Madison’s mayor may require city departments to significantly cut their budgets for the 2014 fiscal year in order to combat the city’s growing debt.

Madison Mayor Paul Soglin said in a statement Monday he wanted the city’s departments to submit, along with their 2014 capital budget, an alternate budget that cuts costs by 10 percent.

Cities have two budgets: an operating budget and a capital budget. The operating budget covers recurring costs like salaries, while the capital budget, which could get cut, covers one-time costs and the cost of physical objects like buses and streets.

Soglin said the city will know more during the next four months about how extensive the cuts will need to be. He said in the worst case scenario for revenue and expenses, departments will need to cut up to 10 percent. He said the city is still waiting on the amount of state aid the city will receive and the total costs of city employees’ health insurance.

David Schmiedicke, the city of Madison’s finance director, said the first step in the budget process will be when the city departments review their budgets and decide on the parts that are the least necessary. 

Schmiedicke said the budget cuts will help the city manage its continuously-growing debt. He said currently, 13.5 percent of the city’s budget goes to paying off its debt, while in the past this number has been around 12.5 percent. 

Wayne Block, the finance manager of Madison Metro, said he is unsure of what his department will submit to cut because they need time to do an in-depth assessment.

“We can’t say what [a 10 percent reduction] would mean,” Block said. “It is obviously something we would have to search for a way to do.”

Block said Soglin is also requesting the departments submit any requests for funding of new projects in individual submissions so the city can review them.

Part of the increase in debt is caused by aging infrastructure and streets in the city, which wear out throughout time and need to be replaced, Schmiedicke said.

He gave the example of the central library being rebuilt downtown. He said the original library was built in 1965 and reached the end of its useful life, leading the city to recently invest in and rehabilitate the building.

City departments will need to send in their budget requests by June 17, 2013 for the city to review them, and Soglin will introduce his capital budget on September 3. He said city departments include city engineering, the parks division, Madison Metro, storm water utility and water utility.

“It’s really about striking a balance between how much the city is paying for debt and how much they’re paying for the everyday operations and programs they support,” Schmiedicke said.