorizing the implementation of the United Healthcare Nexus-ACO program, ACO program for the city of Milwaukee health plan. Did someone wish to speak on behalf of the mayor's office? We got a request.

Okay. Good morning. Good morning. Jackie Q. Carter, Department of Employee Relations. We are asking that this item be held because there have been a number of questions. We would like to be able to respond to those questions before we move it forward.

Okay. And I appreciate that and thank you for letting us know. I just want to place my three questions on the file so everybody can hear them and you can continue to, that way we have it and I'll send an email too, of course. But one question I had was on the coinsurance.

Mm-hmm.

um we got that amber thank you um so we're we're going to be holding this item but i'm getting my questions on the record here the co-insurance changes i'm looking for more information i'm also looking for an equity impact statement on this and i'd also like to i don't know if it's an official referral but i would like the office of um compliance and engagement equity to look at these possible changes to see if there's any impacts that we might not be aware of. And that's due to the inherent possible regressive changes when we have such a diverse salary system, we all know that it could impact those making less money more than others. So I just want to know, I want to see, I want to have open eyes, and these are sensitive plans, but those are the three things that I'm looking for. Co-insurance, an equity impact statement, and then an analysis from the Office of Compliance and Engagement in case there was any inequitable changes that would have an impact and this is very important because we're looking at some of the stuff for the budget as well. Alderman Cox and the hold is before us of course.

Had a couple of questions too that when you come back, it'd be great if there were answers. What percentage of our staff utilize doctors or specialties under each system? I think if I'm not mistaken, it speaks to tier one versus tier two. Right, exactly. I just want to make sure that when you come back that it's able to articulate a clear understanding of which specialties fall under which tier. And... and a history of how we've done this and whether we've ever differentiated between systems and which tiers we're willing to pay for or have employees pay for. Like, have we ever done it like this? You get what I'm saying? Yep. Those are my three questions.

I hope that in the equity analysis, I know I did my own personal research of comparing us to Waukesha, Green Bay, and Madison, but with the benefits, and Ms. King knows this, nothing ever looks the same because you move one lever, like you might have a more affordable premium, but then people are paying a bigger deductible and so on and so forth. But I do think that would be helpful to have in this analysis. And last but not least for me, There's been a number of these changes. This is the third or fourth of... We broke each one down and it came... I need to take a step back and look at it holistically through the eyes of multiple employees from 40,000 to 70,000 to 100,000. I just think the impact... um is going to be felt differently i mean again you could have some of this coinsurance could um be over 10 of someone's salary like again i just want to have that all in front of me before we take what looks like a big step and so i really truly appreciate the hold but i want to do my part too and make sure i'm being you know clear about the questions i have and then hopefully we can get those answered so but the hold has been moved by Alderwoman Coggs per the request of the administration. Any other discussions on the hold? Obviously feel free to email your questions too so we can consider this. I guess my thing is for the budget office, this is obviously the 2027 budget's not depending on this change, right? That couldn't be because it's not even, like this change I assume has some savings embedded and that's not what the 2027 budget depends on, right?

I mean, that would be awkward. Right. No, the 27 budget is about to be proposed, but it's still in development. And this was something that was presented to this committee as a possibility in July. And there's various scenarios that can still be played out.

Okay. I just don't want us asking these important questions to cause any unintentional funding gap, but I guess that's what you'll have to deal with.

Well, I mean, we'll work with you to make sure there's adequate funding.

Okay. Got budget on my mind, you know. All right.

That's a good question.

Thank you. And I appreciate that. I mean, that's the exchange we got to have. And I'm happy to have an additional meeting with you because I have some additional ideas too, because things develop and they're dynamic. And some of them I'm getting costed out at this time. So, but that's the benefit from having these early discussions. Any other questions or comments on the hold?

Madam Chair. Alderman Moore. I just, and I think you might have said it, this decision does have to be made by time we finalize budget. This has a budgetary impact?

Well, it was nuanced. I was worried that the 2027 budget we're going to get on Tuesday had kind of assumed this.

Okay.

And what I heard the director say is it was one of the scenarios they're considering. But certainly we would want, we very soon need to know what healthcare is going to look like in 2027. Sure.

And there's other independent of the budget, which is the, I mean, we're self-insured, so whatever we pay, we've got to pay, and hopefully the budget's enough. But there are some timing issues, which Jackie or Molly could speak to more about. open enrollment deadlines for that. Thank you.

Good question. Any other discussions on the hold or objections to the hold on item six? I did take it out of order because then we'll go back to four. Hearing no objections, so ordered. Thank you so much for that. We'll now go back to item four. 241273, communication from the Department of Employee Relations relating to labor negotiations. From our Department of Employee Relations, we have Ms. Nicole Fleck. Would you like us to immediately go into closed session so you can just be as transparent as possible? Okay, no problem. So the recommendation is to go into closed session and the Finance and Personnel Committee may convene into closed session pursuant to S19.851E Wisconsin State Statutes for the purpose of conducting specified public business whenever competitive or bargaining reasons require closed session. The committee may then reconvene, which we will do into open session for the regular agenda. This motion is made by Alderman Bergelis. Please call the roll on the motion to move into closed session on item four.

On a motion to convene into closed session, Alderman Moore.

Aye.

Alderman Spiker.

Excused.

Alderman Cox. Aye. Honor member Gilles. Aye. And Madam Chair.

Aye. Okay, the vote allows us to move into closed session to discuss these competitive or bargaining items. Think we're good? Okay, we'll just do one quick check that we're in open session on item four. Just checking with channel 25 here. Good to go? Okay, welcome back everybody. Item four, 241273. We've come back into open session after our closed session on employee relations and labor negotiations. The motion is to hold to the call of the chair by Alderman Spiker. Any discussion, any objections? Hearing none, so ordered. Item five now, 260546, a substitute ordinance relating to employee wages, benefits, and regulations. Department of Employee Relations, Jackie Carter and Nicole Fleck. Okay, Ms. Carter.

Good morning. Good morning. Jackie Carter, Employee Relations. Um, we have come to this committee multiple times this year to talk about the workday project and the employees who are doing work on that project. So this ordinance, um, as we've kinda preluded to is, um, in effort to allow DER to establish some guidelines so that we can raise the vacation accrual cap for employees who are going to be included in a vacation blackout so that we can implement the new enterprise system. And so the intent here is really to make some changes that make adjustments to allow those employees to save time that they would otherwise lose as they kind of carry the brunt of the work-for-work day for the entire organization. So we don't want to create a penalty for them. So this would allow us to fix that.

Okay. Right. Yes. Alderman Bergalas on item five.

And temporary vacation accrual isn't something new. We've done this before.

Right. What will be a little bit different with this one is we're going to put a time period limit on it so that it doesn't create some kind of cost at the end. And that basically would give them 12 months to use the time that they saved. And honestly, the people working on workday are going to need a break when it's done. So I don't think that that's going to be a big issue. But if they don't use it within that window that we established and we're thinking 12 months, then they would lose it after that.

All right, and then do you remember when this was last done?

I don't know the exact date. I know there are some employees who have accrual TDA accounts, but we did not have a limit on those, if I recall.

And frankly, those old accounts have just lingered for years.

There's two reasons that somebody would have a TVA. One is when we did a conversion from a monthly accrual of vacation to a pay period accrual. So that happened I think in late 1990s for management level employees. And then it happened, there was another large turnover for Act 10 when the union covered employees went from a monthly accrual to a pay period. And in those cases, you're correct. The balance just carries. They either use it or if it carries, then they're paid out for when they retire.

And it gets paid out at their final wage, not the wage that they were earning when those vacation hours were earned.

Correct.

So that technically conceivably could be doubled.

Correct. So that's why we're putting the cap. There's one there's going to be an 80-hour cap on this TVA and then also that window that you have to use it within a year so that these balances won't continue to carry.

Is there a requirement for you to use your temporary first?

That we can put that in the guidelines?

That would make sense, right? And then would that new provision to require use of temporary vacation also apply to people who have saved their vacation for the last 10 years?

It would not.

And why wouldn't we be able to affect that?

I guess that would be a legal question, but my understanding from when these were done is that... When we did the switch from one accrual to another, that's just how it was set up at the time. And I think employees are just now expecting that. Now, I'm not saying we can't do anything about it, but that's just my understanding.

Because frankly, that looks like, in the eyes of a taxpayer, that looks like a citywide vacation backdrop payment like what the county experienced that cost the county hundreds of millions of dollars. Granted, I don't think that our problem is going to be nearly as big, but holding vacation hours indefinitely.

That backdrop was completely different. Yeah. I don't even want people listening to think that this is anywhere near that, because it's not.

