2026-11-04 - City Commission Work Session

[music] >> All right, everyone. Thank you, commissioners. Uh this is your third quarter finance briefing. This takes us through September. Right? Uh we will cover both general the funds, aviation, and

water um uh enterprise uh functions or budgets. So, I'm going to turn it over to Ms. Jones to lead us in the general fund presentation. >> Thank you, city manager. Can you guys hear me? >> Yes. >>

Okay. All right. So, we will, as city manager mentioned, we'll start with the general fund and we'll go to the statement slide. >> I suspect the microphone is not picking you up. We can hear you, but

I don't think the mic actually can hear you. >> [clears throat] >> It's barely on, but I'm going to I'm going to try to speak louder, so you >> I will get you that. It's better. >> Um so, here uh this

statement shows uh our revenues and expenses. The top section has the 10 revenue categories, and the bottom section shows the expenditures. Um starting with the revenue, overall uh compared to budget,

revenues are 2.8 million or 1.6% higher than year-to-date budget. Compared to 2025 amounts, overall revenues are 1.7 million or 1% higher than 2025 amounts or actuals as of September. And that 1% or

the 1.7 million dollars are slightly understated. Um that's largely because of the 3.7 million dollar transfer um that occurred in 2025, as you can see in the 2025 year-to-date actual column in the

other revenue category. Um that transfer was our last transfer from the photo enforcement fund um that was done in 2025, and it does not exist in 2026. And so, that's why we're not seeing as much

growth year over year. Um as city manager mentioned, um we are 3/4 of the year um and we've collected approximately 75% of the revenue. So, we are trending as we should. Um in the middle section, um I

also want to uh draw your attention to the 27th payroll. Um the transfer, as you can see, inclu- is included in the first column, the $3.2 million. Um that transfer funds the 27th payroll for our

largest pay group, which is police and fire. Um they're going to experience that in 2026. However, we have not done the transfer yet. We're going to wait towards the end of the year, so we have better

estimates uh based on the trend and um we can understand exactly how much is needed. And so, we're going to wait till the end of the year to do that transfer. Um the bottom section, as I mentioned,

shows the overall expenditures um compared to budget. The total expenditures are $3.8 million or 2% lower than year-to-date budget, um which is a good thing. It's a favorable variance. Um however,

compared to year over year, um total expenditures are $9.5 million or 5.4% higher. And as you can see, um as you know, personnel is the largest cost in our expenditure categories. And personnel year

over year are higher by $7.3 million 6.2%. This is largely related to the annual wage inflation, um as well as we have fewer vacancies throughout the organization. Um and we have no health insurance

holiday in 2026. Um and so, that's why we're seeing that 6.2% variance year over year. Um overall, um sources over uses, we are in the negative by $13.6 million. Um this is largely related to the

investments. Um those are the investments in the purple shaded area, which includes capital improvement, equipment, development, uh demolition, and Your Dollars Your Neighborhood. And as you know,

those are up fronted. And so, we fund them in the beginning of the year, so we have time to do the contracts and get the bids out. And so, they are funded 100% in the beginning of the year. That which

means that cost is not spread out throughout the year. The other thing as I mentioned, the 27th payroll, that transfer has not been and then lastly, the interest earnings, which also comes in at the

end of the year. And they show up in the other revenue category, and so they are also missing from this amounts, and that's why we're seeing that $13.6 million deficit sources over uses. The other

thing I also want to point out here is that you will see this in the year-end presentation as well. In 2026, the transfers or the investments are lower by $450,000. This was the budget solution for

2026. We reduced capital improvement, capital equipment, and development, each of them by $150,000 as part of the budget solution. So, you'll see that all throughout the year that the transfers will

be lower compared to last year. All right, so diving into income tax, overall income tax collections are down slightly by about $658,000 or 0.5%. As you can see in that table, withholding is our

largest category in income tax. It's about 87% of the total collections, and it's up by $1.5 million or 1.4%. Withholding has seen a steady growth as you can see in the table. In 2022, withholdings

were $98.4 million as of September, and in 2026, withholdings at 109. $1 million. And so, they are growing steadily, which means it's reflective of the steady job base. Business profits, which is

which is our second largest category, um is down by 7.6% um and you can see that in the chart in the bottom on the left hand corner. Um business profits peaked in 2022 at $19.5 million in 2020, 5

they're $11.5 million, um which is 10.2% of the total income tax collection, which is similar to the 2020 amounts at 9.9%. So, business profits over the course of the last few years have gone up and

down, but they are steadily steadily declining this year. Um payments by individual is the smallest category out of the three. Um it's also down by 3%. However, um uh the dollar amount is small. Um

it's about $139,700. Um and then refunds have continued to climb this year. Um they're about [clears throat] $4.3 million as of September. Um and you can see that in that chart. Um refunds are about

