Finance Committee Briefing and Mid-Year Budget Update – July 30, 2025
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Finance Committee Briefing and Mid-Year Budget Update – July 30, 2025
The city commission received a mid-year financial briefing from the finance team, covering general fund revenues and expenditures, income tax trends, economic indicators, and enterprise fund updates for the airport and water/sewer departments. No formal votes were taken; the briefing was informational.
Discussion Items
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General Fund Mid-Year Review (Ms. Jones/Abby and Jeanette)
- Total revenues are $7.9 million (7.5%) higher than 2024 but slightly under budget by $1.3 million (1%). Income tax – the largest revenue source – remains flat compared to 2024. A shift in five-Friday months (three in 2024 vs. two in 2025) accounts for about $1.1-$1.5 million less in expected collections, yet 2025 is performing slightly better than 2024 when adjusting for this timing.
- Property tax revenue increased 11.9% due to the county’s 2023 revaluation and higher monthly advances from the county. EMS fees rose 13.5% (nearly $500,000) largely from a 77% Medicaid transport rate increase (from $149 to $259) effective 2024, with billing lags now being realized.
- The “other revenue” category jumped 225.5% ($3.5 million) due to the final cash transfer from the photo enforcement fund into the general fund (completed in June 2025, vs. July 2024). This transfer will not recur.
- Expenditures are under budget by $2.8 million (2.2%) but $7.9 million above 2024 levels. Personnel costs rose 5.8% ($4.3 million) driven by police and fire recruit classes, police contractual wage adjustments, and NATO-related overtime (sworn overtime up 18.1% or $635,300). Insurance costs dropped $1.3 million due to a health insurance holiday in June 2025.
- Contracts and materials increased 5.9% ($1.4 million) largely from NATO-related contractual labor and supplies. The data recovery plan (DRP) update: 60 projects, $102 million total, nearly $90 million awarded, $44.6 million spent to date. Three projects not yet awarded (housing, MBE compliance tool, safe/secure housing tool). MBE goal achievement is 96% ($21.5 million of $22.5 million goal).
- Revenue circuit breaker: base collection and other intergovernmental revenue (including NATO reimbursements) triggered warning signals due to timing; staff expect them to turn green once receipts are processed. Departmental budget variances show most departments within thresholds; fire, police, IT, issue six, and income tax are outside due to NATO overtime, technology payments, and early capital funding.
- Revised revenue forecast is slightly higher than original, adding NATO reimbursement. Expenditures expected to remain elevated in second half. Year-end projection: balanced budget with $1.5-$2.5 million use of cash reserve (originally planned $1.2 million).
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Economic and Employment Update (Abby)
- Dayton area employment reached a new peak of 396,300 jobs, 3,700 above pre-pandemic (Feb 2020). The pandemic loss of 60,900 jobs has been fully recovered.
- National job opening rate 4.6%, Ohio 4.7%. Midwest CPI (all items) 3% higher than June 2024; food rose 3%, energy decreased 0.1% (gasoline lower, electric and natural gas higher). Real GDP declined 0.5% in Q1 2025 due to increased imports, consumer spending deceleration, and downturn in government spending.
- Unemployment increased year-over-year: Dayton 6.4% (from 5.9%), Montgomery County 5.4% (from 4.9%), Ohio also up.
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Aviation Department Update (Gail Turner and Anna)
- Passenger enplanements up 2.7% (33,000 passengers in Q2). Airline revenues down $108,000 (2.4%) due to lower terminal rent (from lower operating expenses) and a $92,000 annual airline settlement (returning money to airlines). Non-airline revenue up $1.3 million (12.9%) driven by parking (rate increase and higher usage, +$536,000), rental car concessions (+$678,000, including $589,000 from pandemic settlement), and concessions (+$93,000). Property taxes up $215,000 due to one parcel at Duaba.
- Personnel costs up $496,000 (9.6%) from filling positions (including garage) and wage growth; overtime down 20.3%. Contracts and materials down $137,000 (1.9%) due to parking vendor payment delay, marketing timing, and lower professional services (more fully staffed). Total uses up 8% but 4% under budget. Operating deficit of $18,000 primarily from capital projects transfer. Airport exploring additional revenue from general aviation.
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Water and Sanitary Sewer Funds Update (Keisha Kenny)
- Water Fund: Revenues 7.5% above 2024 ($2.4 million) due to city customer rate increase (9%) and higher usage; other jurisdiction revenue up 12.3% ($1.5 million). Lime sales up 20% ($300,000) from producer price index adjustments. Personnel costs up (positions filled, but 24-hour operations still seeing overtime). Contracts and materials down slightly due to IGS billing issues. Did not utilize cash reserves.
- Sanitary Sewer Fund: City revenue up 6.5% (rate increase 5.5% plus higher usage); other jurisdictions revenue up 9.3% ($1.4 million). Other revenues up due to R&G project. Personnel costs down (vacancies causing overtime up). Contracts and materials lower (IGS billing, one-time liner project not done). Sludge costs up 5% from CPI rate increase. Completed generator project at Ottawa Yard (improving resiliency) and Westbrook pump station upgrades. Did not utilize cash balances.
