NIk Kovac looks back as he starts his new role as Milwaukee Budget Director

Now Budget Director for the City of Milwaukee, former Alderman Nic Kovac shares his thoughts on being our Alderman for 14 years with
Currents’ writer Austin Greenberg.

Only the first two segments were included in the July 2022 Riverwest Currents printed edition. ( Humboldt Blvd. redo and Creation of the Greenway)

Following those two segments on-line we have presented Koavc’s views on several other topics, including: Community decision making, (People vs Property) including a PDF of the original Currents story, ACT 10 and its ramifications on the city budget. Ending with the budget crisis our city faces and that Kovac will work to find solutions with the help of Mayor Johnson and hopefully the State Legislature in Madison.

RC: One of your biggest regrets about your term, or lessons you’ve learned, is that you weren’t able to get protected bike lanes onto Humboldt Ave. .

Humboldt Blvd. under construction June 2022

NK: Yes. In retrospect, we should’ve stuck with our initial position, which is, there isn’t room. We weren’t decisive enough. We tried to do something that, in retrospect, – you know hindsight is always 20/20 – we tried to put too many potatoes in the bag. We tried, and it increased our costs, because of inflation and everything, our contract costs all went up. It basically delayed the project by a year. And in retrospect, it was an unnecessary delay, because we basically went back to the original design, because trying to get separated bike lanes didn’t fit without removing most of the trees. I know there are some people that say, ‘oh, well you could’ve just gotten rid of the parking.’ We explored that. Now, getting rid of the parking would’ve been a whole different community conversation that might’ve been controversial. But as far as I was concerned, as far as the Department of Public Works was concerned, it was on the table. So there is some misinformation out there, some bicycle advocates claiming, ‘oh, they could’ve done it if they had just gotten rid of one lane of parking.’ We could not have. Because we still would’ve had to eliminate one entire row of trees – either one of the curb lanes, or the boulevard lane. There wasn’t room to fit that in without moving one of the three rows of trees, even if you fully eliminated a bike lane, because you had to make the road off-center then, to make it work, and then because you would’ve put the double cycle track on the one side, but then you would’ve had to move the boulevard. Now admittedly, we did lose the whole boulevard south of Locust, that’s where the boulevard was narrowest, but north of Locust we preserved the boulevard trees, and we’ve preserved the overwhelming majority of the curb trees on both curbs. So there just wasn’t a way to do it without significant tree loss. And in retrospect, we kind of knew that from the beginning, but we got so much pressure on it, and we agreed with the pressure in concept, and we tried too hard to make it fit. And in retrospect, it cost us a year and, you know, a significant cost increase.
So that is one I do regret, and I told you about my principle before of having public conversations, and we tried really hard to do that, and one of my principles is, when you do have to make a tough decision, tell the people who are going to disagree with it first. Because the people that are going to agree with the tough decisions, I mean you can talk to them eventually, but they’re going to be happy with your decisions, so you don’t need to call them. The people you need to call are the people who aren’t going to be happy, to make sure they understand why.

So we did that in this case – we convened a meeting of bicycle advocates, let them know. But the bicycle advocate community is big, and diverse, and not everybody was at that meeting, so some people are still harping on the sidelines, claiming things went wrong. And that would probably have happened anyway. You can’t organize your policy around people that are going to troll you on social media, because that’s just the new reality of the world we live in.
But I do think that in that case, we tried to be thorough, and transparent, and explore every option, but in retrospect, I wish we could’ve done better there. But I will say this, if you look back at the last decade and a half, we now have a dedicated bike lane, which was already in the works before I got elected, so I can’t take credit for it, but it got installed – the Beerline bike trail just east of Humboldt. We installed the River Greenway, which is on Fratney and Wright. So we’ve massively increased our bicycling infrastructure in Riverwest; we just couldn’t get it done on Humboldt. But we are going to get it done on Van Buren, south of Holton. I think there’s a very good chance we’re going to get separated bike lanes on Van Buren, because there’s plenty of room there, and not very many trees in the way. So I think there’s room on Van Buren, to do a road diet, to do a complete street there. So I’m very proud of the complete street approach for pedestrian safety, and for livability, for a sustainable future, environmentally and economically. And I think Mayor Johnson is behind that too. Obviously, everything is contextual though, right, you can’t implement everything everywhere, you gotta have room for it. So on Humboldt we just didn’t have room. The only way to have it would’ve been to cut down trees.