32% higher than last year. Uh refunds also peaked in 2022 at $3.8 million compared to 2021. Um when we compare 2026 amount to 2021, um they have more than doubled. Uh and this is largely associated

with the advanced business profits payments that we received in the past. And so together, all in all, when we look at the growth in withholdings, um and then the higher um excuse me, lower business

profits payments and higher refunds, um the net effect is flat revenue performance for the income tax for the year. Now, I'm going to hand it over to Janette. >> Yep. And I will walk us through a

couple of the revenue categories just to give some high-level um changes um year-to-date compared to 2025. So, the first category I wanted to talk through is other charges for services. So, other

charges for services is up just shy of $644,000 over 2025 or 8.6%. There are three main drivers of this increase. Um one you can see is that indirect cost reimbursement category. So, the indirect cost

reimbursement is up on over $234,000 year-over-year. And this is based on our indirect cost allocation. So, this allocation is done for all of kind of the internal facing departments to analyze

operational expenses and then distribute them amongst the other departments. And so, it's 2 years behind when we did the calculations and those calculations are finally catching up with some of those

inflationary cost increases that we've been seeing. And so, that's why you're seeing that increase in terms of the reimbursement that um we get back for that indirect cost reimbursement. The other

category that you'll see a fairly significant change is that miscellaneous charges. That's up almost 200 from 2025. And so, I believe Stefan kind of touched on this when we did the budget

presentation, but they are seeing a lot more activity with their silver silver sneakers program. They've done some new um programming throughout the recreation centers and so, they're seeing more um

activity in the centers and that's why we're seeing that revenue increase. All right. And then the next one I wanted to highlight local government fund, which I know we talked through this a lot, but

just to kind of visualize um some of the reductions that we've been receiving. So, you'll see compared to 2025, overall our local government fund revenue is up um over $2.2 million. But the thing I

want to note here is even with us kind of gaining back some of that revenue, we're still under um our 2022 numbers. We're still lower than when it was in 2022. It was almost $6.4 million year-to-date.

And so, despite the fact that we've made some headway in terms of getting back a little bit of revenue, it is still lower than it was prior to these tax reductions. Um and if you recall those traffic

enforcement camera reductions, we we a multi-year kind of commitment because of the lag in terms of when the state law went into effect. So, that's why you see in 2024 and you can kind of see it in

the like chart below in the bar chart in the up in the top right. In 2024, we really saw the bulk of the reductions. There were about $5.9 million of of our local government fund revenue reduced and

you can see it's kind of steadily since we've met that multi-year commitment. We met it in 2025, um it's reduced, which is good. It means we're getting more revenue on the front end, but we're still

not back to where we were prior to these reductions. Uh the next category we wanted to highlight was other intergovernmental. So, this grew almost $2.1 million over 2025. The bulk of this growth is

because of that adult use cannabis tax revenue. Um as you will recall, we probably talked this through a lot. This includes a $1.1 million deposit in the beginning of this year that reflected kind of

the prior period um from almost 14 or 15 months. 15 months. Uh prior to 2026 and so that got deposited in January and then thereafter we've been getting about $100,000 annually for this tax, which of

course is dependent upon the number of dispensaries and in Dayton. Um casino tax is up. That has been steadily increasing. We've not really seen that dip. Um it is up slightly just over $81,000 from

2025, but the bulk of that growth is truly the adult use cannabis tax. And just to note, since we did get this one-time revenue next year, we anticipate we'll have about million to 1.2 million dollars

on annual basis from here on out based on our our current trends in terms of the revenue that we're getting. All right. And then other revenue. And Abby kind of touched on this when she went over the

statement, but the other revenue category, which includes um our transfers in, is down about $4.2 million from 2025. The big driver here is in that transfers in line because uh 2025 had the last year

of the transfer from the photo enforcement fund that we previously used to collect the photo enforcement revenue. We transferred that into the general fund. So, that was the last year. It was about a

$3.7 million transfer into the general fund. Um so, that's where you're really seeing the bulk of that change year over year. Um you will see the cable franchise fee line. It is down year over year.

Now, this is just simply due to the timing of postings. Um we are the postings are received every quarter and there's just a lag in terms of when they are received and so, we're just not we have we're

down a quarter. And then, the special assessment revenue um that one is down. So, this is just based off of property tax that's levied against specific property owners. So, that's just down based on

the taxes levied year over year. Okay. And then, looking at some of our costs on the personnel cost side personnel costs are up $7.3 million or 6.2% year over year. And so, Abby kind of alluded to

this. So, if you look at civilian wages and even sworn wages, they are up fairly significantly. Civilian wages are up $2.5 million or about 7.5% and sworn wages are up $3.4 million or about 8.5%. And

so, this does include the normal budgeted wage inflation, but also we are seeing lower attrition kind of across the board. So, that's really driving some of those number number increases year over

year. Um one of the good things though is this, because there are more filled positions, we are seeing overtime decline. So, for both civilian and sworn overtime, it's down about $2 million year over

year based on those more filled positions. Um and then, one of the other big changes is in insurance. So, the insurance line uh year over year is about $2.7 million higher in 2026 and this is truly

because as Abby mentioned, we have not taken the health insurance holiday. Um at this point in time in 2025, we had already taken the health insurance holiday. So, it kind of reduced the overall cost