I mean, I also like to clarify, not every employee has a TVA. I don't have one. I might have had one during COVID. That was the other time we did something similar to this request was during the COVID emergency.

But it's putting a liability on the city that we don't know what it's going to cost us when it finally gets paid up.

The TVA for the transitions from vacation accruals, yes.

The old ones. Yes. The old ones. The new ones is going to be reasonable. Correct. Okay. Thank you, Madam Chair.

Is this pensionable? Yes, it would be just like regular vacation. When you use it, it's paid out and pension comes out of it, yeah.

And I guess hypothetically somebody could retire in that 12 month window. That'd be really.

They could.

Okay.

All right. Any other questions?

I've got the number here. Number five. I thought it was more. Any other questions on number five? Alderwoman Moore moves passage of five. Objections to passage of five? Hearing none so ordered. Thank you. Thank you. We are now, we had, for anyone joining us, we had held item six and we're now on item seven, 260713. Communication from the city comptroller relating to the audit of the 2025 financial statements of the city of Milwaukee. Okay. Yes. Comptroller Christensen. Good morning. I thought you had some people you were gonna introduce to be here.

Yes, yeah, good morning once again, Madam Chair, Bill Christensen, City Comptroller. First of all, I'd like to just thank a few people before I turn it over to Paul France from Baker Tilly. Many members from the Comptroller's office and across the city play a role in preparing and developing the city's annual comprehensive financial report. A few folks I'd like to recognize, Accounting Director Rick Baer, Accounting Manager Sheila Scott, Grant Accounting Manager Brad Glaunert, Joel Schomburg, Brad Ninus, and there's many other names that I would mention, but in the interest of time, I'd just like to thank everybody from the Comptroller's Office that plays a role in this, and citywide, it's really a citywide effort. And I would like to note that from 2021 through 2024, the city has received the GFOA Certificate of Excellence in Financial, or Certificate of Achievement in Excellence in Financial Reporting for the presentation of our ACFER. So we're hoping to achieve that again for our 2025 report. And with that, I will turn it over to Paul France from Baker Tilly, who can speak to the preparation, accuracy, and thoroughness of the report.

You didn't bring your certificate of achievement with you. We could put it on the board right behind you.

You know, it's a plaque that's up on our wall. So next, I'll bring it with me next time. Go ahead, Paul.

Good morning. Can everyone hear me okay? Yes.

Yes.

Thank you. Madam Chair, thank you for allowing me to present remotely today. Unfortunately, I'm under the weather and didn't want to share with any of my fine friends of the city. Happy to be with you though, to share my perspective on the reports before you. As Comptroller Bill mentioned, We have issued our opinion within that annual financial comprehensive report, the act for, we've issued an unmodified opinion, also known as a clean bill of health. What that opinion tells you on that document is that all necessary disclosures have been included within that financial statement document, but the document is free of material misstatements. that the city is in line with all necessary governmental accounting policies and principles that needed to be adopted, and that those accounting principles have been applied consistently year over year. So in plain English, when you hire an external auditor, this is the highest level assurance that you should expect to receive, and I'm happy to give it to the city. We received nothing but cooperation throughout the audit process, Late in 2025, and really got then ramped up in May of 26 in our year on testing and we work diligently with city staff through the end of end of July. everything was ready for us to begin our work uh all individuals answered uh questions timely and and gathered us the supporting documentation needed for us to get comfortable and happy to note as we went through our audit we did not identify any unusual risks that we had not planned for uh for a typical governmental entity of of the city uh size And therefore our audit plan that we had built prior to beginning that did not need to be changed as part of the process in evaluating that that work. There is a communication letter that does describe. Our audit process, and so required to communications that we need to have with you as the governing body. In there, it lays out any new accounting principles that we worked with management. On to make sure they were in compliance with what I mentioned earlier. It lists out any accounting estimates that we evaluated during the course of our audit happy to note that they're all clear neutral and non bias, which again means that they're appropriate to be within that financial statement document. We list out any non audit services that we perform for the city during. During the audit and why that's important is at the end of the day, in order for us to provide the opinion that we have. To get with that unmodified, we have to be able to determine that Baker Tilly and myself were independent from the city and happy to note that we were what we looked at that work. Besides the financial audit, we also do a single audit, both over federal and state grant programs. Happy to note that there were no findings and that all issued opinions were unmodified related to that audit as well. With that, I'll pause. I'm happy to take any questions. Otherwise, certainly, Bill, if you have anything else that you'd like to add, feel free to jump in.

Yes, I would just like to point out three items of data that are the content of the report as opposed to the accuracy or completeness of the report. It's a big document, there's a lot in there, so I'll just pull three of the highlights, two of which we've already talked about today. I'll talk about the year-over-year changes in three items that the council has expressed interest in that I think are worth noting. The public debt amortization fund grew from a balance at the end of 2024 from $58.8 million to $62.1 million in 2025. The tax stabilization fund grew from $109.8 million in 2024 to $125 million in 2025. And the amount that was required to be advanced from the general fund to the transportation fund to address a cash deficit, It had been $32.1 million in 2024. It grew to $35.4 million in 2025. So if you have questions on, I guess, the preparation, on the form of the report, those would probably be handled by Paul. If it's more the content of the report, I'd be happy to take those.

okay any yes uh alderman spiker um i guess on the content so the the transfer from the general fund to the transportation fund you said went up from 32.1 and million and 24 to 35.4 and 25. yeah the advance from the general fund yes from 32.1 in 24 to 35.4 in 25. and so um that transfer one it went up but two it happened um and given the health of the fund it seems strange that um some people might wonder what matters if you're making a transfer from the transportation fund to the general fund as we've done in the past or um And one way it might matter is where the rubber hits the road is when you see the general fund having to do this cash advance and the cash advances covering more than Just the difference between Revenues and expenses and the transportation fund proper It's also as it were covering the future loan that's gonna come back or the future transfer that's gonna come back so I just guess for clarity for me, wondering why there, and this might go beyond the scope of answer with the act for 25, but why, where, when we have a fund that is running a cash deficit, why we're incorporating a cash advance that covers what is kind of leading to that deficit, which is the regular transfer to the general fund, at least what was happening for a couple of years there.

So I would respond as such. The advance from the general fund is really to cover the accumulated cash deficit from prior years. So it's less to do with forward-looking advances that may or may not, I'm sorry, transfers that may or may not be budgeted from the transportation fund to the general fund in future years. It's more to deal with the accumulated cash deficit from prior years. And I'm sorry, there was another part of the question that I was, I had something.

Just sticking on that for a second. So if the transportation fund doesn't get healthy, then accumulated cash deficits will continue to accumulate. And so there will be a need for another surge from the general fund cash advance. So I guess this speaks to the question of ensuring the health of the transportation fund because these cash advances aren't, It's not like revenue comes in later in the year that wipes out those accumulated cash deficits. So it seems that the health of the transportation fund matters for the reason that if it doesn't get healthy, then we're gonna again have to have a transfer from the general fund, cash advance from the general fund to deal with the accumulated cash deficit in the transportation fund.

The cash deficit would be addressed by year-over-year revenues exceeding expenditures plus transfers. Revenues exceeding the amount of revenues plus expenditures plus any transfers that may be budgeted. That would need to occur year-over-year and chipping away at that cash deficit until it's remedied.

That could be remedied either by greatly growing revenues or reduction in expenditures, which isn't gonna happen, or a reduction in the transfer, because that's what you're kind of covering as well.

Right, either by a reduction in the transfer or by not making a transfer to the general fund.

Right. So, I mean, that's kind of tying into policy decision with the 2027 budget, whether, and I know we're not transferring to the general fund in that, we're talking about transferring to the capital fund, but it's a reason, for colleagues who might be wondering why we care about the health of the transportation fund, it's, for reasons that are made manifest, I guess, in this report that we're having to do 35.4 million cash advance from the general fund. That need will be there in the future unless the health of the transportation fund is secured. Is that accurate or not?

I think that's fair.

Okay. Okay, thanks.

Any other questions then on item seven? Any other questions? I'm just looking at the board. Questions or comments? Anything else you wanted to conclude with?

um no i would just say that uh i know it's um you know kind of a big dense long document that um you know it's it's not user friendly it's not reader friendly but i i just want you all to know how much kind of work and effort goes into its preparation it's really arguably one of the biggest if not the biggest things that is produced by my office every year so um i'd really like to again thank and acknowledge the the team in the controller's office as well as those that contribute

Okay, great, thank you, thank you very much. We really appreciate it. Yeah, this is a busy meeting for you. Thank you. Thank you so much. The motion then by Alderman Moore is to place item seven on file. Any discussion, any objections? Hearing none, so ordered. I'm gonna pass the gavel slightly on item eight to Alderman Bergelis so I can take a small break, thank you.

