Common Council - Regular Meeting

The hour of 6.30, having come and gone, I will call to order the Common Council meeting of Tuesday, July 7th, 2026, and ask the clerk to please call the roll.

Thank you. Alder Madison. Here. Alder Madison is present. Alder Martinez-Rutherford. Present. Alder Martinez-Rutherford is present. Alder Matthews. I have a question for you. Alder Matthews raises her hand. She's present. Alder Mayer.

Here.

Alder Mayer is present. Alder O'Brien. Here. Alder O'Brien is present. Alder O'Hovitch. Alder O'Hovitch is present. Alder Pritchett. Alder Pritchett is present.

Alder Tishler. Tishler is present.

Alder Revere. Alder Revere is present. Alder Vitterer. Alder Vitterer is present. Alder Jean. Jean is present. Alder Duncan. Alder Duncan is present. Alder Evers. Alder Evers is present. Alder Field. Alder Field is present. Alder Figueroa-Cole. Alder Figueroa-Cole is present. Alder Glenn.

Alder Glenn is present.

Alder Ugair. Alder Ugair is present. Alder Harrington-McKinney. Harrington-McKinney is present. Alder Lankella. Alder Lankella is present. Alder Lieberman. Alder Lieberman is present. Let's double check. Alder Tischler. We'll get back to him. Other than that, Madam Mayor, we have a quorum.

Thank you. So as always, I will remind us that we're here.

I am here. Sorry about that. I'm up north and I'm a little bit slow on the Wi-Fi.

Thank you, Elder Tischler. Glad you're here. So I will remind us that we're here to do the business of the people of Madison and ask that we do that with grace and kindness and that all concerned refrain from using any profanities in your remarks this evening. I would also like to suggest we don't yet have both of the recipients for item one. So I might suggest that we take that up after the consent agenda if there is no objection to that. all right seeing no objection we will do that and and so then the first question i have for all of you is are there any disclosures or recusals on items on tonight's agenda alderfield thank you mayor on 79 and 81 i'm disclosing that i'm an employee of uw madison that will not affect my vote on either of those referrals thank you alder alder mayor did it on item 79 and 81. thank you alder Alder Tischler.

Yeah, I'm still an employee of the university, but it will not affect my vote.

Thank you, Alder. Alder Matthews. I'm also an employee of the university and it will not affect my vote. Thank you.

Thank you, Alder. All right. Are there any other disclosures or recusals on items on tonight's agenda? Seeing none, we'll move on to the presentation of the consent agenda, President Madison.

thanks mayor a consent agenda is moved with the recommended action listed for each item on the agenda including public hearings except one items which have registrants wishing to speak two items which auditors have separated out for discussion and or debate purposes this document lists super majority items agenda items with recommendations different from the agenda items for and oops items for um Agenda items with recommendations different from the agenda, items for exclusion, items introduced from the floor, and agenda items with corrections. Agenda items that are supermajority items. Note, supermajority items will be recorded as unanimous votes unless a roll call or exclusion is requested. 52 or item 52 legislative file number 93528 designating city of madison polling locations for the 2026 partisan primary reporter city clerk 14 votes required to adopt under suspension of mgo 2.055 agenda item 72 legislative file number 93773 authorizing a non-competitive contract amendment with Maguire Iron Inc. for services related to the maintenance of Reservoir 20, which is at 2829 Prairie Road in District 20. Report of Finance Committee, 14 votes required to adopt under suspension of MGO 2.055. Agenda items with recommendations different from the agenda. Agenda item 16, legislative file 93439, amending section 39.029A2.I of the Madison General Ordinances to clarify an exemption of self-governed nations, tribes, and communities of indigenous peoples. Report of Affirmative Action Commission, AAC recommendation, recommend to a council to adopt. Agenda Item 52, Legislative File Number 93528, Designating City of Madison Polling Locations for the 2026 Partisan Primary. Report of City Clerk, Mayor Rhodes-Conway, Recommendation, Adopt, Substitute. Agenda item 88, legislative file number 93777, authorizing a jurisdictional transfer agreement between the Wisconsin Department of Transportation and the City of Madison for portions of South Park Street with Washington Avenue, Proudfoot Street, North Shore Drive, John Nolan Drive, and South Blair Street, and establishing a special revenue fund for transportation-related revenues and expenditures. District 4, 6, 13, and 14, introduction of new business for referral without debate, Alder Lehmann recommendation, change referrals to finance committee on July 13th, transportation commission on July 15th, board of public works on July 8th, and back to common council July 21st, 2026. Agenda items excluded by one request of Alders or two speakers registered by noon on July 7th. agenda item number 12 legislative file number 93403 amending sections 28.032 28.091 and 28.151 of the madison general ordinances to remove the requirement of vehicle vehicular access to a collector street for 10 use types reporter plan commission council president madison AGENDA ITEM 13, LEGISLATIVE FILE NUMBER 93404, AMENDING SECTIONS OF CHAPTER 28 OF THE MADISON GENERAL ORDINANCES TO INCREASE THE MAXIMUM HEIGHT ALLOWED FOR NONRESIDENTIAL BUILDINGS IN CERTAIN DISTRICTS THROUGH CONDITIONAL USE APPROVAL. Items introduced from the floor. Legislative file number 93701, authorizing a non-competitive contract with Arbo Eberle Architects, Inc. to provide professional architectural and engineering services for design and construction of Odanna Hills Clubhouse and Odanna Hills East Park Improvement to District 11, Mayor Rhodes-Conway. It'll be at Finance Committee on July 13th, back to Board of Public Works on July 8th. and Common Council on July 21st, 2026. There are no items listed with corrections.

Thank you, President Madison. Are there, well, let me just first note that, well, we did have somebody registered to speak on items 54 through 60. She is unable to speak and so has withdrawn her residence. has withdrawn her desire to speak. And so we will not be separating those items. Are there other items that members of the council would like to see separated from the consent agenda at this time? Alder Evers.

Thank you, Mayor. I'd like to be recorded as abstaining on item 81, please.

Record Alder Evers as abstaining on item 81. Thank you, Alder. Alder Martinez-Rutherford.

Yes, could you, I just wanna get clarification on item 75, legislature 93243. There is no sponsor on that. Will that be a part of the agenda or is it dead and removed from the agenda tonight?

Thank you, Alder. If items do not have sponsors, they will not continue in the system.

Awesome. Thank you very much.

So the clerk will note that item 75 lacks a sponsor and will not be passed tonight. Thank you, Alder. And then Alder Pritchett. Yes, Madam Mayor. Asking for item number 55. Item number 55. Thank you, Alder. Alder Tischler.

Yeah, I know I disclosed I work for the university, but on item 81, I'm going to have to recuse myself on that item.

Alder Tischer will be noted as recused on item 81. It's OK. Thank you, Alder. Are there any other items Alders would like to see separated from the consent agenda at this time? seeing none let's just go through that quickly just to note that items 52 and 74 are 14 vote items and will be recorded as unanimous and item 16 the recommendation is to adopt on item 52 the recommendation is to adopt the substitute on item 88 It is introduced and the recommendation is to have referrals to finance on the 13th, transportation on the 15th, public works on the 8th, and council on the 21st. And then we will exclude items 1, 12, 13, and 55. We have one item introduced from the floor, Legislature File 93701,

And we have no items with corrections.

Everybody good? Everybody good. Okay. Then President Madison, a motion on the consent agenda, please. Motion to adopt. Second. Moved and seconded to adopt the consent agenda. Is there any objection to recording a unanimous vote in favor of the consent agenda and the recommendations on the items therein? Seeing no objection, we'll record that vote. And I think we will have to move on to item one. So item one is an honoring resolution, Legislature 93728, celebrating July, 2026 as Disability Pride Month. And for the reading, I will turn to Alder Martinez-Rutherford.

Thank you, Mayor. Whereas Disability Pride Month has occurred in July each year since 1990 when the Americans with Disabilities Act, the landmark legislation that prohibits discrimination against people with disabilities, was passed. And whereas Disability Pride is celebrated throughout the month of July to recognize people with disabilities and the many ways disabled people contribute to our communities, whereas Disability Pride Month has its own flag created by Anne McGill, a woman with a disability, and whereas each of the symbols on the flag hold a different significance for the disability community, with the black field representing people with disabilities who have lost their lives to illness, negligence, suicide, and other causes, In addition to the other colors signifying different types of disabilities, red for physical, yellow for cognitive and intellectual, white for invisible and undiagnosed, blue for mental, and green for sensory perception disabilities. Whereas Disability Pride recognizes disability as a natural part of the human experience and highlights that all bodies and minds have access, needs, and value. And whereas Disability Pride recognizes the need for continued work to create equitable and inclusive environments for all, including people with various disabilities. Whereas Disability Pride Month encourages us to celebrate the talents and contributions of disabled people while reaffirming our commitment to continue to create systems and structures that work for all, and whereas Disability Pride is a reminder that representation and celebration of diverse identities is necessary in fostering a more inclusive world, Now, therefore, be it resolved that the Madison Mayor and Common Council recognize and celebrate July 2026 as Disability Pride Month.

Thank you, Alder. We'll take that as moved by Alder Martinez-Rutherford and seconded by Alder Madison. And we have with us to accept the resolution, school board member Nikki Vandermuelen. If you want to come to the, either podium is fine. And Alder.

Hi. I'm so happy to see you. I'm so happy to see you.

Thank you so much for sponsoring such an important piece. Here we go. It's going to fall out. Be careful. Thank you so much. Thank you, Alder.

Thank you.

Thank you very much for being here to accept the resolution. So it's been moved and seconded. Is there any discussion? Seeing no discussion, I would just, I'm looking at somebody for the date and time. I would invite you all to the flag raising. tomorrow at 11.30 at the Madison Municipal Building. So you're all welcome to join us there. Alder Harrington-McKinney, did you wish to speak to the item?

Well, Madam Mayor, I was looking to hear from Nikki, but she has not decided to say some words.

She would be happy to, Alder.

Thank you. She didn't know if the council would like that. I just want to say thank you to absolutely everyone in this council realizing and recognizing the importance of Disability Pride Month. as a world where people with disabilities often feel marginalized, this community has made valiant steps to make sure that individuals with disabilities have a place and a part in all parts of the city, including city government. And I truly am honored to accept this on behalf of my brethren tonight, so thank you.

Thank you, Board Member Vandermuelen. We appreciate you being here.

I appreciate the offer. Thank you.

Alder Martinez-Rutherford. Thank you, Mayor. It is my honor and pleasure to have introduced this bill, or this resolution, well, bill, and to be raising the flag tomorrow. The disability community has a lot of overlap with all of our communities. It's the only minority group that anyone can join at any time. And with the way things are kind of heading in our country, having our federal government remove funding for care for people with disabilities and threatening institutionalization again, it is now more poignant and more important to make sure that we are speaking up and letting the disability community in Madison know that we have their back and that we will stand alongside them and fight for their dignity and worth. The fight that the community has participated in to get the Americans with Disabilities Act and everything else that came after that is so vital and important and it's unconscionable that our federal government is deciding to further harm a community that has fought really hard to get every ounce of dignity that they have. So I will say to you, Nikki, and to every other person who's a member of the disability community in Madison, that you belong here, and I will be by your side at every fight coming up. Thank you.