year to date in 2025. And What is on the contracts and materials side, and this includes other uses or other transfers, so this contracts and materials and other uses are up about $2.2 million or 5.9%

over 2025. Um and you'll see this is probably not surprising what with gas and diesel fuel uh costs are still inflated because of um a lot of what's going on in the global economy. We're still being

impacted by higher fuel costs, so that is up 18% year over year. Um the management public service contracts, this is also something you've probably heard us say a lot. This is where the um regional

dispatch contract lives, and so it's just that timing of the payments. So it's it is showing up over $515 um annually, but that truly will normalize as we get through the end of the year in terms of

when those payments are processed. Um and then miscellaneous, it's down quite a bit. So miscellaneous costs are down almost over $1 million, and this is where in 2025 when the NATO assembly happened,

we paid a lot of those um contractual costs um and just kind of security costs for the event. So uh so we don't have those anymore, so those were one-time costs in 2025. And then one of the big things

uh I'm sure everyone is feeling are utilities. Our utility expenses, especially driven by electricity, um are significantly higher. They are just shy of $1.5 million higher than 2025. So this does

include there were some billing errors in 2025, and we held off on paying some of those 2025 bills. So some of those 2025 bills are being realized in 2026, but then we're also seeing pretty

significant rate increases that are impacting our costs also. So that's really driving those year-over-year increases in the utility category. That's the high level, and I will give it back to Adam.

>> Thank you. All right. So now we'll talk through the the uh trend over the last 5 years um starting with revenue. Um as you can see in that blue bar chart, um income tax as a percent of total uh

general fund income, income tax for 2026 is 69.8% um of the total. Um and as you can see in the chart, in 2022, income tax was 74.1%. Um you may recall 2022 is when we saw those spikes in income tax,

and then income tax kind of flattened out in 2023, and then it spiked again in 2024. Uh the 2024 spike was largely related to two things. Uh one, there was uh five five-Friday months in 2024, normally

we have four. Um and then, in addition to that, we also received one a large business profits payment in July of 2024. And so, that's why income tax was really high in 2024. And as you can see here,

um as a percentage of total income, um it was nearly 74% of the total. Um over the last few years, we have seen that decline. In 2025, um it was nearly 71%, in 2026 as of September, um it's 69.8%. Um

Um and you can really see that in the bottom chart, um which red line equals to the income tax, which is up 1.7% over the course of the 5 years, uh which only totals to about $2 million. Um so, from

2022 to 2026, income tax has only grown about $2 million. Um on the other hand, the blue line is is all other revenue, um and all other revenue has grown 25.6% or about $11 million. Now, other revenue

categories, there are quite a few things that are happening um that's contributing to this growth. Uh property tax, you may recall the 2023 revaluation increased the property tax about $2.9 million or

43.7%. EMS fees have also seen quite a bit of growth because of the Medicaid rate change that took place in 2024. as well EMS fees increased by $2.1 million since 2022. Now, as Janette talked through

local government fund over the course of that same period has declined by about $1.5 million and that's largely related to that traffic enforcement camera program reduction that's coming down from the

state. And to address those reductions in starting in 2025, we started to deposit the photo enforcement revenue into the general fund. So, that the general fund had a net zero impact and that's why

we're seeing the increase in fines and forfeits category by about $3.9 million since 2022. And then as Janette mentioned, the adult use cannabis tax is the city's latest revenue source and the decline

in income tax this year is really helping to offset that decline in income tax that that adult use cannabis tax. All right, looking at the expenditure trend over the course of the last 5 years as you

can see here the green bar represents the personnel cost. And personnel costs were $102.7 million in 2022 and they grew to $125.8 million in 2026. That's an increase of about $23.1 million. Personnel

costs overall represents 2/3 of the total cost um and it's largely driven by as Janette mentioned the annual wage inflation. There are more filled positions across the organization. Over the last few

years we've also experienced higher overtime and the 2025 included that one-time cost for that NATO staffing. The direct line shows the growth since 2022 and as you can see personnel has grown

steadily about 5% at a rate of about 5% annually. On the other hand, contracts and materials and other uses have grown about 47% over the same period or $12.7 million. And this is largely related to

the inflationary pressures that we've experienced over the last few years specifically in fuel supplies, utilities, and contracted services. In addition to that, we've also added some new services

which includes the contract with Montgomery County Sheriff's Office to provide the court security. We've also added the security services for City Hall and some of the technology services also driving

the increase. Speaking of utilities as Janette mentioned, utilities have increased tremendously over the last few years. It has grown 113% over the last 5 years or about 620,100. All right, so we

wanted to we've added this new slide and we really wanted to provide you an insight into how personnel is distributed amongst the general fund. And if there's one thing that you can take away is a

city's budget is largely personnel. It's largely people. We deliver services through our people whether it's police officers, firefighters, public works crews, inspectors, or recreation staff. You can

see that in the pie chart personnel cost is 76.5% of the total operating expenditures and contracts and material is 23.3%. Less than 1% is dedicated towards capital and that's primarily technology.