- Reduction in shutoffs attributed to improved payment accessibility (online, CVS payments, easier payment plans) – not a policy change but higher resident compliance.
Key Outcomes
- The city expects to end the fiscal year with a balanced budget, using $1.5-$2.5 million of cash reserves (higher than originally planned $1.2 million).
- Staff will continue to monitor budget closely due to inflation, rising personnel costs, and economic uncertainty.
- No formal votes or directives were taken; the briefing was for informational purposes only.
Enterprise Fund Performance
- Aviation: revenue up 7.1%, expenses under budget; passenger growth continues; expansion of aircraft capacity (Airbus, 737) noted.
- Water and Sewer: both funds operating as expected, with revenue increases from rate adjustments and usage; no cash reserve use; focus on infrastructure projects (generators, security).
Meeting Transcript
All right. Mayor and Commissioner. This is your finance committee briefing. This is our mid year briefing. So remember, we'll always do a status update too on the health of the organization as we've been spending for the last uh six months. And we'll also do some economic updating as far as you know forecasting what we're getting from the economic experts, as well as you will also hear the uh updates uh regarding the enterprise functions at the airport and the water department. So I will turn it over to Ms. Jones to begin the breeding. Thank you, City Manager. Um good afternoon. Um we'll go over the we'll start with the statement. Um chakra some high level summary before we really fall into the detail. Um as you can see here, all revenues um are trending higher. Um revenues are 7.9 million dollars or 7.5% higher than last year compared to budget. Um, however, revenues are slightly under uh by 1.3 million dollars or 1%. Um, the largest revenue source, which you know um is income tax. Income tax remains flat compared to 2024, and we'll dive deeper into this in terms of the next slide with this report income tax. As for the other revenue categories, the largest increase is in the other revenue category by $3.5 million, as you can see. Uh, the revenue category is 225.5% higher than last year, and that has largely to do with the uh final transfer, cash transfer that we did this year from the coachment fund. Um, last year we completed this transfer in July. This year we did the transfer in June. Um, and this is the last year for that transfer. After this year, we do not have any cash balance remaining in that fund because we moved uh booking of that revenue into the general fund, and that's why you're seeing that a fund at program category, which is up by 1.4 million dollars or 502.2 percent. The other noteworthy category is EMS fees, um, which is up by 13.5 percent or nearly 500,000, and this is largely due to a 77% increase in the Medicaid rate, um, which went from 149 for transport to 259 at the start of 2024. But because there is a lag associated with the billing, and when we receive the revenue, we are seeing the impact in 2025. Expenditures for 2025 were under budget by 2.8 million or 2.2 percent, um, and we're 7.9 million above last year's amount. Uh, personnel costs were $3.6 million under budget by 4.3 million or 5.8 percent higher than 2024. In addition to the annual wage growth, timing of the police and fire recruit classes, as well as the police contractual wage adjustment, as you know that occurred at the end of last year. Um, and also the NATO-related cost are the driving factor for this increase. Contract material and other uses were up by $600,000 compared to 2024, and this was largely contributed by the higher supplies and material cost um that were needed for the NATO events, which were also by lower transfers compared to 2024. And as you know, to allow for adequate time for procurement, most investments have been funded in the beginning of the year. Um, one item to note in the investment section is the euro dollars year neighborhood investment with the renewal of issue six. As you can see, the um issue nine, issue six line um has an increase of 31.4 percent, and that's because of that increase in issue six from 8.3 million dollars to 10.9 million dollars. All right, we'll go into the income tax slide. So income tax, um, uh, like I said, is the largest source of revenue uh and it represents over 700% of total revenues as of June. Net collections through June are nearly flat and we're slightly under budget by 456,500. Um, even with net collections being flat, one thing to note is that there were five by Friday months in during 2024. Uh but for the first six months, there were three five by Friday months in 2024, as opposed to two five Friday months in 2025. You can see that in that table below, the green and blue highlighted columns represents the five Friday months, and as you can see for the first six months, we have three in 2024, and we have two in 2025. A five Friday month is approximately 1.1 to 1.5 million dollars. So with that in mind, 2025 is performing slightly better than 2024. Um, in the chart left to you, you can see three of the six months um have outperformed in income tax compared to last year.9 percent or six hundred and seventy thousand dollars compared to 2024. The tax on business profits, which includes corporate profits and partnership increased by 7.4% or 620,300, and payments by individuals are also up by 2.5%, although a small amount, a little over 100,000. All right, with that, um, Jeanette is going to walk us through the remaining revenue categories. Thank you. Um the first revenue category that I want to walk through is the property taxes and other taxes. Um, as you'll see, property taxes increase by 11.9% or just over almost 578,600. And part of the reason why we wanted to highlight this is because it's not that property values have actually increased because the last revaluation was in 2023. The county did the reval, and that impacted 2024's actual receipts that we received. Um, one thing to note when we started looking into this, um, every year we receive monthly advances from the county for our property tax revenue, and then by annually, they do what's called a settlement.
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