Greenway foot trail June 2022

RC: Nik Kovac served as 3rd District Alderman from April 15, 2008, until May 9, 2022, when he took over as City of Milwaukee Budget Director. Among his jobs prior to government service were writer and editor for Riverwest Currents. He spoke with RC the week of June 20th. Below is excerpts from the interview, edited for clarity and concision.
Kovac discussed the Milwaukee River Greenway. You will see that he stated that he had joined the RiverWork Group before he was elected, the following response is in the context of his work as alderman.

NK: The river work group started long before I was elected; I joined it before I was elected. Vince [Bushell, Riverwest Currents founder and editor], had been a part of it going back a long time, Ann Brummitt was one of the original conveners of it. The work group was always a coalition of interested parties, some of whom were neighbors, but a lot of whom were nonprofits, like the Urban Ecology Center, the River Revitalization Foundation, and the Riverkeepers. And so, they had a variety of goals. Those goals, as they came out of the work group and got put into proposed legislation, became primarily three different things: a zoning regulation, a clear-cutting ordinance, and stormwater regulations. The stormwater regulations – and I actually mailed a letter to all affected property owners, and got calls back from several of them, probably more than a dozen, and I either talked to them or made several different site visits to business owners and residents that may have had concerns about that legislation.
There was some pushback from the Department of City Development on how strict the zoning setbacks [building regulations to preserve vegetation and scenic beauty] would be. I don’t know if I’d name names, but it was the people leading the DCD at the time. And some of them were being motivated by the development community, saying that less restriction is better than more restriction. To which I would say to them, what you want is smart restriction that works for everybody. Good zoning works for neighbors, but it also works for developers, because developers become neighbors. They all want to build, and they ought to want to build buildings that are contextual. If you build a building that is out of context, and somebody next to you does the same, then your building loses value. So, it should be a collaborative process. Now, I’m not so naïve that I don’t think that there aren’t sometimes going to be disagreements within that.
So we were talking a lot about the setback, and the DCD didn’t even like the concept of the viewshed [the view one has when on the trails or the river – whether or not one can see buildings, smokestacks, power lines, etc.]. To me, all zoning is contextual. So they didn’t like the viewshed because they were like, ‘well you live in the city, you shouldn’t be afraid to see buildings.’ I said, yeah, everywhere else in the city, I’m not afraid to see buildings, but I want to see good ones. When I’m walking down North Ave., or Locust, Prospect, Farwell, I want to see great buildings. But when I’m in a river, where I feel like I’m suddenly in the middle of nowhere wilderness, we’ve already got that context because of the bowl of this river valley, and the trees, and the steepness of the bluff, so why would I want one building to stick out of that?’ And proof is in the pudding. As you get to North Ave., the context does change. There, there are like three or four buildings in a row on the east side of the river. The lot in between those three buildings, could be the fourth building with the exact same setback. So we had zero setback there because that was the context.
But then as soon as you get north of North Ave., it suddenly opens up into this majestic natural vista, for the most part. Obviously in winter it’s different because there are no leaves on the trees. And I’m not saying you can’t see a building here and there. But for the most part, you feel pretty isolated. So we thought, let’s try to go with that. And also, as a practical matter, there weren’t that many buildable sites that even would’ve caused this, because most of it’s on the bluff anyway. So it wasn’t actually that extreme of a position.
But there was pushback, initially. But, if it had just been me, rookie alderman versus the Department of City Development, I probably would’ve lost. But because I had a work group, and I had neighbors behind me, and we had done our outreach, and even the people who were a little cynical about it had at least had a chance to sit down with me for an hour and talk it through, I think it really helped, and we were able to get something that was pretty close to what we wanted in the beginning.
And there was some controversy from the County about the clear-cutting ordinance, so that one took five years to get done, but that, to be honest, was more about just one bureaucrat being power-hungry. Basically, the County just didn’t want the City to tell them to do anything. It took us five years, frankly, and one particular bureaucrat retiring, for us to convince their successor that we’re not trying to tell you what to do, but we legally couldn’t make a rule for the whole corridor that didn’t include everybody. As a practical matter, we were willing to exempt the County because we trusted them, but legally we wouldn’t have then been able to enforce it, in between where the County was. So we finally got a County leadership at the parks level that agreed with us, so that’s why that one took five years longer.

