Operating Budget will be considered first and a portion of the budget will require a two-third vote to violate budgeting policies.
The council meets to discuss budget. The meeting starts and hour earlier. Also, they have scheduled meetings for Wednesday and Thursday night if needed. Here’s the agenda
5:30 pm Common Council City-County Building 210 Martin Luther King, Jr. Blvd, Room 201
- MPPOA Contract – Amending Sections 3.32(7)(e), 3.54(17)(a), and 33.10(4) and creating Section 3.32(12)(d) of the Madison General Ordinances to specify provision for double-time pay, authorize leave for death of a current City employee, extending night and holiday differential hourly premium through Saturday, and to authorize the Committee on Employee Relations to make recommendations to the Madison Professional & Supervisory Employees Association Handbook.
- 2020 Executive Capital Budget
- 2020 Executive Operating Budget
- Adopting the 2020 City Budget authorizing a 2019 general property tax levy of $____ for City of Madison purposes, adopting a supplemental increase of $92,674 in the allowable property tax levy for 2019, as authorized under s. 66.0602(3)(f), Wisconsin Statutes, and declaring the City’s official intent to issue general obligation and revenue bonds to reimburse for certain expenditures authorized therein.
Staff says the Council will Consider Operating Budget First
I kind of think that is up to the council to decide, isn’t it. Anyways, this is what staff told the council, perhaps this was decided by . . . council leadership? The mayor?
I have attached proposed amendments for both the operating and capital budgets. The full Common Council will vote on these proposals during next week’s meetings (Nov 12-14). A number of the amendments proposed to the operating budget have capital implications. To accommodate this, during next week’s proceedings the Council will begin by voting on the operating amendments followed by voting on the capital amendments.
When preparing for next week’s deliberations please keep the following items in mind:
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- If you wish to move an amendment from the floor it must first be written down and distributed to the full Council before it can be considered. If you plan to make an amendment please approach any member of my team during the deliberations. We will draft your amendment and print copies that can be distributed. Any amendment from the floor must have 2 sponsors to be considered.
- The 2020 Executive Budget includes provisions that use debt reserves to pay debt service in an amount that is greater than operating appropriations from the General Fund for capital projects. Under MGO 4.17, this action requires a two-thirds (14 vote) majority for approval. When adopting the final budget, a separate vote will take place authorizing this action.
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Please let me know if you have any questions in advance of next week’s meetings.
Have a great weekend,
Laura Larsen, Budget and Program Evaluation Manager
Finance Director Further Explains the 2/3 Vote Requirement
I gotta say, I watched the meeting of October 7th and overview of the budget and somehow, I missed this. It’s pretty wonky. Not sure I entirely understand what is going on, but it doesn’t sound good.
Good Evening Mayor and Council Members:
Passage of the 2020 budget includes adoption of the 2020 budget resolution, which approves the 2019 property tax levy that is collected in 2020, as well as the 2020 budget.
Council Members have asked for background on a new provision included in the 2020 budget resolution that references a separate two-thirds vote required under the Use of General Debt Reserves section of the ordinances (MGO 4.17). This ordinance directs that any budget that uses General Debt Reserves to pay General Fund debt service must appropriate an equal amount in the General Fund operating budget for capital projects (the appropriation in the operating budget for capital projects is listed under the Direct Appropriations section of the operating budget as “Direct Appropriation to Capital”).
General Debt Reserves are generated primarily by reoffering premiums (a “reoffering premium” is an amount paid by investors in addition to the amount of debt the city was selling at the time it issued its debt). Investors pay these premiums in return for receiving a slightly higher interest rate as the city repays the debt. Both the present value of the premium and the interest rate are used in determining the “true interest cost” that establishes the lowest (winning) bid when the city sells its debt. State law requires that these premiums be used to pay debt service. Federal tax law requires that premiums be expended within 24 months of the date of the debt issuance for which the premium was received.
The use of General Debt Reserves to pay General Fund debt service “frees up” capacity under the maximum allowable property tax levy that, if not for the use of General Debt Reserves, would have been used to pay General Fund debt service. MGO 4.17 was enacted so that this “freed up” allowable levy capacity would be used for capital projects, since this allowable levy capacity was ultimately created by the use of premium received for debt issued to pay for capital projects. MGO 4.17 authorizes the Council to set aside this requirement through a two-thirds vote at the time of budget adoption.
The 2020 executive operating budget uses $7.7 million of General Debt Reserves to pay general obligation debt service — $3.0 million to pay for Transit Utility debt service, $0.7 million to pay Fleet debt service and $4.0 million to pay General Fund debt service. The executive operating budget appropriates $1.6 million for capital projects. Since the amount of the appropriation for capital projects is not equal to the amount of General Debt Reserves used to pay debt service, the two-thirds vote requirement under MGO 4.17 is triggered.
The $6.1 million difference between the $7.7 million of General Debt Reserves used to pay debt service and the $1.6 million appropriated for capital projects is a major element in balancing the 2020 operating budget. If that $6.1 million had been used to pay for capital projects, it would not have been available to meet costs in the operating budget, as has been detailed in presentations made to the Finance Committee and in materials included in the executive budget book and summary.
Please see the links below for additional supporting documentation regarding this provision:
2020 Budget Resolution — https://madison.legistar.
Use of General Debt Reserves Ordinance (MGO 4.17) —https://library.municode.
GO Debt Service Summary (see footnote for explanation of use of General Debt Reserves) — https://www.
Direct Appropriations (Direct Appropriation to Capital) — https://www.cityofmadison.
Capital Budget Policy — https://www.cityofmadison.
2020 Executive Operating Budget Overview Presentation to the Finance Committee (October 7, 2019) — https://madison.