Thank you, Elder. Elder Madison.

Thank you, Mayor. I do just want to say, you know, shout out to Nikki for all of your work. I mean, years of work. I've known you and for always, you know, sometimes there are tough discussions that elected folks have to have and everybody might not buy, you know, agree with them. So I appreciate you for. Sparking discussions whether or not we land in the same place but also want to acknowledge your mom because I think folks don't always acknowledge how much an impact it is also on our families when we decide to serve in very Visible roles so shout out to your mom who was also I'm part of her under 5-2 club. So Thanks for allowing me to join you Yes, private club, only 5-2 and under. So thanks, Mayor.

Thank you, Alder. I have no other Alders in the queue wishing to speak. So item one has been moved and seconded. Is there any objection to recording an enthusiastic unanimous vote on this item? Seeing no objection, that vote will be recorded. And thank you again for joining us. Thank you. All right, we will go then on to public comment and just note to note that we do have a presentation on item three, so that will be after public comment. On public comment, we have, One registrant wishing to speak on item 13. Item 13 is amending sections of chapter 28 of the Madison General Ordinances to increase the maximum height allowed for non-residential buildings in certain districts through conditional use approval. On item 13, we have Oreki Daterly of District 5 wishing to speak.

Yes. Go ahead. Near me. Yes. Yes, good. Thank you for your time. Yes, I would like to propose and would hope that Common Council would consider putting both the 93404 as well as its companion, the 93403, on hold for the time being to allow alders to have more time to educate their respective populations about the impact that these two proposed changes, ordinance changes, would have in the neighborhoods. It's been very, very short time since it was passed through common Council until now, and I think it would behoove Council to give all of us more time to digest some of the facts involved in these and how it would impact us throughout the city. My first reaction to the 93404 on reading it very fleetingly, because I just found out about this yesterday, is that I don't know why we're raising the height of this. the non-residential units that are, and not keeping it as is. I don't see, I don't know, is there a problem there? And this is why I think we need more time to have discussions with our alders in our respective neighborhoods. I'm always amazed at how the plan commission and common council simply hand over the keys to the kingdom to developers and say, go at it guys. It seems like a Wild West zoning mentality going on, and the neighborhoods often feel pummeled and not considered. And I think to give more time to us to talk about these changes would be advantageous. So, council, please consider that. I think it would certainly help me. It would help my neighbors that I've talked to briefly about this. And I'm sure that a lot of our residents don't know the implications of these two ordinance changes at this point. So, again, thank you for your time. And I hope you consider putting a hold on this so that you can fan out throughout the city. Talk to your residents in your districts. I know I'm looking forward to talking to my all districts. Okay, thank you very much. Appreciate your time.

Thank you. We have no other registrants wishing to speak on item 13. Are there any questions for the registrant? Seeing none, I think that is it for registrants wishing to speak. So we will go on then to item three, which is legislature 93677, the 2027 operating budget outlook and request guidance. And I'll turn it over to Director Schmidicke.

Good evening, can everyone hear me? Great. I'm gonna first share my screen so everybody can see this.

All right, I think we're ready to go.