RC:You mentioned the importance of getting input from all parties for policy decisions, and that the position is in some ways a kind of executive, because most of your recommendations are passed by the Common Council..
People vs Property – East Village Association and Property Owners- original article following these comment. Article follows from October 2005 Currents, years before Kovac was elected alderman, this story must have influenced Kovac’s attitude toward community common ground, even when there is sharp discord,

K: Yeah, the fact that you have this executive quasi-authority, but it’s only a quasi-authority because you can be overruled by your colleagues. We talked about an old article I wrote for the Currents, I think back in 2005 [People vs. Property, October 2005], about the controversy just north of Brady St., in a neighborhood known as the East Village, centered on Pulaski St. where Wolski’s is. And one thing I learned there was that sometimes you can have the best intentions, and you can put something on paper that might look like it’s a good idea for the city, but you have to check in with neighbors, to make sure that they’re on board, and at least aware of the process, and how it’s going to be approved, whether or not they agree with the end result. But also, you need to check in with your own city bureaucracy to see if this is even an effective tool.And so in the case of the East Village Conservation Overlay District, it failed on both of those fronts. It was a good idea in concept – the idea was, let’s protect the neighborhood, let’s not demolish these historic houses. But if you looked at the city laws, the answer was: either make it historic, or not. There really wasn’t a middle ground there. And there’s a perfectly good historic preservation ordinance that we can use in some cases, where there’s a neighborhood consensus around preservation. In this case they tried to invent this new category, it was created as a conspiracy by many other neighbors, and then rather than reach out to those neighbors and try to build bridges, it just became more and more antagonistic, and it got worse and worse – the relations in the neighborhood. And I wrote a whole article after that had all sort of gone sideways, and I learned about how it went sideways as a reporter for the Riverwest Currents.

So for me that was a very good note to learn about how to do things differently, both in terms of making sure your end result works as a city law, but more importantly, making sure that neighbors – again, whether or not they agree with the end result – making sure that neighbors feel a part of the process, and can trust that their voice has at least been heard. So that was something that I always strove for, especially in zoning and licensing decisions. That is an area where an alder has quasi-executive authority. Not final executive authority, you can be overruled by your colleagues, which means that if you come with an idea that most of the people in the neighborhood disagree with, there’s a much higher chance your colleagues will overrule you.

So, both as a practical matter, because if you want to get something passed, that you support, you probably want the neighbors behind you in order to get something through a legislative body. So just as a practical, getting things done matter, you want to have a process where people feel involved, and aren’t going to come to the committee table ready for a fight, but instead are hoping for a discussion. But also, if you hope to have a long career, and I’m lucky to say I think I did as alder, 14 years, the most important discussion is the next one. So “getting what you want” isn’t as important, I think, as making everyone feel their voice was heard so the next time there’s an important discussion, again, they’re open-minded and willing to listen to you and to their neighbors.

That was something I tried really hard to do, and it was probably my biggest priority coming in, given the context of what happened before me, was to try to rebuild that trust. To try to let neighbors know, hey, we’re going to come together in a forum where we talk about a new liquor license, or we talk about a new building that’s being proposed, and we’ll go over everything. We’ll go over a parking issue, we’ll go over the structure of the financing and who’s going to live in the building. We’ll go over how the building looks, how big it is, how wide it is, how it’s shaped, the details of the design, do the windows have enough depth to create shadow lines, to create visual interest.

