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2023 Capital and Operating Budget

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On Tuesday, November 15th (and November 16th & 17th, if necessary), the Common Council is scheduled to hold a public hearing and adopt a capital and operating budget for 2023.

For those interested, this post provides details on what's happened so far and what's next.

The City of Madison has a capital budget and an operating budget.

cap vs op

The capital budget provides funding for the City's major construction projects including building new facilities, improving our transit system, maintaining our roads and parks, and purchasing major equipment. The capital budget includes the Capital Improvement Plan, which lays out anticipated projects for the next five years. The capital budget is primarily funded via borrowing over 10-year period.

The operating budget provides money for running City departments and services. It pays for the day-to-day spending on employees, materials, supplies and community programs. The operating budget is primarily funded via taxes.

CAPITAL BUDGET

On September 6th, Mayor Rhodes-Conway introduced the 2023 Executive Capital Budget. The Executive Capital Budget includes $368.4M in new capital expenses in 2023 and $101.1 million in reauthorizations from 2022.

You can explore a very cool interactive story, which outlines proposed spending for 2023 to 2028, spending based on the elements of the Madison Comprehensive Plan (Land Use & Transportation, Neighborhoods & Housing, Economy & Opportunity, Culture & Character, Green & Resilient, Effective Government and Health & Safety), funding sources, and a map of facilities, parks, transportation, and utilities that are covered in the budget.

Some brief highlights of the 2023 Executive Capital Budget (full highlights in the Mayor's Executive Capital Budget Summary):

Land Use & Transportation 

  • 2023-28: Pavement Management Program ($68.7m); Street Reconstruction ($54.5m); Sidewalk Repair ($15.1m); Transit System Upgrades ($6.7m); Bikeways program ($3.7m); Safe Streets Madison ($10.0m
  • 2023: State St Garage Replacement ($29.5m); Atwood Ave Reconstruction (4.5m); Safe Streets for All Federal Grant Match ($4.0m, contingent on receipt of grant)
  • 2023-24: East-West Bus Rapid Transit (BRT) ($10.3m); North-South BRT ($13.3)
  • 2026-27: John Nolen Drive ($21.1m)

Neighborhoods & Housing 

  • 2023-28: Affordable Housing Development Projects ($48.3m); Affordable Housing Consumer Lending ($7.3m); Land Banking ($6m)
  • Affordable Housing Development budget also includes $12.2 m in TIF proceeds; Consumer lending includes $11.9m in other sources
  • 2023: Permanent Men's Shelter ($3m)
  • Capital budget also includes $6m from Dane County and $2m in federal funds, bringing the 2023 amount to $11m; this is in addition to $10m appropriated in prior budgets  

Economy & Opportunity 

  • 2023-28: Small Business Equity and Recovery ($4.5m); Center for Industry and Commerce ($240k)

  • The 2023 Capital budget also includes $7.8m from TIF proceeds for the Village on Park Redevelopment.

Culture & Character

  • 2023-28: Park Land Improvements ($15.2m); Park equipment ($2.3m)
  • 2023: Reindahl Imagination Center ($10.5m); Warner Park Community Center ($4.3m)

Green & Resilient 

  • 2023-28: Energy Efficiency Improvements ($17.5m); Citywide flood mitigation ($9.4m); Stormwater Quality System Improvements ($9.3m); Electric Heavy Trucks and Infrastructure ($8.2m); Park Facility Improvements ($4.8m); Beach and shoreline improvements ($2.7m)
  • 2026: Central Library green and resilient project ($1.4m)
  • 2026-28: James Madison Park Improvements ($1.6m)

Effective Government

  • 2023-28: Network Operations and Infrastructure ($7.3m); Digital Workplace ($7.1m); Fiber and Wireless Network ($5.3m)
  • 2023-25: City County Building Office Remodels ($13.2m)
  • 2027: Far West Public Works Facility ($43.1m)

Health & Safety

  • 2023-28: Fire Apparatus/ Rescue Vehicles ($21.0m); Playground/ Accessibility Improvements ($4.1m); Fire and EMS Equipment ($3.4m); Public Safety Radio System ($1.9m); Healthy Retail Access Program ($1.5m). 