Good evening. I am David Schmiedeke. I'm the finance director. And thank you for having me here this evening to talk to you about the 2027 operating budget. And we will cover in the agenda the budget calendar and deadlines for both the capital and operating budgets. We'll look at the outlook for the 2027 budget. That includes some of the limitations we have on the budget, both from revenue and expenditure perspectives. Dive into the cost to continue for both our revenues and expenditures and the assumptions behind those. Review again the five-year outlook that this council passed back in November. And then the approach for 2027. We'll look at the mayor's budget guidance to agencies for developing their operating budgets. And then a little bit of background on the other taxing jurisdictions that are on the property tax bill, including the distribution of the property tax bill, and then just the timelines for both the Dane County and Madison Metropolitan School District budgets. All right, so the key dates for developing the budget, we have the two budgets, as you're aware of, capital and operating. We start the capital budget process first, which started in March. Agency requests came back in April. We've had some briefings on that back in May, and then decisions will be made over the next several weeks with the executive capital budget introduced in early September. Then it moves to the finance committee for agency briefings. in the middle of September and then the finance committee as well as the full council at that time has the opportunity to amend the executive capital budget and then it returns to the full council in November. On the operating side, that started last month. Agencies are currently working on their budget requests which are due in about 10 days. THERE WILL BE OPPORTUNITY FOR AGENCIES TO TALK WITH THE MAYOR ABOUT THEIR AGENCY PROPOSALS. THAT WILL HAPPEN NEXT MONTH AND THEN DECISIONS ARE MADE AND THE EXECUTIVE BUDGET IS INTRODUCED IN EARLY OCTOBER. with agency briefings of the finance committee, October 12th and 13th, the finance committee amendment process towards the end of October, and then the full council decides both the operating capital budget in mid-November. So when we look at the operating budget, we obviously have to have revenues equaling expenditures. And we have constraints on both the revenue and expenditure side of the ledger. On the revenue side, the primary limit is the state law related to the amount that municipalities and other local governments can increase the property tax from one year to the next. And when we look at that growth rate, that growth rate does not keep pace with the cost of maintaining current service levels, particularly in higher inflation times. As you probably all recall, there is one approach to increase the property tax above that rate, and that's through referenda. The voters approved a referendum to increase the city's tax levy by $22 million as a part of the 2025 budget. And that helped close for that year the gap between that ongoing cost to continue current service levels and the allowable revenues. That budget also had the adoption of a five-year plan looking at how does that pace of growth and cost compare to allowable revenues and how we close that continuing gap over the five-year period. On the expenditure side, the state also places a limit on the rate of growth in our general fund expenditures. And the general fund pays for most of the costs that we think about every day. Our streets, our parks, our libraries, and picking up the trash, plowing the snow, our law enforcement, emergency medical service, fire response, and so on. That rate of growth is roughly the rate of inflation. If the city budget exceeds that rate of growth, It loses about $9 million of state aid. It's one of our largest single program amounts of state aid in the budget. So if we stay under that rate of growth, at or under, we continue to receive that $9 million every year. The city has received that annual funding every year since the early 1990s. So it's been a continuous part of the city's budget. What we're seeing with the expenditure limits is that the rate of growth in cost and continued current services is not only exceeding the levy limit, but exceeding that expenditure restraint limit as well. The graph on this slide gives you a sense of how that works. So historically what we've seen is that the levy limit, which is that revenue column, kind of green on the screen, it controls that revenue growth. Our expenditures are more than those revenues each year, but typically have been below the expenditure restraint limit, which is that dotted line at the top. and of the graph. And so that gap is what we've had to address every year. The referendum passed in November of 2024 for the 2025 budget helped close that gap permanent on a ongoing basis. So it raised our allowable revenues and to meet those expenditures and we were still under the expenditure restraint limit. We also then, we do resolutions at mid-year and year-end to adjust the budget based on budget to actual comparisons for each of the agencies as well as what we see in terms of revenue changes. And so that lifts the expenditure level right up to that expenditure restraint limit. And so that's a lot different than what we've seen in prior years where we've had some larger gaps there and more flexibility. In the 2026 budget, because of the rate of growth in costs, we saw that expenditures were at the expenditure restraint limit, but we were below the levy limit. That was a combination of more rapid rate of growth in costs, higher inflation rates, and so on. On the expenditure side, on the revenue side, we got some additional state aid, the municipal services payment that you heard from our state lobbyist a couple of meetings ago. That helped as well as higher investment earnings that the city has been receiving. So we were in essence able to reduce the amount of levy that we needed below the levy limit. and fund the budget, but we were at the expenditure maximum. And so we're about $200,000 under that maximum for 2026. Again, if we go over by $1, we lose $9 million. So keep that in mind. So we've got the revenue levy limits in effect. We've got the expenditure restraint limits. And in that context, we now are looking at, well, what's the cost to continue current services in 2027? And it's really the first step that we do to develop the operating budget. We sit down with all the agencies. The agencies go through what are their work plans, what are they seeing in terms of contracts they already have in place and escalators in those contracts. They look at things like, maybe one-time costs or partially funded costs in the 2026 budget that have to be fully funded in 2027. And those are the processes that we go through to set this sort of cost to continue level as a starting point prior to agency requests. So at the citywide level, we update our revenue projections. We take out any one-time funding. We do a salary and benefits projection, looking at each position, assuming a cost of living adjustment and positions that are eligible for longevity increases and step increases, and then make some estimates, preliminary estimates, for health insurance costs and retirement costs, which will be further refined over the summer as we get more information on those. And then there's those agency-specific adjustments that I mentioned. All right, timing down a little bit further into the details, when we take a look at the projected revenue growth and compare it to the expenditures through that cost to continue exercise, we have about an $11 billion gap between the allowable growth in revenues, so primarily the levy limit, compared to what we expect cost to be to continue current service levels. So we're $11 million above that revenue level, and we're $7.2 million above the allowable rate of increase in expenditures. So we have both a revenue gap problem and the allowable expenditure problem as well. So the components on the revenue side, we have about a $19 million increase in revenues, about 4.3%. The bulk of that is the allowable increase in the property tax levy under the state levy limits. We're seeing some increase in ambulance fee revenues. A lot of that is related to a new state program that secured a waiver under the federal Medicaid program that allows basically higher Medicaid reimbursements for certain ambulance conveyances. We're continuing to see strong building permit revenue. We do see in the municipal services payment, that's the state aid for compensating for all of the buildings, state-owned buildings that are in the city. We did get a significant increase in that in 2026, but because our... Tax rate is going down. We do see that there'll be some reduction in that for 2027. We see some adjustment in interest earnings. We did use fund balance in the 2026 budgets. We just sort of take that out before we look at what to apply in 2027. And then all other sources, about a $1.8 million increase. On the expenditure side, expenditures are going up about 6.7%. So you can see the difference, 4.3% growth in revenues versus 6.7% growth in expenditures. About a third of that is salary and benefits. Another third is the subsidy from the general fund to the Metro Transit budget. And I have a slide a little bit further on that goes into a little more detail on that. We have a placeholder for general fund debt service, which is going up about 6% now, or $6 million. That is increasing. That is not subject to the expenditure restraint calculation under that state program. And then we have some non-personnel costs of about 2.6 million. About half of that is for software contracts. So built into software contracts we have are escalators that we have to take into account. Another large piece of that increase is for the library. We pay into the Dane County library pool because residents of Madison, there's more residents of Madison who go to libraries outside of the city than come to libraries inside the city. And that's a part of the revenue sharing under that program. We do see some relatively percentage-wise large increases in legal costs associated with challenges to property tax assessments, particularly from larger property owners. Some building maintenance costs and other expenses, and then we're seeing increases in fleet charges, primarily due to higher fuel costs. So again, when we go back to this picture of revenues versus expenditures, the levy limits and the expenditure restraint limit. So we have, obviously we're above allowable revenues, but we're also above the expenditure restraint limit. So expenditures have to be brought down, not just revenues lifted up. All right, in a little more detail, I won't spend a lot of time on this. It is in the slides that were shared with all of you, but we have assumed for salary and benefits a 3% cost of living adjustment, as well as those step in longevity increases. There was some adjustment in the clerk's office. Obviously, it's a major election year this year, 2026, so the clerk's office budget does not need as much funding in 2027 when there are fewer elections. We've assumed an 8.5% increase in health insurance. That was the initial indication from the state of Wisconsin through whom we get our health insurance services. And again, those will be reviewed over the summer as will the assumptions for Wisconsin Retirement System. We did maintain a salary savings rate of about 3%, so no changes there. Smaller agencies have smaller salary savings. Larger agencies have larger rates. For the election, I mentioned that there is a reduction there associated with staffing and postage costs. But there were some funding added back in the clerk's office, particularly for facility rental for storing election equipment and having to find a new facility for that. I talked about the debt service placeholder. There's some changes in room tax support that were one time in the 2026 budget and have to be kind of unwound in the 2027 budget. I talked about the purchase services details there with information technology contracts, software costs, and so on. The Metro subsidy is up $9.5 million, so to a total of $34.5 million, and that really reflects increases in overtime, diesel fuel costs, expected contract increases, repair transit services, and a few other costs, liability insurance and things like that. I talked about the fleet rate. We have a cost allocation process. Actually, that's a little bit of offsetting revenue. And then we have insurance and workers' compensation billings that are also adjusted. Turning to the five-year plan, again, first adopted as part of the 2025 budget process. And this is the 2026 update that you see here. We will update this again for the 2027 executive budget. This is really sort of a look at the gap between allowable revenues and expenditures each year and how we can close that gap in each of those years with the expectation, first of all, of applying fund balance. The city's general fund balance is now at about 30% of the budget. Our minimum goal is about 15%, so we definitely have some cushion there that can be applied to help balance the budget over the short term, the near term. So this assumes about $40 million would be applied and that would bring that 30% down to pretty close to 15%. And then the other, know one one of few options left to the city on the revenue side is really additional special charges and back in the lead up to the 2025 budget we talked about special charges with the council we currently have two special charges in place one for urban forestry and the other for resource recovery or recycling purposes So that was the model for 2026. The model did not assume really the rate of growth in inflation that we've seen. So how that's affecting fuel costs, nor did it build in the pretty rapid rate of growth in the Metro subsidy that we've seen and uncertain how that'll be into the future. So we will update this for the 2027 executive budget. All right, a little bit more background on the Metro revenues and expenditures. So when you look at the Metro budget, there's always been a subsidy component to that budget. And that's the case with most transit systems around the country. Now, in most transit systems around the country, there are revenue sources other than the property tax to provide that subsidy. Typically, it's in the form of a regional sales tax or a regional gas tax to help fill that gap between own source revenues, federal aid and state aid, and the cost to operate the transit system. In the case of Wisconsin, and particularly for Madison, that gap has to be filled by property taxes from the general fund. Typically, that subsidy prior to the pandemic was about $12 to $15 million a year. And this graph shows the left-hand bar in each of the years are the revenues and the breakdown of those revenues, starting with vehicle registration fees, federal aid, state aid, our partner revenues from surrounding communities, the university, the school district and so on, and then fare revenue passes and so on. When we get to the pandemic, pretty significant increase in federal aid to help maintain the viability of transit systems during that pretty dramatic drop in ridership for many transit systems around the country, including here in Madison. And We had a lot of federal aid to the extent that that even helped with not needing a subsidy in 2020. And that helped out the general fund. General fund in turn was helping out other funds around the city in terms of their responsibilities. Federal aid, really the last gasp of that federal aid was in 2024, and that's now gone. And so what we've seen since 2023 is no growth in revenues, So we see no increase in federal aid, state aid, past revenues, or the vehicle registration fee, but increasing rates of cost for a variety of reasons. I gave you some of the components for 2027. So because of that, the amount of general fund subsidies since 2024 has increased by about $20 million. That includes the projected increase for 2027. All right, so turning from some of the background on the numbers to the guidance to agencies in the context of the gap that I talked about and how to close that gap. So first of all, due to these expenditure limits, all agencies will be required to submit 2% reduction plans as at least a series of options to look at for the mayor to look at in providing a balanced budget to the council. The savings rate for salary savings of 3% that will remain in place as will the budget efficiency of three-quarters of a percent that's been in place for the last couple of years. Agencies cannot ask for any new positions or any supplemental requests above their cost to continue needs. Kind of different from prior years is this is being extended to the enterprise fund agencies. So for example, the water utility, sewer, storm water, and so on. Because of the sort of overall cost of government effect and affordability effect of those fees. So the base budget, again, that quarter of a percent reduction will be in there and department heads will be required to manage that number. Enterprise and restrictive funds will have that required reduction. And then the salary savings, again, is at that 3% on average. It varies from no salary savings in very, very small agencies to 4% in the largest agencies. And we have excluded grant funds from that. It really makes no sense to cut grants. They have to be used for specific purposes. Department heads are asked to look at their entire budget, look for efficiencies, look at perhaps efficiencies across agencies of ways to deliver services more effectively and possibly at reduced costs. And then again, that focus, that inclusion of enterprise and restrictive funds in this exercise as a way to sort of keep costs down overall. Agencies can reallocate within their budgets. to meet certain priorities. They have to show what those are, and the mayor will review those changes. Indices cannot sort of change any sort of interdepartmental charges. For example, the fire department can't charge the police department to try to balance their budget. That just doesn't work. So that is a pretty clear directive. And as I mentioned, no new position requests. And they can reclassify or recreate positions, but there is a process we go through that involves HR with all of that. No supplemental requests, but sort of new for this budget process is asking agencies to take a look out beyond a year and to think about impacts of maybe new buildings that are coming online, maybe new software contracts, things that they kind of know are out there so we have a little better sense of what's coming. when we develop that five-year plan, which kind of functions at very high levels of the city budget and doesn't dive too deeply into what each agency might need in future budget cycles. Again, agency heads are asked to look at citywide priorities around racial equity, social justice, sustainability in developing their budgets, as well as how they look at their 2% reduction proposals. Again, looking at innovative ways to deliver services, working across agencies, and so on. And then using the data from the Results Madison process, where they have been gathering information and data for a number of years. They've developed indicators and think through how they do business and what their indicators tell them in terms of how to put together these proposals. We'll also be publishing as a part of the budget two to three service indicators as really our next step with Results Madison in bringing this information more and more into the budget process. All right, so that's the background on the guidance. Let's have just three more slides left. First is the taxing jurisdictions in the city. Just a reminder, the city government is one component of the tax bill. It's the second largest component representing about a third of the tax bill. The largest is the school district. It's about half of the tax bill. And there are roughly eight school districts that have property within the city limits. The largest by far of course is the Madison Metropolitan School District that has about 90% of all of the area in the city. City is about a third, the county is about 12% of the levy, and then the Madison Area Technical College or Madison College is about 3% of the levy. um this is this slide just walks through the madison metropolitan school district's budget timeline so just a little background on that the school district has a fiscal year that runs from july to june so different from the city the county which has a january to december fiscal year So they are working on their budget at different times and in a couple of different iterations. So they'll develop a budget in advance of the start of their fiscal year in July and in advance of the upcoming school year. And then they'll have to refine that budget when they know their state aid numbers in the fall. And then ultimately, they have to set a property tax levy, just like the city does and the county does and the technical college does. in November. So their process works a little bit different and you can see the details here of how they're working at it in the spring. And then again, they get more information late summer, early fall. County budget process pretty much mirrors the city's budget process because the fiscal years are roughly the same. They do compress their budget process so that capital and operating are roughly happening at the same time. And BUT THEY DO HAVE AN EXECUTIVE BUDGET FROM THE COUNTY EXECUTIVE. IT GOES THROUGH COUNTY BOARD COMMITTEES AND THEN ULTIMATELY IS ADOPTED BY THE COUNTY BOARD AROUND THE SAME TIME THAT THE CITY COUNCIL ADOPTS ITS BUDGET AND THEY SET THE LEVY AT THE SAME TIME. So those levies are all set in November. They have to be set by roughly the end of November and then have to be basically transmitted to the finance department, our treasury section, so that the property tax bills can be produced and sent to property owners. And with that, I have... I'm sure exhausted you with all my slides, and I am happy to answer any questions you might have.

Thank you, Dave. Alder Evers, questions?

Yes, thank you, Mayor, and thank you, Director Schmiedeke, for an excellent, informative presentation. One item that I noted that in years past has fluctuated, and that is with respect to The interest rate, when the interest rate goes down, well, our borrowing costs in some sense may go down, but our investments show a hit in revenue. What I'm understanding now is that because of the inflation that you referenced also in your presentation, it's quite possible that we might see one or two increases in the interest rate by the end of the year. And if that's the case, might things look a little better, marginally so, instead of a million-dollar reduction in revenue? Could we potentially... see an increase in revenue or at least that a million dollar loss be eradicated?

So, thank you for that question, Alder. You're absolutely right. The investment earnings have skyrocketed for lack of a better adjective on that. And just to give you the numbers, in 2021, so sort of at the depth of the effects of the pandemic economically, we were earning about a quarter of a percent of interest and about half a million dollars in interest earnings. To today, we're almost at 4%, and we're earning, including mark-to-market, over $20 million. So you can see the changes there. It's kind of a follow the bouncing ball right now with interest rates, and they're kind of closely tied to what's happening with inflation, which is right now also kind of tied to what's happening with oil markets. It's possible. You know, you hear different things out of the Federal Reserve. I think where they seem to be right now is to hold steady on rates. If that's the case, we have seen some decline in our investment yields over the last several months. We kind of peaked at close to or above 4%. We're down to around 3.6% now. And so the million dollar reduction does assume some reduction in federal reserve rates. If that doesn't happen, we'll obviously recalibrate that and it might be no change from 2026 estimates. Thank you. Yep.

Thank you, Alder. Alder Laberman.

Thank you, and thank you, Director Spinnakey, so much. For the increase in the metro subsidy, you mentioned part of that was increase in diesel costs and part of that was increased in the cost for the people, basically. Can you give just a rough estimate how much of that increase is due to the increased price of diesel versus how much is due to the increased overtime and other people-related expenses?

