MILWAUKEE COUNTY BUDGET OVERVIEW Department of Administrative Services Office of Performance, Strategy & Budget

Table of Contents About DAS-PSB Budget Process Budget Terminology 2014 Budget Facts Significant Budget Issues Questions?

Performance, Strategy & Budget About DAS-PSB Performance, Strategy & Budget Budget Office – Perform duties delegated to DAS Director by §59.60 Analyze policy proposals & changes throughout year Provide planning services for Executive Branch Provide technical assistance for any department/office Tackle short-term and long-term process and policy issues Budget Analysts generally responsible for functional areas Visit our blog: www.milwaukeecountypsb.com Follow us on Twitter: @milcopsb

Budget Process Main Budget Steps: April – June: Departments develop & submit requests June-September: County Executive & DAS-PSB analyze requests, develop recommended budget October: County Board Committee on Finance, Personnel & Audit budget hearings November: County Board adoption; vetoes January 1: Budget implementation

Budget Process Detailed Calendar* DATE ITEM April 1 Departments access BRASS budget software April 25 Departments receive tax levy targets Late April-May Comptroller provides updated five-year forecast May 17 Capital project requests due to DAS-A&E, DAS-IMSD May 30 Internal Service Fund Charges due to DAS-PSB June 30 Elected Offices’ Budgets due to County Executive, DAS-PSB Capital budget requests due to County Executive, DAS-PSB July 15 Cabinet Dept budget requests due to County Executive, DAS-PSB Late July County Executive Requested Budget Hearing (§59.60(6)(a)) August 15 Requested Budget Summary published (§59.60(5)) * = Estimated dates; specific dates can be subject to change

Detailed Calendar Continued* Budget Process Detailed Calendar Continued* DATE ITEM July 1 – Sept 8 DAS-PSB, County Executive analysis of budget Sept 8-12 Final decisions made September 19 Budget narratives sent to printer September 25 County Executive issues recommended budget Early October County Board Committee on Finance, Personnel & Audit Hearings End Oct/Nov County Board public budget hearing November 11 County Board adoption of budget Mid-November County Executive issues vetoes County Board votes on vetoes January 1 Budget implemented * = Estimated dates; specific dates can be subject to change

Amendments – General Process Budget Process Amendments – General Process County Board shares with Comptroller Research Staff, DAS-PSB, or both, or neither. DAS-PSB can & will assist with operational & fiscal impacts, language, etc.

Budget Terminology ITEM DEFINITION Abatement Negative expenditure, usually offsets an internal crosscharge Appropriation Unit Group of similar accounts for revenues and expenditures. For instance: salary and fringe benefits are in “Personal Services” Fringe Benefits Benefits provided to active employees and retirees. Includes pension, health, dental, life insurance, bus pass, wellness, etc. FTE Full-time equivalent. Share of 2,080 hours that a position is expected to be employed by the County. Internal Crosscharge Charge by one county department to another for services. For instance: fleet charges out cost of debt & maintenance of vehicles. Legacy Fringe Fringe benefits, mainly health insurance, pension, and Medicare premium reimbursements for retired employees Non-Departmental Budget unit for items that don’t belong to a department. For instance: sales tax, contingency fund, internal service allocation

Budget Terminology ITEM DEFINITION Performance Measure Measure of how well a program area does at providing service to customers and taxpayers. Strategic Outcome Plank of the County’s Mission Statement that Strategic Program Areas (see below) seek to achieve. Strategic Program Area Individual service provided by County Departments Structural Deficit The estimated amount by which expenditures are forecasted to rise more quickly than revenues annually. Tax Levy Property tax levy, the County’s largest single source of discretionary revenue More definitions are available in the 2014 Adopted Budget narrative document, at: http://county.milwaukee.gov/ImageLibrary/User/bpariseau/2014-Adopted-Operating/Revised2014AdoptedOperatingBud.pdf