Here we go, item eight, file 260604, communication from the city comptroller relating to the audit of Milwaukee Water Works Financial Administration. Welcome to the table. please introduce yourself as well.

Good morning, Adriana Molina, Audit Manager here at the city. We're gonna go over the results of the Milwaukee Water Works Financial Administration Audit. And we'll keep it brief but juicy. I'm sorry?

Keep it wet.

Yes. Sure. We'll just get right to it. I won't go into the Milwaukee Water Works overview, but really just touch on why we're doing the audit. The financial administration audits are part of the audits that we're doing in my department that cover compliance with pro card, travel expenses, gas card if there are any, and petty cash if there are any. Milwaukee Water Works was in scope because they are one of the largest users in the city with approximately about $50,000 every two weeks, give or take. That's data from the 2025 year. Audit scope, like I mentioned, we're covering those three areas, and our scope was from April 1st, 2025 through March 31st, 2026. This audit did not include customer billing, so it wasn't anything related to Milwaukee Water Works customer billing. This was more on the financial administration within the department. We reviewed policies, procedures, card issuance, purchases compliance with guidelines and or ordinances, as well as reviewed FMIS, transactions recorded in FMIS accurately and completely. Our icons didn't transfer, that's okay. We also, Zach's gonna go over the findings that we noted, but we did pick samples of travel expenses as well as pro card transactions and then reviews usage of gas card and then any associated activity with that. In conclusion, we concluded that the controls within Milwaukee Water Works are operating effectively, and we did note two opportunities for improvement that Zach's gonna go over here shortly. Before we go, I did want to express thank you to Terry and the Milwaukee Water Works team for assisting us with the audit. They were great. We were able to start and finish the audit rather quickly, so thank you. and turn it over to Zach Rilling.

So Zach Rilling, Associate Auditor with the Comptroller's Office. Before we go into the findings, I just need to actually take a quick second to explain the travel expense reimbursement process just super quickly. So the travel expenses for the conferences come through the budget process, each year actually. So there's an estimate that comes through roughly the May before it goes through that whole process. Once it is time for the employee to actually travel, there are a couple forms actually which get filled out. Management then actually signs it. The employee is then at that point able to make up any of the travel arrangements. Once the employee comes back, the statement of expenses form actually is filled out. The statement of expenses along with the actual receipt is then submitted to the supervisor who reviews them and submits them to the water financial manager. And that entire process from when actually the employee comes back from travel to actually the entire packet landing actually in the comptroller's office has to be done within 15 days and those actual three steps are where the findings were located in this one and is where the analysis was primarily located, was primarily focused. So audit finding one, was that there were three cases where a senior official's travel expenses were approved by a subordinate employee rather than the employee supervisor. That is an improper review actually because, quite frankly, it puts the employee into a very awkward spot if there is an incorrect or an improper expense on that. And then also there were three statements of expenses that were submitted to the comptroller's office more than 15 days. I will say, though, that the actual late statements were all submitted within a month. So it wasn't a drastic, we're actually waiting for a year for the reimbursement to come through. Nothing like that. The risk there actually is that actually the expenditures may not be properly authorized or reviewed. This risk rating actually is a medium primarily driven by that first bullet point with the senior officials travel expenses. For our recommendations, that first bullet point can be summarized in one sentence. We would like actually the Milwaukee Water Works to stop the process of having senior officials travel expenses, be signed off by a support employee, and then management agencies should also implement a process to monitor the timely submission of the expense report. This is partially implemented, And the recommendations are partially implemented for one very simple reason. We are waiting for the senior official to complete travel so we can complete the verification and then we can flip that over to fully implement it. And I'd like to praise Water Works for the speed of the implementation of all of our recommendations. For finding two, we're dealing with the pro cards. There was a situation that we discovered where a Milwaukee Water Works employee who was issued a pro card was sharing the pro card with a subordinate employee for the purposes of buying premium fuel to fuel a city vehicle. There was also a situation where the department pro card manager ended up signing an affidavit that the cardholder completed a purchase when it wasn't actually that employee. It was actually that employee subordinate who completed that transaction. There were also six to seven transactions where items that can be purchased on cards in limited circumstances did not have the required supplemental documentation. A good example of this one would be pallets of water. In general circumstances, food and beverages cannot be purchased on the pro card. However, the bottles of water were actually being provided to daycare during the lead line replacement project. Therefore, it counts as city business and it can be purchased. It just needs some other supplemental documentation. And then there were five other transactions where someone bought some items that are not allowed to be bought on the pro card. Once again, the routine card sharing reduces card custody and transaction accountability and increases that risk of the unauthorized purchases. And then when the supplemental documentation is not maintained, it makes it harder to go back in and verify all of that. For our recommendations, our first recommendation is to actually develop a department-specific pro card procedure that covers those gray areas where there are situations that require some other supplemental documentation that may be in the gray areas, only certain circumstances, stuff like that. And then also emphasize that cards can only be used by the employee. and the employee should be trained on that. This recommendation was fully implemented. and this finding is actually closed out. One other point that also we would make is that our department has now done three of these audits. So we have discovered some themes with travel expenses and pro cards, four ways to improve it to citywide, any member was sent to DOA, and the purchasing of outlining our observations. These are observations, these are not formal audit findings, Because DOA and purchasing were not the exact subject of our audit. So we were not comfortable holding them to it, requesting responses, anything like that. With that, I would ask for any questions you may have.

All right. Thank you very much for that. So the one employee that signed an affidavit that they did something that they didn't do, was that employee... Disciplined?

So let me clarify. The situation with the affidavit, so with the pro cards, there are some very tight actual time frames on when that paperwork has to be submitted to the comptroller's office. You have to do that within 10 years. So it is perfectly fine actually within the actual city policy for a different employee to sign the affidavit if that employee is on vacation. For the other circumstances, I'm gonna turn that over to Terry for that response.

Well, I think it was somebody on vacation. We have to turn the pro card statement over rather quickly, and the assumption was that it was for a gas card, that the actual supervisor went out and got the gas for the car, but it wasn't. It was given to an employee, and we just didn't know that, and that whole process has changed since then.

Yeah, so the... The card was incorrectly given to a subordinate employee. The subordinate employee made the purchase.

Yes.

And then the employee to whom the pro card was issued signed an affidavit saying that they used the card.

No. The employee that had the card was on vacation. and the pro card manager at the time signed the affidavit in order to process the pro card record. It's unfortunate that it took that much time, but there was no receipt, so we needed an affidavit. They lost the receipt.

They lost the receipt.

Okay, any other questions from committee members?

Hearing none, Alderwoman Moore moves to place this item on file. Thank you very much. Thank you. Hearing no objections, so ordered. Moving on to item number nine, file 260681, communication from the Department of Public Works, Water Works, amending the positions ordinance to add position authority for positions to support water main replacement program and expanded use of GIS. Might have someone on the board for this.

Good afternoon, Jane Estill, Milwaukee Water Works, and I can speak to this issue or this file if necessary.

Thank you, Jane. Please proceed.

Oh, of course. So this request is to add two positions, one civil engineer three and a GIS analyst, and both would be to support our increased use of GIS and our mains design. As some of the committee members may recall, we have expanded our lead service line replacement program and we have had to I guess, reallocate some of our engineering staff to that effort. And that has come at the expense of our mains design group. And so the civil engineer three would restore some of the staffing in that area so that we can meet our 14 mile per year replacement requirement. And then certainly both The work in our main design area and in lead service lines requires an expanded use of our GIS software. And last year, we also made a change to move over to the utility network, and we've taken on internally a lot of the maintenance of the GIS system. And so a GIS analyst is necessary to make sure that we can keep up with that and support our GIS system. and I'm happy to answer any questions that you may have.

Thank you for that. So two new positions funded by tax levy or by the Department of Revenues?

This would be Department Revenue.

Right, thank you very much for that. The fiscal note's in the file. Any questions from committee members? All right, thank you. Hearing no discussion, Alderman Spiker moves to place this on file. Hearing no objections, so ordered. Thank you very much. Moving on, item 10, file 260528, communication from the Department of Administration Office of Innovation relating to the semiannual reporting of current activities and initiatives. Welcome, Innovation Director.

Good afternoon.

Glad you got back for the exciting part.

Mm-hmm. OK. Innovation, right? Everybody good? Not yet. OK. Almost good? Almost.

Madam Chair, really quick, how long do we have for this presentation?

This one? Yes. That was between 5 and 10 minutes, right? So you're feeling good about that?

I will try to keep it to 10 minutes by glossing over as much as I can here.

OK. OK. Because this is just for current. Current activities and initiatives.

