Dayton City Council took another step toward adopting its 2026-27 budget Monday, Aug. 17, voting to propose the city’s no-new-revenue property tax rate while also approving financing, employee benefits and several other measures.
Council members voted to propose a 2026 property tax rate of $0.652895245 per $100 valuation. The rate is slightly higher than the city’s current rate of approximately $0.6476 per $100 valuation.
The proposed rate is the city’s no-new-revenue rate, which is calculated to generate approximately the same amount of property tax revenue from properties taxed in both the current and previous years. New property added to the tax rolls is excluded from that calculation.
During a presentation to council, city staff reported that Dayton’s certified tax base increased by approximately $123 million, or 8.3 percent, from the previous year, largely because of new construction and development. Approximately $138 million in new value was added to the tax rolls.
The discussion also focused on changes to state property tax exemptions, particularly an increase in the exemption for tangible personal property held or used to produce income. Staff said the change reduced the city’s taxable business property base and was estimated to cost Dayton approximately $238,619 in property tax revenue.
Council members expressed frustration over receiving final tax calculations so late in the process. Staff said the final figures were not received from the Liberty County Tax Assessor-Collector’s office until late in the afternoon on the day of the meeting.
The timing was particularly concerning because Aug. 17 was the deadline for placing a tax-rate election on the November ballot if the council wanted to consider a rate above the voter-approval rate.
Council members discussed whether the city could instead retain its existing tax rate rather than adopting the slightly higher no-new-revenue rate. Staff said doing so could leave the proposed budget approximately $62,000 short, although potential savings from employee health insurance selections could help close that gap.
Council was also reminded that the rate approved Aug. 17 establishes a ceiling. The city may ultimately adopt a lower rate, but it cannot adopt a rate higher than the proposed rate without restarting portions of the tax-rate process.
The city’s voter-approval rate was presented at approximately $0.684719 per $100 valuation. Staff estimated that rate would generate approximately $509,000 more for the budget and increase the annual city tax bill on a roughly $259,000 home by about $82 annually compared with the proposed rate. However, city staff wanted to go along with the no-new-revenue rate as it was better for the citizens of Dayton.
A public hearing on the proposed tax rate was set for 6 p.m. Monday, Sept. 21, at the council chambers inside the Dayton Community Center. Council also set that same date, time and location for the vote to adopt the tax rate. The council separately scheduled a public hearing on the city’s proposed 2026-27 budget for Sept. 14 at the Dayton Community Center at 6 p.m.
In another significant action, council approved the issuance of $6 million in City of Dayton Tax Notes. The money will be used for infrastructure and other public safety items. The city received seven bids for the financing after 10 potential bidders initially expressed interest. The lowest bid came from TD Financial Products with a true interest cost of approximately 3.124 percent, substantially below the 4 percent-plus rate that had been used in the city’s earlier financial models.
The city’s financial adviser also reported that Standard & Poor’s affirmed Dayton’s AA-minus credit rating.
Council approved authorizing the issuance of the tax notes and related financing documents.
Council also approved the city’s employee benefits package for fiscal year 2026-27 after staff found ways to keep the city’s insurance increase within the amount budgeted.
HR Manager Tammy Alexander said the city’s initial medical insurance renewal was expected to increase by nearly 26 percent, while Dayton had budgeted for only a 10 percent increase. Staff initially negotiated the increase down to about 15 percent before working with the city’s benefits consultant to restructure the available plans. This allowed the City to remain within the 10 percent increase.
In the new budget season, employees will have three medical plan choices: an HSA plan, an HMO and a higher-level PPO plan. The city will continue contributing $1,000 toward employees participating in the HSA plan. The HSA and HMO plans will use an 80/20 cost split, while the higher PPO plan will use a 70/30 split.
In other business, council discussed whether Dayton should change its fire hydrants from purple back to the traditional red and white.
Council previously adopted purple as the city’s hydrant color several years ago. Staff said there is no price difference between purple and red hydrants under Dayton’s current design standards because the city requires a particular manufacturer. Changing manufacturers, however, could affect costs and would also require the city to stock parts for different hydrant models.
The Dayton fire chief was consulted about the colors and, according to Councilwoman Sarah Vickery, indicated that red hydrants are somewhat easier to spot during daylight hours. Reflectors are being added to hydrants to make them easier for firefighters to locate at night.
Staff also noted that peeling paint seen on some purple hydrants is primarily affecting older hydrants that were repainted rather than newer hydrants manufactured in purple.
Council voted to not amend the hydrant design standards and leave them as they are currently.
The council also approved adding the city-owned parking lot on Bryan Street to Dayton’s master fee schedule, opening the property for rental.
The request originated with the owner of Daystown Craft Coffee, who wants to use the parking lot, primarily on weekends, to bring in vendors and generate additional activity in the downtown area.
City officials said placing the property on the fee schedule will allow reservations to be coordinated through the city and prevent conflicts with established events such as Dayton Ole Time Days. The lot will be available to others as well and will operate similarly to the city’s Crossroads property.
Following an executive session, council approved amendments to City Manager Derek Woods’ contract as discussed behind closed doors. Council also approved a settlement with former city manager Kimberly Judge and authorized the mayor to execute the agreement.
Dayton Police Department also announced it will host an ice cream social from 6 to 8 p.m. Sept. 9 at Parker Park on North Winfree Street. The public is invited to attend.
The portion of the meeting before the financial report included several presentations and reports. According to the published agenda, those included a presentation on the city’s new Comprehensive and Hazard Mitigation Plan process, a Deaf Awareness proclamation, the oath of office for new Patrol Officer Jonathan Santana and recognition of City Secretary Jennifer Perkins as the August 2026 Employee of the Month.