2014 Budget Facts $1,306,950,613: Total budgeted expenditures $1,027,629,418: Non-property tax Levy revenues $80,034,220: Capital Budget Expenditures $1,226,916,393: Operating budget expenditures $279,321,196: County property tax levy 4,601.6: Budgeted FTE positions 3,080: FTE positions managed by Executive Branch

2014 Budget Facts $284,211,854: Largest expenditure department (Family Care) $66,660,702: Largest tax levy department (Sheriff) 81: Budget units (Departments, Divisions, Etc.) 149: Strategic Program Areas 9: Offices managed by elected officials 4: Revenue Appropriation Units 5: Budget Narrative Expenditure Appropriation Units

2014 Budget Facts

2014 Budget Facts Cont.

2014 Budget Facts

2014 Budget Facts

Significant Budget Issues Financial pressures Structural Deficit Revenue Limitations Fringe Benefits State Mandates Infrastructure Issues Other Major Budget Issues

Significant Budget Issues Structural Deficit Comparison of Forecast Structural Deficit, 2012-2014 Budgets

Significant Budget Issues What about those big surpluses? State Law prohibits unrestricted fund balance Implications: No rainy day fund: any deficit carries over into next year No ability to save for one-time investments Rating agencies like reserves; impact on borrowing costs 2012 surplus of $24 million = 2 % of operating costs Debt Service Reserve balance: $7 million or less than 1% of operating costs Waukesha County 16% unrestricted fund balance Dane County 12% unrestricted fund balance Would equate to $147-$200 million for Milwaukee County

Significant Budget Issues Milwaukee County has Limited Discretionary Resources Overall Tax Levy is $279 million Other General Revenue is ≈ $127 million TOTAL = $406 million 30% goes to support elected offices: General Government is $4 million Courts are $34 million Sheriff & DA are $79 million Legislative & Executive are $6 million Debt Service is $42 million Legacy (Retiree) Fringe Benefits are ≈$57 million Remaining $184 million or 45 percent to support all other County functions

Significant Budget Issues Fringe Benefits ITEM 2014 $ Gross Employee & Retiree Fringe Benefits, 2014 Adopted Budget $189,029,570   - Less, Direct Revenues in Agency 1950 ($18,346,142 = Amount Allocated to Departments $170,683,428 Estimated Revenue Offset at 17% ($29,016,183) Approximate Tax Levy Cost, Employee & Retiree Fringe Benefits: $141,667,245

Significant Budget Issues Gross Fringe Benefit Expenditures by Category (In Millions)

Significant Budget Issues Forecasted Fringe Benefits as Share of Total County Expenditures

Significant Budget Issues Fringe Benefits – Comparison with Similar Counties

Significant Budget Issues Forecasted Legacy (Retiree) Fringe Benefits as Share of Total County Expenditures

Significant Budget Issues Benefit Liability Costs

Significant Budget Issues Benefit Liability Costs

Significant Budget Issues State & Federal Mandates Public Safety Jail, Juvenile Detention Center Courts Expressway Patrol Process Service District Attorney Medical Examiner Human Services Behavioral Health Child Support Disabilities Services Adult Crisis Services Aging Veterans’ Services Home Energy Assistance General Government Treasurer Register of Deeds Clerk Civil Service Commission Corporation Counsel Comptroller DBE Compliance Transportation & Public Works Paratransit Environmental Laws

Significant Budget Issues Infrastructure Issues County Owns ~1,000 buildings across the county 14 million square feet to maintain Some space ill-suited for needs 75% are 30+ years of age Largest amount of square footage is 75+ years of age $300+ million in deferred maintenance Borrow to fix = debt service costs Do we really need all this stuff? Can we AFFORD all this stuff?

Significant Budget Issues Infrastructure Issues How much capital funding is really available?

Significant Budget Issues Infrastructure Issues Issue more debt?

Significant Budget Issues Infrastructure Issues Could we afford to maintain the infrastructure we improve?

Significant Budget Issues Other Major Issues Implementation of Mental Health Board Transit Service Model Public Safety Information Technology Upgrades Compensation Structure Implementation of Performance Measurement & Management Others?

Questions? THANK YOU!