City of Dayton tackling financial crisis

The City of Dayton is being forced to do a little belt tightening. Twenty-four employees have been laid off, hiring for open positions is frozen except for essential positions and department heads have been asked to operate as lean as possible to help offset an estimated $5 million budget shortfall.

City Manager Steve Floyd, who joined the city in January 2022, said the City’s financial problems first came to light a month or so ago after he brought on board a new finance director who found and reported the issues.

“We are going to fix things. I explained to City Council last night (Wednesday) that the proposal we have gets us to break even, but it won’t replace those 24 employees and it won’t fund any new projects,” Floyd said.

He explained that over the last few years the City has spent large sums on lawsuits, settlements, legal fees for outside attorneys, professional services such as plan reviews, engineering services and consulting fees.

“We have spent an awful lot on that and a lot of these services could be done in house just by hiring a city engineer,” he said. “Every project that we have currently is tied to an outside engineering firm. One of the things I have done in my career is try to bring everything in-house that we can. At some point, I would like the City to hire a civil engineer who can take care of a lot of these things.”

He explained that new buildings being proposed in Dayton must have a site review by an engineer, even though the plans created by the builder or developer have already undergone work by an engineer, and that a secondary review of the plans could be performed by a city engineer.

Third-party projects also contributed to the budget shortfalls, according to Floyd. The City used third-party consultants on the Daniel Park lighting system and sewer system upgrades, and Christmas lighting selection and installation.

“I guess the third-party consultants were here working on projects, so it was easy to call on them. These outside people are easy, but they charge 10-20 percent over the price of a project. It adds up,” he said.

Floyd said the City, like everyone else, is impacted 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 rate of inflation was 7.9 percent and the Consumer Price Index was 8.5 percent last month. This effects everything that we purchase,” he said.

So how is the City going to address the budget shortfalls? Floyd said the City will use $2 million in funding it received from the American Rescue Plan Act as a cash infusion into the budget; the Dayton Community Development Corporation is going to contribute $1.2 million to help with infrastructure costs; and by cutting the 24 employees and trimming expenditures, the City is saving approximately $1 million.

All combined, that will put the City closer to breaking even. Floyd also is looking toward a rate increase for water and sewer service to bring the City closer to the statewide 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 on where we should be,” he said. “The City of Dayton provides a lot of services to our residents. It is extremely expensive to operate water wells and the necessary equipment to provide safe drinking water. Include a wastewater treatment plant and lift station pumps, etc., along with staff to operate, and you have a multi-million dollar operation. The necessary chemicals to operate these plans continue to rise in costs, almost on a weekly basis.”

Providing police service is another big expenditure, attributing to almost a third of the entire City budget.

“There is a small amount of revenue generated from citations but unfortunately a lot of those funds go to the State of Texas and we don’t get to 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 the facilities, trying to keep the drainage system operation so that we don’t have flooding issues, keeping all the vehicles and equipment running and in good repair, and the list goes on for daily operations. Everything we do at the City requires staff to carry out the tasks. Staffing is typically the biggest expenditure of a city budget.”

While he has the difficult task of getting the City back on sound financial footing, Floyd feels optimistic.

“Being a small city without major industry, a big property tax base, or multiple retail sites to collect sales tax from, we have only taken care of the day-to-day operations for years and not planned for the unprecedented growth headed our way. We are starting to experience growth that is only going to increase over time,” he said.

With new growth comes a strain on the existing infrastructure and the need for new water wells, drainage systems, water and sewer line extensions and expansions, street upgrades, and police and fire protection.

“The task at hand is going to be tough. However, I accepted the city manager position based on the future growth and the many opportunities that are ahead of us,” he said. “We have to bridge the gap from where we are currently to the point where we are realizing the increased sales and use taxes, increased property taxes and additional revenue from sales of services. We have an aggressive city council that understands our situation and they are willing to work to get us where we need to be.”

Floyd knows the closing of the Daniel Park municipal pool was an unpopular decision made by Council but given the financial constraints, there was no other option.

“We have a lot of more pressing issues that need to be addressed, such as ample water supply to meet current and future needs. Our drainage system needs to be re-engineered, our streets need to be rebuilt from the base up, our wastewater 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 that we are facing that will require substantial funding to complete.”


  1. 62.08 is what I get charged for water and sewer a month, not the 38.68 as stated. I am being taxed into bankruptcy by the city. My taxes went up yet again. My taxes have increased to nearly 50% in the past 8 years. I pay (or should I say rent from the city) around 220 a month in city taxes alone then another 100 bucks for services. I haven’t even covered the county tax and hospital tax. How is someone on a fixed income supposed to make it?

  2. This internet company has destroyed our streets, water and sewer lines and yet no service or average home owner can’t afford.

    • The old families that control Dayton don’t care about a bypass. They only cate about their own self interest. This city is going to hell in a hand basket and no one seems to care?

  3. I understand the City had an engineer who the X city manager transferred to the library and hired some buddy of his to run the department. Was his friend an engineer? They can give us any excuse they want to,but it boils down to mismanagement. Where was our Mayor and Council when all this happening?

  4. Our Mayor and Council have no idea what’s going on or we would not be in this mess. Some of the outside lawyers were hired over the ex city manager suits they were kept a secret from the tax payers. Laying off 24 employees and raising the water and sewer bills will fix it all up?

  5. The Christmas lights are a joke, stop spending money on useless crap! And the crossroads food truck thing is another total waste of money, but it gives a select few covered parking

  6. What was the pay out for the last City Manager when he left the City of Dayton and who approved it?

  7. Every council member should resign in shame over this, every one that voted for these people should also hang there head in shame.. Legal investigation should happen also. They came from our town only to take your money and spend it like dunking sailors. Follow the money trail to the end and you will have answers. But they did get there food truck court! Like rhino’s on a dunking spending spree!

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