FISCAL NOTE
This resolution appropriates $70,000 from the general fund contingent reserve and transfers funding to the Water ($31,000), Sewer ($28,000), and Stormwater ($11,000) utilities to fund MadCAP, a comprehensive customer assistance program for the City’s municipal services bill, for the remainder of 2026. The resolution also updates the eligibility criteria to streamline program administration.
MadCAP was approved in the Madison Water Utility’s (MWU) 2022 rate case with the Public Service Commission of Wisconsin (PSCW) on a 2-year trial basis. The program provides a credit of up to $20 or $30 per month to qualifying low-income households for the five City services on the municipal services bill (Water, Sewer, Stormwater, Urban Forestry, and Resource Recovery). The credit was funded through rate revenues for Water, Sewer, and Stormwater, and through the general fund for the Urban Forestry and Resource Recovery special charges.
The PSCW decided not to allow MWU to continue funding its portion of MadCAP from water rate revenues in its public hearing on the utility’s 2025 rate case. As a result, the City will also not be allowed to fund the Sewer or Stormwater portion of MadCAP. The PSCW ruling would disallow new applicants beginning around March 1, 2026, and around August 1, 2026 for existing participants. The appropriation proposed by the resolution would allow the City to continue accepting new applicants and funding existing participants for the remainder of the year.
Continuing MadCAP after 2026 would require approval of funding by the Council in future budgets. The estimated general fund cost in 2027 is $188,000. The impact on the tax levy for the average value home is estimated at $1.94.
TITLE
Amending the City’s 2026 adopted budget to appropriate $70,000 from the general fund contingent reserve to fund the Water Utility, Stormwater Utility, and Sewer Utility portions of MadCAP for the remainder of 2026.
BODY
WHEREAS, MadCAP is a comprehensive customer assistance program that provides credit of up to $20 or $30 per month to qualifying low-income households to offset the cost of the City’s Municipal Services Bill, which includes the following five City services: Water, Sewer, Stormwater, Urban Forestry, and Resource Recovery; and
WHEREAS, the Madison Water Utility (MWU) is a municipal public utility, with its rates subject to the oversight and approval of the Public Service Commission of Wisconsin (PSCW). As part of MWU’s 2022 rate case (3280-WR-116), PSCW approved funding MWU’s portion of the Madison Municipal Services Customer Assistance Program (MadCAP) from utility rates on a 2-year pilot basis; and
WHEREAS, following PSCW’s determination, MadCAP was formally implemented, with the Water, Sewer and Stormwater portions funded from utility revenue based upon PSCW’s determination, and the Urban Forestry and Resource Recovery portions funded from the general fund as part of the approved budget; and,
WHEREAS, the General Fund currently pays the $10,000 annual cost of MadCAP for the Urban Forestry and Resource Recovery portions of the program; and
WHEREAS, RES-24-00611, Legistar File No. 85165, authorized the General Manager of MWU to file a conventional rate case with the PSCW for the test year 2025 (2025 rate case); and
WHEREAS, PSCW, at its public hearing on January 29, 2026, in 3280-WR-117, entered an oral decision on the Utility’s 2025 rate case and approved new water rates, but decided not to allow MWU to continue funding its portion of MadCAP from water rate revenues; and
WHEREAS, because of the PSCW decision on rate case 2025, the City will also not be able to fund the Stormwater and Sewer portions of MadCAP from their respective rate revenues, enroll new applicants in MadCAP from the date of the written order from the PSCW conveying its decision, which is anticipated to be around March 1, 2026, and fund existing MadCAP participants from August 1, 2026, which is 90 days after the expected implementation of the new water rates on May 1, 2026; and
WHEREAS, the City desires to continue providing financial relief to eligible low-income municipal services customers through MadCAP to fulfill its commitment to make municipal services both accessible and affordable, which program will now have to be fully funded by non-utility revenue; and
WHEREAS, the City wishes to make certain modifications to MadCAP to simplify enrollment into the program, such as a) adopting a single qualifying income threshold of less than 50% Area Median Income and a single tier monthly credit of up to $30, with any current enrollee receiving up to $20 monthly credit to be switched to up to $30 credit on August 1, 2026, b) making all municipal customers who qualify for Section 8 Housing Choice Voucher Program, or the Women, Infants, and Children (WIC) program, and over 85% of municipal customer receiving Wisconsin FoodShare or SNAP benefits eligible for the program by presenting a Wisconsin Food Share card, or other documentation of participation in the other programs to verify income, and c) changing the need to enroll in the Utility’s water conservation program as a pre-enrollment requirement to a post-enrollment follow up measure; and
WHEREAS, participants in MadCAP can be renters or homeowners if they are residential customers with their name on the Municipal Services bill, and who can verify their income eligibility; and
WHEREAS, the City wishes to continue funding new applicants for MadCAP from March 1, 2026, and existing participants from August 1, 2026, utilizing general fund monies; and
WHEREAS, the cost to the General Fund to support MadCAP for the Water, Sewer, Stormwater and Landfill portions of the municipal services bill is estimated at $188,000 annually starting in 2027.
NOW THEREFORE BE IT HEREBY RESOLVED that it is in the best interest of and benefit to the City’s low-income municipal service bill customers for the City to continue funding MadCAP with the recommended eligibility modifications and authorizes continuation of MadCAP with those modifications and from the dates as indicated above, subject to funding availability; and,
BE IT FURTHER RESOLVED that new MadCAP applications received between the date of the written PSCW order regarding the 2025 rate case and date of the adoption of this resolution will be processed only after this resolution is approved; and
BE IT FINALLY RESOLVED THAT THE CITY OF MADISON COMMON COUNCIL amends the City’s 2026 adopted budget to make a one-time appropriation of $70,000 from the General Fund contingent reserve to fund transfers to the Water Utility ($31,000), Stormwater Utility ($28,000), and Sewer Utility and Landfill ($11,000) to support the cost of MadCAP for the remainder of 2026. Each utility’s budget will be amended to reflect the transfer in from the General Fund and reduce revenues received from charges for services by the same amount to reflect the change in funding source for MadCAP.