Muskego mayor warns of tight budgets, flags public-safety referendum and demolition of old police station

Mayor Rick Petfalski delivered a fiscal and development update at the Muskego Area Chamber of Commerce 2025 State of the City breakfast, saying the city’s limited revenue growth and rising service demands will force choices including a likely public-safety funding question for voters.

The mayor told attendees Muskego’s equalized property value is about $5,000,000,000 and that roughly 87% of that value is residential. He said the city added about $120,000,000 in new commercial construction in the prior year but that available sewer-served land is running out, which will slow future development. “We’re one of the safest communities in the state of Wisconsin,” Petfalski said, adding that rising calls for service and constrained budgets make police and fire staffing “urgent” issues.

Petfalski framed the fiscal pressures for residents: state rules limit how much a municipality may raise its levy, and Muskego’s net new construction rate has ranged roughly from 0.5% to 1.8%, well below recent inflation. He said the 2025 budget required about $200,000 in one-time funds to avoid service cuts. To preserve service levels for roads, public works, police and fire, the mayor said city leaders expect to consider a public-safety referendum in coming years, estimating a need in the “tune of probably $3 to $5 million.” He said that, even with a $4 million increase in levy, Muskego would remain among the lowest tax-rate municipalities in Waukesha County based on equalized comparisons.

On capital projects, Petfalski highlighted Kirkland Crossing, a planned roughly 40-home subdivision, and a Tractor Supply store proposed by the Kohl’s site. He said the common council’s current direction is to demolish the old police station; a phase I environmental site assessment was completed and the city will solicit bids for demolition and hazard abatement as needed. Petfalski described the step as council direction rather than a completed contract or vote.

City operations and staffing drew repeated attention. Petfalski said Muskego’s bond rating is Aa1, the city carries comparatively low debt among peer communities, and the community’s household income (cited from the U.S. Census) is about $116,000. He also warned of a shrinking municipal labor pool and said departments are reorganizing to place more staff in frontline roles — for example, the police department reduced senior command positions to add street officers.

Petfalski discussed service priorities and efficiency efforts: the city intends to review road funding and rankings (a biennial rating program that prioritizes repairs), explore joint arrangements such as shared fire services with neighboring communities, and consider cooperative healthcare purchasing with the school district. He also said the city has begun experimenting with artificial intelligence tools for administrative tasks (minute-taking and evaluations) to improve staff productivity, stressing the aim is to increase efficiency, not to replace employees.

During audience Q&A, the mayor confirmed the council’s instruction to pursue demolition bids for the former police building, noted the demolition cost estimate will follow the bidding process, and said conservation requirements will preserve environmentally sensitive areas within new subdivisions.

Ending: Petfalski closed by thanking municipal staff and the chamber. The mayor and city staff remained available for follow-up questions after the program.