Dayton staff outlines budget changes: projected levy up about 8.96% after grant offsets, staffing and equipment costs

City staff presented a high-level operations budget update to the Dayton City Council on June 23, saying the proposed changes would leave the city with an overall levy increase near 8.96% after recent grant offsets.

"Tax rate's still the same from what we talked about at the last council meeting at 35.603 percent," the staff presenter said, adding that every 1% change to the levy equates to about $94,000 in city revenue. Staff said recent grants from Met Council and Hennepin County reduced the general fund levy by $100,000.

Staff walked through several department-level changes that drive the overall increase: planning professional services were reduced by a $100,000 grant offset (a net $25,000 planning services budget), but the planning budget includes funding for a new associate planner/city planner position (roughly $106,000 in salaries/benefits for the position the city is budgeting). The police department showed higher overtime tied to mandated training and calls for service; staff said the budget inputs include additional staffing to better match current overtime spending. The fire department increase was attributed to paid on-call duty crew changes and pay/benefit increases for chief and assistant chief, along with uncertain ladder-apparatus repair and maintenance costs.

Staff noted other budget items: a roughly $25,000 server/IT quote to replace aging on-premises infrastructure as the city moves financial software to cloud-based modules; a contingency line of $50,000 for council-directed spending; and legal costs rising because of a higher volume of data requests and redaction work (staff cited about $10,000–$12,000 in legal fees over the last two months for redaction and data requests). Staff also described that some revenues (state aid and MSA maintenance dollars) fluctuate with lane-mile assessments and grant usage.

Council raised questions about pavement management and whether prior pavement investments had achieved the expected condition. Staff said the pavement management plan will be reassessed this year via a drive-through evaluation and that pavement work is charged to pavement-management funds, not the general fund. On EDA-owned properties, staff said taxes for some EDA parcels (notably a commercial triangle parcel) are being carried in the budget until sale; staff gave a provisional estimate of roughly $50,000 associated with the triangle parcel but said county valuation numbers for 2027 were not yet available.

Staff closed by asking for direction on operations and said the council will focus on long-term plan discussions at a July 14 meeting; staff will refine levy and capacity numbers and return with updates. No formal motions or votes occurred during the work session.