By Gretchen Schuldt
The City of Milwaukee, just five months into the year, already is in borrowing mode to pay off court settlements related to police conduct, a financing strategy that increases costs for taxpayers and leaves them with nothing to show for their money.
The city will borrow $2 million to pay the family of a man who died in the back of a squad car, and will borrow another $2.3 million to pay the family of a man who died in jail of an epileptic seizure about 18 hours after telling police he did not have his regular dose of anti-seizure medicine, according to city documents and Budget and Management Director Dennis Yaccarino.
Interest alone could add a million dollars or more to the total price tag over the life of the bonds, depending on their longevity and interest rates.
Ideally, state and local governments use bonds to pay for large capital projects that are expected to last a long time, like roads, bridges, and schools. Borrowing for these types of projects allows governments to spread the costs over decades to ensure that future beneficiaries of the projects share in the costs.
Borrowing for police-related settlements, however, is on the increase not only in Milwaukee, but across the country.
Here, Yaccarino said, "It is a challenge to continue to budget core city services with no growth in revenues and have no ability to set up a funding mechanism for court settlements that eliminates borrowing without impacting those core services."
The city traditionally has relied on a $5 million contingent fund to pay settlements that exceeded the amount budgeted for them, he said.
This year, though, Yaccarino said, snow and ice removal costs are running $4.3 million over budget, melting away much of the contingent fund.
The city's uncomfortable position is not unique to 2019. Budget figures show it is now common for the city to pay out more in damages and claims than the total $5 million budgeted in the contingent fund.
Last year, the city borrowed $6.2 million to cover damages and claims like the police-related lawsuits it needs to borrow for now, according to city bonding documents.
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