Dayton Mayor offers insights on State of City: Debt service a significant concern

Mayor Tim McNeil has been busy. Included in his first duties as mayor, he has participated in two State of the City luncheons. The I-94 West Chamber of Commerce and Anoka Area Chamber of Commerce played host for these events. At the Jan. 22 council meeting McNeil commented on his public speaking skills stating it was a skill set he was going to have to work on. By the Feb. 12 council meeting, McNeil appeared to have a handy grasp on the issues as he delivered for council and those in attendance, his State of the Cities presentation.

He outlined the following as the key issues facing Dayton today:

• New council with very little experience

• Lack of trust by the residents

• 30 percent decrease in tax capacity

• Misplaced faith in the “if you build it, they will come” philosophy

• Slight credit score downgrade due to the city’s future debt service

• A tax rate higher than neighboring cities

He cited four areas of opportunity for the city including the budget, interchange, comprehensive plan/zoning and open land. The former council authorized setting aside some funds for major projects such as roads, public works and debt service. These funds, while only about $200,000, are a small step towards the opportunity to employ a “pay-as-you-go” strategy instead of always borrowing first.

The interchange now has an approved design proposal which constitutes being a shovel-ready project should financing be put in place.

McNeil also expressed pride in the extensive work on the city’s comp plan which he feels is very good only requiring minor tweaks here and there.

Above all, McNeil says the city’s open land sets it up well for when building and growth recover.

“With Champlin almost built out and Maple Grove nearly built out Dayton is getting close to being the only game in town,” he said.

McNeil said the decisions facing today’s council are numerous. The interchange is still a driving topic of conversation with Dayton having taken the lead on the project last year. McNeil says the council must decide if they are truly read to commit to the interchange project and figuring out how to finance it.

Secondly, issues about development costs and the budget will play a large role in decision making. Who will pay for development costs of things such as larger sewer or water trunk lines? Will it be new developers, residents, or the city?

Keeping the budget in check remains a concern as well as developing greater transparency and understanding.

The city’s debt from the NE project rises from $0 this year to nearly $2 million per year 11 years from now.

“We cannot refinance this debt until 2018,” he said. “Can we rise to the challenge and run the City without taxing our residents to death?”

He outlined that the average household contributes about $1,000 year in taxes to the city.

“We would have to build 2,000 houses in 11 years and contribute all of the taxes they generate to debt service,” he said, pointing out that would mean the city would have to more than double in population over the next decade and put all their spending into debt service only.

Finally, McNeil asked who does Dayton want to be. He said time and again he hears about how people are attracted to Dayton because of its rural small-town feel.

“Can we keep our rural feel or do we become another Champlin, Otsego or Maple Grove?” McNeil asked.

The primary thing McNeil asked for from residents was time and patience to allow the city and staff to research, discuss and implement changes to help achieve their goals.

 

Contact Mindy Mateuszczyk at mindy.m@ecm-inc.com

 
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