And So when we talk about the growth, what we're really talking about is the cost of our workforce. Now I want to draw your attention to that line chart that shows the comparison of September of each

year. And as you can see, the green line shows the personnel cost. In 2022, personnel were $102.7 million. In 2026, personnel costs are $125.8 million. That's an average of $5.8 million growth

annually. Personnel budget for 2026 is $171 million. So, just on a simple math, if you were to say 1% growth in personnel, that equals to $1.7 million. You saw in the earlier slide, income tax has

performed pretty much flat this year. And so, when we're talking about that structural gap, this is what we're really talking about. Um, in the bottom chart, um, you can see the gray bar shows the

four largest department, the distribution of the budget. Um, in those four largest department includes police, fire, public works, and P&D. And you can see for personnel, um, out of the $125.8

million, those four departments, um, are $102.5 million, which is 81.5%. Um, for contracts and material, uh, $29.5 million is spent in those four departments, and that's, um, that contracts and and

materials it we is really supporting the personnel and the operations in those departments for day-to-day service. And that's 77% of the total $38.3 million. And so, since And so, since 2022, the four

departments has accounted for $9.1 million growth in contracts and material. About 80 cents of every dollar is in these four departments. Um, but these four departments are also providing those core

services that the resident count on a daily basis. Wait. All right. So, this is our dating recovery plan update. And before we get started, I really do want to, um, uh, inform that the, uh, dating

recovery plan, um, ends and, as you know, ends in 2026, in December of 2026. We must spend all of the funds by December 26. Um, and we have spent all of the funds, um, as of now. So, that's a really

good news story. The organization has worked really hard managing the 60 projects in the dating recovery plan over the last four years. Um, and that's I really wanted to shout out and give kudos to

the organization cuz essentially they've been doing double duty managing these projects. Um, total awarded contracts to date is $94.8 million. Um, there have been 19 external projects completed to

date and six projects are expected to be completed in the next few weeks. There are several several large internal projects in the improving neighborhood category are also complete which really

includes the sidewalks and curbs, tree lawn, and parks. Um, in the housing improvement program, five projects have been completed and two more are completed but awaiting closeout documentation out of

the total nine projects. Um, the MBE goal, as you can see here, um, is $23.1 million. Um, and so far we have achieved $22.4 million which is a 97% compliance rate. So, here is a bit more breakdown of

the projects and the subcategories and you can also view this information online. The dashboard link is included in the bottom. Um, you can see that more detail in the dashboard um, by each project

and each contract. As you can see here, out of the $102 million, $94.8 million has been awarded. Um, and over 80% of that, or $82.3 million, has been spent so far. Year-to-date, this year alone, um,

we have expensed $16.7 million for the DRP. Um, there are three projects remaining to be awarded, um, and they are in the improving neighborhood category. We've talked through these projects. These

projects are just moving a bit slower. Um, and there's a reason for that. Uh, one of them is the Longfellow Midtown project. It's a, uh, United Church Home project which has an allocation of a $1

million. Um, the grantee has been working really hard to, um, provide the scope of the project. Um, they have received the historic tax credit and they are working with the project manager to figure

out the best path forward. The other one is the Pool house at Fairview, uh, which is 587,200. This is the demolition of the pool house. We bid it out three times and finally we are currently working

on the lowest bid being vetted by public works and HRC. And so the goal is to begin demolition by May of 2027. And then the spray park project, which is dependent on that pool house demolition

project, has also been awarded. Work is expected to begin in early 2027 and the estimated completion for that project is by May of 2027. And then lastly we have the MBE compliance tool. This tool is a

software tool that is intended to engage diverse businesses and comply with prevailing wage requirement is currently on hold in the implementation. We want to see what the new technology is capable of

and if there is capacity to fulfill the requirement in the new technology, then we need to re-evaluate that. And so that's why the project is currently being All right, so this is our compliance and

as of September we should be around 75% and as you can see here expenses and transfers overall are around 75.2%. Um when we include the encumbrances, we are at 79%. There are only three lines here

that does not show that 75% compliance. One being the non-departmental is at 47.7% and that's because of the 3.2 million dollar 27th pay budget that's included in non-departmental. Because we have not

spent that yet, that's why we're seeing that lower variance. And then the other two is issue six or Your Dollars Your Neighborhood and income tax. Those are almost 100% and as I mentioned because

they're funded early in the year, we are going to see that throughout the year that they are at 100%. Looking at the Dayton MSA jobs, as of September we are at 402,300 jobs, which is the highest point

that we have seen so far. It's 9,700 above the pre-pandemic level. Employment, as you can see in this chart, it dipped slightly in February of 2026 and was about the same as 2025 for March and April,

but since May we have seen the growth outpace last year's numbers. Compared to September of 2025, in [clears throat] totality we have 2,800 more jobs in the Dayton region. And of course this data is

preliminary, so it it may change. This chart shows the year-over-year change by industry. And one caveat, these are not the same numbers that are used in the previous chart because the these numbers

are not seasonalized. Industry The job numbers by industries, the data is not available as seasonalized. And so as you can see here, out of the 10 industries, six have added jobs, the largest being um

in um education and health, which has added about 2,200 jobs in one year's span, followed by the professional and business category, which has added about 700 jobs, and then construction and leisure

and hospitality, they both have added about 600 jobs. And then lastly, trade, transportation, and utilities have added 400 jobs. The largest decline is in government. It has lost about 800 jobs,

followed by loss in other services, which has lost about 400 jobs, and then information and business activities, they both have lost about 200 jobs. Now, government decline, it can be correlated with

the reduction in federal jobs as part of the deferred resignation program that took place at the end of 2025. All right, speaking of the economy, um uh for the employment, um over the past year, the

