Wauwatosa reports an unaudited 2024 surplus; auditors on site and reserves above policy

Director Regine and finance staff presented the City of Wauwatosa's unaudited financial results for 2024 to the Financial Affairs Committee on April 8, 2025. Staff reported an approximately $3.0 million unaudited surplus for 2024 and said independent auditors were on site doing fieldwork; audited financial statements are expected to be available by July.

Staff said the city ended 2024 with general-fund reserves at about 18% of operating expenditures, above the city's policy target of roughly two months (about 17%). Regine framed the result as improved financial resiliency after two years below policy.

On revenues, staff highlighted several drivers: property-assessment receipts exceeded budget in percentage terms (presenter described them as about 240% of a small budgeted amount), and miscellaneous revenues exceeded budget largely because of investment earnings. Regine explained the portfolio experienced large mark-to-market losses in 2022 when interest rates jumped, but as rates moved recently the portfolio recorded unrealized gains: roughly $2.4 million of valuation recovery in 2024 compared with a $4.4 million paper loss in 2022. Of the reported miscellaneous surplus of about $2.6 million, the city said roughly 30% were realized cash gains (about $800,000) and the remainder were unrealized mark-to-market gains.

Regine described citation and parking revenues: citation revenue (municipal court) has trended down since 2012 because of changes in policing approach and department vacancies; staff estimated a long-run citation volume around 7,000'8,000 annually when fully staffed. Parking revenue met budget in 2024 for the first time since 2019. Public-charge revenue (ambulance/transport) was below budget because Wisconsin's higher Medicaid/Medicare rate did not have federal approval until December 2024; that approval was retroactive to 2023 and the city is submitting information to recover past revenue.

On expenditures, capital outlay looked materially over budget in percentage terms but was a $62,000 overrun tied to health-department renovations funded by grants. Overtime was a larger concern: fire overtime showed an overtime deficit of about $115,000 that was largely offset by salary savings and grants; police overtime had a larger overtime deficit (about $826,000) partially offset by $558,000 in salary savings and roughly $212,000 in grants and reimbursements (including RNC-related reimbursements), leaving a modest net deficit. Staff noted police overtime is driven in large part by vacancies.

Insurance and claims trends were mixed but encouraging in 2024: health-claims costs decreased roughly 20% from the prior year, though the city said recent large claims prompted insurers to raise premiums by 40% for the 2025 budget; general-liability claims were low by dollar severity (about $9,000 paid) and workers'compensation severity declined to its lowest inflation-adjusted level since 2009.

Staff concluded 2024 was a positive year financially, but cautioned that federal policy changes and macroeconomic conditions could affect future grant flows and budget assumptions. Auditors are completing fieldwork; staff said they do not expect major changes but noted the audited statements will be available in July.