2022 Capital and Operating Budget

On Tuesday, November 9th (and November 10th & 11th, if necessary), the Common Council is scheduled to hold a public hearing and adopt a capital and operating budget for 2022.

For those interested, this is 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.

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 over10-yearear 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 August 31st, Mayor Rhodes-Conway introduced the 2022 Executive Capital Budget. The Executive Capital Budget includes $355M in new capital expenses in 2022 and $63.5 million in reauthorizations from 2021.

You can explore a very cool interactive story, which outlines proposed spending for 2022 to 2027, spending based on the elements of the Madison Comprehensive Plan (Land Use & Transportation, Neighborhoods & Housing, Economy & Opportunity, Culture & Character, Green & Resilient, Effective Government), funding sources, and a map of facilities, parks, transportation, and utilities that are covered in the budget.

Some brief highlights of the 2022 Executive Capital Budget (full highlights in the Mayor's Executive Capital Budget Summary):

Land Use & Transportation 

• 2022-27: Pavement Management Program ($75m), Street Reconstruction ($54.1m), Sidewalk Repair ($14.5m), Transit System Upgrades ($8.1m); Bikeways program ($5.7m)
• 2022: University Ave, Shorewood to University Bay ($14.0m)
• 2022-23: East-West Bus Rapid Transit (BRT) ($16.0m); North-South BRT ($4.0m)
• 2026-27: John Nolen Drive ($23.2m)

Neighborhoods & Housing 

• 2022-27: Affordable Housing Development Projects ($35.1m)
• 2022-27: Affordable Housing Consumer Lending ($7.0m)
• 2022-27: Land Banking ($9.6m)
• 2022: Community Facilities Improvements ($1.0m)

Community Facilities Improvements: New program in 2022 to support smaller capital projects proposed by non-profits community partners to meet facility needs that serve or benefit specific neighborhoods or populations.  

Green & Resilient 

• 2022-27: Electric Heavy Trucks and Infrastructure ($7.4m); Fleet Equipment Replacement ($43.1m)
• 2022-27: Park Facility Improvements ($9.7m)
• 2022-27: Stormwater Quality System Improvements ($7.7m)
• 2022-27: Sustainability Improvements ($4.9m)

Economy & Opportunity 

• 2022: Village on Park Redevelopment ($6.2m)
• Tax Increment District (TID) 46 Research Park ($4m)
• TID 49 Femrite Drive ($2.1m)
• Co-operative Enterprise Development ($300k)
• 2023-27: Small Business Equity and Recovery ($4m)

Culture & Character

• 2022-27: Park Land Improvements ($13.6m)
• 2022-27: Building Improvements ($6.3m)
• 2022-27: Playground / Accessibility Improvements ($4.1m)
• 2023: Warner Park Community Center ($3.4m)
• 2025: Forest Hill Cemetery Projects ($1.6m)
• 2026: Lake Monona Waterfront Improvements ($500k)

Effective Government

• 2022-27: Citywide Flood Mitigation ($7.7m)
• 2022: Fire Station 6 Remodel ($4.0m)
• 2023: Reindahl Imagination Center and Library ($10.5m), City County Building Office Remodels ($4.7m)
• 2027: Far West Public Works Facility ($41.5m)

Health & Safety

• 2022-27: Safe Streets Madison ($10.4m)

Safe Streets Madison consolidates several existing capital programs from Engineering and Traffic Engineering, following recommendations from a joint subcommittee of the Transportation Commission and the Transportation Policy and Planning Board. This program includes neighborhood traffic management and pedestrian improvements, Safe Routes to School, bike and pedestrian enhancements, and Vision Zero implementation. 

District 19 Highlights

District 19 related highlights in the 2021 Executive Capital Budget include:

• Metro - Bus Rapid Transit
• Engineering – Bicycle & Pedestrian: Old Middletown Underpass (2022), new path in Wexford Greenway and a new cycle track on Old Sauk Road
• TID 46 - University Research Park
• Twenty is Plenty - Change Neighborhood Streets to 20mph
• Pavement Management: Old Middleton, Craig Avenue, Lake Mendota Drive
• Spring Harbor Dredging

HORIZON LIST

The 2022 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 2022 Horizon List includes: 