Dayton region has added 2,800 jobs, which is about 7% uh slightly faster than the Ohio's 3% 0.3% rate. Excuse me, 0.7% and 0.3%. Uh the regional employment is now at its highest level on our chart and

well above where it was before the pandemic. Um and that really matters to us because um employment uh equals to um withholdings income tax. And so, as far as um uh income tax goes, if our employment

stays steady, um then um our income tax is also going to stay steady. Inflation for the Midwest uh region uh was 4.2% in September, um which is higher than the national average, which is about 3.7%.

And most of that is in energy, um it's up 22% over the last year, um and as Janette talked about, um a large portion of that is gasoline, it's about 36% higher, and electricity is almost 9% higher. Um

when we exclude food and energy, Midwest inflation is about 3%. Um and as you know, fuel and utilities are the two areas that we talked through that have seen a tremendous growth um just for our

budget. GDP is that orange chart, um the national economy grew at 3.4% annual rate in the third quarter, which is up from 2.2% in the second quarter. This growth really came from business investments,

especially computers and technology equipment, consumer spending, and government spending, and was partially offset by lower exports. So, the economy is still growing even with higher prices. The 3.4%

third quarter GDP figures by the BEA is the first estimate and it will be revised. And then the last chart in the top corner is the interest rates. With inflation moving up, the Federal Reserve raised

the rate by a quarter percentage point on September 16th to a range of about 3.75% to 4%. This was the first increase that occurred since 2023 and as you can see that in the chart. Um this is why the

effective rate on the chart went from 3.63% in July to 3.88% in October. Um the Federal Reserve held rate steady at its October 28th meeting. Um and this also is uh somewhat of a good news story for

us, especially because um higher rate means higher borrowing costs, but it also means higher interest rates. Um and so, we have experienced those higher interest rates um in our investment earnings

and um based on this, we're going to continue to experience those in the next years. All right. So, through September, um revenues are $2.3 million above budget and expenditures are $3.8 million under

budget um with income tax essentially being flat. Um overall performance is supported by the local government fund, adult use cannabis tax, and the traffic enforcement camera program. Um on the

expenditure side, personnel costs were $7.3 million or 6.2% higher than the 2025 amounts. And as we talked through, this is largely related to the annual wage inflation as well as lower attrition and

the no health insurance holiday in 2026. Um contracts and materials and other uses were up 5.9% or $2.2 million and this is largely driven by those utility payments that we're making in 2026, um which

are partially um uh leftover from 2025. Um, overall uses exceeded sources by $13.6 million. So, we will continue to monitor the general fund closely um, and as as we as you heard in the um, budget

work session, we do expect to end the year with about $4 million in the use of cash reserve. Um, and um, uh, we have we've experienced some good years for the last few years, but this year based on

the revenue trend and based on the expenditure trend, trend, we do think that we're going to end the year with uh, uh, a little bit of use of cash reserve. Any questions? >> Commissioners, are there

any questions, comments? Commissioner Bacon. >> No questions, except I just want to congratulate the organization on the uh, meeting our deadline for the use of the dating recovery plan funds. I mean,

$138 million spent over, you know, a diverse set of priorities and programs is really heavy lift. So, thank you all for that. Uh, and uh, just please keep us updated on the status of the projects that

have not yet been completed. And those are all. >> Thank you. Commissioner Faircloth. >> No, just thank you for the work, for the presentation, but also as Commissioner was saying, the diligence in

responsibly expending all those ARPA dollars. Um, I think as the city manager described it, it's you had to spend an whole extra general fund over what, 3, 4 years. And that's a significant task. So,

thank you for all the extra work. And your reward is now you get to implement in the ERP. >> Yes. >> Right, just in time for ERP. >> So, I'm I'm sorry about that. I guess you you'll be able to rest in

like 3 years, something like that. So, but no, we're really grateful for all of you. >> Commissioner Shaw. >> Same comments. Thank you for saying it. >> Commissioner Joseph. >> Yeah, thank you all.

