Budget

Capital vs Operating Budget

• There are two budgets: Capital and Operating
• Every dollar spent by the City will go against one or the other
• Capital = long-term (focused on things that last over a year)
• Operating = short-term (1 year or less)

Capital Budget

Provides funding for major construction projects including building new facilities, infrastructure improvements (roads, bridges, sanitary and storm sewers, water) and purchasing major equipment.

The Engineering Division has six Capital Budgets:

1. Facilities Management
2. Major Streets
3. Bicycle and Pedestrian
4. Engineering-Other
5. Sewer Utility
6. Stormwater Utility

Unused budget rolls over from year-to-year unless budget is specifically canceled.

Includes the current year plus the Capital Improvement Plan (CIP) which is a 5 year plan for capital spending beyond the current year. The out years (2023-2027 for the 2022 fiscal year) are not set in stone. They can change a bit when the next Capital Budget is built. They are meant more as a long term planning tool.

Capital Budget includes Projects and Programs. Projects have a defined start and end date and usually involve a specific location (e.g. CCB Remodel). Programs are ongoing efforts and may involve many locations (e.g. Citywide Flood Mitigation). There are many sub-projects under a program, each with its own unique Munis number.

Budget may be freely transferred between any sub-projects within the same program. Budget cannot be freely transferred between programs or major projects. This requires a Common Council adopted budget amendment.

Capital Budget Preparation

Agencies prepare their requests using the existing adopted budget’s Capital Improvement Plan (CIP) as a starting point. The Mayor also provides high level goals and guidance for the new requests. This is the first stage of the Capital Budget (Agency Request).

Once requests are submitted and the agencies brief the Mayor on their budgets, the Mayor’s office works on the Executive version of the budget. The Mayor may make various changes including adding/deleting projects, increasing/decreasing funding, or moving projects between years of the CIP. This is the second stage of the Capital Budget (Executive).

After the Mayor releases the Executive Capital Budget, the Finance Committee and Common Council have opportunities to propose amendments to the budget. These amendments are voted up or down by the Finance Committee or the entire Common Council. If approved the budget will be updated with the amendments. Eventually the entire budget as a whole is adopted by the Common Council and it becomes official. This is the final stage of the Capital Budget (Adopted).

General timeline

March-April: Agencies put together their requests
May: Agency briefings with Mayor’s office
September: Executive Capital Budget released, Finance Committee briefings and amendments
November: Common Council amends and adopts Capital Budget

Operating Budget

Provides money for running City departments and services. It pays for the day-to-day spending on employees and materials and supplies and routine/small scale repairs and maintenance. Generally speaking anything that is not part of the Capital Budget is covered by the Operating budget.

Engineering Division has four Operating Budgets

1. Engineering
2. Landfill
3. Sewer Utility
4. Stormwater Utility

Operating Budget is built one year at a time and unused budget does not roll over at year end.
Operating Budget Preparation
Agencies prepare their requests using the Cost to Continue (covers base level of service and existing commitments) as a starting point. The Mayor also provides high level goals and reduction scenarios. This is the first stage of the Operating Budget (Agency Request).
Once requests are submitted and the agencies brief the Mayor on their budgets, the Mayor’s office works on the Executive version of the budget. The Mayor may make various changes and implement reduction scenarios. This is the second stage of the Operating Budget (Executive).
Similar to the Capital Budget, after the Mayor releases the Executive Operating Budget, the Finance Committee and Common Council have opportunities to propose amendments to the budget. These amendments are voted up or down by the Finance Committee or the entire Common Council. If approved the budget will be updated with the amendments. Eventually the entire budget as a whole is adopted by the Common Council and it becomes official. This is the final stage of the Operating Budget (Adopted).

General timeline

June-July: Agencies put together their requests
August: Agency briefings with Mayor’s office
October: Executive Operating Budget released, Finance Committee briefings and amendments
November: Common Council amends and adopts Operating Budget

View more details about the Executive Budget timeline, on the City of Madison Finance Department website.