On October 31st, 2022, the Town of Madison will dissolve and become absorbed into the cities of Madison and Fitchburg.
That means the Town of Madison’s assets and liabilities will soon become distributed between the two cities.
The Town of Madison, the City of Madison, and Fitchburg outlined the town’s dissolution and attachment back in 2003 in an effort to resolve a history of boundary disputes, but the process has its own challenges.
Jeff Greger is a planner with the City of Madison’s Planning Division. He says the City is examining how additional infrastructure, primarily related to sewerage, will affect its budget.
“We’re starting to think about things like where people vote, how garbage collection occurs, [and] what people’s taxes are going to look like,” Greger says. “We’re taking over a lot of infrastructure. We’re looking for conditions of streets, we’re looking at conditions of sewers, [and] trying to identify how all of that is going to affect the City of Madison departments and ultimately future budgets.”
Greger also says accounting for the additional 5,000 residents the City of Madison will gain presents the biggest challenge.
The City of Madison has gained residents as part of past annexation agreements before. But when the the process — formally called attachment — happened in the past, such as with the towns of Burke and Blooming Grove, the process was more streamlined, and only a few hundred residents were added to the City of Madison.
“Having those communications with all [of] those 5,000 residents versus a couple hundred residents just compounds efforts, and another thing we need to do is to assign a zoning classification to each of these parcels prior to attachment, and just the sheer number of parcels is a project in itself,” Greger says.
Beyond infrastructure, the City has noted a “high risk” of housing displacement in the attached town property due to rising property taxes, zoning, and gentrification.
During a presentation to the City of Madison’s board in charge of Tax Increment Financing last Thursday, the Office of Real Estate Services suggested the City of Madison use healthy tax incremental districts, or TIDs, to fund expected infrastructure costs and offset displacement.
When a TID is created, the current value of all taxable property within its bounds is established.
If the value of that property grows, the City collects all of the related taxes as “tax increment” revenue.
The City must then use that revenue to pay for improvements made to property in the defined TID.
Matt Wachter is the manager of the City’s Office of Real Estate Services. He says this tax incremental financing process is just one of the tools Madison could use to address these concerns.
“The city has a whole host of tools and programs that we would look at [and see] how they fit into South Madison, from housing to business assistance,” Wachter says. “All of those pieces will be looked at in the next year or so, so TIF is really a financing tool, but there’s also a lot of work that will be done [with] our general toolbox.”
But, there are signs that the process of displacement may already be in motion.
During a Common Council Executive Committee meeting in September, Alder Shiva Bidar said out-of-state buyers have purchased many of the rental properties in the Town of Madison because they expect property values to increase after the attachment.
If that’s the case, these buyers will be able to raise rents higher, which is a concern for an area where the average household income is just about $37,000.
“These transfers are happening, and there’s already displacement that’s happening because [of] their expectations,” Bidar says. “These investors know what they’re doing in advance, so they’re already displacing residents.”
At this time, the City does not have a communications plan for Town of Madison residents’ questions specifically related to the annexation process.
Jeff Greger says that the City’s communication strategy regarding attachment will be ready by the middle of next year.