Excellent work, really. >> Thank you all very much and congrats on meeting the deadline. >> Thank you. >> Hey, now we'll bring the aviation crew up. >> Hey, well, good afternoon. I'm Gil Turner,

director of aviation. Here, Kenneth Stegall. Enjoying the busy matters of finance and administration. Well, >> [clears throat] >> just to give you an update on where we are with the enplanements. We

ended the third quarter with about 473,000 enplanements, which is a decrease. We're down about 5% of our uh of the 2025. So, a lot of reason for that is, you know, as you know, we started out the

beginning of the year with a lot of bad weather. Uh then we had the war, fuel prices spiked, uh the airlines pulled capacity. So, we are, you know, once airlines sort of pull that capacity, it's kind

of hard to get it back. As you know, we just got breeze that started here in the fourth quarter. But, uh I don't think we have they're going to bring it out of this dip. So, I think we're probably in

uh 2026 probably about two to or about 2% below or flat. So, I think that'll be good, you know, so we're doing very well. But, uh that was a a hit for us with government travel, with the uh uh bad

weather, and you know, fuel price spikes. So, that was kind of a the reason why we're down. Our airline revenues are up about 3% compared to 2025. Our non-airline revenues are down a little bit and

Anna's going to break that down to you. I think I've told you guys about this several times in the previous presentation because of the rental car setup settle-up, that was the reason why. So, it's

showing a little bit off balance here, but parking revenue increased by about 3.5%. Rental car concessions were down. Again, that's what she's talking about that compared to 2025 because of the

settle-up. The concession revenues are up by 21%, so that's good because we never got all the all the restaurants up and running now. We got a new concessionaire on board and they are really doing

well. All of our stores are open now. They're doing very well. Some of those little people are bypassing the work way and going straight to the concourses now, so that's all of a an issue we're

working through, but but overall, the experience is good. You know, the restaurants are thriving and our income our revenues are up. Total sources are up by 90,000 or 0.3%. But we're still about 1.4

million or 4.9% lower than our budget. Total uses increased by about 2 million or 7. But we're about 3.1% lower than budget. Personnel costs are about 441,900 441,000 5.3%, but we remain about 2.4

lower than our budget. Contract material and others were up by about 1.6 or 14.6%, but we are 5.1% lower than our budget. Capital costs are up by 575,000. Little bit of a summary. >> You know, all

that you can give me the details. >> started with operating revenue. So, total revenue is down about $194,000. Um it's just 0.7% compared to the same period of last year. Um airline revenue is up

$195,000 or 3%. Uh this increase is primarily driven by additional landing fee revenue collected through Plane Pass, um along with the fact that we did not have an airline settlement payout this year,

which would have reduced revenue. Non-airline revenue is down $359,000 or 2.1%. Primary driver in this difference is the rental car settlements that Gil mentioned, um compared to last year. However,

some of that decline has actually been offset by stronger concession revenue and additional revenue for services we're providing to Sierra Nevada Corporation. We'll take a look at these in more detail

in the next few slides. Within airline revenue, terminal space rent is up about $22,000 or 0.6%. This increase is related to the annual settlement paid to the airlines in 2025 for fiscal year 2023. As

a reminder, we reconcile these amounts 2 years in arrears, but for this year we determined that a payout was not necessary. The rates did not change. Landing fees are up $173,000 or 6.3%, and the

primary driver of this increase is the additional revenue we're collecting through Plane Pass, which collects landing fees for general aviation aircraft. When we look specifically at the major

airlines, landing fees are relatively flat compared to last year. So, the growth is primarily coming from general aviation activity. So, through Plane Pass, we're collecting approximately 10 to

$20,000 per month um at the Dayton International Airport and another 1,000 to 4,000 per month at the Dayton Wright Brothers Airport. Year-to-date, we've collected about $155,000 in landing fees from

the general aviation aircraft alone. Uh so, Plane Pass allows us to capture revenue from aircraft aircraft activity that might otherwise have gone uncollected. >> Hello, Commissioner Shaw. You had

asked me about that. >> Great. How many weeks to do that? >> I don't know. >> I'll think about that. Thank you. I appreciate it. >> All right. Moving on to non airline revenue. Our revenue is down at

$359,000 or 2.1% compared to the same period as last year. Uh while the overall category is down, we're seeing some encouraging growth across several of our revenue streams. So starting with parking,

our revenue is up $346,000 or 3.5%. This is the result of the rate increases implemented in 2023 along with higher parking volumes compared to this time last year. Rental car revenue is down $1.1

million or 30.4% primarily due to the settle up payments received in 2025. These prior year payments create a higher comparison point. So when we remove the impact of these settle ups, rental car

revenue is actually up approximately $340,000 or 16.3% year-over-year. Concession revenue continues to perform very well, increasing $205,000 or 21.1%. This growth is largely driven by the success of

our new restaurant offerings. Restaurant revenue alone is up $167,000 representing an impressive 133% increase. We're also seeing year-over-year growth in vending machine, gift shop, and advertising

revenue. Currently, this revenue is up $43,000 or 2.4% reflecting Sierra Nevada's continued continued investment in the airport and including the construction of its fourth hangar. >> And one thing I

want to highlight too is we have a company that does like for the advertising in the airport. You see a lot of ads in the hallway. Uh When I first started here, I think we were making about $300,000

annually in marketing revenue. This year, we're on track to raise uh about $700,000, which is a record since I've been at the airport. So the company Departure Media is doing a fantastic job of