Madam Chair, committee members, good afternoon, Jim Bohl, Innovation Office. This initial slide here, I'm just gonna gloss over. This provides a 50,000 foot overview of the number of engagements. As you know, there are two members on our team, myself and Srila Srinivasan, who is our fellow from Bloomberg Harvard. This provides an overview of kind of a outline of where the engagements fall. This is a granular look, a snapshot that was taken in late summer, kind of a breakdown of where the projects that were active are falling. In addition to a number of individual projects, there are a number of work groups that we are a part of, including one that I'm with Alderman Moore among the several. This provides a list of some of the successes that we achieved in the last six months or so. I will, for the interest of time, gloss over, allow you to take a look at that on your own, and if you have individual questions on any of these, I'm happy to take time to meet with you and discuss them to greater extent. This is a list of some of the active projects I want to provide you a brief overview on. Accessory dwelling units, actively we're working with the Hone Foundation to provide funding for an outside architect to provide a number of architectural renderings of accessory dwelling units that will be provided to the Department of Public Works and made accessible to any individual residents in the city of Milwaukee looking to to build a auxiliary dwelling unit, housing unit in the back of their homes. This is something that we have an agreement that's being finalized right now and we hope to be bringing to you here within about a month's time. I'm working also on a gateway signage program. This goes back to a program that was initiated in the mid 2000s through Spirit of Milwaukee. There are six sign locations across the city. These most recently were turned over to MMSD who is looking to relinquish this. We have worked with DPW to commence a deal with Potawatomi who will be taking over three of the locations. We're in active discussions with another organization in the 13th district about one of the other signs. This particular file with the changes that should be coming will be scheduled hopefully before the next council cycle and also I'll be able to go into more detail on that. The item on your right is a virtual assistant. We are looking to add a widget to the city's website. One of the things that we learned from some activities that the mayor's office conducted with residents, user groups, feedback on the website is that the city's website is not very functional, the search mechanism on that. And so we were able to secure at no cost to the city a $37,000 widget that will be coming on the website, kind of like Clippy, It will allow residents to meaningfully navigate to their very question, to the page that they want to find. We've done beta testing on that. We're ready to bring that forward. This particular mascot will also double as the voice mascot that we're already rolling out in our front desk system before the UCC and will be expanding here sometime here moving forward.

Is that a, that's a Cream City brick? That is a Cream City brick. Not a Cream City sponge?

And not a sponge and not a French toast stick or something else, if you want to call it that. And the name of it will be MIL, which stands for Milwaukee Information Locator.

Whose voice is doing all of the voiceovers? The voice is a standard. Executive David Crowley or Mayor Johnson?

Maybe so. Maybe so. If that helps us, if he's successful here in November. I wanted to also outline employee health clinics. We've been working with Molly King and the Benefits the health benefits side of DER to look to expand operations for city employees and their spouses who are uncovered under city's healthcare. As you know, we have a facility here, a health facility at the Zeidler building. We have another one in McKinley downtown and then we do fast care clinics. One in Greenfield and a number of them in the far reaching suburbs of other counties. We don't believe that that necessarily is viable for city employees and we've had discussions with the county We're hoping to actually land a couple of additional low cost locations that we will be able to bring into the fold to expand our low cost ability to provide additional services for city residents or for city employees and their spouses and family members that are covered. Under DEC we are looking at some opportunities particularly around dispatch services with a couple of other communities looking for some efforts to collaborate and save cost. On the issue of youth force, this is a program that is already underway in parts. The fire department, this is a program that provides pre-apprenticeship for MPS high school students in collaboration in part with MATC providing certification. It is an attempt to fill, difficult to fill jobs with high school students through junior and senior year pre-apprenticeship, paid pre-apprenticeships, that will encompass the school year 20 hours and the summer months. AC Parish and the fire department has done a couple of really robust programs with Pulaski through carpentry and vehicle service technician programs. There's an additional one that has been done with the forestry department for an arborist program. We're looking to expand some of the efforts in DPW to mirror some of the programming that the fire department does have and to add an additional position here in hopefully the near future around vehicle service technician as well as CDL equipment operation. We are also looking to take advantage of a second round of funding that is being provided by the state of Wisconsin through their innovation grant. We've done some outreach and we have, at least this time, what we hope in the second round is several potential robust applications. One that will be in DPW, another one that we're looking at in DER, the one in DPW would be for a potential contracted service for plowing of bicycle lanes in the cold weather months. In terms of the city and MSOE, we are now active in testing a project that would create a forestry maintenance tool that enables forestry to more succinctly determine trees based on a number of data points the species the age the failures to actually triage and know where to better actually do its preventative maintenance and trimmings to reduce kind of the catastrophic breaks We are also working on with a number of classes here on user experience improvements, including of the my Milwaukee home site that can be very wonky to operate, trying to find functional improvements to some of those. And we're hoping to do that. And right now we're in active discussions with the university to try to formalize a even broader arrangement to continue to expand touch-based operations on a number of technology features, as well as some future potential AI projects. Lastly, I wanted to go into a deep dive in particular around the front desk system, which I know that Alderman Spiker has received some updates on for the CIMC, but I don't think has been adequately explained to the council and wanted to take the opportunity to do that. Front desk is a omnichannel solution. It is much of what we already know is a voice virtual system that will front end the 286 city call system. It will additionally be able to have a chat and email component in the near future where any resident who, if they want to seek a service or answer a specific question, will be able to actually do that over the phone with the virtual agent fronting the call system or by text or email. the the system actually scrapes city web pages is able to handle answer a general question like when is my next schedule pick up day i missed leaving my card out and it will be able to interact with person be able to provide that answer without having to have that call before it into the call system as a so-called busy call The goal for our system in particular around the voice is 100% front end calls, zero initial wait. I will go into some data momentarily. You will see the wait times are something that actually is mind blowing and frankly is not becoming of our system and we think that this system will actually improve those operations. Currently all calls in the trial that we are doing before the city hall operation and the second shift portion of the UCC All requests for service, like I have to report a pothole, are getting forwarded to the actual agent. Any emergency call, any garbled calls are automatically reported, and any individual caller who calls into the 286 City system and immediately says, I'm hearing a virtual agent, I want to speak to a real person or an agent, is automatically forwarded, no questions asked. So what are we losing or gaining with this new system? This system, first and foremost, is not being introduced to replace staff, but it is meant to augment it. It is being established to improve the efficiency of our service, to alleviate call wait times and abandon calls, increase the capacity of the UCC and the City Hall operations staff to manage high volume call times, and to improve access to our non-English speakers and provide a service where, frankly, we are not not up to par. Case in point. when people call two eight six city uh... a lot of times you're thinking that all those calls are being handled by by the unified call center unified call center does have two shifts they operate from seven a m to in the morning to one a m the following day so overnight calls between one seven a m weekdays are handled by a single city hall operator the city hall operator also handles all calls made into the system over weekends from one a m on saturday morning until seven a m on sunday You have six or seven operators on normal shifts in the UCC and when you come to a Saturday, we've seen calls that have come in at the range of about 250 handled by one person who has a plethora of other duties. What does the data show around this? Last year, in a full year's time, there were 22,000 calls made to the call system when it was handled by a city hall operator. About 6,000 of those calls were abandoned by residents who simply were waiting way too long and just weren't feeling that they were getting through. um that is about one in four calls into the call center system during those calls of operations the average abandoned time was a little over one minute and individuals actually waited in various months on the call system 30 36 45 and up to 90 minutes to try to get their call through our ability to take off a large portion of the calls that are very rudimentary and can be handled actually frees up the time so the people are waiting and they're able to get through particularly when they have emergencies that they have to relay we ask about how does this work even with the data on the ucc and during its hours of operation last year there were over two hundred thousand calls made to two eight six city during the the unified call center hours sixteen percent of those calls went unanswered and were abandoned by the caller before they got through. The average abandonment time was at 2 minutes and 34 seconds, although we know that residents waited in various months for 38 minutes, 44 minutes, 45 minutes. One caller during the month of July during that major rainstorm waited online for four hours to have their call answered. is where this system works uh... we know that from the data two eight six city system actually does operate well unless and until it's under stress and we have a lot of incidents like snowstorms flash flooding even the most recent canadian air quality time in which sanitation shut off its services and closed for a day or so its operations at the self-help center inundated the system. So when you were calling in for a real emergency, like if you had a water main square that was actually sunken in the road and you are dealing with literally dozens upon dozens of people in the queue asking for when their garbage is next gonna be picked up, you're not able to relay that emergency that we need to get to sooner This system will help to alleviate that. This system also will be able to assist with the challenging call situation with the city hall operator where one person is handling those abundant weekend calls. So one other area where we think that this is a great equalizer is around the services that are provided by this system as a multilingual service. This system actually operates in more than 75 languages. It will be able to operate by phone system, by text, and by email. What we do know from our call center data is even though based on the Federal Census Bureau data, Almost 23% of Milwaukee residents, about 125,000 are actually people who speak a language other than English at home. That is absolutely substantial. 50,000 Milwaukeeans are classified as individuals who speak English less than very well. We know that a large sizable portion of these are Spanish speakers, but there still are, according to even federal data, 35 to 50,000 Milwaukee residents who speak a foreign language other than Spanish. We know from the call center data that only about two to three percent of calls that are coming in are actually people who speak a foreign language. We know that residents who have to report potholes and lights out in broken garbage cans deserve to have the ability to make that contact to the city and be able to have that responded to them. Currently, the system is failing them, and we believe that this will be a great equalizer in its ability to actually be able to provide those services in a multilingual way to all of our residents, whether they speak English well or not. uh... i want to show you very briefly have just a couple more slides this is this is uh... a scenario of what we see on a daily basis right now we currently review all of the calls that are being tried through our trial system the system will actually do a breakdown where it will actually break it by content area by priority this call is actually one of the one of the key examples of where this is the system works well We know that a couple weeks ago on the near south side there was an underground cable fire that actually knocked out a large area of street lights for residents and it was going to be a substantial amount of time for us to actually get that fixed. This particular caller called in giving an address saying there's an area wide outage. This system we were able to program so that it actually provided data and information as to what the reason was and could provide a time as to when that would be fixed. Like all other calls the system additionally did ask, I can connect you to a human agent if you want more precise information. They did request that and it was transferred. This however does show the capability of our system and the ability actually to triage some of those calls that might go otherwise. Um, I'm down to my last two slides and they'll be very brief.

