Public Policy Forum's top five research findings of 2012

If it’s December, then it must be time for the Forum’s annual list of its top five research findings of the year.  Last year’s list included findings on MMSD’s daunting capital needs, the dramatic decline in Milwaukee County’s corrections population, the City of Milwaukee's reliance on state shared revenue, and our region’s tardiness in embracing strategic economic development planning.  The 2012 list is summarized below in chronological order:

1. More than four-fifths of Milwaukee County’s rated child care providers stand to lose funding under YoungStar, the state’s new child care quality rating system.  Our January report analyzing the first year of Youngstar implementation examined the ratings earned by 534 child care providers in Milwaukee County as of December 2011.  We found that 428 (80.1%) received 2-star ratings and 33 (6.2%) received 1-star ratings.  In light of the state’s plan to reduce Wisconsin Shares subsidy payments for 2-star providers and disqualify 1-star providers from Wisconsin Share payments entirely, that meant more than 80% of the rated providers would lose funding under YoungStar, a consequence that could impact the availability of child care options.

2. Much of the growth in the Milwaukee Parental Choice Program in the past year appeared to come from existing private school students.  The 2011-12 school year was the first to reflect the impact of major changes to school choice program eligibility adopted in the 2011-13 state budget, including an increase in the enrollment cap, broader eligibility limits, and expansion to schools outside the City of Milwaukee.  Our annual survey of voucher school participants released in February revealed not only that much of the growth in voucher use from the previous year was in schools that already participated in the program, but also that it appeared to have come from students already enrolled in those schools.  

3. Fire department consolidation that preserves existing capacity can still save millions.  In May, we released a comprehensive report on options for sharing or consolidating fire services in the southern Milwaukee County communities of Franklin, Greendale, Greenfield, Hales Corners and Oak Creek.  Our finding that a full consolidation option could save nearly $2 million annually may not have been surprising to those who have examined fire service consolidation proposals in other states, or to those familiar with Milwaukee County’s consolidated North Shore Fire Department.  It was illuminating to find, however, that such substantial savings were achievable without eliminating any fire stations or reducing direct firefighting staff.

4. MATC’s technical diploma offerings are generally attuned with the region’s projected job openings.  Our December report on the activities and resources of Milwaukee’s key workforce development players examined MATC’s role in providing non-degree occupational training to job seekers.  We found that despite longstanding criticism of the college for failing to appropriately align itself with the needs of area employers, MATC’s technical diploma offerings match up well with Department of Workforce Development projections regarding future job openings.  Nursing, Barber/Cosmetologist and Emergency Medical Technician were the most heavily enrolled technical diploma programs in the 2010-11 academic year. 

5. MPS’ five-year fiscal forecast is more optimistic than those of Milwaukee County or the City of Milwaukee.  Our December fiscal assessment of the Milwaukee Public Schools examined the district’s most recent five-year fiscal forecast and found that its projection of a $41 million deficit in 2017 is plausible and perhaps even a bit on the conservative side.  While a projected deficit of that magnitude certainly is not ideal, it is more optimistic than the five-year deficits projected by the City of Milwaukee and Milwaukee County earlier this year.  It is important to note that each government’s five-year forecast is based on financial modeling that is somewhat speculative in nature, and that a complete understanding of the fiscal condition of each must go far beyond their five-year forecasts.  Nevertheless, given the substantial position cuts and general gloom surrounding MPS’ budget in recent years, to find that MPS’ five-year challenges may not be deeper than those of the city and county was somewhat surprising. 

With 18 research reports in 2012, it was not easy to reduce our list of top findings to five. Left off the list this year were important findings related to the application of the state’s new child care ratings system to afterschool care providers; the out-of-classroom spending habits of Milwaukee County suburban school districts; the range of case management services available to persons with mental illness in Milwaukee County; opinions on mental health redesign by nurses and their employers; and the continued impacts of pension and health care benefits on Milwaukee's city and county budgets. Those interested in reviewing those and other findings can access the Forum’s full list of research publications here.

Consolidating dispatch operations in Milwaukee County's South Shore

Would an independent consolidated dispatch center better serve the communities of Cudahy, St. Francis, and South Milwaukee?  Our latest report finds that consolidating dispatch could produce substantial operating and equipment savings, as well as operational improvements, which include the ability to better coordinate responses to major incidents. It also indicates, however, that those potential advantages must be weighed against the current benefits for each city of solely controlling its dispatch operations and maintaining those operations at its own police headquarters.

Because dispatch personnel at the three police departments do far more than traditional dispatch activities, with additional duties ranging from parking administration, to background checks for liquor license review, to collecting bail on warrants, the report includes models that take into account the need for each government to cover those non-dispatch tasks.  

Key findings from the analysis include the following:

• By consolidating their dispatch operations into an independent consolidated dispatch center, the three cities could reduce current collective annual operating expenditures by approximately $132,000 to $256,000, and produce equipment savings within the next five years of approximately $400,000 to $600,000.

