Wauwatosa panel approves 2024 reestimates tied to litigation and Boston Store; authorizes $17.44M borrowing

The Wauwatosa City Financial Affairs Committee on Tuesday approved revisions to the 2024 budget and authorized city borrowing to finance capital needs.

Finance director Mr. Riggini told the committee the council should approve three reestimates before the full 2025 budget adoption: a $40,000 increase for fire equipment repairs to cover higher repair costs, a $200,000 increase to manage property tax litigation expenses (noting expert witness and discovery costs), and a $200,000 allocation to cover holding costs for the Boston Store property. Riggini said investment earnings are expected to offset much of the net fiscal impact.

Riggini said litigation costs have been volatile, citing extensive discovery and expensive expert appraisals in cases involving hospitals and mall property. “There’s only so much we can say in open session,” he added, and noted additional case specifics would require closed-session discussion. The finance director estimated average annual litigation costs historically have been around $500,000 in years with major cases.

On the Boston Store, staff described the acquisition as an aggressive redevelopment tactic to secure leverage in negotiations with Brookfield Properties. Riggini said the city has spent $661,000 on holding costs so far and asked for $200,000 to cover expenses through the end of the year. He described negotiations as ongoing and cautioned that conditions Brookfield must meet prior to transfer had not yet been satisfied.

Committee members pressed staff on whether the city had tied litigation settlement terms to the property transfer; city attorneys said attempting to hold a tax litigation settlement hostage to the property transfer had been a nonstarter in negotiations. The mayor and other council members emphasized the strategic rationale for the acquisition and said protecting the broader tax base justified continued engagement.

The committee also authorized the finance director and city attorney to pursue debt issuance for capital needs, approving parameters for issuing $17,440,000 in general obligation notes and a $665,000 State Trust Fund loan. Kevin Mullen, the city’s financial advisor, said market conditions made a borrow rate of roughly 3.3 percent plausible compared with the planning assumption of about 3.8 percent.

Riggini and the committee reviewed debt metrics used by rating agencies, coverage ratios for utilities, and the city’s debt policies. Staff said the issuance would remain within policy limits and is intended to be sized to reduce borrowing risk while preserving debt capacity.

The committee voted to approve the reestimates and the debt-issuance parameters by voice vote.