Madam, because you are at about 17 minutes.

Um, this particular slide actually shows a Sunday two weeks ago before the, the call center on the volume of calls that went before the city hall operator. There was 149 in that day. The system itself was able to take into triage and answer sufficiently 40 of those calls, reducing the call volume time by about 27%. as you'll see from this data at the eight a at the eight p m time however that's one of the areas where we saw a tremendous amount of drop off that's because during that hour you're seeing a lot of calls come in from really true areas number one is streetlights that are out and number two it's going to be individuals requesting overnight parking service One of the last areas where we are hoping to roll in, and I said that currently right now, any and all calls that are made for a service request are being passed through to a live agent to triage. We have the ability, and this last data is kind of a snapshot of of a disproportionate share of the calls that went in in the months of summer here were for area dark reportage, and that's streetlights that are out. As you are aware, with a lot of the series circuitry that we have in the city of Milwaukee, when you have one streetlight out, you have areas that go out, and that could be a four by five block area where all the lights are gonna be out for several days. We also know that based on this, what we see when you have 300 people live in an area where there's an area outage, we have dozens of calls that are coming in for the same system of people reporting the light outage. And what that does is that ties in the system. We actually have the ability to have this system uh... integrate into our seller system there dpw work orders it has the ability to to make a request of a person ask them if it's an individual light or fits the lot a large area outage is able to tie to the system to actually integrate where the series circuitry is it will actually provide a ticket into electrical services to get a repair order in play, and provide the resident with a ticket number for the repair. If subsequent callers call in that same night to report the same area outage, it has the ability to indicate that you are the fifth caller in this area. There is a ticketing in the system already, and we won't have to have that pass through to a person. So when there is a more urgent call where we're getting the dozens of calls night after night in the same area, that may take multiple days to do. We are looking at two other areas besides the lighting. We're looking for reporting of overnight parking violations and replacement carts as the two other areas of this system that we are currently trying that would be added as a component for ticketing. So far, the initial trial before we've gone live has actually looked very successful. this this in many ways should be a game changer to equalizing the services and actually providing true help for residents when they do call in not having to have them abandon it and also providing access to residents in city walkie who may not be keen language speakers of the english language uh... this is what we're hoping uh... to move forward on uh... right now we are We're doing a second shift of the UCC and during all City Hall operations in the pilot. Within a couple of weeks, we want to roll over to the entire UCC, and we're hoping with some additional testing to add these additional components. But with that, Madam Chair, I will take questions that you may have of this and or any of the other things, and I do thank you for your time here today.

Oh, thank you very much. I know that was a lot of ground to cover. How do these innovative projects come to your desk? Are you deciding them? Are department heads coming to you? I know you've asked council members. Just quickly summarize that process. All of the above.

Oh, okay. There are some that actually that will that will actually come from department members There are some that will be initiated by the mayor's office There are sums that that that naturally will fall into sight of kind of our ballywig area of trying to look at Intergovernmental and so it just automatically passes through the grapevine It's any and all those we've even had from time to time a resident who will reach out and even suggest an idea and if that's something that we vet properly it could be added into the the portfolio of things that we may consider taking on

Okay. Manager? Yes. Alderman Cox.

For just a couple of things. For any technology that you introduce similar to what you were talking about for the call center, I would recommend for anything that's public facing that there be some level of once introduced that it be introduced to the public too. uh... just because of the change yes uh... so do you already have any plans on once the system is totally integrated with the virtual any public uh... anyway so that the public yes uh... and in fact we we will attempt when we do make it through to this next phase uh... to actually have a full public rollout one of the benefits even on the the the multi-language feature is

Residents in our community have to know and understand that they have the ability to call into the system. If I speak Russian and very broken English where I can't really get over the concern that I want to relay, that I actually can call the system and start speaking in Russian and that system would be able to answer my call on when my garbage next collection day is because I forgot to roll up my cart on that individual day.

As you think about the future for, into the distant future for the virtual thing, do you foresee the elimination of any of the positions for the call takers within that department?

That is not something that we have envisioned. We've looked at this as a current system of augmenting the service. Clearly we know with the volume of calls, that we're just missing calls and that the level of urgency. So our system is really set up as a compliment. Believe it or not, this is a very low cost. We were able to get up front with a veteran company that was looking to break into a different area. And so being on the front end, We have a very low cost trial, $10,000 for a six month trial. If we go and opt to renew this in the first year, it'll be $35,000. The year after it lowers to $30,000 and it is in that price moving forward. And so this is a very low cost option that has the ability for us even to expand our reaches into text and other areas to provide just a plethora of information and and additional services to our residents and so yes our goal is is absolutely to to make this very publicly known we want to roll out our mascot with this and even show some of the additional changes that should be forthcoming with some upgrades to the city's website as well with our mascot mill

And lastly, for any technology, new technology that we use, I also would expect some reporting back to us about how the integration is going annually. And I just say that because every time we get some new software, we get a whole presentation how great it is, and then we hear from employees or or others about all the challenges um that happen and sometimes it comes out of committee and sometimes it doesn't and so i just want to make sure that um as you do the virtual thing and i know it'll be other technology stuff that comes giving your position that there be just a regular um inclusion in your reports about where we're at with it and what the challenges may be and what we're doing to address those challenges yes thank you all for for that um you

We've done a little bit more drill down in the CIMC, but I realize that we're providing a lot to Alderman Spiker. This is a big project, and even though this is a collaboration with ITMD, I don't think that you've gotten anything more than a cursory level, so I really wanted to do the drill down so that we were providing you the data and a little bit more in-depth, and certainly I will make every effort to try to do that in my individual reports. in addition to constant outreach to you all as well in the interim to ensure that you are not receiving it after the fact and that you're aware of it as it's moving forward and decisions are being made. Thank you.

Any other questions on the innovation report, Madam Chair?

Yes, I'll remember. Just really briefly, thank you so much, Jim, for this sort of... presentation for the work that you've been working on. I love the, so a lot of folks call in and whether people are holding or those missed calls, I like that we're finding ways to make sure that we're capturing, supporting our constituents and I love the language capability. Really quick, in reference to, and this is probably something that you may have to provide us, in reference to, I would love to know the data, so what the AI is, those, particular things that they're supporting, right? Putting that in a seller or whatever. I would love to know the follow up on that, like of those, right? So if, you know, 150 are submitted for that week or whatever it is that day, how much of those are actually closed out or attributed to. So I would love to sort of know that sort of back end, because as we're now picking up volume, right, because we're answering more calls, et cetera, et cetera, how do we move that from completion, from capturing it to completion? So I would be interested in

We will be looking at a number of elements with data. I mean, one of the things that I provided you was the number of drop calls. I mean, one of our areas is to look at, are we reducing that? Because that's part of the central goal on that. Part of the thing moving forward, we'll be looking at versus the level of data that we're seeing right now with individuals who are speaking a language other than English when they're calling in to the 286 system, 286 city system, which does have the capability with some operators that are multilingual. We don't know that that's known, but we want to make certain that we're capturing all residents and we have ample data and that people feel confident that they can call in and receive vital questions on their city government and report things, whether they feel that their English language is strong enough or not. And so we'll be looking at data at all those points. I will talk to David and we'll certainly, as we continue to roll this out,

look for an opportunity even potentially with with he and maybe reach out to do a communication file and provide some update including those those key points thank you any other questions on innovation i don't know if you feel comfortable but are there any of these that are like likely to be featured in this new budget that we should be looking at closer or like even just the bucket not the project Seems like you're really focused on the call center stuff.