So most of the overall increase is, as with the rest of the city budget, is related to people, right? Salaries and fringe benefits. But the percent increase is pretty much in line with the rest of the budget. So, you know, maybe around a 5% increase in salaries. Right now, roughly a 2% increase in benefits. But when we look at overtime, that's up 16% on a budget basis. When we look at diesel fuel, that's up 55%. When we look at inventory, which is things like tires, lubricating oil, things like that, which are tied directly to oil costs and petroleum costs, similar to diesel fuel, that's up 37%. Metro expects that their paratransit contracts, they have to be renegotiated, so they're up starting in 2027. they'll be renegotiated and just kind of based on the landscape and the delivery of those services, they expect that to be up 37%. And then liability insurance is up about 28%. So you put that all together, you get about a, nine to $10 million increase in costs, which is about a 10% increase, but there's no growth in revenues. So in effect, all that has to be covered by the subsidy, and that's why the subsidy is up about a third compared to 2026.

Related to the overtime costs, the no new positions requirement, is that for, that doesn't count positions that are currently listed but not filled, right? Do folks have, agencies have the option to fill current positions in order to reduce overtime costs? Yes. Okay. Just wanted to make sure of that. Yeah, those were my questions. Thank you so much.

And just to fully answer your question, Alder, there is overtime that is due to not having enough people, and then there's overtime that is structural. And so all three of our biggest agencies, police, fire, and transit, have structural overtime, which is generally not solved. by adding more bodies and some of that is due to contract um and the negotiations these so these apps also are the three represented agencies so there is some rules around over time that are just built into the contract and that's particularly true for metro transit and so there's Some problems can be solved by more bodies and others need other solutions with respect to overtime.

All right, Alder Vitiver. Okay, bear with me. I have a few questions. Sure. Okay, so first about this year, are we in danger of hitting the ERIP max for this year?

We are very close to the maximum. We do have in the budget, as you all know, the contingent reserve, which is about $2 million. And that's really meant to be the cushion in the budget to keep us from exceeding the expenditure restraint limit. Now, there have been some small draws on that for the MADCAP program. I think that was a couple hundred thousand dollars. We are seeing those increased costs for legal assistance associated with property tax assessment challenges. And then we are going through a process right now of looking at AGENCY PROJECTED COSTS COMPARED TO BUDGET. ONE AREA THAT WE HAVE TO MONITOR OR WILL BE LOOKING AT PRETTY CLOSELY IS METRO. SO AT THE MOMENT, NO, WE DON'T THINK WE'RE IN DANGER, BUT WE ARE GOING THROUGH THAT PROCESS RIGHT NOW. WE DO HAVE SOME OTHER OPTIONS WE CAN LOOK TO, ALTHOUGH THEY'RE VERY LIMITED TO you know, look at the overall expenditures. And then what we have found is there is underspending in some of the agencies. It's gotten smaller. And so when we do those projections, that creates some additional cushion beyond the cost, the contingent reserve.

So if you were, like, if we get to, say, October, and you're like, oh, boy, we're really close to that limit, you can draw on the fund balance, So my question is what is it that we can do? Like if we really look like, boy, we are coming really close to that limit, what is our actual mechanism of dealing with it so that we don't go over it and lose our $9 million from the state next year?

Great question. So it keeps us awake at night. The contingent reserve is really that first fallback. And then the underspending, whether it be in agency budgets or in what we call the citywide direct appropriations, the largest one of that is our compensated absence escrow, so that's a pot of money we set aside to help supplement agencies who have to pay out sick leave balances when employees retire. We have not had to use all of that over the last few years and don't expect to have to use it all, but it is another place we can turn to. um so i think that's where we'll turn fund balance is not an option fund balance is an addition of revenue uh what this is an expenditure issue and so you know we've already budgeted the contingent reserve we already budgeted all of those other areas and if there's underspending there then we have budget room to address other areas okay now i'm going to move on to next year's budget um

I did not follow you about why we should get fewer dollars in municipal services from the state. Can you explain it to me like I'm 10?

Try 10. It might be maybe 12. Let's see what we can do. So the municipal services payment is a formula. And it effectively is you look at your police and fire costs for the city. And then we look at our total property value. And so you're looking at those costs on almost a per $1,000 of property value. And so cities that have a relatively lower or higher property tax rate under this formula will get more money under the formula because they have, in essence, less property tax base to support those costs. In the case of Madison, we have more property tax base, so we'll get a little bit less. It's almost like the school aid formula, where Madison gets less state aid because we have higher property tax or property values per student. But other parts of the state have lower property value per student. They get more state aid proportionally. Our tax rate has been dropping pretty dramatically. Other parts of the state have not. So there'll be some redistribution of that fixed pot of money that we expect to see because of what's happening with our overall tax base and tax rate.

And the state budget cannot change in this next period because it is in effect until June of 27.

Yes, although the legislature could come back. Could. But we've seen how successful that's been.

Yeah, okay. Okay. So we are, I think, hoping and expecting for some more federal funding to support Metro for next year. No, not so much. familiar with it okay not operating not operating so it's capital yeah okay never mind if all goes well yeah yeah um we have a proposal that was introduced tonight um to move some roads onto the city coffers, for lack of a better description, what impact would that have overall on revenue and expenditure restraint?

IF YOU'RE REFERRING TO THE RESOLUTION THAT'S BEEN INTRODUCED THIS EVENING AROUND THE JURISDICTIONAL TRANSFER, SO MY UNDERSTANDING OF THAT, IT WOULD MOVE PARTS OF WHAT ARE HIGHWAY 151, ESSENTIALLY PARK STREET, JOHN NOLAN DRIVE, BUTTER STREET, PARTS OF EAST WASHINGTON AVENUE. from the state's jurisdiction to the city's jurisdiction. And then under the State Department of Transportation sort of rules around that, whenever there is a jurisdictional transfer like that, they do a calculation and then pay a lump sum to the municipality that's taking that over. THAT'S MEANT TO COVER A CERTAIN NUMBER OF YEARS OF COST TO MAINTAIN THE ROAD. THE RESOLUTION, YOU KNOW, IT'S BEEN INTRODUCED. IT'LL GO TO FINANCE COMMITTEE, TRANSPORTATION COMMISSION, I THINK ONE OTHER COMMITTEE. IT CREATES A SEPARATE FUND TO PUT THAT MONEY IN SO THAT IT'S USED FOR TRANSPORTATION PURPOSES. THE IDEA THEN IS THAT FUNDING WOULD BE USED IN THAT CORRIDOR FOR TRANSPORTATION PURPOSES GENERALLY, BUT THAT WOULD HAVE TO BE APPROPRIATED BY THE COUNCIL.

BUT WHAT IMPACT? WOULD IT HAVE AN IMPACT ON EITHER REVENUE LIMITS OR EXPENDITURE RESTRAIN?

NO, BECAUSE IT WILL BE IN A FUND SEPARATE FROM THE GENERAL FUND. OKAY.

THANK YOU. I THINK DIRECTOR SPIELER WOULD LIKE TO, OH, MAYBE NOT. WEIGH IN.

Yeah, I would also note that the maintenance on that section of Park Street was already being done by the city, and therefore was already a city expenditure, even though we were getting state aid to help cover the cost of that expenditure. So the amount of, say, snow plowing we're doing is not actually going up as a result of a transfer like that.

Okay. And then the 2% cuts across agencies... We have some prohibitions on first responders from the state. So are we able to actually cut our two biggest budgets, police and fire, by 2%?

So you're referring to the maintenance of effort requirement for both law enforcement, emergency medical services, and fire services. And so under the maintenance of effort requirement, the police uh... police department budget has to uh... FOR A NUMBER OF DIFFERENT FACTORS. IT'S BASICALLY NUMBER OF LAW ENFORCEMENT OFFICERS EMPLOYED, THE OVERALL AMOUNT OF THE BUDGET FOR LAW ENFORCEMENT OFFICERS, THE SHARE OF THE BUDGET FOR LAW ENFORCEMENT OFFICERS. ONE OF THOSE CRITERIA NEED TO BE MET. AND IT NEEDS TO BE AT LEAST AS MUCH AS THE PRIOR YEAR. NOW, THEIR BUDGETS UNDER COST TO CONTINUE ARE ALREADY GOING UP by probably 3% because of the pay increases that are built in. Now that's not to say a 2% cut would affect their entire budget. I mean, there's a whole series of discussions around that until you get to that final number. So on the police side, the answer is it depends on the size of the cut. But when you look at, we're already lifting their budget by 3%. It has to just be more than the prior year. On the fire and emergency medical services side, it's four criteria, similar to the police on the budget number of firefighters and so on employed, and then they also have a response time requirement or criteria and a training criteria. And so two of those four need to be met. So clearly in thinking about reductions and the scope of those reductions, those criteria and meeting those criteria need to be taken into account. The effect of not meeting those criteria is that the city would lose 15% of its shared revenue payment, which is roughly $1.5 million.

Thank you. I'm done with my questions. Thank you for entertaining me.

You're welcome.

Thank you, Alder Oglovitz.

Thank you, Mayor. I also have a few questions. So looking online, it looks like the formula for ERIP includes an adjustment for the consumer price index. When you're doing your estimates, how are you forward estimating the consumer price index increases?

So we look at the consumer price index or CPI every month. And so update it every month. And then we take that amount in the most recent month and just cast that forward. We might lift it a little bit depending on inflation trends. And then there's also a factor that's added for net new construction, 60% of net new construction. So when we talk about the ERIP limit, we've calculated it based on those factors.

Okay. And then for the new construction, if we close TIDs, would the construction value increase essentially from when the TID started? Would that be applied to ERIP and thus increase our ERIP limit?

So when a TID is closed, it does not affect the expenditure restraint limit, but it does affect the levy limit. OK. And so what happens is when a TID closes, 50% of the value of the TID at closure is then ADDED TO OR KIND OF DIVIDED BY OUR TOTAL VALUE IN THE CITY. AND THEN THAT FACTOR IS THEN ADDED TO KIND OF THE NET NEW CONSTRUCTION FACTOR TO GIVE US A TOTAL AMOUNT WE CAN INCREASE THE LEVY. NOW, KEEP IN MIND THAT, YOU KNOW, OUR TOTAL TAX BASE OR PROPERTY VALUE BASE IS ALMOST $50 BILLION. You know, if we close a TID that's even $500 million in value, we're getting $250 million that we can actually apply. The percentage is relatively low. It has a relatively limited effect on the levy. Obviously positive, but limited.

And then for cost to continue, does that include the cost to continue for programs that were started funding partway through the year? I'm thinking specifically of the Imagination Center.

Yeah, so part of that process, and I mentioned this, is if something's partially funded in the 2026 budget, then we're fully, you know, we're looking, okay, how much do we need to fully fund it for an entire year in 2027? That's a part of the cost to continue process.

Okay. And then you briefly mentioned the salary savings rate. Could you say more on what that is?

Sure. So salary savings, another word we might use for it is turnover rate. So we budget, we start the budget process for salary and fringe benefits saying, here's all the positions in the city, right? We look at what's the cost of all of those positions. You know, we increase it by 3%. We increase it by those that are eligible for steps in longevity. And we say, okay, here's the amount. But typically, through a year, a position may not be filled for the entire year. What we have seen in terms of a vacancy rate over the last few years, it's maybe five years ago, it was at 7%, 8%. It's come down closer to 4% to 5%. And so that salary savings is meant to kind of say, we don't need to fully budget for all positions because there is some churning that's happening throughout the year. And that's what that salary savings is about.