District 19 Highlights

District 19 related highlights in the 2023 Executive Capital Budget include:

  • Metro - Bus Rapid Transit
  • Engineering – Bicycle & Pedestrian: Old Middletown Underpass, Wexford Pond dredging
  • Well 14 mitigation
  • TID 46 - University Research Park
  • Twenty is Plenty - Change Neighborhood Streets to 20mph (Carry Forward from 2022)
  • Pavement Management: Craig Avenue, Lake Mendota Drive

 

HORIZON LIST

The 2023 Capital Budget continues a concept introduced in the 2020 Capital Budget called the Horizon List. This list identifies critical and high priority projects that are at the conceptual stage but need additional planning before being included in the Capital Budget.

The 2023 Horizon List includes: 

  • Engineering – Facilities: Sayle Street Remodel
  • Fire – Fire Station 4: Monroe Street Remodel Project
  • Information Technology – Customer Single Sign-On Solution Project, Common Customer File Project, 311/CRM System 
  • Parks Division – Brittingham Beach House Renovation Project, Elver Park Community Center Project, Goodman Pool Replacement Project, Hill Creek Park Improvements Project, Hudson Park Slope Stabilization Project, James Madison Park Facilities Project, McPike Park Construction Project, Odana Hills Golf Course Project, Olbrich Botanical Gardens Project, Vilas Park Master Plan Implementation
  • Police – New North District Station, Property & Evidence Facility

Madison Public Market

The City of Madison has already invested approximately $2.3 million to date on consultant studies, business planning, design and construction documents, a MarketReady Program, and Madison Public Market (MPM) Foundation support related to the Madison Public Market (MPM). The 2023 Capital Budget includes an additional $11,849,383 for construction of the market ($4M from State Neighborhood Investment Fund Grant, $7.8M from City's Capital Budget ($7M - TID #36 and $849,383 – Prior UDAG). In addition, the City is leasing the City's former Fleet division building (which was also used as a Temporary Men's Homeless Shelter) to the Market for $1/year.

Earlier this year, the project was expected to cost $18.2M to build. Construction cost estimates have increased $1.7M and are expected to go up even more (full funding details).

The MPM was unable to obtain fund from the Federal Economic Development Administration (EDA), which has led to a request by the Public Market Foundation for the City to fund an additional $5.2 million dollars. The Executive Budget doesn't include this additional funding, but it's likely an Alder will propose an amendment at our November budget meeting to try and add the funding. It's been reported the County may help with the gap by providing $1.5M.

The MPM's business plan hasn't been updated since late 2020, but that plan shows that the market isn't expected to turn a profit in the first few years. The deficit in the first few years is built into their capital plan, but no plan has been detailed to deal with future deficits.

I won't be supporting additional City funds for the Public Market. Any additional funds will be essentially giving the Public Market a blank check. After investing so much money, the City would essentially be obligated to fund future capital requests (which are likely due to forecasted/expected constructed increases) and use our already stretched thin operating budget to deal with operating deficits.

I believe there are more affordable and smarter ways to support the food economy in Madison.

PUBLIC MEETINGS

On September 12th and 13th, the Directors from each of the City's departments presented their capital budget requests to the Common Council's Finance Committee. I am a member of the Finance Committee. The meetings were long, but informative. The Finance Department presented an overview of the capital budget. 

September 12th focused on Public Spaces (Library, Monona Terrace), Planning, Community & Economic Development (CDA Redevelopment, Planning, Community Development, and Economic Development), Public Safety & Health (Public Health, Fire Department, Police Department), Administration (Finance, Henry Vilas Zoo).