That's a large part of it. There are a couple of areas where we're in negotiations around some intergovernmental collaborations and depending on how things go in the next month or so, we may envision that being rolled in and considered into the next budget year. That may be something that comes as like a late addition ask or potential amendment if those things go through. I'm happy to have conversation with you off time if you want a little bit more detail here at this point because of some sensitivity and some of the negotiations. I don't want to kind of expand out, but there is some potential with that, yes.

Yeah, time is tight because we get it on Tuesday, then we have just a couple weeks, so I kind of got the feeling, but If that was the case, we would, you know, we'd want to be briefed on it and get more information. But this is more of a, you know, your semi-annual report here. So any other questions or comments by members? Alderman Spiker is on virtually just so we know for the record. Madam Chair. Oh, okay. Alderman Spiker.

Yeah, just very briefly. So I know it was on one of the slides. You didn't go into it, but Gov AI has been rolling out. What have you seen? What are the plans for the future about integrating that into how we do business at the city? I know we've discussed it at CIMC, but there hasn't been a discussion at finance about it. So could you just give us the briefest of updates there, and is it you and David Henke working on that together, or who's leading the charge there?

It is a collaborative effort between our office and ITMD with David and his team alderman, and thank you for that question. As you know, GovAI is now the city's enterprise-wide system. It's available on all city desktops of all city employees. A couple of things that we've done is we are office orchestrated with the Gov AI through a series of trainings. Our attempt is to reach bottom up and top down. We also initiated a consultant and received a pro bono service of a training that was provided to executive and administrative and higher management level staff. We are looking and we are starting initially some outreach with some departments and gathering some ideas around AI agents and AI assistance that we may be able to facilitate. Part of that collaboration is finding the time with an ITMD and so we are looking for avenues including outreach with the aforementioned MSOE. to look at collaborations where we actually may bring on students that could assist us with facilitating some of the AI agents and assistants that would be helpful to various departments in kind of creating a rudimentary systemic way of approaching some of their manual type of duties. And so we're looking at all of those opportunities. And in addition to that, Gov AI is additionally the entity that we're looking to provide the AI system on the city's website, the assistance widget. And so that's another avenue of our outreach. And right now, we're just finalizing the beta testing, and we're hoping that that will be rolled out sometime very, very soon.

And do you have any plan or idea of how you're going to gauge the uptake of and departmental. Functions, whether it's being used, who's using it, that sort of thing is there going to be any sort of attempt at having the departments. figure out how widely it's being used in there and no judgment being passed. Just want to know is the uptake succeeding or are more efforts. It's fine to give people the training, but it's good to know whether they're actually finding a use for it.

We do have a folio where individual usage can be monitored. I have not looked at that. in very recently, in like the last month or so, we had seen a steady increase as we continue to see more and more case levels. And I think that even at the CIMC, Alderman, as you are aware, We heard from Commissioner Arroyavega who described even like some of the anecdotal evidence that she was even getting in her departments where people were able to spread through word of mouth some of the successes that they've been able to administer through their usage of that and that they've actually even noticed that particular uptick. That is something that as we continue to roll out some additional levels of training we will have to take a look at. It's just at this point here, With the folio of 40 or so projects, it's something that I haven't drilled down on, but it certainly is important enough for us from an efficiency and productivity standpoint that we want to make certain that the usage is actually taking root. And as you know, it provides a greater return on our investment with that product. So we'll certainly be taking steps in that regard.

And the last comment is, yeah, it's fine also for us at CIMC to do that outreach and make sure that we're, the commissioner, Aurora Vega, Uh, volunteered it, but we're looking to to have the department heads more systematically look at how their employees are using this. And I've heard things like the AI can be a bit clunky as compared to plot or some other things. But, of course, the enterprise aspect, the security aspect I know is. Is part of the trade off there, but, um. yeah there what i'd like to know is if there isn't uptake if it's because people are just cool to ai uses in general or is it something specific to gov ai so that's something i want to make sure we keep an eye on the one thing alderman

in that regard that I'm hoping to change. I know that one of the initial trainings were made here in spring and early summer. And that information was shared with cabinet members and asked them to filter it down to the departments. When we did see the amount of employees that were on those early trainings, I did note that there were a couple departments that were missing. That was, in my view, problematic. With the additional trainings that we're hoping to start in October and November with GovAI, we hope to utilize the eNotify system to employees so that we're actually spreading the word. and that we have a greater participation rate because when we know that familiarity is actually going to breed more comfortability with use and that's where we're gonna see more of the benefits. So we'll make those added efforts to try to expand out the outreach.

Okay, we can conduct the rest of this offline and through CIMC. Thank you, Madam Chair.

Thank you.

Okay, great. This is item 10, and Alderman Cox moves to place it on file. Any discussion of placing it on file? Any objections? Hearing none, so ordered. Thank you so much for this report. Thank you so much. Appreciate your work, thank you. Item 11, 260653, substitute resolution relating to increasing the 2026 tax incremental borrowing authority. We're joined from the budget office. Mason, okay, great. Good afternoon.

Good afternoon, Chair, members of the committee, Mason Levy, City of Milwaukee Budget Office. This file requests an increase to the 2026 Tax Incremental Borrowing Authority. These funds are used for public projects such as street paving and pedestrian and traffic safety items. 2026 Authority was originally budgeted at $25 million. We're requesting an increase of 40 million to 65 million for 2026. If the funds are borrowed they will go over they will count towards our overall debt obligations, but they do not count towards our overall internal limit administration of 116 million dollar in borrowing so And this is for street paving. Yeah for public projects in within a half mile of TIDs Okay, I know those already decided upon for future I believe they are I think DCD is here they could give you a little bit more detail on it and

I don't want to go into that level of where they are. I was just kind of wondering where we are in the timing. Yes. Is this for you to do future work or current work?

Both. Dave Pete, Budget Manager for the Department of City Development. Basically, this is where all the TID plan amendments that we do and all that stuff, like when we approve projects, fits into the budget process. So we need to have budget authority to basically take money from that when we do TID amendments for different projects like street paving or infrastructure improvements, all that kind of fun stuff. One of the biggest ones we just did lately would have been like Reed Street Yards, which was like, I forget, like 15, 17 million, something like that. I mean, we did one over in the PAPs that was like in the 20 million or something like that. So I mean, a couple of these large ones have basically eaten up all of our budget authority. And we've got a bunch of different other projects that we still have in the pipeline that we want to get done starting this year.

Within a mile of the original Tiffin site.

Half mile, one half mile.

Questions or comments on item 11 then? Anything, Alderman Bergalas?

Thank you, Madam Chair. So what is the impact to tax levy? This is all going to be paid for by,

So basically there's no impact on the tax levy. These are all paid for by the tax incremental districts that are currently active and open. These are all pretty safe ones because they're all established TIDs that are producing annual increment. That's what we use as a basis on what would be paid off. So it is not, it's basically separate from our just general levy.

But it's part of our $116 million or $120 million. No, it's not. It's not.

Part of our state borrowing limit cap, but not part of our levy-supported general obligation borrowing. All right, so it's TID district-supported borrowing, not levy-supported borrowing.

It is a revenue source.

And then a 40% increase is pretty substantial. What happened? How did we underestimate by so much?

So there's been a general policy change to try to maximize what we can use these TIDs for. Like years ago they used to have one where it was like one year's of increment for like infrastructure projects around a TID. Now we're just trying to maximize what we can get out of these things.

And then what's the forecast for next year?

have to be higher next year too we'll have more details for you on that on tuesday so that'll be part of the budget process yes all right thank you if we step back as a city as as a whole would this ever propel propel excuse me street repairs and improvements near the half mile of a tid ahead of other ones that had been waiting throughout the city

Basically, hopefully it's in tandem and hopefully it's supplementing just general city projects. So then we won't have to use general tax levy to pay for any of these projects. We can hopefully use it in other areas of the city.

If we didn't extend TIDs, then we'd have that general purpose tax levy.

Could you say that again? I'll take that back. So basically this does not affect the levy that we get in the door.

