Finance committee receives 2026 executive capital budget briefing; borrowing, BRT and library collection increases highlighted

City budget staff briefed the Finance Committee on the 2026 executive capital budget and the six-year capital improvement plan (20262031). The executive plan proposes $285.2 million in new appropriations for 2026 and a six-year plan totaling about $1.4 billion. Staff emphasized changes compared with the 2025 SIP, funding mixes, and process deadlines for members who may bring amendments.

Christine (budget office) opened with how to navigate the published materials and the agency pages in the budget book. Staff highlighted that the highest-share category in the plan is land use and transportation (about 37% of the 2026 budget) followed by green and resilient projects (about 28%). General obligation (G.O.) borrowing remains the largest funding source; reserves and intergovernmental grants are also significant. Staff noted the 2025 adopted SIP included large one-time, mostly federal appropriations for North-South Bus Rapid Transit (BRT), which explains a portion of the year-to-year variance in total appropriations.

Dave (debt analyst) reviewed the relationship between capital borrowing and operating budgets: the city issues G.O. bonds to fund capital projects and repays principal and interest (debt service) from the operating budget; debt service begins the year after bonds are issued. He reminded members debt service is an operating cost that cannot be cut without default on obligations, and explained how debt-service treatment interacts with the state levy limit calculation (debt service is excluded from the levy-limit calculation of operating increases, then added back when the total levy is set). The presentation noted some program increases in the SIP: added budget for Fire Station 6 construction and higher fleet replacement estimates, and a request to increase library collection spending.

Library Director Tana Elias explained the library collection proposal that appears in the executive budget: an additional $250,000 for 2026 and a continued built-in growth rate thereafter to respond to rising costs of materials, digital licensing and expanded demand across multiple formats. Elias said the central library and branch circulation patterns have shifted since 2012 and that collection per-capita spending in Madison lags peer libraries in the county.

Staff also reviewed process and timetable. Budget staff asked members to notify the budget team of any intended capital amendments by Wednesday, Sept. 24 at noon so analysts can prepare fiscal impacts for discussion at committee. The committee will receive agency briefings over two days; remaining agencies will present in the next session. Staff also explained the city is moving its digital operating budget to a new vendor (ClearGov) and will share demos in advance of the operating budget release.

Items flagged for attention in the presentation included: reallocation of some TID and project funding to support BRT flexibility; an increase to the projected local match for the Hepker Road interchange; and continued attention to carry-forward borrowing authorized in prior budgets (large appropriations previously authorized do not always reappear as new 2026 appropriations because the budget shows new appropriations in 2026 only).

What committee members asked and next steps

Committee members asked for clarifications about the levy-limit/debt-service interaction and requested that budget staff: (1) help members identify carry-forward dollars that will affect 2026 implementation; (2) confirm the Sept. 24 amendment timeline; and (3) work with agencies on follow-up detail as needed. Budget staff said they would post additional detail and respond to amendment inquiries to prepare the committee for final deliberations.

No formal vote was taken on the capital plan at the briefing; the budget will be subject to amendments and final action by the full council as part of the 2026 budget process.