The city of Dayton is forced to tighten its belt. Twenty-four staff have been laid off, hiring for vacancies is frozen except for essential positions and department heads have been told to operate as little as possible to help make up for an estimated budget shortfall of $5 million. dollars.
City Manager Steve Floyd, who joined the city in January 2022, said the city’s financial troubles first surfaced about a month ago after he recruited a new chief financial officer who found and flagged the problems. .
“We will work things out. I explained to City Council last night (Wednesday) that the proposal we have allows us to break even, but it will not replace those 24 employees or fund any new projects,” Floyd said.
He explained that over the past few years, the City has spent significant sums on lawsuits, settlements, legal fees for outside counsel, professional services such as plan reviews, engineering services and professional fees. consultation.
“We spent a lot on this and a lot of these services could be done in-house just by hiring a city engineer,” he said. “Every project we currently have is linked to an external engineering company. One of the things I did in my career was try to bring everything we could in-house. At some point, I would like the City to hire a civil engineer who can handle a lot of these things.
He explained that proposed new buildings in Dayton must have a site review by an engineer, even if the plans created by the builder or developer have already been worked on by an engineer, and that secondary review of plans could be done by a city. engineer.
Third-party projects have also contributed to budget shortfalls, according to Floyd. The City engaged third-party consultants to upgrade Daniel Park’s lighting system and sewer system, as well as select and install Christmas lighting.
“I guess the third-party consultants were working on projects here, so it was easy to bring them in. These outsiders are easy going, but they charge 10-20% of the price of a project. It adds up,” he said.
Floyd said the city, like everyone else, is affected by inflation.
“Cities are not exempt from having to pay the same increases that we all do as consumers. For the month of February, the inflation rate was 7.9% and the consumer price index was 8.5% last month. It affects everything we buy,” he said.
So how will the City make up for the budget shortfalls? Floyd said the city will use $2 million in funding it received from the American Rescue Plan Act as a cash injection into the budget; the Dayton Community Development Corporation will provide $1.2 million to help cover infrastructure costs; and by reducing the 24 employees and expenses, the City saves about $1 million.
All combined, this will bring the city closer to breaking even. Floyd is also considering an increase in water and sewer utility rates to bring the city closer to the state average.
“Our current combined base rate [for water and sewer service] is $38.68 while the state average is $71.09. As you can see by the average, we are way behind where we should be,” he said. “The City of Dayton offers many services to our residents. It is extremely expensive to operate water wells and the equipment needed to provide safe drinking water. Include a sewage treatment plant and lift station pumps etc., along with staff to operate, and you have a multi-million dollar operation. The chemicals needed to run these plans continue to increase in cost, almost on a weekly basis.
Providing police services is another major expense, accounting for almost a third of the city’s total budget.
“There is a small amount of revenue generated from citations, but unfortunately a large portion of those funds go to the state of Texas and we cannot keep them for our use,” he said. “We also provide quality of life opportunities such as city parks, Dayton Public Library, Dayton Community Center, mowing all facilities, trying to keep the drainage system running so that we don’t have flooding issues, keep all vehicles and equipment running and in good working order, and the list goes on for day-to-day operations. Everything we do at the City requires people to do the work. Staffing is usually the largest expense in a city’s budget.
Although he has the difficult task of putting the City back on sound financial footing, Floyd feels optimistic.
“Being a small town with no major industry, large property tax base, or multiple retail sites to collect sales tax from, we have only been dealing with day-to-day operations for years and have not anticipated the growth. unprecedented ahead of us. . We are starting to see growth that will only increase over time,” he said.
New growth is causing pressure on existing infrastructure and the need for new water wells, drainage systems, extensions and expansions of water and sewer lines, street improvements and police and fire protection services.
“The task at hand is going to be difficult. However, I have accepted the position of city manager based on future growth and the many opportunities available to us,” he said. “We need to close the gap between our current situation and the point where we realize the increase in sales and use taxes, the increase in property taxes and the additional revenue from the sale of services. We have an aggressive city council that understands our situation and is ready to work to get us where we need to be.
Floyd knows closing the municipal pool at Daniel Park was an unpopular decision made by council, but given financial constraints, there was no other option.
“We have many more pressing issues that need to be addressed, such as an adequate water supply to meet current and future needs. Our drainage system needs to be redesigned, our streets need to be rebuilt from the ground up, our sewage treatment plant will need to be upgraded in the near future [and] we have 19 lift stations that need attention,” he said. “This is a small list of things we are up against that will require substantial funding to complete.”