Right. Well let's separate those questions because I see how they're related but you saw where I was going and I'm actually relieved to hear your response so thank you for that because I was just thinking if you're looking at all the dots and there's a long outstanding deferred maintenance and then because you're within a half mile of a TID you get to jump the line which these people you're looking at here have to talk about that line very often in difficult phone calls and emails right? That would seem somewhat unjust but what you're saying is the movement of the money allows for an overall increase in the authority to do this work and hopefully help the system. So that's what I'm hearing.

Yeah, because basically this work is going to have to probably be done eventually anyway. So that way at least this, we don't have to use the actual general levy for it.

Yeah, if these projects weren't being paid for through this process, they would be on the list to be borrowed for in general obligation borrowing through our cap of $116 million. So it would just be that many more projects that would be in the mix.

True, but we often look at the order of that list, and so do our constituents, and that matters where you are on the list.

But it makes the line shorter.

Right, that's where I'm, we're like all, you know, been here for hours, but that was what I was trying to articulate, but I just had to ask it because it was kind of burning inside of me, so.

And DPW can talk to you about the way they, and I think they probably have, about the way they use their levy projects combined with this, they're aware of both and they try to make it as equitable as possible.

Well, you know, I'm not going to go into my, the, the, pool of water that i dipped my toe into a second ago but you know we do have to acknowledge that there are parts of the city that have more of these districts and others that have none right correct

Yeah, I mean, someone could be driving on a street feeling that it's in terrible shape, thinking, oh man, I might be at the top of the bad, I'm the worst, so I've been at the top of the list. And then I was just wondering, does this, is that list equitable? So like, then is it a half mile of a tid in the same spot as that other spot is on the list? If you don't have the answer, you can always look at it, but you can see how that would be kind of something to question.

The problem is we're kind of limited on what we can do with TID tax rental districts. There needs to be the money and they have to have one there in order for us to do it. It's gotta be within half a mile. We can't just go wherever we want with this stuff. So we're basically using it as a tool to maximize what we can get out of it.

And I get your point that it's lightening the load and the list. It's just like, if it's lightening the bottom of, if it's light, you know, making more lighter, the bottom of the list, it seems, you know, if there, I get that everything has to be repaired at some point, but, um, I'll, I'll work on this question. Maybe I'm the only one thinking about this. Um, but the larger issue is that the list is way too long and there's not enough funding. Right. So like, let's just be honest there, but, um, okay. Anything else? Sorry to take people down that, but, um, Item 11, adoption is before us. Moved by Alderman Spiker on 11. Any questions or comments on adoption? Any objections? Hearing none, so ordered. Thank you. I'll follow up a little bit more with you, but I appreciate it.

Thank you.

Thank you. Item 12, 260672. Resolution relating to the expenditure of funds to be reimbursed by greater than anticipated revenue. This is the special purpose account, the Firefighters Relief Fund, and Comptroller Christensen was going to speak on this matter. Oh, I'm sorry, you're here. Is your office speaking on item 12, or did you want to do that, Budget Director?

I had various notes here, so. Did you want to handle it, Charlie? I'm not prepared to. Okay. Okay. This is, and I actually don't have the details in front of me. I have vague memories of this. No, it's okay. It relates to anticipated reimbursement of the fireman's relief fund, which there's revenues that come in, and it happens every year.

Okay, and it was greater than anticipated, so generally good news. Any questions on item 12? Adoption is moved by Alderman Bergelis. Any objections? Hearing none, so ordered. We'll now move to item 13. We are getting a little long here, so we will begin looking to see if anything can be held over and then ask everyone to be incredibly short in the remaining items. So item 13, 260538, communication from the Department of Administration, Budget and Management Analysis Division regarding vacancy requests, fund transfers, and equipment requests. So I will go over this. Is there anything that could be helpful? I'll just take a peek. Okay. Property tax levy supported positions. So we have the assessor's office, property assessment technician three, per always call out if you have an issue and want to discuss it. City attorney paralegal, common council city clerk, legislative and fiscal, legislative and fiscal services, executive administrative assistant, and public information manager. Comptroller, accounting program assistant two. Election Commission, Early Voting Coordinator. Department of Employee Relations, Human Resources Assistant, Administrative Assistant II, Human Resources Representative. Health Department, Public Health Nurse III, Medical Assistant. Library, Human Resources Assistant, Building Services Supervisor II, Library Services Manager, Library Security Guard. Department of Neighborhood Services, Building Construction Inspector 6, Customer Service Representative 2, Office Assistant 3, Residential Code Enforcement Inspector 4. Police Department, Custodial Worker 1, Police Service Special Investigator, Police District Administrative Assistant Painter 4. Department of Public Works Administrative Division, Accounting Assistant 2, Payroll Assistant 3. Department of Public Works Infrastructure Division, Electrical Services Manager, Civil Engineer II, CAD and GIS Technician II. Department of Public Works Operations Division, Sanitation Supervisor, Sanitation Supervisor Vehicle Services Technician IV, Drop-Off Center Supervisor, Fleet Operation and Training Supervisor, Sanitation Inspector II, Program Assistant II, Communications Assistant IV, Office Assistant IV, Driver Training Instructor, Urban Forestry Technician. Any questions on property tax levy supported positions? We'll now move on the non-property tax levy supported positions. Employees, Retirement System, Pension Accounting Manager, ERS, Chief Technology Officer. Department of Public Works, Transportation, Parking Enforcement Supervisor, Communications Assistant Lead. Department of Public Works, Water Works, Accounting Assistant III, Water Repair Crew Leader, Water Distribution Investigator, Water Plant Maintenance Manager, Water Plant and Systems Manager, Water Repair Crew Leader, Public Works Dispatcher II, Water Financial Manager, Water Accounting Manager. Any questions on the non-property tax levy supported positions? We have two fund transfers. Department of Emergency Communications, $300,000 for the final cost of an upgraded 911 phone system was greater than anticipated and the funds are available to cover due to position vacancies. Health Department, $75,000 replacing and equipping a weights, measures, and gas pump certification vehicle. Department carried over funds to operating for this purpose. Any outstanding questions or comments on property tax levy supported positions, non-property tax levy supported positions, or fund transfers? And that's item 13. Hearing none, Alderwoman Amora moves approval of 13. Any objections?

So ordered.

Okay, great. All right. Okay. Number 14, 260-539. Communication from the Department of Administration informing the Finance and Personnel Committee of waivers granted for certain single or sole source contracts or contract amendments. And we have our purchasing department here.

Good afternoon. Good afternoon, committee. I'm Delisha Moore, Procurement Manager for the City of Milwaukee Purchasing Division, presenting on behalf of City Purchasing Director Rhonda Kelsey. There are six, I'm sorry, there are eight contracts to this file. The first contract on the list, we are executing two amendments for. The first one is with the DOA, ITMD, and Avaya LLC, contract number E15412. This contract is for Avaya system maintenance and annual license renewal. This is the third amendment. which will increase the current contract value of $3,073,085.72 by $50,767.50 for a total contract value of $3,123,853.22. This amendment will also extend the contract term from July 1st, 2026 through June 30th, 2029 to cover the cost of 50 additional subscriptions. We are also executing amendment number four to this same contract and amendment number four will increase the contract total from 3,000, I'm sorry, $3,123,853 in 2020 by $159,659.28 for a total contract value of $3,283,512.50. And this increase is to cover the cost of a three year subscription renewal, allowing continued operation of city and public safety phone systems. The next contract on the list is with DOA ITMD and Zoho Corporation, contract number E18809. This contract is for managed engine software subscription, annual maintenance and support. This is the second amendment to this contract. This amendment will increase the current contract value of $124,442.50 by $37,800 for a total contract value of $162,242. and 50 cents and it will also extend the term for one year from March 29th, 2026 through March 28th of 2027. The next contract on the list is with DPW Water and Systems and Software, contract number E18077. This contract is for InQuesta 6R Customer Information System Upgrade Support and Maintenance This is the second amendment to this contract. This amendment will increase the current contract total of $5,054,600 by $951,373.33 for a total contract value of $6,005,973. and 33 cents. This contract will, I'm sorry, this amendment will also extend the contract term for one year from January 1st, 2026 through December 31st of 2026 to continue using and supporting the software, ensuring the city is keeping up with best practices related to utility, customer services, and billing technology. The next contract is on the list is with DPW Water and Mars Company, contract number E183. This contract is for hardware and software maintenance of water meter test bench system. This is the first amendment to this contract. This amendment will increase the current contract value of $1,128,882 by $245,755 for a total contract term of $1,374,637 to provide for maintenance and certification of the water meter services meter test bench required by the Public Service Commission to validate test results of water meters as operating within required limits. This contract currently has an expiration date of April 15th. The next contract on the list is.

