Finance committee rejects extension of Madison Street Medicine contract for Dairy Drive

The City of Madison Finance Committee voted down a proposed extension of the contract between the city and Madison Street Medicine (doing business as Madison Street Medicine) that would have continued services at the Dairy Drive campground through April 2026 and authorized up to $100,000 of Dane County funds to help operate the site. The motion failed on a roll-call vote after extensive public testimony and questions from council members and city staff.

The proposal before the committee (Legistar 89779) would have extended a contract that funds outreach, on-site case management and other services at the Dairy Drive campground. Supporters, including Madison Street Medicine representatives and residents who use the campground, urged continuation of the program and described progress getting people into housing. Brenda Conkle, representing Madison Street Medicine, told the committee the organization had flexibility in how it would use remaining funds and said, “we are willing to be flexible depending upon need.”

Case manager Savannah Harpel gave granular, client-level status on voucher placements, saying the program had 10 Housing Choice (Section 8) vouchers and five rapid rehousing slots associated with the site. Harpel reported that “two of our folks have moved out, using those vouchers,” and summarized others as pending inspections, briefings or actively searching for housing. She told the committee that all 15 supported slots were currently allocated to individuals or in active process.

City staff and council members pressed on both budget and service details. Community Development Division (CDD) staff explained the mix of funding the mayor proposed to use for homelessness services more broadly: approximately $1.7 million of city levy each year directed to homeless services, a one-time pool of American Rescue Plan Act (ARPA) HOME funds (described in staff materials as $915,000 in the recommendations) to extend an eviction diversion/defense program, about $165,000 in Emergency Solutions Grant (ESG) funds from HUD, reallocated Community Development Block Grant (CDBG) public-service dollars, and limited use of HOME tenant-based rental assistance (TBRA) funds for vouchers or short-term housing payments. Director Lynette Rhodes cautioned that some federal and county funds carry use deadlines; she described the ARPA HOME funds that are being used for eviction diversion as a one-time grant that staff will stretch over several years.

Speakers at the committee also described operational details at Dairy Drive. TJ Jones, a Madison Street Medicine representative, said the group could manage site-related contracting and repairs, and that some structures on the site required ongoing maintenance. James Degray, a program participant, described the campground as an effective, person-centered program and urged continued funding.

Committee members repeatedly returned to two practical questions: (1) whether adequate funding and staffing exist to preserve the level of on-site services (case management, behavioral-health and housing navigation) that advocates said made the campground effective; and (2) how any extension would handle city costs now paid directly by the city (utilities, trash, pest control, site maintenance and potential site restoration/demolition costs). Madison Street Medicine said it had some unrestricted funds and HUD grant money that could be used for certain costs but also noted federal restrictions that limit how HUD grant dollars can be applied to subrecipients.

City staff said the city currently carries a separate operational cost for the site (staff described utilities and maintenance around $5,000 per month and additional engineering/maintenance budgets that had been estimated at roughly $10,000 per year). The community development director emphasized the city had budgeted approximately $220,000 in 2025 to restore the site to its prior condition if the campground were closed; those funds are one-time and, as budgeted, would not be available in 2026 without a council action to reallocate them.

After public comment and staff questions, the committee moved to a roll-call vote. The extension motion was defeated; the committee recorded more negative votes than affirmative and the extension will not proceed as drafted. The defeat leaves a number of residents on the campground without a guaranteed contract extension and transfers the decision about next steps to subsequent council and budget processes or to alternative funding arrangements.

What comes next: staff said they will continue case conferencing and use the existing contract authority through the contract end date identified in the agenda materials; they also indicated they would work with the provider and county partners where possible to identify short-term options (hotel placements or other shelter) for individuals who do not have vouchers or rapid rehousing slots. The committee discussion made clear that further council action or a budget amendment would be required to extend city-funded operations beyond the adopted 2025 budget authority.

Votes and formal action

- Item: Legistar 89779 — Extension of contract with Madison Street Medicine to continue operations at Dairy Drive through April 2026 and authorize up to $100,000 of Dane County funds to pay for services. Motion failed on roll-call; recorded as failed with a tally of yes: 4, no: 5 (committee recorded five no votes; item did not pass).