Okay.

And so that's a guideline for agency heads and not a target to hit? It's built in. It's already taken out of their budgets.

Oh, okay. Yep. Thank you. Yep.

Thank you, Alder. Alder, are you here? Yeah.

Thank you, Mayor. Well, you've already answered my question on the maintenance of effort. Thank you. Regarding the formula that the state uses for determining the EREP limit, is that a fixed number or is the state going through a calculation of that growth that's just radically different than what the city is experiencing?

So it's the consumer price index for all urban consumers. So that's a national number. And the period of time is from August to August. And then, so we are monitoring that number each month. And then the net new construction, we kind of have a sense of that now based on the city assessor's numbers from April. And we feed those in, but we get an exact number from the Department of Revenue in August. So this all kind of culminates in August when we get the final CPIU number, Consumer Price Index number, and the final net new construction. But we monitor it pretty closely, and we are pretty close to the number, if not exactly at it. And it's really tracking what's happening with inflation each month.

So the city is experiencing a different kind of inflation or in different components. It's just not reflected in that formula in the...

Right, we may be seeing, I mentioned some numbers around diesel fuel and things like that. Obviously, that might be a component of the overall national CPI calculation, but how it affects individual municipalities such as Madison or other places around the state there's really no sort of distinction there they use that one factor the one difference that varies from community to community is that net new construction number Madison's tends to be higher than the rest of the state other than you know when we look at probably many of the surrounding communities to Madison they might be having a you know, a higher net new construction rate just because of their rate of growth relative to their base is so much larger.

Okay. The other question is, in the guidance, as you explained, that an agency can reallocate among the services it's currently providing.

Yes, that's correct. Yep.

With regard to the guidance that essentially no new projects or initiatives, supplementals, can an agency propose something new by finding some other part of its budget or is that an absolute exclusion?

It can reallocate within the budget, and that might include something it's not doing right now, but it has to be within that total budget amount.

But they also have to find the 2%.

Right.

So if they want to do something, they have to find 2% plus whatever they might want to reallocate. Yes. Thank you. It's conceivably possible.

All right. Alder Mayer.

Thank you, Mayor. How do you forecast something as volatile as fuel prices? I mean, you spoke a bit about consumer price index and interest rates, but that seems really difficult. And I assume that you can't always expect the worst. You can't have a worst-case scenario, but it's... How do you do it?

So... Some of this is point in time. We did a cost to continue exercise. We looked at fuel prices at that time and we built that in. We will revisit those numbers over the next few weeks based on what's happening with fuel prices and may build in, we may find some areas there where we'll reduce that amount based on what's happening and trends in fuel prices. The challenge though is if we come in too low, then we run into the expenditure restraint problem in 2027 where we haven't budgeted enough for fuel and it's really outstripping our contingent reserve and things like that. So that's the balancing act that we keep in place. So we had to make an estimate for cost to continue. We will look at those numbers again for the executive budget.

Do you think that's the most volatile part of the budget? I mean, I would also think of maybe like snow plowing if we have a dry year versus a snowy year.

Yeah, so it's a great question on the snow plowing. We do work with streets, and streets has a pretty, I think, robust forecasting with that in terms of what's happening with the number of full plows, but also what's happening in changes in climate and weather patterns as we're seeing different types of snow and ice removal happening. Maybe it's more frequent, but not a full-blown change citywide plow. So that's built in and then we have since for probably the last 10 years assumed that some of that will fall into the contingent reserve if we face more plows than what we expected. A final fallback is if we get in a situation of you know really dramatic snow events In those cases, the governor can declare an emergency. Costs related to an emergency are exempt from the expenditure restraint limit. And so those are the kind of, and then probably another element to this would be if it becomes a federal disaster designation, although obviously things are changing with how FEMA works with that, but if we were to receive federal aid, then that wouldn't be a part of the expenditure restraint either. Thank you, Director.

Thank you, Alder. Alder Pritchett.

Maybe three questions. Looking back to 2024, when the referendum was passed, and I'm very, very mindful of inflation, would it be fair to ask whether or not with that referendum, did the gap close or did it widen? and or are we on the brink of derailing?

Thanks for that question, Alder. I think that's why we do the five-year plan now and we update it each year. I think we stayed on track with the expected gaps the last couple of years, so in 2025 and 2026. I think that gap is probably gonna widen when we redo it for 2027, given kind of the pace of growth and costs in Metro as well as fuel prices. Now, the widening of that is probably not gonna be dramatic, but it'll be larger than I think what we have in the plan right now. And then we have to look at, okay, what are those options? As we laid out there, we do have fund balance that we can apply to close revenue gaps, as well as special charge options. But even under the plan that's in the 2026 budget, we assume by that last year, we run out of options and then we're left with Does the state legislature react to help with more shared revenue, for example, or different revenue options for local governments? Or are we back in having to consider a referendum option, for example? All those are sort of possibilities, I guess, that might occur as we go through all this. Now, what happens with inflation after this year? Difficult to say how inflation, how persistent it remains. Clearly in this very short term, we're just seeing a lot of reaction to geopolitical events. We see oil prices go up or down depending on what's happening day to day and so hard to predict what's gonna happen with inflation out into the future.

So the second question, knowing then that we are looking forward to a 2% reduction in agency and department cuts. Now, if we're doing that and if an agency is hedging a bet, that they're going to get additional resources, let's say from the state or from the federal government. Would that be wrong? Or should they base their budget on what we actually have?

I would say very few agencies have anything like the option that you're talking about there. Most of them are heavily reliant on general fund support, and most of those revenues, whether it's state aid in particular, is going to come in to the general fund as a general revenue, not to a specific agency. On the federal side, federal money that comes in has to be used for federal purposes usually, federally directed purposes, not for general types of discretionary purposes. And I think just the way that things are, you know, happening with the federal budget, I wouldn't expect anything like that to really happen, and agencies, I wouldn't expect them to hedge, nor should they hedge on something like that, because that's just not the way the money flows on all of this.

So, third question is, for those agencies that are putting together their budget for 2027. And I'm mindful, too, that monies can be reallocated. It takes some here to put it there. But now, let's suppose they're struggling. Really, when it's down to the nitty gritty, they just can't find any place else to cut. So what? Are there guidances, is there a recipe that they can use to hopefully get their budget in line with the 2% cut that they're being asked to make? I mean, many times, people, I think about putting together, let's say, my own budget, and I look at what I have. And then I try and balance it out whether this is a need you can do without Ventureland versus something that I know I have to have. So I'm asking that for those agencies, especially when we start thinking about fleets and things like that, fleets department, what kinds of instructions, what kinds of guidance, what kind of a recipe can you provide them knowing how the numbers play out from zero to nine? What can they do?

Well, what we've asked agencies to do and the mayor's asked agencies to do through the instructions is to really, what are the priority services that they provide? What are those core services? And for most agencies, that may be most of what they do. There's not a lot of, EXTRA THINGS IN THE BUDGET, SO THEY HAVE TO LOOK AT, OKAY, AND IT'S DIFFICULT DECISIONS AROUND, WELL, HERE'S OUR CORE ACTIVITIES. THIS IS SOMETHING THAT MAY BE A LOWER PRIORITY OR DOESN'T QUITE LINE UP WITH ALL OF THE CITYWIDE PRIORITIES. THAT'S ONE APPROACH. Another, as I mentioned in the presentation and is in the mayor's instructions, how can we work collaboratively with other agencies? And we've already seen that in prior budgets with parks and streets, you know, collaborating on how they deliver services when, you know, we have to deliver a certain series of services in the winter compared to the summer. And how do we share all of that? So that might be another approach as well for agencies to think about with that. Maybe looking at their, reviewing their contracts, you know, those things that are coming up, do we need to continue those, some of those contracts or not? So I think those are the types of things, and agencies have been through this exercise before. We haven't had to do it maybe the last year or two, but we did an exercise that was much larger than this leading up to the 2025 budget. So it's not a new thing to them to sort of think about, okay, how are we delivering services? What are different ways that we can deliver those services? And think about cross-agency collaboration and things like that.

Sometimes you have to go back. You have to do a retrospective look back.

Mm-hmm.

to see what really worked and what didn't work. If you're buying a set of tires and they didn't last the 60,000 miles that they were supposed to, maybe you shouldn't be buying tires from them again. So looking back then, It's helpful to know what worked and what didn't work. And or if you were doing something and it's not working, do you stop midstream and say, we've got to change the direction we're going? These are the kinds of things that I find just drives me nuts when I think about the budget process. I'm looking for outcomes.

It might be helpful, Alder, to know that every agency has an analyst in the finance department assigned to them.

So that analyst is obviously very familiar with the budget and familiar also with the agency. And so they actually can help with some of that looking backwards. where were we spending or not, what was working or not, and help give them some of that guidance and recipe, if you will, for their specific budget, because they work very closely with the agencies, but they are on the budget team, so they're in the finance department.

I ask that question primarily because I had a constituent at, this is for Madison Metro, and at the station, let me put it that way, the screen that said the bus arrives and it leaves at a certain time, it had been out. Well, plus and minus close to two months. And so when I spoke to transportation and I was inquiring about it, and then I was told that the vendor that they get this thing from hadn't responded. Now, how long does it take? And then why are we paying this person? Because now we're asking people to increase ridership, but if they don't know when the bus is coming, then that's a disservice in terms of how the money is being spent. And so looking at vendors and what did you promise me? And you didn't deliver, but then we can go ahead and pay them anyway. No. Thank you.

Thank you, Elder. Elder Tischler?

Oh, thank you. I just have one question. The 2% reduction for all departments, and I notice you highlight, you put it all in bold. And I just wanted to just clarify that there's no exception for any department, no matter how big or small. Is that correct, Dave?

Yes, Alder, that's correct. It's all agencies except for monies in an agency that may come from the city's grant fund.

Right. Okay. Or what Alder brought up with her line of questioning. Okay. That was really my question. Just wanted clarification on that. Thank you.

Thank you, Alder. Alder Jean?

My turn. Are there agencies that are significantly expanding level of service within like the operating budget?

Within the operating budget?

Yeah.

I mean, some agencies in the 2026 budget, the budget we're in right now, expanded some services. For example, the library has a new facility they have to staff. And in the 2026 budget, that was funded for a portion of the year, so just for a few months of the year. And so in the 2027 budget, we have to fully fund for the full year. The same with the fire department adding another ambulance, and that was partially funded for a year, and then that has to be fully funded for the year. But looking at the 2027 budget, you know, the mayor's instructions to the agencies is no expansion, no supplemental requests.

Thank you. Which agencies most frequently get outside funding or grants?