getting companies to advertise in the airport and I mean I'm just really thoroughly impressed with what they've been doing. Uh once now you see, you know, there's ads on the escalators and ads are all

the wall. I mean, any space you can find they're putting selling. It's amazing you know, to see they're doing. >> Mr. Turner, have you had conversations with them this particular ad agency about the

display cases? That's a potential revenue generator as well. Have we had that conversation? >> Yeah, say again. >> Have we had any conversations with the the new ad uh the new advertising company

about the potential for the display cases as a revenue generator? >> We we have and they've been talking back and forth, but we did put them in our video display, but we got to get uh a sponsor for

the uh display of an actual display case. >> Okay. >> That is the next step. >> Okay. Thank you. >> we can find somebody to uh sponsor that, that'd be great. If not, I guess, you know, we could look

at other alternatives, but I'll get into it a little bit more. >> Okay. >> I'll get back to you probably. Give me a couple months. >> Okay, sounds good. Cuz I I do know that that's an an avenue that

other airports that they explore and that they're using to help with um advertising a number of the various different businesses, opportunities, entertainment. And again, it could be a revenue

generator. Thank you. >> Ground lease revenue is up $43,000 or 2.4%. That's reflecting Sierra Nevada's continued investment in the airport. I think I just butchered that one. I apologize. >> Guys,

we're on to other non-airline revenue, which is up $204,000 or 10%. Um this is primarily related to our our rehab staff providing contracted support services to Sierra Nevada as needed. The airport

receives compensation for providing rehab staff this. So, while non-airline revenue is slightly below last year's level, we are seeing positive momentum in several areas, particularly in parking,

concessions, and additional services we're providing to our airport tenants. >> One of the things this year uh TSA did bring back the uh grant for our K9 reimbursement. So, they taken it away for

about 2 years, and uh so now we we got it back. Uh they gave it to us for a whole year, I think. Back dating this this year, so which was amazing. And now they're as of September the 1st, we're

starting to get reimbursed for our officers at the checkpoint. But, they pulled that out also. So, this is you know, we're making some progress with getting, you know, some funding back reestablished

that they had taken away uh just a few years ago. See. >> Moving on to expenses, total personnel costs are up $441,000 or 5.3%. Compared to the same period last year. So, starting with rate wages,

expenses are up $216,000 or 4%. Primarily reflecting general wage growth and inflationary adjustments along with higher staffing levels compared to last year. Fringe benefits are down approximately

$1,700, which is 0.1%. This is largely due to reducing reducing the workers' comp transfer rate from 2% to 1.5%. Overtime is up $23,000 or 5.9%. This increase is primarily related to our staff

providing the support for Sierra Nevada, which is a reimbursable expense that Sierra Nevada pays us for. And then finally, insurance is up $204,000 or 17.5%. This increase reflects a combination of

the no health insurance holidays Abby mentioned, higher health insurance premiums, and a greater number of employees electing coverage under the city's health insurance plan. Moving over to contracts

and materials, total expenses are up 1.6 million or 14.6%. Compared to the same period last year. Starting with maintenance, expenses are down $390,000 or down 13.7%. This is primarily due to lower

landscaping costs. Um as last year's expenses included additional landscaping associated with the NATO conference in Dayton. We're also seeing lower computer maintenance and general facility

maintenance expenses. Management contracts are up $462,000 or 39.5%. Primary Primary driver is additional snow removal at the parking garage during the winter. That includes salting the walkways

during periods of extreme cold. We also had a timing difference involving a payment to our parking garage vendor that was originally expected to be paid in December, but it was delayed until January

due to reconciliation issues. Professional services are up $233,000 or 17.6%. Largely due to the installation of our new common use terminals. These terminals are an important investment because they

allow us to attract additional airlines without requiring them to install their own equipment at individual gate. They also create an additional revenue opportunity for us as we bill the airlines for

their use. So, so far these investments are helping us provide greater flexibility for current and prospective airline partners. >> Well, airlines like Breeze it costs a lot of money to come in and

install this equipment. So, the common use allows any of the airlines, say Delta's jet bridge broke uh for some reason, they can just go over to one of these common use, log in from Delta, boom and

go. Or if a new airline wants to come in and and don't have the resources to uh bring in their own IT equipment, this is already set up and they can just go and log in and start operating. So, this is

a a very uh common practice for a lot of airports and areas and so forth. Makes it easier for uh uh so a legacy carrier to use utilize a jet bridge that's not at least >> Facilities are up $1.4

million or 106.6%. Um this reflects higher rates for electricity, natural gas, and sewer services. It also includes >> And we're working for the with the sustainability office now with the solar farm.

