Mayor Rhodes-Conway's 2021 Operating Budget Message
Tuesday, October 6, 2020 - 12:48pm
This has been an unprecedented and challenging year. First we were faced with a global pandemic unlike anything we had ever seen before. Then we were faced with dramatic increases in unemployment, food insecurity, and housing insecurity, and economic distress in far too many households. We were also challenged anew to address the racial disparities that exist across our country and right here in our community. Today, we continue to face levels of uncertainty that seem never-ending, impacting the health and wellbeing of our residents, and increasing demand for the services the City and other levels of government provide.
While Madison has moved to address many of these issues, some of our biggest challenges - like COVID-19 and the housing crisis - are made worse by the lack of response at the federal level. Unlike in other emergencies, American cities have received very little support from the federal government, despite the fact that cities are on the front line of all the challenges 2020 has presented us. Partisan gridlock at the state level has also hindered much needed state aid. Lacking support from other levels of government, we have been forced to cut spending and services in order to balance next year’s budget as required by state law.
In June, when agencies were beginning work on their budget materials, the City was faced with a $25.0 million shortfall. While $10.0 million of this gap was the result of revenue loss from COVID, $15.0 million of our shortfall was the result of a structural gap that exists because our annual expenditure growth outpaces revenue growth. While healthcare and personnel costs were projected to increase by 5%, the allowable revenue growth under state limits is only 2.5%. As we saw in 2020, our revenue options are limited, often regressive, and cannot be the full solution to dealing with this gap.
Based on these realities, I have balanced the 2021 budget through a series of expenditure reductions coupled with modest fee increases and the use of fund balance. These balancing actions include:
- Utilizing $8.0 million of the City’s unrestricted fund balance for temporary revenue loss and one-time expenditures. Because 2021 is the beginning of what will be multiple years of uncertainty, we must adhere to our policies that put appropriate limits on the use of fund balance to ensure we have the resources we need to respond to the uncertainty that lies ahead.
- Increasing the ambulance conveyance fee and building inspection fees to levels comparable to other communities and reflective of inflation. These changes are expected to add over $1.1 million to general fund revenues in 2021. Assumption of fire, emergency medical and inspection fee services from the Town of Madison will add $1.3 million in new revenue next year.
- Implementing $3.3 million in cuts to agency budgets; $1.5 million of the total cut to agency budgets will be realized through efficiencies in our service delivery and will not result in major changes to service delivery.
- Calling on the Police and Fire unions to come back to the negotiating table to reopen their contracts to renegotiate provisions agreed to in 2019 (by the previous administration) that are no longer realistic in the City’s budget. The majority of the savings I’ve identified in the budget ($1.5 million) can be realized if these employees agree to take the same health insurance package as all other City employees.
- Requiring furlough days for the City’s General Municipal employees. This program will realize $1.2 million in savings next year, with each employee taking 2 to 4 days of unpaid leave over the course of 2021. This program will be implemented in a progressive manner ensuring that those who make more money will have more furlough days than those who make less.
These reductions are difficult and will force us to make adjustments in the way City services are provided. These reductions have largely, though not completely, avoided layoffs for City staff who work very hard every day to deliver exceptional services in the midst of a pandemic. Unfortunately, we have not been able to avoid a small number of layoffs in our Parking Utility where revenue is not anticipated to rebound until after a vaccine is found for COVID-19.
In spite of this challenging economic outlook, my budget seeks to make progress in the following ways:
Preserving Funding for Social Services
Madison’s residents are not getting the support they need from federal and state governments and our community cannot sustain reductions to social and public health services at this time. That is why I have not made any cuts to the City’s Community Development Division, where our funds for community organizations and social service delivery live. These funds will support residents, especially our most vulnerable, in these tough economic times. My budget:
- Includes $10.9 million in General Fund support (double the amount of federal funds we receive in this area) for local community organizations providing a wide range of programs vital to our youth, parents, job seekers, and some of our most vulnerable populations. These funds will be used for:
- Creating a flexible $400,000 COVID Relief Fund for community organizations to support families navigating the social and economic fallout of the pandemic.
- Providing $1.8 million for Housing Assistance programs and homebuyer readiness programs supporting low-income families to purchase homes. This investment is on top of the $7.7 million budgeted in the 2021 capital budget for Affordable Housing.
- Providing $6 million for Community Support Services including much needed childcare and youth services, violence prevention, children and family programming, and services for older adults.
- Providing nearly $950,000 (and an additional $660,000 from federal grants) to keep our neighborhood centers operating.
- Providing $1.8 million for employment services for youth and adults along with technical assistance to small businesses.
- Provides funding to ensure we are equipped to keep fighting COVID, including:
- An overall 11% increase for Public Health services to fight COVID. My budget provides ongoing funding for nine new positions created earlier this year through the CARES Act. These positions are working tirelessly to continue contract tracing, supporting testing efforts, and ensuring residents from all backgrounds have the information and public health resources they need to safely navigate the pandemic.
- Funding for our Emergency Operations Command Center to purchase personal protective equipment ensuring our front-line City employees have the supplies they need to keep providing services to our residents safely and efficiently.
Reimagining Public Safety
For decades, public safety has represented the largest share of the City’s operating budget, and keeping people safe is a core function of local government. That function is even more important now, as the turmoil of COVID-19 has led to an increase in dangerous and violent crime. While police focus on that crime, we also must envision new ways of pursuing public safety that produce more equitable outcomes. As we begin reimagining how our resources could be deployed to better align our response with community needs, my budget begins taking some responsibilities off our Police Officers to free up their time to focus on responding to dangerous and violent crime by:
- Experimenting with a new type of Crisis Intervention Team to support residents with behavioral health emergencies. Recognizing that an armed officer is not always the best response to an emergency call, many cities across the nation are experimenting with new models of crisis intervention and service delivery. Madison’s Fire Department will lead the way in soliciting community input and designing this program using community paramedics and contracted crisis workers.
