Revenue Rank: 30
Form of Government: Mayor-Council
Mayor: John Norquist (took office 1988)
City Council: 17 members, elected by district
FINANCIAL MANAGEMENT: B+
Milwaukee produces good revenue and expenditure forecasts, and does an excellent job at gauging the future fiscal impact of its financial decisions. Solid control is maintained over current spending.
One particular bright spot is outsourcing and procurement. Departments are trained in contract management, and the majority of the contracts with vendors have performance criteria. A standardized “procurement card” has essentially eliminated the paperwork process for smaller purchases.
Investment responsibility in Milwaukee has mostly been in the hands of one individual in the treasurer’s office. “There are a lot of checks and balances on him, but he has a lot of flexibility,” says Gary Langhoff, the acting budget director. “We have a lot of faith in the person who is making investments. But if he retires, we’re concerned.”
Milwaukee has an unreserved, undedicated balance called a Tax Stabilization Fund, put in place to smooth over unexpected shortfalls in property taxes. This balance has declined, however, from 11 percent in 1995 to 10.3 percent in 1996, 7.6 percent in 1997 and 6 percent in 1998. This could be a sign of future trouble. The issue has caught the attention of Moody’s Investors Service and Standard & Poor’s, which are watching carefully. Concerns that the rating agencies have had about the city’s pension plans seem headed for resolution as the city moved toward a settlement with its unions.
HUMAN RESOURCES: C+
Milwaukee’s labor relations are among the most contentious in any large American city. Even surveying the work force is a hassle for city officials. “The unions don’t like us surveying their employees,” says Jeffrey Hansen, director of employee relations.
The state doesn’t make things any easier. By Wisconsin rules, Milwaukee managers must choose from a list of three candidates for most positions. Among uniformed employees, there is a list of one (which is civil service talk for no choice at all).
But for all the problems, Milwaukee does display some good human resources management techniques. Training is strong here, including managerial training. While unions have squelched formal performance appraisal, the city has developed a whole host of means for recognizing superior employees through non-cash rewards. It has developed innovative recruitment techniques, seeking out qualified individuals when they are available even if a position is not yet open.
INFORMATION TECHNOLOGY: B-
At one time, Milwaukee’s IT management was tightly centralized, with a monolithic structure that handed down dictates from on high. Then it shifted to a decentralized system, described by one official as “a 25-headed monster.” Now the city has made sensible steps to come to a balance between the two. The difficult job of striking this balance is the assignment of a new Information Techology Management Division.
For the past few years, in the absence of a strong central IT function, the city budget office has more or less filled the job. One positive side effect: Departments have been forced to develop strong budgetary justifications for their new projects.
Milwaukee has a new financial management information system and upgrades to its human resources technology. It also has one of the most elaborate mechanisms in the country for manipulating performance information. The system captures outcome and management indicators and links them to broad strategic goals. In the near future, departments with good data going in will be able to use the system to make decisions about how to allocate resources.
CAPITAL MANAGEMENT: B+
Milwaukee has unusually good information on the condition of its assets, and has been careful to ensure that it is spending its maintenance money sensibly. “The mayor won’t leave himself open to criticism that he is underfunding the infrastructure,” explains Steve Kreklow, the budget director at public works.
The city’s Capital Improvement Plan is unusual as well. Instead of merely listing projects, it is organized around infrastructure areas. Individual projects are mentioned only in the context of capital improvements for the whole area.
Despite the obvious strengths, some improvements could be made in capital management. The city could do better at estimating the costs for its capital investments and follow through more thoroughly to make sure projections are accurate. “Departments are much more concerned with the early years,” says Toni Biscobing, capital planning and finance specialist.
MANAGING FOR RESULTS: A-
The city has an active strategic planning process and uses citizen input to set priorities and help make spending decisions in six major areas: preserving neighborhoods, increasing economic activity, preserving public safety, improving public health, enhancing educational opportunities and delivering good value at a fair cost.
As part of budget development, the mayor holds public hearings with department heads over a three- to five-day span to talk about departmental strategic plans, programs and outcome measures. When departments revise their own plans, they work with a copy of the city strategic plan and make sure the pieces fit together. Unfortunately, the skill with which they do so is not uniformly good among the departments. In addition, the city council has not been involved in the process.
The overall quality of measures and goals here is high, and the two are linked together effectively, both citywide and in individual departments. Unlike many cities, Milwaukee is making the transition to measuring outcomes, rather than outputs. It has convinced its departments that bad numbers will not be used against them arbitrarily. This has helped enormously in getting departmental buy-in to the process.
AVERAGE GRADE: B
Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.