And as that started to evolve, that process, you started to realize there were some things where I did have some positions that were pretty clear. For instance, I was going to be for – as long as it’s a well-designed building with a massing and context for its block – I was not going to oppose a building because it included affordable housing. In fact, I was more likely to support it, because for me that was a matter of social justice. So I always made that issue clear, that that, for me, was non-negotiable. And there were at least three cases where I ran into some controversy in neighborhoods, two in particular, where there was considerable – one on Water St. and one just north of North Ave. – where we did get affordable housing units approved, and there was neighborhood opposition, and some of that opposition was based on not wanting affordable housing near them. And I just told them, on that issue, I’ll hear you out, make your case, but you’re not likely to convince me.

I don’t feel it quite as strongly, but I would say I took a similar stance on parking. Yes, you want to manage parking, you don’t want to be reckless about parking effects, but successful developments tend to be popular, and even if they’ve got some parking on-site, they tend to create some overflow parking, whether we’re talking about a commercial/retail business, or an apartment building, or an office. Now, in the case of an office, where you know you have regular parking demand, it makes sense to have a plan. Same thing for an apartment. But in the case of retail, where you’re going to have ebb and flow, and there will be peak times, do you really want to say no to a retail business just because it’ll create parking demand when they’re busy – for street parking. And on that one I wasn’t as firm as with the affordable housing issue. We would talk through the issues and see if there were ways to mitigate it. But overall, for me, parking was not a reason to say no to a development. It was a problem you manage and a problem you hope to have. Because the neighborhoods that don’t have parking problems are neighborhoods that have massive economic disinvestments, and a lot of vacant lots. That shouldn’t be your goal, to be able to park anywhere you want. Your goal should be for parking to be difficult, but not impossible.

And so those were a couple issues where you put down a marker and say these are some principles of social justice and good urban planning. They come up a lot, frankly. The opposition based on parking, or based on affordable housing/financing. But those were two where I said, ‘we need to get to yes.’ On everything else, if you’re talking about the size of the building, the mass of the building, the design of the building, we really had an open discussion every time there was a development, and I’m very proud of that.

I’m very proud that we had those kinds of discussions, and it actually led to upzoning east North Ave., but upzoning it with extra design criteria. Because one thing we discovered with the North Ave. discussions was, you don’t want to have the same meeting every time, where you’re having these debates that are somewhat settled. It’s a principle of mine, and a principle of most of the people who I think live in the 3rd District, that we want to have an economically diverse community. And also we want to have an economically successful community, and that means we’re going to have a lot of people wanting to be here, and so there’s going to be a lot of cars trying to park. Ideally, people will start walking and taking the bus more, but one sign of economic success is you’re going to have a lot of cars. And some of them are going to try to park on the street. So, those are the two things where you don’t want to have that discussion over and over again. But you do want to really drill down and make sure these buildings are well-designed, and are going to stand the test of time. That was one thing I campaigned on in 2008: development that will stand the test of time.

So one way we did that was by creating an extra set of design standards – the East Side Architectural Review Board. And I think you can look at all the new buildings – they don’t look the same. One criticism of these architectural review boards I’ve heard people say is, ‘that’s designed by committee, everything will end up looking cookie-cutter/same thing.’ I would say look at the five new buildings on E. North Ave., and tell me they look the same. They really don’t. They all look different, they all meet certain principles of good design, like I said, window depth, base-middle-top, ground floors that are open to the streets and feel welcoming, good glazing, lots of windows, windows that are well-proportioned. But you can meet those design standards in a hundred different ways. And you see that between the library building, the Prospect Mall building, the Contour, the building on Oakland and North, and now a new building that we just approved, or it’s got the preliminary approval, going up on North and Newhall, and then of course the Mercy Housing building – the affordable housing building that I talked about before. So there’s a range of ways to meet the criteria, and we had very public discussions both about establishing the criteria, and then making sure that each building met the criteria.

So I’m very proud of just that general process, of trying to find a neighborhood consensus. And when you can’t find a consensus, agreeing to disagree, but in an amicable way. And I think that’s very important, just as a citizen, to be respectful of your neighbors, but I also think especially with the job of alder, where a lot of the decisions you make are not ideological, they’re practical. And whenever you’re trying to make practical decisions that affect people in their everyday lives, I think it’s really important that whoever has the power to make the decision hears them out, but also, that they feel that their comments are not going to be taken in vain, but will be taken seriously. So that, I think is the most important part of the job, in terms of zoning and licensing decisions.