• If one of the three cities were to perform dispatch services under contract with the other two, or if the three cities contracted with a neighboring jurisdiction for dispatch services, then substantial additional savings could be generated. While the report focuses primarily on creation of an independent consolidated dispatch center, it suggests that contracting for dispatch services could be even more cost efficient because the three cities would not have to lease or purchase space, hire a dispatch center manager, and contract for back office support.

• Potential cost savings must be weighed against loss of local control and the potential loss of 24-hour staffing at each city’s police headquarters. The report notes that the lack of on-site dispatchers may preclude 24-hour staffing at police stations, which some may argue would produce a decline in the level of police protection offered in each community.

• If the three cities do not decide to pursue consolidation of their dispatch operations, then they may wish to at least review whether the administrative tasks assigned to dispatchers might be more appropriately assigned to clerical staff.

In the end, the question of whether to pursue an independent consolidated dispatch center – or to jointly contract for this service with a different jurisdiction – must be considered within the context of each city’s short-term and long-term financial circumstances and public safety needs.  An additional consideration is whether the cities may wish to pursue additional public safety consolidation, which may further dictate the logic of consolidating dispatch services. (Our analysis of the possibilities for shared or consolidated fire and emergency medical services in the South Shore will be released early in 2013.)

The report was funded by the three cities and the Greater Milwaukee Committee, with whom the Forum has partnered to facilitate an Intergovernmental Cooperation Council workgroup that is discussing shared services among Milwaukee County’s 19 municipal governments. In May, the Forum released a report on possible consolidated fire services in the five other southern Milwaukee County municipalities.

Revisiting the role of counties

The title of an article by Alan Greenblatt in this month's Governing magazine asks a question that has received considerable attention in Milwaukee County during the past few years: Are counties "an outdated concept or the future"?  

Local businessman Sheldon Lubar aggressively raised that question in 2008, when he suggested in a speech to the downtown Rotary Club that Milwaukee County government had grown so dysfunctional, it wouldn't work "if Jesus was the county executive and Moses chaired the board of supervisors."  He suggested that the government gradually be dissolved, with its functions spread out to state government, municipalities and regional authorities.

In January 2010, the Public Policy Forum weighed in on the subject with a 160-page analysis commissioned by the Greater Milwaukee Committee.  Our report, "Should it Stay or Should it Go," detailed the logistical, legal and political hurdles that would complicate an effort to dismantle the county, and suggested that alternative restructuring approaches - such as consolidating certain municipal functions at a county or regional level - also be considered. 

Interestingly, the Governing article reveals that virtually identical debates are occurring in other parts of the country.  It cites cases of elected and civic officials who have grown so frustrated with the financial problems and/or dysfunction of their county governments that they are suggesting those governments be dissolved, and other cases where leaders are pushing for the opposite approach of growing their county governments by having them absorb municipal functions.

Another important take-away from the Governing  piece, however, is that while we can and should think about radical restructuring as a response to county government financial woes, we should not allow such contemplation to preclude action on strategies that are less comprehensive, but that may be effective nonetheless.

As Greenblatt puts it, "the growing disconnect between the demand for services and the general county-level ability to pay for them has led to a round of structural changes in the ways that counties do their business. For one thing, counties are outsourcing and privatizing like never before. And they are collaborating more with other governments than they ever have, both with the municipalities and special districts within their borders and with other counties in their regions."

Greenblatt cites examples of county governments across the country that are teaming up with adjacent counties to provide health and human services, or offering their municipalities the opportunity to contract with them for information technology and public works.  He also suggests such initiatives would not have occurred had counties not had a "financial gun to their head."

Whether or not one agrees that lethal fiscal threats are a good thing, applying that principle to our circumstances in Milwaukee County may make sense.  There has been ample discussion about the need to pursue service sharing and functional consolidation at both the municipal and county levels, and a few notable recent examples of success in our region (e.g. consolidated dispatch centers in Racine and Waukesha counties) and in Milwaukee County (e.g. partnerships between Milwaukee County and adjacent counties for delinquency services and Family Care).  Still, movement toward meaningful service sharing between Milwaukee County and its municipalities has been somewhat slow.

While Milwaukee County's fiscal fortunes appear to have improved somewhat in recent weeks, deep structural problems remain.  Greater collaboration with municipal governments in functions ranging from property tax collection to public works remains a promising yet largely untapped area of potential relief.

Possibilities for shared or consolidated fire services in southern Milwaukee County

A new report released by the Public Policy Forum this morning finds that the five municipal fire departments in the southern part of Milwaukee County work closely together, providing mutual aid in times of high activity and cooperating in areas ranging from training to special rescue teams.  That begs the question: could the five departments do even more to share services, perhaps even following the lead of the North Shore Fire Department to fully consolidate?