Madam Chair.

Alderman Moore. I'm so sorry, please forgive me.

The example of the contract for water, the one that has, and this is just a technical question, as we're renewing contracts, vendors typically allow us to continue services until a contract is renewed. because I'm just looking at the 20, you know, this contract goes until the end of 2026, but obviously they're providing services, so typically that's sort of the, you know, that's how they typically do things as far as our vendors. Do you get what I'm saying, Ms. Rhonda?

I'm sorry. Good afternoon. I'm so sorry. Rhonda Kelsey, City Purchasing Director. For a lot of IT contracts that applies, but not necessarily other types of contracts that we execute.

So IT is, you know.

Is a different animal. Oftentimes we're paying, frankly, in advance for the following year for IT software services. Mm-hmm. So they're a little unique in that way. Got it. Thank you. Sorry about that.

Thank you so much. Okay, the next contract on the list is with the Health Department and Life Technologies Corporation. Contract number E-17074. This contract is for preventative maintenance for laboratory equipment. This is the ninth amendment to this contract. This amendment will increase the current contract value of $656,250.90 by 50%. for a total contract value of $706,250.90 to provide preventive maintenance coverage for six studio instrument for an additional three years. This contract is currently set to expire December 31st of 2029. The next contract on the list is with the Fire Department and Interstate Power Systems, contract E20469. This contract is for engine and transmission repair services and OEM parts. This is the third amendment to this contract. This amendment will increase the current contract value of $475,000 by $100,000 for a new contract value of $575,000. to cover additional OEM parts purchases and emergency fire apparatus repairs, and this contract is currently set to expire July 29th of 2027. The next contract on the list is with the Police Department and Belanger Corporation, Incorporated. Contract number E21425, this contract is to replace steam station for District 1. This is the first amendment to this contract. This amendment will increase the current contract value of $39,996 by $47,000 for a total contract value of $86,996 to replace additional required items found in addition to the original scope of work. This contract is currently set to expire December 31st, 2026. And the last contract in this file is with the police department and petroleum Equipment Incorporated, contract number E22087. This is a new contract for fuel pump repair at Police District Number 7. This contract value is $72,784. The contract term is from September September 1st, 2026 through December 31st, 2027. And this contract is to address necessary repairs to the leaking fuel pump meeting the Department of National Resources deadlines. And that concludes. Good job.

That was a lot. Any other questions on any of those? I'm glad that you kind of flagged it while we were going because it was a big one. Any questions by committee members? We're on 14. No? Okay, Alderwoman Coggs moves to place it on file. Any discussion? Any objections? Hearing none, so ordered. I'm just making notice now that item 16 will be held at the call of the chair for next time. Okay, so 16-260-479, communication from the Department of Administration Purchasing Division relating to the report of Local Business Enterprise Bid Incentive Program held at the call of the chair by Alderman Bergalas. and hearing no objections to order, so we're on 15. 260515, substitute resolution establishing a contribution account for the acceptance of funds from BMO Harris Bank to support the annual city vendor fair.

Good afternoon.

Hello.

Thank you committee members Rhonda Kelsey city purchasing director. The file is pretty straightforward We're setting up the formal contribution account to receive a donation from BMO Harris has been a partner with us for the annual City Vendor Fair We actually have a pending contribution amount of $1,500 that we'd like to move forward with for this year that we Already have what we have to set up the account, but we'd like to establish this larger amount for future and greater donations in Future years for future years.

Okay. Yeah, it does seem very straightforward Okay Okay, all the Roman Cox I know and from a few months back we passed a

a digital contribution account for the mayor's events, similar to the council's one for Give M.K. And we set up our whole separate thing for that. Could this not have gone through that?

I think it makes sense to have it managed in DOA purchasing since it's specific to an event that we manage, that we plan for, that we hold every year. So it is specific to DOA purchasing operations. So for that reason, I think it makes sense for that account to be set up in DOA purchasing specifically. Okay.

Okay. Any other questions on that? Alderman Bergellis has moved adoption on 15. Any objections? Hearing none, so ordered. 16 was held for the next cycle. Thank you for that. We're now on 17-260719, communication from the Department of Employee Relations amending the salary ordinance relating to the recruitment rate for the title of Water Distribution Investigator Helper 1 in the Department of Public Works, Water Works. Department of Employee Relations, Ms. Knickerbocker, anything that we need to know about that?

This is just correcting a footnote amount.

Correcting a footnote on 17 Alderwoman Moore moves placed on file. Questions or comments on that? And objections? Hearing none, so ordered. 18260724, communication from the Department of Employee Relations amending the salary ordinance relating to the recruitment rate for the title of temporary winter relief driver worker in the Department of Public Works Operation Division. Ms. Knickerbocker?

Yes, this does change the recruitment rate for this temporary title and in part because of the number of vacancies that the Department of Public Works has and being prepared for the upcoming GIC snow season.

Questions or comments on 18 regarding this temporary winter relief driver worker? Seeing and hearing none, Alderman Coggs moves to place on file 18. Any objections? Hearing none, so ordered. 19.260542, communication from the Department of Employee Relations, amending the salary and positions ordinance relating to clerical or administrative corrections.

and that is what these are.

Yes, that's just the usual. Place on file is moved by Alderwoman Moore. Discussions or objections on 19? Hearing none, so ordered. We're now on 20 and let's flag this because it relates to the earlier business we had that was hours ago. Item 20, 260544, an ordinance to further amend the 2026 rates of pay of offices and positions in the city service. Okay, we have a substitute. So let's just make sure we walk through this carefully. Correct me, I'm just gonna read what I had from the city clerk here. That common council file number 260544 is a substitute ordinance to further amend the 2026 rates of pays of offices and positions in the city service. This ordinance includes the pay increases for the mayor, council, and other city elected officials as well as other pay adjustments previously discussed. We do have a substitute that implements these annual raises. Alderwoman Moore would move that the substitute be before us. And hearing no objection, so ordered. The substitute's before us. Now we will discuss it. So, can you help us go through two things? The substitute, oh Kathy's here. The substitute I think was to correct to make it 2-2-2-2, correct?

Kathy, can you help me out? Yes, good afternoon. Kathy Brangos, Legislative Reference Bureau. The changes to this ordinance can be found in Part 8. And basically what they did was they changed the 8% that was originally proposed for the other elected officials to 2%. So all of the other elected officials will get 2% for each year of the 2028 to 2032 term. And it also added the city attorney as a title that is eligible for those raises.

Okay, so let's pause. If you all recall, originally I had eight, two, two, two, as we had talked about, but because everyone but Common Council and Mayor can get those increases that the city employees got now in this term, they would not need the match-up or catch-up of eight, so it would be two, two, two, two. So, my only other question is, Where is the item? Is it 21 for those that objected earlier? Are they objecting in 21 or in 20? Just 20. In 20? Okay. Because I just want to make sure that those who objected earlier and this carries out that work, that they can still place that. So first let's do, the substitute is now before us. That is the only thing that's before us. And it implements what we had discussed in earlier files. But as stated by Kathy, the substitute changes the eight in the future term to a two because those other electeds that are stipulated in item eight, ironically, will be getting... They're dealt with in a different spot of the salary ordinance and they'll be getting those general city employee mirroring matching increases now. So they would not need that 8% catch up as I'm referring to it. Sorry for being excruciatingly detailed, but I wanna be transparent for anybody that's listening. Jim, do we handle that okay? Okay. All right, so that substitute is before us. Passage is moved by Alderwoman Coggs. Any objections and on 20? Bergelis, right?

Object.

Okay, and then Spiker, did you wish to object to 20?

Yeah, the relevant part of it.

Okay.

For both this and the non-council ones, the ones affecting the treasurer controller, that too.

Okay. Noting previous objections.

Right. Well, because the package includes more than just the electives. Right. Yeah. So I just want to restate it back. Bergelis and Spiker are objecting to part eight, which deals with basically electives. Right. Okay. So passage is before us. Any other discussion on passage? The objections are noticed. Any additional objections? Hearing none, so ordered. So item 20 is approved. We're now on item 21, 260545, an ordinance to further amend the 2026 offices and positions in the city service that reflects the action we've taken in early files not the things we just talked about previously. Passage is moved by Alderman Bergelis. Any objections to passage? Hearing none, so ordered. Item 22, 260543, substitute resolution authorizing attendance at conventions, seminars, and other travel. Are there any questions? Seeing and hearing none, all the room and cogs moves adoption of 22. Any objections to adoption? Hearing none, item 22 is approved and that concludes our business today. And at 1.09, this meeting of finance and personnel is adjourned.