PDF FILE FROM October 2005 Currents , story by Nik Kovac

ACT 10 AND ITS RAMIFICATIONS ON THE CITY OF MILWAUKEE’S BUDGET

RC: What  about the biggest changes you’ve seen in government over your term, you discussed the 2011 enactment of Act 10..

NK: I would say not just Act 10, but also the cuts that came with it and the freeze relative to inflation that has happened after that for the last decade where we, despite the fact that inflation has been occurring every year, even when it was low it was still happening at 2%, or close to it, and our revenue from the state has been frozen. So it’s not just that they created a caste system of employees by protecting some workers and not others, which caused our public safety budgets to become even more disproportionate than they were before, because we had to pay public safety workers more than we paid everybody else. But they also starved us of resources. So we have to make cuts across the board, including public safety. So Act 10 got all the headlines, but to us, structurally, as important as Act 10 was the permanent freeze they put on shared revenue – the sales and income tax that we pay, but no longer get back in our fair share.

RC: Did some of this occur under [former governor Jim] Doyle before Act 10?

NK: To be fair, Doyle did cut it slightly. There is some bipartisan criticism to go around. There was a slight cut to shared revenue in the biennial budget before [former governor Scott] Walker’s first budget, but it was slight, it was a couple million out of $300M. Walker then cut it by $10M, and has never raised it since. So I would say that in Doyle’s last budget, he made an error, but it wasn’t an error that by itself would have caused this [current Milwaukee budget crisis]. It’s the fact that that error was intensified and repeated in biennial budget after budget. I feel like if we had a governor that wasn’t actively campaigning against Milwaukee, like Walker was that whole time, we eventually could’ve made our case to them. Because every now and then the state is going to have a tight budget and they might have to make a cut to us. If that’s in the context of generally giving us inflationary rises, where one budget is tough and they give us a cut, I don’t like it, but everybody can survive a two-year cut. We have enough reserves, we can get through that. You can’t get through a decade, and now two decades of permanent, structural reductions. The only way to survive that is to significantly reduce or even eliminate services that residents expect their city to provide.

There is bipartisan criticism to go around, and frankly I have a list of complaints about things the Democrats have done. One goes back to the 2008-10 session when they were in control and they did slightly cut shared revenue, and also failed to pass a local sales tax despite the fact that the voters approved one in an advisory referendum in 2008. There was also a big lost opportunity on the RTA that Doyle vetoed. That’s a long story, but there was a chance to get a regional transit authority, and we had public will behind it, so Democrats screwed that up, to be fair. But that’s not as bad as what’s happened since 2011. It’s just been devastating.

RC: So there’s a caste system of public employees..

NK: And that was created by Act 10.

RC: So it’s a caste system because..

NK: The per-employee costs. That was already higher for public safety workers, partly because compared to average city workers the salaries are a bit higher for entry-level for police and fire, but also, we’ve changed it some since then, but they’re allowed to retire much earlier than other workers, and there are good reasons for that. They have a very physically demanding job, so their retirement age is lower. It used to be a lot lower, now it’s a bit lower. So that’s nobody’s fault, that’s just a reality of the work, but it does mean that you already have built in, a slightly increased cost. But then when you preserve bargaining rights for just those workers, and not for others, then it exacerbates that disparity, that per-employee cost.

RC: So that’s what caused the caste system, the right to bargain for public safety, and not for others..

NK: Right, for non-police and fire personnel. Their unions can’t negotiate anymore.

RC: And the drop in revenue sharing from the state is separate from Act 10..

NK: Well, in their mind it was related, because in their [state legislators who voted for Act 10] mind it was, ‘we’ve given you the right to take this money from some of your employees, and just save that money then. And we’re going to give you less money to force you to take the money from the employees.’ So in their mind it was related, but that was a one-time thing. And once that savings happens, now you just have a regular budget that’s increasing from that new baseline. That was how they justified the initial cut, but they’ve never explained to anyone, I don’t think, how they can justify not raising it, at least with inflation, since then. [Revenue sharing] has been frozen since 2010. That new low that it went to in 2011, we’re still $10 million less in real dollars, so if you inflation adjust, we’re over $100 million less [in revenue sharing received from the state]. So we’re $100M short relative to our inevitable cost structure, given cost-of-living adjustments/inflation, than where we were just 12 years ago.

