A Story about the Decimation of the Madison Capital Revolving Fund
Sigh . . .
During the budget debate, I, along with Alders Judy Olson and Mike Verveer attempted to introduce an amendment that would have updated the City of Madison Economic Development Plan that was last updated in 1983. After an amazing display of political gymnastics, the Council essentially defeated the motion. The City’s plan needs to be updated!
This became painfully apparent again last evening at the Common Council meeting when we voted to loan $700,000 to Tomo Therapy. Alder Sanborn and myself voted against it. Why? After all, it was going to keep a business in the City of Madison and create jobs. All worthy goals, but the devil is always in the details. (For more on the Common Council meeting, see the live blog from Kristian at thedailypage.com)
First of all, the money came from the Madison Capital Revolving Fund even though the proposal didn’t meet the conditions for approval for funding from the fund.
A. It didn’t meet the objectives of the program which are as follows:
1. Encouraging the expansion of new and existing business enterprises that create jobs for unemployed and underemployed people.
2. Preserving and expanding the housing supply within the City, including market rate housing and affordable housing for low- and moderate-income households.
3. Redeveloping blighted and underutilized properties for uses consistent with a strategy for neighborhood and downtown revitalization.
The proposal comes close to the first objective, but there was no evidence that these jobs would be for unemployed or underemployed persons. And, it doesn’t actually say new jobs will be created, is says jobs were created.
B. The fund has a limit of $250,000 per loan and this loan is for $700,000.
C. The proposal is not within the geographic boundaries for the fund.
Second of all, the proposal drained the Madison Capital Revolving Fund. There was only $836,000 in the fund, and there was already commitments for $104,000 in Facade Improvement grants. So that leaves a whopping $32,000 in the fund for 2006. Luckily, there will be a repayment of $150,000 in loan repayments. When we tried to find out how quickly the fund would be replenished, that information was not available. However, they did say that the repayment schedule would be slower than the $150,000 we will be getting back next year.
Last, and definitely not least, there are many questions that should be asked. How do we decide who to give economic development assistance to? How would other companies know that they don’t need to follow the rules for the Madison Capital Revolving Fund? What are the economic development priorities for the City of Madison? Who sets those priorities? Shouldn’t we consider several proposals and give our money to the most worthy? Or should it be first-come, first serve? What happens when we don’t have the money to help the next company that comes through the doors? What other tools do we have available? What other tools should make available? What is the plan? When are we going to stop complaining about economic development and get serious and have a community conversation about the City of Madison’s Economic Development goals and priorities?
Sigh . . . this is getting ridiculous.