September 13th focused on Administration (Mayor's Office and Information Technology), Engineering (Bicycle & Ped Projects, Facilities, Major Streets, Other Projects, Sewer Utility, and Stormwater Utility), Public Works (Water Utility,  Fleet Services, Parks Division, Streets Division) and Transportation (Parking Utility, Traffic Engineering, Transportation, and Metro).

You can download the full PDF of the presentations to review and/or to use to follow along with the videos.

The Finance Committee is the Council's first opportunity to amend the Mayor's proposed budget. On September 21st, the Finance Committee discussed and voted on those amendments.

Starting November 15th, the Council will discuss and vote on additional amendments.

You can see the full legislative file for the Capital Budget here.

OPERATING BUDGET

On October 11th, Mayor Rhodes-Conway introduced the 2023 Executive Operating Budget. The Executive Operating Budget is $381M in General and Library Fund Expenses.

A summary of highlights of the 2023 Executive Operating Budget (full highlights in the Mayor's Executive Operating Budget Summary):

Balancing the Budget

The persistent structural gap between on-going service costs and limited revenue growth imposed by state mandates remains a challenge. Our costs are growing faster than our allowed revenues. The trend is getting worse, not better. The annual operating budget must be balanced, meaning expenses cannot exceed revenues.

The Executive budget increases General and Library Fund expenditures by $21.6 million (6 percent) to a total of $381.9 million. About half of this increase is associated with one-time spending, including a $1,000 payment to employees funded from surpluses in the City's life and wage insurance programs, seed funding for a private-public endowment to support on-going homeless shelter operating costs, and 2023 homeless shelter operating costs supported by one-time American Rescue Plan Act (ARPA) funds. Debt service for City infrastructure and other capital projects is increasing by about $5.5 million (10 percent) and represents about a quarter of the overall increase. The remaining increase in expenditures is associated with employee compensation (e.g., 2 percent to 3 percent pay increases for all employees), the cost of program expansions (e.g., CARES, young adult employment, reproductive health services) and new positions (e.g., emergency management coordinator), and a one-time $7.7 million reduction in the City subsidy for Metro Transit to reflect use of one-time federal transit funding.

Local City revenues (e.g., building permits, ambulance fees, room taxes, investment income) are recovering from the economic effects of the pandemic with an increase of 14 percent ($6.9 million) over 2022 budgeted levels. The closure of tax increment districts, particularly Tax Increment District 25, is providing a onetime boost in revenue of $6.9 million. State aid is up 3 percent ($1.2 million). The property tax levy will increase by $14.2 million (5.5 percent) to $273.3 million based on the added property value of new construction, attachment of property from the Town of Madison, and debt service costs. This growth in revenues will offset the use of $13.1 million of one-time American Rescue Plan (ARPA) funding used to help balance the 2022 budget.

The budget includes a $7.7 million reduction in the City subsidy to Metro Transit. This one-time reduction is possible due to the availability of federal economic recovery funding for transit systems. The City subsidy to Metro Transit is $9.1 million in 2022 and will decline to $2.0 million in 2023. In 2024, the subsidy will increase to $14 million to reflect restoration of the City subsidy and the first year of repaying the $7.7 million reduction in this budget. This shift in funding between years requires that the City prudently budgets to accommodate the $12 million increase in the City subsidy between 2023 and 2024 and continue to qualify for the $7 million in aid under the state expenditure restraint program. The 2023 executive operating budget includes $10 million of one-time appropriation increases. Those one-time increases will be replaced by the permanent restoration of the Metro subsidy in the 2024 budget.