• Engineering – Bicycle & Pedestrian: Old Sauk Trail Pass, West Towne Path – Phase 2
• Engineering – Facilities: CCB 4th and 5th Floor Remodel, Sayle Street Remodel
• Fire – Fire Station 4: Monroe Street Remodel Project, Fire Station 14: Burn Tower Project, Fire Station 14: Fire Training Development
• Information Technology – Customer Single Sign-On Solution Project, Common Customer File Project, 311/CRM System 
• Parking Division – Lake Street Garage Replacement
• Parks Division – Brittingham Beach House Renovation Project, Elver Park Community Center Project, James Madison Park Facilities Project, McPike Park Construction Project, Vilas Park Master Plan Implementation
• Water Utility – East Side Water Supply

PUBLIC MEETINGS

On September 13th and 14th, 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 Committee used the interactive story to provide the Finance Committee an overview of the capital budget. 

September 13th focused on the Fire Department, Library, Monona Terrace, Administration (Finance, Henry Vilas Zoo, Information Technology, and Mayor's Office), Planning, Community & Economic Development (CDA Redevelopment, Planning, Community Development, and Economic Development).

September 14th focused on the Police Department, Engineering (Bicycle & Ped Projects, Facilities, Major Streets, Other Projects, Sewer Utility, and Stormwater Utility), Transportation (Parking Utility, Traffic Engineering, Transportation, and Metro) and Public Works (Fleet Services, Streets Division, Water Utility, and Parks Division).

You can download the full PDF of the presentations if you want to use the PDFs to follow along with the videos.

• September 13, 2021 – City Channel Video (Budget hearing with public comment starts at 1hr 10 minutes after a regular Finance Committee meeting. Total video is 3 hours and 29 minutes) | via YouTube (queued up to start of Budget Hearing)
• September 14, 2021 – City Channel Video (3 hours and 15 minutes) | via YouTube

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.

• September 27, 2021 – City Channel Video (Starts at 1hr 24 minutes after a regular Finance Committee meeting; 2 hour 47 minutes) | via YouTube (queued to start of Budget Hearing) | Proposed Amendments | Approved Amendments

Starting November 9th, 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 5th, Mayor Rhodes-Conway introduced the 2022 Executive Operating Budget. The Executive Operating Budget is $771.8M ($358M in General and Library Fund Expenses).

A summary of highlights of the 2022 Executive Operating Budget (full highlights in the Mayor's Executive Operating Budget Summary):

The City began its 2022 budget process staring down an $18 million deficit. Over half of that amount was associated with one-time measures used to balance the 2021 budget in the face of the severe revenue losses due to the impact of the pandemic on our local economy, including use of $8 million from our rainy day fund. While the economic picture is improving, we continue to experience depressed revenues compared to pre-pandemic levels. In addition, the persistent structural gap between on-going service costs and limited revenue growth imposed by state mandates remains a challenge.

Balancing the Budget

The annual operating budget must be balanced, meaning expenses cannot exceed revenues. This year's budget reflects two ongoing challenges in achieving a balanced budget. First, the continued health and economic impacts of the COVID-19 pandemic have significantly impacted revenues. In 2021, the City used an unprecedented $8.0 million in fund balance, or "rainy day" funds, to balance the budget, in addition to applying reserves from other enterprise funds. The use of fund balance was a one-time measure; funds used in 2021 must be restored for prudent financial management. The 2022 Executive Operating Budget avoids further use of fund balance by allocating one-time federal funds from the state and local allocation of American Rescue Plan Act (ARPA) funds to support city services. The 2021 mid-year and year-end appropriation resolutions include measures to reduce the use of the "rainy day" fund from $8 million in the adopted 2021 budget to $5.5 million by the end of 2021, through use of ARPA funds for already budgeted government services costs and transfer to the General Fund of a portion of the City's share of the $30 million surplus in recently closed Tax Increment District (TID) 25.

The second challenge is an ongoing structural deficit. As the City continues to grow and services expand to meet community needs, the year-over-year costs of providing core services increases. At the same time that expenses increase, the state legislature puts strict limits on City revenue. In addition, the State Aid revenue to cities has not kept pace with costs. As a result, expenses are increasing faster than revenues, creating a structural gap.

To address these challenges, the 2022 Executive Operating Budget includes 1) temporary and permanent reductions to agency budgets that were carefully considered to have the least impact on existing services, 2) strategic use of ARPA funds to balance the budget and continue community investments to help residents and the economy recover from the pandemic, and 3) new investments in priority areas to address core services related to a growing city.