In order to assess that question, the Forum worked with administrators and fire chiefs from Franklin, Greendale, Greenfield, Hales Corners and Oak Creek to explore several options for enhanced sharing and coordination, including a model for a consolidated fire department. The project was initiated by a work group formed one year ago by the Intergovernmental Coordinating Council, which has been exploring a range of possibilities for greater service sharing among Milwaukee County’s 19 municipal governments.

A similar fire and dispatch project also is underway in Cudahy, Saint Francis and South Milwaukee.

The new Forum report focuses initially on consideration of enhanced cooperation and sharing in various areas of fire department operations that could occur within existing administrative and operational frameworks.

It then moves on to model three increasingly comprehensive consolidation approaches:

• A Coordinated Support Services model, which involves the creation of unified bureaus to conduct training, vehicle maintenance and fire inspection services for the five departments collectively.
• An Operational Consolidation model, which envisions a unified operations framework under which the “closest unit responds” regardless of municipal boundary, but which retains the five departments as separate entities with independent personnel, vehicles and governance.
• A Full Consolidation model, under which the five departments would merge into a Southern Milwaukee County Fire Department with its own governance structure, budget, personnel, equipment, and operational framework.

The fiscal and operational analysis associated with those models suggests that each holds potential for improving the coordination and efficiency of fire and emergency medical services in the five communities. The analysis also shows, however, that substantial financial savings only would be achieved with the more comprehensive consolidation models.

The full consolidation model, for example, could yield more than $1 million per year in annual operating budget savings and nearly $4 million in vehicle replacement savings over five years, without closing any existing station locations or cutting firefighter positions. Those potential benefits, of course, must be weighed by each municipality against any perceived negative impacts that would result from ceding local control of fire and emergency medical services to a consolidated department.

The report concludes by suggesting that the five municipalities consider the findings within the context of their own financial and operational needs and concerns. As they do so, it says, “they should keep in mind that a phased approach is a viable option, in which enhanced service sharing is implemented first as a possible precursor to operational or full consolidation; and that additional planning and analysis – as well as creation of a framework for an intergovernmental agreement between the five communities – will be needed to definitively project fiscal and operational impacts associated with the operational and full consolidation models.”

The full report – which was sponsored in part by the Helen Bader Foundation and the Greater Milwaukee Committee – can be accessed here.

A closer look at non-instructional expenditures in suburban school districts

The Forum released a new report this morning that examines out-of-classroom expenditures in Milwaukee County's suburban school districts. The examination was prompted by the increased pressure faced by most districts to identify operational cost savings while also maintaining or enhancing academic performance. Given the apparent conflict between the two imperatives, non-instructional areas of spending are likely to receive increased focus for possible cost-saving opportunities, including possible service sharing with other districts or local governments.

The report focuses on the dollars spent on non-instructional support services, including administrative, "back office" functions (e.g. payroll, accounting, information technology); administration of ongoing operations and school buildings; non-instructional pupil services, such as social work and guidance; and instructional staff services, such as curriculum development and staff training.

Among our key findings:

• Milwaukee County suburban school districts tend to spend more on support services per pupil than their peers from across the state. This finding is particularly perceptible for the smaller and wealthier school districts in the county.
• Fourteen of the 17 Milwaukee County suburban districts are at or above their peer medians in support services expenditures when measured as a percentage of total expenditures. Consequently, support services expenditures constitute a greater proportion of these districts’ budgets and require a greater share of district revenues.
• There is considerable variation within Milwaukee County in support services expenditures per pupil, ranging from $3,220 at Oak Creek-Franklin to $7,035 at Nicolet, and from 29% of total expenditures at Cudahy to 39% at Nicolet and Fox Point-Bayside. Nicolet and its small feeder districts, among the wealthiest districts in terms of property values, generally have the highest expenditure totals per pupil, while the largest districts (Oak Creek-Franklin, West Allis, and Wauwatosa) are among the lowest.
• Many Milwaukee County suburban districts are cooperating with neighboring school districts in providing administrative and other services. Nevertheless, the report identifies three areas of shared services saving opportunities that may hold promise for additional cost savings: cooperative health insurance purchasing, back-office operations, and regional networking.

The report finds that consolidation of back office operations is perhaps the most intriguing of the three options examined, particularly for the Nicolet district and its three feeder districts, all of which are small in size, with high costs, and a tradition of inter-district cooperation. Residents in small- and medium-sized districts in the southern part of the county also might find this attractive given their traditional concerns about cost, and the fact that district borders cross several other municipal taxing jurisdictions, allowing costs to be spread among a larger tax base.

We hope the suburban school districts will consult the expenditure data included in this report as they consider internal fiscal and program evaluations and contemplate budget strategies. We fully expect each district to do so, of course, in the context of its own fiscal and educational circumstances, which may include a preference for a level of services that costs more, but that they determine best meets student needs.

A full copy of the report can be accessed here, and our media release here.