So most of the cities, Outside funding, and we'll just focus on federal money, comes in three or four areas. Metro Transit receives federal aid under federal formulas to support a portion of its costs. another big area is public housing but most of that money goes to the Community Development Authority which is you'll see it in the city budget but it's really a separate entity from the city and it actually operates itself with all of that federal money it doesn't really get any other dollars to support it we do receive some Other sort of community services related funding through the Community Development Block Grant from the federal government. That's primarily through the Planning Community and Economic Development Department and primarily in the Community Development Division. Again, those are formula dollars for the most part. Again, sort of separate from the city budget, we only fund a portion of that budget, but there's a significant amount of federal funding is the public health department. So that's the joint city-county public health department. And then there's kind of a sprinkling after that. We get some federal money for certain activities in the police department. Usually those are short-term in duration. We might get grants sometimes for the fire department. In the capital budget, we do get some indirect federal funding for street construction projects that we get from the State Department of Transportation, but it's really kind of federal dollars once removed. I'm sure there are others that I missed, but those are probably the main ones.

So these are largely formula dollars and not like specifically applied for, for the most part.

The large dollar amounts are formula amounts, but there are smaller grant categories that are applied for and we receive. And you often, you might see those as resolutions to either get the authority to apply for it or to modify the budget to accept those grant revenues.

And then earlier you mentioned some agencies might tend to underspend. What would be some examples?

So agencies typically underspend because they have vacancies through the year that they have more vacancies than what they have to save relative to that salary savings percentage. And that might be they have retirements or somebody leaves for a different job and it takes time to fill the position. And so often that's the reason for the savings. Sometimes it's And we've seen this in IT and information technology. Sometimes we'll budget for software contracts, but the timing of those software contracts didn't match up with what was put into the budget, so it might happen in the subsequent year. And we'll adjust the budget in the subsequent year. But it's typically those two reasons. It's primarily that turnover amount in agencies for staff.

Thank you. Thank you, Alder. Alder Harrington-McKinney.

Thank you, Madam Mayor. I have three questions, and one goes back to the series of questions by Alder Vitavir, and you mentioned pay out for sick leave contingency fund. And I was trying to take notes. Could you kind of summarize that? What is it and how is that, what is that amount and how does that play into the overall budget?

Sure, Alder. Thanks for that question. I talked about two things. One was the contingent reserve. So in each budget, we budget for about a half a percent of all of the total budget. And that's roughly $2 million that we basically just sort of set aside in the budget. And it's there for emergencies that may arise, agencies that for whatever reason are spending more than what was budgeted. So that's kind of our cushion in the budget. that's two million dollars. We have centrally budgeted funds the largest of which is for compensated absences and in this budget I think it's about three to three and a half million dollars and that's to supplement agency budgets when to help them pay for the cost of when people retire from city service, if they have sick leave built up, sick leave hours built up, that has to be paid out at retirement. And those are things that are difficult for agencies to budget, so we budget it centrally. And then we, through the mid-year resolution or the year-end resolution process, will transfer money from that central appropriation to the agencies to help them meet those costs. Now typically those costs have occurred in police and fire, because that's where a lot of our personnel are, and there's collective bargaining rules about how much they should be paid and for what leave amounts. And so that's what that pot of money is for.

Okay. And a follow-up question is that that is not just money for retirement. That is also money when someone goes out on sick leave in one of the departments. Is that also included in that money?

No, it's only at retirement, and it's to pay employees who retire for the value of their sick leave, for example. So let's say they have a thousand hours of sick leave in their account, and we multiply that thousand dollars by their hourly pay, and we pay them that amount of money. and that they're supposed to use for health care, health insurance after they leave city service.

Thank you so very much because I was going in a different direction. My second question is, you mentioned COVID and I want to make sure I'm clear on this because on the west side, we'll be having our west side alders. And one of the questions that came up already is for the COVID dollars that the city received, could you kind of

give us a cap in our a quick summary of of how those monies were were spent um that's probably a separate briefing but i'll do uh my best to sort of give you this yeah just a quick one so the primary money that we probably talked the most about was the um under the american um Rescue Plan Act, ARPA, was the state and local fiscal recovery funds. And the city from that, that was nationwide, there was $350 billion allocated in the federal legislation. The city received about $48 million from that fund. And roughly half of it was used to help balance budgets and maintain current city services. And the other half was allocated by the council for different types of purposes, like affordable housing, response to specific emergency needs from the pandemic, certain other housing type issues in that area. And all of that money has, 99.9% of that money has all been spent. We're down, I think, to one of the subrecipients has to basically cash a check for $10,000 that they received. So that's one big pot. Another pot, which kind of flowed through the city, was for emergency rental assistance. That came through the city and then was basically allocated to community organizations to then in turn allocated to individuals who needed rental assistance. Off the top of my head, I think it was about $80 million. So that didn't benefit the city budget directly. It basically flowed through to individuals to help them with rent. And then we received, I think, another roughly $80 million of additional transit money to basically help transit systems throughout the country and in Madison to continue to operate when they saw dramatic drops in ridership. as well as recognizing that other funding sources, for example, the city budget or in other communities around the country, it might be sales taxes were affected by the economic effects of the pandemic. So that money was used to sort of continue operations for transit systems in Madison Metro Transit. Those are sort of the three big pots of money. There were also COVID dollars, a lot of COVID dollars received by public health for the public health response associated with the pandemic in terms of you know, immunization, public health education, tracing cases, all of that sort of work. You know, if you kind of think back to large-scale immunization efforts out at the Alliance Center and things like that where staff had to be hired and trained and the equipment procured, all of that sort of stuff. So I would say the thumbnail, that's the thumbnail, and there are lots of other little pots of money that were received through that. There were certain enhanced amounts we got through community development block grants and things like that, but those are the large shares of what happened. And most, if not all, of those dollars have been fully expended.

Thank you very much. You did very well for the thumbnail. My final question is the League of Wisconsin Municipalities. And I thank the Alder for sending that through. Are we still a member of the League of Wisconsin Municipalities? When I say we, the city. The city is not a member. Okay.

And that membership ended when? I believe it was a part of the 2025 budget, if I remember correctly. That funding was eliminated.

Okay. I will do my other questions offline. Thank you so very much. You're welcome. I'm complete.

Thank you, Alder. Alder Matthews?

Thank you, Mayor. I just have two questions. My first question is for the municipal services payment. I know you've talked some about why that's projected to be a decrease, and I think the reasoning definitely makes a lot of sense. But even with the increase that we got this last year, are they paying us the amount that their calculation says that they should be paying us?

Thanks for that question, Alder. So that's a great question. The formula, as I said, looks at our costs for police and fire services, runs it through that formula, and then gives us a number of what we should be paid. And we get about 40% to 50% of that calculated payment. Now, that's up from about 37% prior to this most recent state budget. So we made some good progress in the budget, but we're still a long ways from receiving effectively our complete share, our full share our calculated share of what that amount should be. And so in effect, those costs for serving state-owned buildings is falling on property taxpayers in the city.

Thank you. So yeah, we can't count on that money, but maybe it could change. Then my other question, and if this is too tangential, that's totally fair. But you mentioned how Currently, they're like the projected future and like the recent past the tax rate has actually been falling for the city. Are you able to kind of Explain what that means for the tax payer.

Sure. Thanks for that question. Alder so The tax rate, let's start with the math of this. So we have the levies, the property tax levies for all of the taxing jurisdictions, right? The city, the school districts, the technical college and the county. And so the total of all of those levies divided by the total property value in the city is the tax rate. that tax rate is then multiplied by the value of the property to get the amount that that property owner has to pay in taxes for all of the taxing jurisdictions. So the rate has been falling because the rate of growth in the levies is for the most part limited under state law. It's limited for the school districts, it's limited for the city, the county, and Madison College. Now there's nuances in all that, particularly for the schools. The tax levy can go up if the amount of state aid stays the same or goes down. So there's a lot of nuances there. But overall, the rate of growth in the tax levy has been going up at a slower pace than the property value in the city has been going up. And that's why the rate has been falling. Now for an individual property owner, it depends on what happens with their assessment from year to year. If their assessment is going up, you know, at a rate that's faster than the overall rate of all of the totality of property value in the city, their taxes are going up, right? If their property value is staying relatively the same, they might see their taxes stay the same or fall. It's different for every different property owner around the city. But I think the headline is that value is going up, the tax rate is going down. If the tax rate were not falling, obviously that means values are not probably going up as much. Hard to say, I mean, the new construction helps with those who are existing property owners, but that tax rate does have effects on some of the formula dollars we receive, particularly in this municipal services payment program. And it does have much larger effects on what the school district receives in state aid.

Thank you. I appreciate it.

Thank you, Elder. I know there are others in the queue with questions. So I would like to say a big thank you to Director Schmidicke for his presentation and explaining everything.

And yet another thank you to the entire finance staff for putting this together and doing all the work on the budget. And the city is really lucky to have these folks.

Alder Fittifer.

We have a 10 minute recess.

Alder Vitaver will move a 10-minute recess. Is there a second? Moved and seconded. Is there any objection to taking a 10-minute recess? Seeing no objection. It's 8.27, so 8.37. We will be back. it's all right all right all right the hour of 8 37 having come and gone if the alders on zoom could turn their cameras back on And the alders in the room could sit back down.

It's saying that I can't start my video because it's disabled by the host.

Yes, sorry, that's my fault, alder. Maybe staff can help Alder Matthews turn her camera back on since I seem to have messed that up. Sorry, Alder. Okay, I will call the Common Council back to order and ask the clerk to please call the roll.

Thank you, Alder Madison. Here. Alder Madison is present. Alder Martinez-Rutherford. Present. Alder Martinez-Rutherford is present. Alder Matthews.

Present.

Matthews is present. Alder Mayer. Here. Mayer is present. Alder O'Brien. Aldo O'Brien is present. Aldo Hovitch. Present. Aldo Hovitch is present. Aldo Pritchett.

Here.

Aldo Pritchett is present. Aldo Tischler. We'll get back, okay. Alder Revere. Here. Alder Revere is present. Alder Vitiver.

Here.

Alder Vitiver is present. Alder Zhong.

Here.

Alder Zhong is present. Alder Duncan. Here. Alder Duncan is present. Alder Evers.

Here.

Evers is present. Alder Field.

Here.

Alder Field is present. Alder Figueroa-Cole.

Here.

Alder Figueroa-Cole is present. Alder Glenn.

Here.

Alder Glenn is present. Alder Ugair.

Here.

Alder Ugair is present. Alder Harrington-McKinney.

I'm present.

Alder Harrington-McKinney is present. Alder Lankella.

Here.

Alder Lankella is present. Alder Lieberman.

Here.

I believe, Ms. President. Madam Mayor, we have a quorum.

Thank you. All right. We will go to item 12, which is Legistar 93403, amending sections of the Madison General Ordinances to remove the requirement of vehicular access to a collector street for 10 use types. On item 12, President Madison, a motion, please.

Motion to adopt.

Second. Moved and seconded to adopt item 12. On item 12, are there questions for staff? Alder Field.

Thank you, Mayor. I wonder if we could get an overview of this item, when it has come up, what it would do.

Yes. Katie Bannon is here, our zoning administrator. Katie? Katie?