RC: And has over that time our share of how much we’re paying in taxes to the state gone up..

NK: It’s actually gone up. So they’re giving us less, and taking more.

RC: And so you were saying, no adjustment for inflation, and no adjustment for cost of living..

NK: Those are synonymous, because cost of living tracks inflation. So from the perspective of an employee, it’s cost of living, but from our perspective, we’re paying the wage, so it’s just a built-in increase. For instance, we were giving raises that tracked inflation to police and fire every year – mind you some years, with negotiation, it would be more than others – but on average, police and fire salaries were keeping up with inflation because they could bargain, and that’s what an arbiter would demand. But all the other employees that didn’t have bargaining rights, we didn’t keep their wages with inflation, because we couldn’t afford to, but that means we have a lot of turnover now in those positions. We’re losing a lot of really good employees. But the state basically told us, ‘you must do this,’ and they made us do it by starving us of resources, and the only option we had to get resources was to not pay half of our employees more. And that’s why I call it a caste system. There was already a disparity, and it has only intensified in the last 12 years.

RC: The fact that we as a city can’t implement a sales tax, or even put it on a ballot, did that come under Doyle?

NK: That wasn’t Doyle. Doyle, like I said, other than the slight cut to shared revenue right before he left, but then he also vetoed the regional transit authority, which would’ve probably involved a referendum, but maybe you’re talking about something I don’t know about that Doyle did. I don’t know everything he did. To my knowledge, we need state authorization to have a local sales tax. There are a number of things the Republicans [in the state legislature] did on fees. Now on fees, they did say you cannot raise a fee without having an associated reduction in your property tax. So they basically said, ‘your main source of revenue [state revenue sharing] – we control, and we’re going to cut that. The other main source of revenue is property tax, and we’re going to tell you that if you come up with some way to generate more revenue outside of that, then we’re going to sabotage it, so don’t even try.’ So that’s something the Republicans definitely did. What are you referring to that Doyle did around the sales tax?

RC: I wasn’t sure if it was Doyle, but my understanding was that when Barrett was, for years, campaigning for a local sales tax, he and you guys on the Common Council could not implement it, nor even put it on the ballot, because it was illegal under state law.

NK: I’m pretty sure the Republicans did that, they also did some referendum restrictions. But any referendums we had done would have been nonbinding anyway. The only people with the authority to create a binding authority referendum to allow a sales tax, was always the state. And I don’t think that’s because of recent changes. But the state could also just create a local sales tax without a referendum. Either option is available to them. They could just create a local sales tax now, just by voting as a legislature, or they could create a binding referendum, or a nonbinding referendum. They have all those options in front of them.

(Note to reader: this last question is about Milwaukee’s budget crisis. One reason for the crisis that has gotten a lot of press is that the pension costs for city employees, which are recalculated every five years, are set to double in 2023 from $73 million/year to $149 million per year, per the Mayor’s Pension Task Force September 2021 report. This question was asked and answered via email.)

RC: To your knowledge, has the city faced a budget crisis like this in the past?

NK: No. This crisis has been building ever since 2011 (as we discussed on the phone) because state shared revenue was cut that year and has been frozen ever since. With inflation compounding every year since then, we are now more than $100M short in that revenue category relative to pre-2010 levels, and we also are going to owe at least that much in pension costs for the next five years.

That increased cost (both inflationary and pensions) combined with the reduction in revenue has given us a huge structural deficit. The federal ARPA [American Rescue Plan Act of 2021] money is allowing us to delay the effects of that deficit for a year or so, but without a significant new source of revenue we will not be able to sustain city services.

Hopefully the state will take a close look at our books and realize that by cutting and freezing our shared revenue they helped create this crisis – and therefore will help us solve it by giving us our fair share of the sales and income taxes our residents, workers, and visitors pay as well as giving us more options to raise our own revenue.