The budget continues to achieve balance using one-time revenues, specifically $6.9 million from the City

share of surpluses in closed tax increment districts. Long-term, the increase in the cost of City services will continue to outpace the allowable growth in the property tax levy and historical growth in state aid and other City revenues. Remaining ARPA funding of $4.4 million, along with additional one-time monies from tax increment districts, are expected to keep the deficit in the 2024 budget at approximately $7 million. However, starting in 2025, the deficit is expected to reach between $20 million and $30 million annually. Over the next two years, service levels and revenue options will need to be thoroughly explored. The City's Results Madison effort is focused on reorienting the budget toward use of performance data in the delivery of City services. The 2023 budget includes $350,000, to fund a thoughtful review of City compensation structures, processes, procedures, recruitment and retention.

This review will be conducted in close consultation with employee unions and associations. Working groups will be formed to review options for additional revenues to help continue high priority City services.

Key Areas of this Year's Budget

The Mayor focused on three key areas in her Executive Operating Budget: building a safer community,

building healthier neighborhoods, and creating opportunities for youth.

Building a Safer Community

In 2021, Madison launched a new 911 emergency services team called Madison's Community Alternative Response Emergency Services or CARES. Madison CARES is a mobile unit that pairs a community paramedic and a crisis worker to respond to behavioral health emergencies. This program started as a test in downtown Madison for only 8 hours a day, 5 days a week. With the help of a budget amendment I sponsored last year, CARES has since expanded City-wide, added a second location, and increased service to 12 hours a day. With promising early results, the 2023 budget expands the Madison CARES program to 7 days a week, 12 hours a day and continues its growth and development as an essential City resource addressing community mental health needs.

The City's Public Health Department has a Violence Prevention Team that does evidence-based work aimed at reducing violence in our community. The 2023 budget continues funding for this team, which will be hiring new staff focused on preventing crime in the downtown entertainment district and mediating conflict across the City. Our Community Development Division also funds numerous community organizations across the City that work to increase safety and provide needed services to residents.

One of the most concerning safety issues in Madison is traffic crashes. The City's Vision Zero program aims to reduce serious injury and fatality crashes to zero. The capital budget anticipates, and provides the local match for, a $16 million federal USDOT Safe Streets grant. If the City is successful in securing these funds, we will hire a Vision Zero Safe Streets for All Project Manager to accelerate the implementation of safety infrastructure and a long list of Vision Zero projects. With our work on Vision Zero being recognized nationally, including by USDOT, Madison is well positioned for this federal grant opportunity.

Building Healthy Neighborhoods

Much of what the City does is aimed at supporting healthy neighborhoods and families. City agencies provide clean water, sewer and stormwater services, trash and recycling pick up, and leaf and snow removal services. Parks and libraries offer outdoor and indoor opportunities for residents to enjoy, and the Economic Development Division supports businesses across our community. Our Department of Civil Rights makes sure people know their rights and have recourse if they face discrimination. Our amazing clerks administer safe and secure elections, and the 2023 budget includes a new bilingual clerk position.

Our police, fire, public health and building inspection departments help keep our neighborhoods safe. Public Health continues to respond to COVID-19, while also restoring other public health services to their pre-pandemic levels.

This past June, the U.S. Supreme Court's decision on abortion created a health care emergency for women in Madison. This unprecedented loss of rights requires an unprecedented response. The 2023 budget includes investing $475,600 to expand staffing and hours and provide more comprehensive services in Public Health Madison and Dane County's reproductive health clinic, including meeting an anticipated increased demand for long-acting reversible contraceptives that provide long term pregnancy prevention.

Everyone in Madison should have access to safe, secure and affordable housing. The 2023 Capital Budget expands the City's Affordable Housing Fund. This fund is now more than double the size since 2019. But the economic impacts of the pandemic have made it difficult for many residents to keep up with rent and utility bills. The City has helped more than 7,000 Madison households remain stably housed over the past 18 months, thanks to unprecedented federal funding.

To help Madison families afford City utility bills, this budget includes funding to launch Mad-CAP, the Madison Customer Assistance Program (which was recently approved by the State Public Service Commission). This innovative program will offer financial assistance to Madison's lower income households and help bring down the cost of the Municipal Services bill, which includes utilities (water, sewer, stormwater, and landfill remediation) and special charges (resource recovery and urban forestry).