Uh, thank you, Mary. Um, I can give a short, uh, overview of this and how this has kind of come about. Um, so the, this is a proposed zoning code change to remove a current zoning code requirement, which requires vehicular access from a collector or higher classified streets. So these are usually higher traffic, higher speed streets, and these 10 uses are required to have, um, vehicular access at least one point from a collector or higher street. What we've found is this is a really kind of black and white zoning code requirement that can be an issue. So it's come up a couple times. The first time I can remember in my time here is when a church, which did not have any side of their lot that was on a collector or higher street, wanted to redevelop. develop some housing, make the church part of this housing development. They didn't have a way to be able to do that because they didn't have any collector or higher streets located adjacent to their property. So there was a previous zoning code change to have that only apply to if there's 600 or more seats basically in a place of worship. It's coming up again now as we have Madison Metropolitan School District redeveloping a number of school properties building new, and we have this requirement that kicks in when you're doing a new development like that. So specifically, it's coming up with Cherokee Heights Middle School. The collector or higher access would have to be from Midvale or Nokoma. They currently have access from Cherokee that is not a collector or higher street. They would like to maintain that access. And it's kind of been a conflict because the zoning code is very black and white. You have to do it this way. And then we have traffic engineering staff kind of a little bit confusing why the zoning code is stepping in when traffic engineering staff has the expertise and ability to decide on a site by site basis where access makes the most sense from. So from a traffic engineering staff perspective, what we're hearing from our colleagues is Midvale is definitely not where we wanna access from. We'd prefer it to be maintained on Cherokee But the zoning code doesn't allow that flexibility. So we talked a little bit with our colleagues in traffic engineering, trying to kind of puzzle through, is there a path that traffic engineering can just, you know, use their skills, powers and abilities to make these calls on a site by site cases, basis, I'm sorry. These do generally go to plan commission. So there is still the opportunity to add particular conditions as needed. But it seems like the zoning code is really standing in the way of some flexibility that would make these projects more possible. Tom Moore is here from Traffic Engineering if you have any specific questions about Traffic Engineering's role. But that's kind of where this zoning code change is essentially coming from.

Thank you, that was tremendously helpful. Just one quick follow up. On the plan commission review, I understand that one of the standards of approval is whether a site proposal, a land use application is, consistent with and compliant with ordinances and rules that govern that zoning district and part of the city. Can you remind us when the Cherokee Heights Middle School is expected to come to the plan commission and when we would want this ordinance change adopted in time for staff review of that proposal?

Yes, let me pull that up real quickly here because I know this was something MMSD is on a tight schedule with their construction projects, and we definitely wanted to think through. They've already submitted an application. They're looking to... Oh, actually, I'm sorry. I don't have the date. Oh, it's scheduled to be July 27th, but it's dependent on having a code change that allows them to maintain that vehicular access from Cherokee and not require additional access to be from one of those other streets, Midvale or Nokoma. So that is their current timeline that they're hoping to hit on this project.

Yep. Thank you very much. And then, Mayor, a question for Tom Moore. we do have tom here i believe go ahead hello thank you for joining us um i wonder tom if you could talk a little bit about some of the trade-offs that traffic engineering staff might consider when making a recommendation for site access from a busier collector street versus a less busy street in a neighborhood um not to focus too much on cherokee heights middle school but just in general what would you take into account or staff on your team take into account

Yeah, good question. So this is what we do for kind of any driveway. Take things into consideration, like the speed of the street, the volume of the street, whether it's a hill, visibility issues, proximity to traffic signals or intersections. If it's close to a roundabout, that would be a concern. Major pedestrian crossings. So things... kind of cherokee heights middle school is kind of a a pretty good example of the issues that's created with this ordinance being in place that um that the ordinance always presumes that uh access from a arterial or collector is going to be the better or safer option in this case it's pretty clearly not so you know the local street lower volume safer there's going to be Young kids going in and out of vehicles. We definitely don't want that on Midvale with the higher speed and higher volume. So yeah, that's a pretty good example of why we think this should be changed. I'm complete. Thank you, Mayor.

Thank you, Alder. Alder Laberman?

Thank you. I'm curious specifically about including hospitals in this list. We just had a long discussion when we were discussing the Regent Street geometry about the need for hospitals to feed onto wider roads, specifically that one for ambulances. Do you foresee I guess first off, do you foresee any new hospitals being developed soon in Madison? And do you think any would develop where they were not using a collector or larger road as their main as their point of access?

Yeah, I don't think we have anything in mind. I think we just want to have the flexibility to make that decision when it comes. But that's a good point. kind of with the Regent Street project in Meritor, UnityPoint Meritor. So that would violate this ordinance because Brooks Street is a local street and there are driveways on Brooks Street. So that would be another example. So kind of a lot of these older buildings are built in a way that then if they're rebuilt would violate the ordinance. So this gives us the flexibility to do the the work and evaluation, make the judgment call when it comes along.

Alder, I would just add that while we might not get what you would think of as a full-blown hospital, We actually have in the past five years and I anticipate in the next five to ten years seen a lot of uses that would be classified as hospital that have built new buildings. Just the east side UW complex comes to mind and I believe they intend to expand there. The digestive clinic on University, there's been a lot.

I guess that was a good question I should have asked of more of what we define in that category there, because I think some of the public comments have tried to portray it as if we are building hospitals in the middle of neighborhoods now. But no, that answered my question. I thank you very much for that.

Thank you, Elder. Elder Matthews, do you have your question answered? Yep.

Thank you, Alder. Alder Viniver. I'm just going to drive this point home with a direct example in my own district. So there is a church, a Geneva campus church. It is on Black Hawk. Alder, is it a question? Yes, I'm getting there. And so if that church were to, it is, there's no collector street anywhere near it. So if that church were to enlarge and expand, change their purpose, whatever, under the current ordinance, they would be restricted from doing so. And it would require, they would only be able to do so if we change this ordinance. Am I correct in my surmisement here?

To build a new facility, yes. All current code requirements come into play. Maybe there would be room for a zoning variance in a case like that. but it would not meet zoning code. Presuming they don't have access to Collector Ohio, which I wasn't able to check real quickly here. They don't.

Thank you, Alder. I have no other Alders in the queue with questions. So item 12 has been moved and seconded. Is there discussion? Seeing no discussion, item 12 has been moved and seconded. Is there any objection to recording a unanimous vote in favor of adoption? Alder Pritchett? Yes. Would you like to be recorded as voting no? No. It's no. You would like to be recorded as voting no?

Yes.

Okay. We'll record Alder Pritchett as voting no and record the balance of the council present as voting aye. Aye. That's with 18 ayes, that item passes. And we will move on to item 13. Item 13 is Legislature 93404, amending sections of the Madison General Ordinances to increase the maximum height allowed for non-residential buildings in certain districts through conditional use approval. On item 13, President Madison, a motion, please.

Motion to adopt.

There's a motion to adopt. Is there a second? Moved and seconded to adopt. Item 13. On item 13, are there questions for staff Alderfield?

Thank you, Mayor. Same question, just for an overview and what this one would do.

I believe this is also Director Bannon.

Yes, I can provide that overview. So this is another zoning code change. In this case, it's to modify the maximum height allowed for non-residential uses in residential zoning districts. So it's pretty limited, the non-residential uses that are allowed in residential districts. It's typically things that we've historically seen developed in residential districts, things like schools, community centers, libraries, places of worship. Um, so it's, it's really quite limited. They're almost always, um, conditional uses, but there are things we've historically seen in residential, um, quite limited in what's allowed in the zoning code. Um, and the idea is, um, like many of our other zoning districts, allowing the opportunity for a conditional use to exceed the maximum height or non-residential uses in these zoning districts, um, with a conditional use up to 50 foot maximum. Similar to the other zoning code changes coming up because we have an MMSD project, Madison Metropolitan School District, a new school being built. And it's Toki Middle School, Orchard Ridge Elementary, that site. They have a gym space. It's multiple stories of classrooms. And they exceed the maximum height that would otherwise be allowed of 35 feet. The only way to allow that, even though it's already a conditional use for the use, is to... change the zoning code. So that's why this is before you today to allow this flexibility that's allowed elsewhere. Again, it's only the non-residential uses allowed within the residential districts and only through a conditional use process up to a maximum of 50 feet.

Excellent. Thank you for the overview, Director Bannon. Just one follow-up. Could you please remind the council of the difference between prohibited, conditional, and permitted uses, and particularly as relates to something like a school exceeding 35 feet in residential now, and then if this code change were to be adopted?

Yeah, so there's basically three categories of uses, and so these are things like A school, a library, single family home, a duplex. And they can either be prohibited, which is not allowed at all within a zoning district. They can be a permitted use, which means if you follow the conditions in the zoning code, other regulations that may apply that other agencies administer. You can be approved, get your building permit, move on. And then there's conditional uses, which are only allowed in certain cases within a zoning district. So these require some additional oversight, maybe some specific conditions that address impacts of those uses. Conditional uses, unlike permitted uses, are not just a staff level review. They go to the plan commission for a decision about do conditions need to be applied? If so, what conditions? And we have a number of different conditional uses. Most non-residential uses allowed within residential districts are already conditional uses for the use itself, for school, for example. This would require, in this particular case, for this school or any other situation where we'd have a non-residential use looking to exceed what would otherwise be the maximum height permitted. They would need to go to the Planning Commission and also request a conditional use for that additional height up to 50 feet, but it could be less than that. And then the Planning Commission could apply whatever conditions it thought was appropriate if it wanted to approve it, or it could deny it if it thought conditions couldn't be met to approve the conditional use for height.

Thank you very much.

Thank you, Alder. Alder Matthews?

Thank you, Mayor. I just want to ask, since we've had our public comment and I think some of the emails, is it true that this ordinance change, since it's non-residential, would not mean that a 50-foot apartment building could be built in the middle of a neighborhood of single-family, tiny, one-story homes? This wouldn't be possible where it otherwise wasn't already possible.

That's correct. If an apartment building isn't already allowed or a mixed-use building, this would only apply to the non-residential uses that are already allowed within the zoning district. Some of these zoning districts do allow apartment buildings. In those cases, nothing is changing there. It's really exclusively non-residential buildings that would be affected.

Thank you. Thank you, Alder. Alder Zhang.

Following up after Alder Matthews. So to reiterate, this is to provide more flexibility with non-residential buildings, but likely wouldn't fundamentally change neighborhood character.

It would allow some additional height for these non-residential uses if approved. as a conditional use for additional height. So, you know, it can be arguable what is character. These uses are already allowed in these areas as a conditional use. I think it hasn't come up a lot in the past just because we haven't had a lot of redevelopment of things like new schools in these areas where schools have historically been or places of worship, frankly. This would allow some more flexibility in cases where it may make sense to have a taller building for that particular non-residential use.

Thank you um another question, a good amount of public comments seem to be relating this item and the previous item functionally are they meant to be paired together.