Four key areas of this year's budget are:

Equitable Service to New Residents from the Town of Madison  

As the City prepares for the attachment of the Town of Madison in October of 2022, we are already gearing up to ensure we can provide high quality and equitable service to the approximately 5,000 people who will become city residents.

Innovation in Violence Prevention and Public Safety 

• $600,000 to support a new program to reimagine emergency response for mental health-related calls called CARES (Community Alternative Response Emergency Services). CARES teams consist of a paramedic and a crisis worker treats behavioral health emergencies as the medical issues they are, centering patient needs and patient care and linking them to treatment options, diverting people from emergency rooms and jails.
• Continued full funding for an Independent Police Monitor and the Police Civilian Oversight Board. The Board will be hiring an independent monitor soon.
• New Police Reform and Innovation Director position within MPD.
• Leveraging federal ARPA funding, over $1 million for violence prevention efforts that implement the Madison Dane County Roadmap to Reducing Violence. 
• Enhanced funding for youth employment and leadership training run by community organizations.

Affordable Housing

• Funding for affordable housing in the Executive Operating Budget is in addition to $21.6 million dedicated to housing issues in my Executive Capital Budget.
• $6,590,000 to help expand low-cost housing choices
• New $1 million new program that reduces barriers to renting for tenants that may otherwise be screened out of the process due to damage reports or low credit scores.
• Dedicated funding to expand our Eviction Defense Program.
• Dedicated $2 million to support operations associated with homelessness services

Growing Our Own Diverse Workforce

• Engineering: Expanded Green Power solar trainee program and an infrastructure employment and training program to bring our annual sidewalk installation and repair program in-house instead of contracting it out.
• Parks Division: new conservation trainee position.
• Streets: New trainee program as an outgrowth of the Division's longtime seasonal laborer positions.
• Fleet: Continuation of the high school apprenticeship program our Fleet Department, initiated in partnership with Madison Metropolitan School District in 2018.
• Investment in the City's workforce by providing $1.5 million for a 1% pay increase to help close the wage parity gap for our general municipal employees and removing the residency requirements that have reduced longevity increases for some of our employees.

PUBLIC MEETINGS

On October 11th and 12th, 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 11th focused on Municipal Court, Public Health & Safety (Public Health, Fire, Police), Library, Monona Terrace, Room Tax Commission, Assessor, Transportation (Metro, Parking Utility, Traffic Engineering, Transportation).

October 12th focused on Administration (Attorney, Civil Rights, Clerk, Employee Assistance Program, Finance, Human Resources, IT), Public Works (Engineering (including utilities), Fleet Services, Parks (including Golf), Streets, Water Utility), Planning, Community & Economic Development (Building Inspection, CDA Housing Operations, CDA Redevelopment, Community Development, Economic Development, PCED Office of the Director, Planning).

You can download the full PDF of the presentations and a schedule of presentations if you want to use the PDFs to follow along with the videos.

• October 11, 2021 – City Channel Video (Budget hearing with public comment starts at 3 hours and 11 minutes in after a regular Finance Committee meeting; Total video is 6 hours) | via YouTube (queued up to start of Budget Hearing)
• October 12, 2021 – City Channel Video (3 hours and 40 minutes) | via YouTube

The Finance Committee is the Council's first opportunity to amend the Mayor's proposed budget. On October 26th, the Finance Committee discussed and voted on those amendments.

• October 25, 2021 – City Channel Video (Starts at 1hr 09 minutes after a regular Finance Committee meeting; Totl video is 6 hour 44 minutes) | via YouTube (queued to start of Budget Hearing) | Proposed Amendments | Approved Amendments

Starting November 9th, 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 2022 proposed budget to their site: Wisconsin Policy Forum | Madison: 2022 Budget Brief | Full Report | Interactive Data

UPCOMING MEETINGS

Information on the upcoming budget meetings:

• Tuesday, November 9 @ 5:30 p.m. (Virtual Meeting)
• Wednesday, November 10 (if needed) @ 5:30 p.m. (Virtual Meeting)
• Thursday, November 11 (if needed) @ 5:30 p.m. (Virtual Meeting)

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

-Keith F