Creating Opportunities for Youth

The operating budget includes a number of investments in programs for young people across City agencies, including Parks, Library, Community Development, Civil Rights, Engineering, Fleet, and Metro Transit. Many City departments offer internships. In the City's Green Power Program, apprentices install solar panels, while in the Fleet Services Department, they learn technical skills working on City vehicles.

In 2022, Madison held 31 Parks Alive! events. These were a new way to emerge from pandemic isolation, using our amazing City parks, resident leaders, Neighborhood Resource Teams and other City resources to engage residents and reenergize park programming. They helped build relationships between young people and adults, and build trust between residents, City staff, and other neighborhood stakeholders. The 2023 budget includes a full-time program manager and provides support to Parks Alive! and other programming.

The City invests nearly a million dollars each year to support programs operated by community partners like Common Wealth Development, the Urban League, Mentoring Positives, Operating Fresh Start, CEO's of Tomorrow and others that combine employment and internship opportunities with mentoring and skills development. Young participants earn a paycheck, gain leadership skills and receive work-based credits from the Madison Metropolitan School District. They also participate in financial empowerment education that introduces them to financial systems and helps them open their own bank accounts. This year we took advantage of available federal funding to support about a dozen local agencies offering programs that will benefit 900 Madison youth.

The 2023 budget provides an additional $250,000 to support further expansion. These funds will be used specifically to reach a group of young adults, aged 18-26, who are not adequately served by existing programs. The group consists primarily of young people of color, LGBTQ+ and low-income youth who are not currently connected to traditional educational and employment systems. With support, they have the chance to improve their job prospects and develop tangible career options.

PUBLIC MEETINGS

On October 17th and 18th, the Directors from each of the City's departments presented their operating budget requests to the Common Council's Finance Committee. Much like the capital budget hearings, the meetings were long, but informative. Here's an Executive Operating Budget Overview that was presented to the Finance Committee at the beginning of the hearing.

October 17th focused on Public Spaces (Library, Monona Terrace), Planning, Community & Economic Development (Building Inspection, CDA Housing Operations, CDA Redevelopment, Community Development, Economic Development, Planning, PCED Office of the Director), Public Health & Safety (Fire, Police), Administration (Civil Rights, Finance).

October 18th focused on General Government (Municipal Court), Public Health & Safety (Public Health), Administration (Accessor, Attorney, Clerk, Employee Assistance Program, Human Resources, Information Technology), Transportation (Metro, Parking Utility, Traffic Engineering, Transportation), Public Works (Engineering (including utilities), Fleet Services, Water Utility, Street and Parks (including Golf)).

You can download the full PDF of the presentations to review and/or to use to follow along with the videos.

The Finance Committee is the Council's first opportunity to amend the Mayor's proposed budget. On October 31st, the Finance Committee discussed and voted on those amendments.

Starting November 15th, the Council will discuss and vote on additional amendments.

You can see the full legislative file for the Operating Budget here. 

Wisconsin Policy Forum Review

A non-partisan organization called the Wisconsin Policy Forum posted a review of the 2023 proposed budget to their site: Wisconsin Policy Forum | Madison: 2023 Budget Brief | Full Report

Community Session on the 2023 Budget

City Finance staff hosted virtual information session on the 2023 budget on October 13 [Watch YouTube video] and October 24 [Watch YouTube video]. The sessions will include background information on the city's capital and operating budget process, highlights of the 2023 executive budget, and a moderated Q&A.

UPCOMING MEETINGS

Information on the upcoming budget meetings:

If you have questions, comments, suggestions, etc., about the budget, feel free to reach out: district19@cityofmadison.com

-Keith F

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District 19 - Alder Guequierre

John Guequierre

Alder John P. Guequierre

District 19
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