Finance director reports small first-quarter variance and urges council direction on levy policy as 2026 budget gap widens

Wauwatosa’s finance director on Tuesday presented February (first-quarter) financial results and a five-year general fund forecast for 2026–2030, warning the committee that structural pressures—chiefly compensation increases, slower state aid growth, softer interest earnings and volatility in building-permit and ambulance revenues—have pushed the 2026 projected funding gap higher than earlier forecasts.

John Regeney told the Financial Affairs Committee that revenues are projecting a slight shortfall ($66,000) on an $80 million budget, while expenditures show a slight surplus compared with the original budget. When carryover appropriations approved previously are included, the forecast projects a roughly $760,000 positive balance at year-end and an unrestricted fund balance of just over $27 million — roughly 70 days of operating expenditures, above the city’s two-month policy minimum.

Key revenue risks and trends highlighted in the presentation included: - Building permits: Year-to-date permit valuation and permit counts were materially below the prior year, producing a forecasted shortfall of roughly $90,000 versus budget and a…