They are separate code changes. they're both came about as part of. Madison Metropolitan School District new school construction projects. So that's why they're on a similar timeframe and both apply to non-residential uses. Some of those limited things like schools that are allowed within residential districts that as we, you know, really review these projects found some of these things were too restrictive and making it difficult to do things that otherwise seem like they should be allowable.

Thank you. Thank you, Alder.

Alder Pritchett. Yes. So it's my understanding that a 50-foot structure would be non-residential. Is that correct? This is for staff.

It could be up to 50 feet, a non-residential use in these residential districts, if approved with a as a conditional use of Planned Commission for that additional height.

Because you use the example of schools being one such structure, correct? Correct.

That's one of the non-residential uses allowed in residential districts.

Are there exceptions or... Are there businesses that could go into the non-residential businesses to go into this 50-foot structure? Is there an ordinance that declares what it can or cannot be, meaning the type of business? Schools is the example you use. Are there other examples of 50-foot structures that are non-residential that can go into this residential area?

It's, you know, just looking real briefly at retail, it's not really an allowed use within residential districts other than landmark site, there's an exception that you could put a very limited retail use in a historic building. I don't think we're going to hit the 50 foot because they're not building a new building in that case. But retail is not really a use we see that is allowed in residential districts. So that's kind of a core thing of the zoning code is where and what zoning districts do we allow certain uses. And in these residential districts, it really is intended to be primarily residential other than some of these historic non-residential uses that have been incorporated into residential areas like places of worship, schools, community centers, things like that.

Okay, thank you.

Thank you, Alder. Alder Lieberman.

Thank you. Just very quickly, and I know there's not an exact answer to this, how many of these conditional use applications do you foresee getting over the next year if this change passes?

You know, it's always driven by what applications we receive, but I assume it'd be relatively limited because we just don't allow very many non-residential uses in these districts. It's relatively rare someone wants to build a new non-residential building for one of these very limited uses in these areas. So maybe a school or a church in the next year or so, a couple, depending on how many Madison schools maybe come through this year.

Great. Thank you.

Thank you, Alder.

Alder Ochevitz?

Thank you. This is also for Katie, or Director Bannon. There are some spots in our zoning code like the mixed use and TRU2 within TOD where there's a specific clause that says that the height may exceed the otherwise permitted height with the conditional use permit but doesn't specify a maximum. Is there a reason you went to 50 feet instead of just doing a general, you know, we can issue a conditional use if we feel it meets the standards?

Yeah, I think just as zoning and planning staff evaluated what potential zoning code change might make sense here, thinking about adding an upper limit because it's really not intended for apartment buildings or anything like that. It is these very limited non-residential uses. It made sense to add a reasonable limit to be sensitive to the surrounding uses. We didn't want to do something too extreme.

Okay, thank you.

Thank you, Alder.

Alder Matthews? Thank you, Mary. I just had one more question. I think that I'm remembering this correctly. Some of the emails we got also mentioned that, like, they aren't so concerned about schools because the setbacks are already bigger, but they would be concerned maybe about some other use that didn't have those setbacks. Is this changing the setbacks or are those already kind of like set in the zoning code for the non-residential use? Or do different non-residential uses have different setbacks, I guess?

Sorry. Great question. So typically in these districts, there's a single, there's like a column in the table that addresses things like minimum lot area, lot width, setbacks and things like that. And there's a column that's specific to non-residential uses in these residential districts. Nothing about the setbacks is proposed to change. However, there could be a scenario where potentially the Planning Commission would say, you know, maybe that's a condition we want to think about a step back or something else or a greater setback from a lot line in order to allow this conditional use for height. And those are the kinds of things that Planning Commission can think through with the conditional use consideration.

Thank you.

Thank you, Alder. Alder Pritchett? so this is for our staff again suppose now this non-residential 50-foot structure has been in this residential neighborhood for 10 years 10 years passes and now they decide they're going to move on would there be would it require let's say another business not business but another entity wants to move in And they now, they know that it's a non-residential type of business, I don't wanna say business entity that they're gonna run, but they're asking for an ordinance change. Could that happen?

Um, so any new use, uh, needs to be approved for buildings. So that's either a building or a tenant space. That is kind of one of the common, uh, zoning approvals that we review and approve any change in use. So if it's going from a school to a place of worship, um, they would need to make that application. Um, in some cases it would require conditional use for the new use. Um, the height is already there and it's a non-residential building. So it'd be able to continue, um, And it couldn't change to a use that wouldn't be allowed. For example, retail, as we talked about, not allowed here. They wouldn't be able to convert it to retail because it's a residential building because that use is not allowed. It would have to convert to a new use that is allowed in the zoning code. So, for example, a place of worship.

So how would a decision be made then regarding, let's say this church decided to move on and some other entity wants to move in, how and who would determine whether or not they can, this ordinance needs to be changed to accommodate them? I'm asking because I know neighborhoods that have changed. An ordinance will have a change to benefit the new entity that wants to move in. They want to maintain the integrity of their neighborhood. But that's changed primarily because of an ordinance. What say do they have?

So the zoning code would have to list it as an allowed use in order for it to be approved. If it's not listed as an allowed use, so not permitted, not conditional, not listed at all in these residential districts, again, for example, retail.

the council would have to make a decision to change the zoning code to add that that new use would be allowed in the zoning code otherwise it is not approvable okay thank you thank you alder i have no other elders in the queue with questions so on item 13 it's been moved and seconded is there discussion Seeing no discussion, item 13 has been moved and seconded. Is there objection to recording unanimous vote in favor? Seeing no objection, we'll record unanimous vote in favor of item 13. And go on to item 55, which is legislature 93412, approving the amendment to the project plan for tax increment district number 46, Research Park. On item 55, President Madison, a motion, please.

Motion to adopt.

Second. Moved and seconded to adopt item 55. On item 55, are there questions for staff?

Seeing Alder Pritchett? Yes. For item 55, the question is this. At the end, well, not at the end, but we have here where it says intent and purpose, and I need clarification. And this deals primarily with TIF District 46. I'm interested primarily in the last part of the statement there, where there is an allowance or budget for small business assistance. Westtown area improvement, all of the other improvements that are listed, they are A-OK, but I am primarily interested in given budget kinds of constraints that we're talking about, why are we putting $1 million out there for small business assistance?

Director Mikulajewski is here.

Thank you, Alder Pritchett. Yes, so within this, well, first of all, for those watching at home, I'm Matt Michalowiczewski, the economic development director for the city. Yes, Alder Pritchett, as you indicate, the current amended proposed amendment for TID 46 would add a million dollars for the city's small business programs. These are programs that include facade grants, building improvement grants, commercial ownership assistance, small cap TIF, We've utilized other TID districts throughout the city to fund these programs in other locations throughout the city. TID 46 is a very healthy TID. It has basically generated enough increment to repay all of its existing debt. It's probably going to be closed in a year or two. And so we felt that this was an opportunity to use some of that increment that was available to potentially assist small businesses within that TID should they qualify for those small business programs.

The second part of that is because at the end of this document where it has land acquisition and it says estimated cost, then it has affordable housing, and it says $4,444,000,000 eliminated as part of the 2025 budget plan and boundary amendment. Funds were reallocated to other projects. Why was that taken out? I mean, we've been talking about affordability. We've been talking about housing. But now suddenly we've taken it away.

Yes. So we have used TIF funding in TIF 46 to fund housing. One notable project is the apartment project that's being constructed at University Research Park. What we do with all of our TID project plans is we enumerate expected expenditures within expenditure categories within the project plan. And that includes infrastructure, private development loans, small business support, And then we rebalance the allocation of funding based on projects that we know are on the horizon at a given point in time. I believe the reason the decision was made to likely reallocate the funding is that we didn't have a housing project on the immediate horizon that was going to utilize that funding. That doesn't stop us though in the future that if we became aware of another housing proposal that could utilize TIF within that district, that certainly doesn't stop us to reallocate the funding again within the project plan to direct more money towards housing. Again, we've funded housing in this district in the past and we certainly could do so in its remaining life. Although again, we'll probably be closing this TID in about a year or two. And so we're kind of getting the point in time when likely if we were going to fund housing, we would know that the project was already before us.

Thank you. That's comforting to hear. Otherwise, I would say, how would you prioritize how this $1 million would be spent? So knowing that affordability is not necessarily off the table it could be there if there were, let's say, a proposal submitted for those funding. Is that true?

Yes, absolutely. I think it's also important to note that unlike the small business programs and the infrastructure projects, When we provide private development loans to housing developers, whether it be market rate or affordable, those projects are self-supporting. So we are generating additional increment from that specific project that's used for the TIF loan. In this case, it's slightly different because this TID is cash rich, so we would likely use cash instead. But the point being that housing projects always support themselves. And so within any TIF district, we always have the opportunity, if the council still chooses, to fund a housing project and to amend a project plan to utilize TIF for a housing project.

Okay. It's still comforting. Thank you.

Thank you, Alder. Alder?

Thank you. Matt, I have a question, and so I'm going to go back in history. And so I'm in District 20, and we don't have substantial anchors that will relegate a TED district. And there was some conversation in past is that how do we address this absence in areas that don't have those anchors? It's just not going to be cash rich. What does that look like? And how is that moving forward? And how do we talk about, you know, those kinds of circumstances with a lack of TID or creating TID? So could you just kind of speak to that?

Sure. So I think the question is what to do in districts that don't have a lot of generator projects. I think the first thing that should be noted is that the city as a whole has significant capacity to implement new TIDs elsewhere in the community. Under state law, we're allowed to have up to 12% of our equalized value located within two districts, and the city is currently at about 5.5%. So we have significant ability to set up new TID districts. So if, for example, there was a project in your district in the future that needed TIF and that the council was interested in investing TIF in, it would be possible to do that and to set up a new TID in your district. So we're not kind of limited at the moment. We do need, though, for TIDs to be successful, we do need to have sort of generating projects. And there are certainly areas of the city that have currently more development occurring and areas that have less development. And so we do need those initial projects that are going to generate increment, likely to support themselves and also support the other initiatives that the city has.

Go ahead. This is an off-the-line continued conversation, and I'll make sure that I connect with you. Thank you. Yep, happy to. Thank you, Alder. I'm complete.

Thank you, Alder. I have no other Alders in the queue with questions. So on item 55, it has been moved and seconded. Is there discussion? Seeing no discussion on item 55, which has been moved and seconded, is there any objection to recording unanimous vote in favor? Seeing no objection, recording unanimous vote in favor of item 55. That will take us to the end of our agenda. Are there any additional introductions of items from the floor? Seeing none, are there any announcements? Alder Mayor.

I would just like to welcome everyone to the 20th annual Fete de Marquette this weekend at McPike Park. It's a big fundraiser for Wilmar Community Center. Hope to see you there.

Thank you, Alder. Any other announcements? Seeing none, Alder, Madison, it's your turn. motion to adjourn is there a second moved and seconded to adjourn is there any objection to recording unanimous vote in favor of adjournment seeing no objection we stand adjourned have a good evening everyone