- Transferring the $600,000 Crossing Guard program to Traffic Engineering, so crossing guards can work directly with our Vision Zero and Safe Routes to School programs.
- Removing four School Resource Officer positions from the budget, in line with the joint decision by the Madison Metropolitan School District’s and the City to cancel SRO contracts and envision new ways to provide safety in the school system.
At the same time that the budget is removing tasks and responsibilities from MPD, it will double down on violence prevention efforts outside of the police budget by creating a new Violence Prevention Unit in Public Health with robust investments in new staff and new strategies. It will also increase funding for programs that provide employment and activities for young people.
The Violence Prevention Unit will now include four positions that will be fully dedicated to this work. These positions will work with staff from the Community Development Division to allocate $475,000 to community partners implementing strategies focused on reducing violence in our community, including violence interruption activities and efforts to reduce recidivism, and will innovate on new ways to involve community members in community safety.
The City also invests millions of local tax dollars each year in broad array of programming and activities that support families and promote positive youth development in ways that often help reduce conditions that fuel violence. These include, for example, nearly $800,000 for youth employment. A few weeks ago, I found another $100,000 to keep summer employment programs going into the fall and I will add another $106,000 to the 2021 budget to support Operation Fresh Start contracts with the City that employ young people to help with storm water and engineering projects.
In addition, the City spends $233,000 on youth restorative justice efforts that work to divert young offenders from the criminal justice system and $142,000 toward early intervention and prevention programming. I prioritized these investments in the 2021 budget, making no cuts in these programs even in a difficult fiscal year.
The budget also provides $450,000 for the newly created Independent Monitor and Civilian Oversight Board, which will help the City review policies and procedures and engage in continuous improvement. I approved the position of the Independent Monitor in my budget last year. This year my budget fully funds the operating model approved by the Common Council earlier this summer.
With the financial constraints we are facing, I have asked the Police to cut $1 million from their budget – a percentage cut on par with many other departments. By law, I cannot specify where these reductions come from, but I believe there are options that don’t reduce positions or the neighborhood-focused services the community cares about.
2021 will bring many more opportunities to innovate as we will be welcoming a new Police Chief to our City, and working to ensure the success of the Independent Monitor and Civilian Oversight Board. I welcome this new era of innovation in public safety.
Maintaining Commitments to Sustainability and Climate Action
We continue to acknowledge the urgency of climate action, by reducing our emissions through renewable energy, energy efficiency, and sustainable transportation options, and by enhancing our resilience to climate impacts, such as with our watershed studies to ensure we’re prepared for the future flooding events. My budget does this by:
- Continuing our ongoing investments in Metro Transit to ensure residents can rely on crucial transit services even in these uncertain times. The 2021 budget provides funding to continue enhanced cleaning practices for Metro buses by creating five new Bus Cleaner positions. Staff will also continue moving forward with Capital Budget projects to build the first phase of a bus rapid transit system and begin electrifying our bus fleet.
- Maintaining annual funding to conduct Watershed studies that will guide future Stormwater Capital Investment, protecting our homes and neighborhoods from future floods.
- Creating two new positions in Engineering to help with the Green Power program – also known as our solar apprenticeship program - expansion that was included in the 2021 Capital Budget. These positions will work on solar panel installations and help accelerate progress toward the City’s 2030 Renewable Energy goal.
Making Progress on Racial Equity
The Black Lives Matter movement inspires us to expand our efforts on racial equity and reduce the well-documented disparities that have existed for far too long in our community. We are hiring a new Equity and Social Justice Manager who will guide and direct the City’s work to further embed equity into the City’s work. To do this, my budget:
- Funds a new $80,000 program in the Community Development Division providing resources to renters in our community vulnerable to evictions. These funds will work to improve access to housing support to our most underserved populations.
- Provides support for small businesses to navigate these uncertain times, especially those businesses run by people of color and women. The Community Development Division budget includes $420,000 to provide technical assistance to these businesses. This funding is in addition to $6.5 million in funding over the next three years through the Small Business Equity and Recovery program in the Capital Budget for equity-oriented business support, recovery, and ownership programs.
- Increases our Double Dollars program by 50%, so residents can utilize their SNAP benefits to purchase fresh food at our local farmers’ markets.
- Eliminates late-return fines from our library system to provide more equitable access to our library collections.
- Continues to prioritize how the City, as an organization, addresses the disparities that exist throughout our workforce and in operations. The budget creates a division of equity and social justice in the Department of Civil Rights in an effort to ensure the City’s equity work is focused on putting the community’s voice at the center of key issues surrounding race.
I do not take the difficult decisions I’ve made in this year’s budget lightly, and have tried to balance reductions across departments, including taking a 5% cut to my office’s budget. I look forward to constructive debate on these proposals and continue to welcome your creative ideas on how to meet our community’s needs while balancing the City’s budget.
In spite of these unprecedented times, I continue to be inspired by this great City. Madison has, in so many ways, come together to help each other through uncertainty and adversity. This is the mindset and spirit that is necessary to navigate these hard times. I am confident that together, we will weather these storms and emerge as a stronger, more equitable, and more sustainable city.
Mayor Satya Rhodes-Conway
The entire budget can be found here.