That I found at the airport. So, hopefully we can get that agreement in place so we can get that solar farm up and running over the next few years. That's to save us some of the cost of utilities, and

also we're working with the water department and trying to get our billing straight for us our sanitary sewer billing. That's to reduce our costs. >> And of course we had the issue last year where we

were not paying AES and IGS bills because of billing issues. So some of those bills got paid in 2026, which is adding to this. Uh finally, the other category is $330,000 below 2025 year-to-date. So

this is largely attributable to the rescue grant funding we received last year. Um a portion of those grant funds were distributed to airport concessionaires, which is reflected as an expense in 2025,

but does not recur again this year. So looking at our enplanement numbers, we are currently down 25,541 passengers compared to the same period in 2025, which is a 4.2% decrease. Since the government

shut down in January, followed by significant increases in energy prices through the remainder of the year, we've seen a broader trend of airlines pulling back on capacity. We've seen some of that

impact here at Dayton, particularly with American and Delta, which have reduced enplanement. Um but despite these industry-wide headwinds, United and Allegiant have continued to grow their service at

Dayton, which is encouraging. And of course Breeze could be a carrying passengers at the end of October. We anticipate that the new service will boost our enplanement numbers to the end of the year.

>> So just to wrap it up, you know, total sources are up hopefully equal to 0.5. Our enplanements are are down, talked about earlier, about 5%. Our net airline revenue is down. Uh we also talked about

the settlement for reduced are uh up 2 million and 10.8 million. Personnel expenses are up about 5.3. Uh contracts material uh used the fleet by 1.6 million or 14.2. Uh due to snow removal, higher

fuel prices, increasing utility rates, sewer, electricity, fuel, and the capital project expenses were approximately $85,000 compared to 2025. We were within range of what we wanted to Uh the we ended

with third quarter with about a $1.1 million deficit. This was all the primary driven by higher utility costs. Uh snow removal, higher personnel costs, and the transfer from operating capital. But

we'll continue to monitor spending trends and identify opportunities to manage our costs and improve our financial position through the remainder of the remainder of the year. So, we're in a fairly

good position. Any questions? >> Thank you. Commissioners, are there any questions or comments? Commissioner Beckham. >> I'm good. >> Commissioner Fetcho. Commissioner Shaw. >> I just thank you for

having that extra level of detail with the landing fee. Thank you. Thank you. >> Commissioner Johnston. >> Nothing, thank you. >> Thank you very much. >> Sure. And invite everybody out on Friday. We

having the third launch of third free service to Raleigh-Durham. I think around 11:00 up here if you want to come out. It'll be the initial launch, so you're welcome. >> Thank you. So, arrive at

10:30. >> At 10:30, yeah. Absolutely. >> Oh, unfortunately I will not be there. I have a scheduling I'm playing but please I'm sure my colleagues will be there in my absence. But congratulations,

we're very excited. Great work. Thanks, aviation team. >> You're >> All right. Now, we'll invite our water team to come and up provide their results for water and sanitary sewer. >> Just kidding. >>

[clears throat] >> I'm here at the Commissioner or City Manager's office. My name is Alicia Kelly and I'm the Director of Water and I'm here to present the water and sanitary sword fund update from

the third quarter. Here with me is Hannah Meyer. She's our financial officer for the Um, so we'll start with the water fund for our overview and our source of revenue statement. Starting with our

sources, our revenues, overall we're up 2.8 million or 5.6% when we compare to this time last year in 2025. This increase was driven largely by our two largest revenue categories, which the first is

from City of Dayton customers and that was a 5.5% increase from 2025 of about 1.4 million dollars. Our second largest revenue category is our other jurisdictions, so our cost of service agreements

with the county, Brookville, Trotwood. Um, that was uh, around a 5% increase of 1.1 million from those customers. Our water fund also benefited from increases in our other revenue, so non-metered

revenue streams, which were up 42.4% and a large driver of this was um, increased uh, water lab testing services as well as the fees associated with new service connections, so that increased uh, for

this year. Then looking at our expenditures or uses in the bottom part of our grid, those were up 10.2% or 5 million dollars when you compare to this time last year. And that was due largely to

increases in contracts and materials, capital equipment, and personnel costs, but we did have some offsets or decreases in capital improvement and debt interest costs. So, while our uh expenses

outpaced our revenues this this quarter, we did have to use a minimal very minimal amount of cash reserves. >> So, when we look at the details here again, water finished up some of the um As you can

see for both city customers and other jurisdictions, we're up for both of those. As you can see for the city customers, we're only up about 5.5%. Although we have a 9.5% or 9% increase, we didn't

fully realize that increase because of some of the accounting adjustments that we discussed during the last quarter. You're still seeing that here in the quarter as well. So, we're hoping when we get

to the fourth quarter, everything will even out. When you're looking at our other jurisdictions, those are up, but this is due to volumetric, but also we have a little bit of bill timing here as well.

So, that's why you see that stamp. As we're talking about the other charges for services, you're going to see that that regional lab that we've been talking about often, we're starting to see the

revenues come in. This is going to be both with an increase we have for some of the pricing due to those inflationary costs to get some of the goods and to do the the consumables to do the testing,

but we're also seeing additional customers come in. So, this again is showing that that impact of having the lab and getting the word out is starting to show with those increased uh revenue streams

coming in for the lab. Um property tax again, we're starting to collect on that, but another good news story for the water side is that we do have some additional services that are being installed,

and this is more going to be on the business side. When you look at revenues, however, for the lime plant, those are lower than what we normally see, but this is due to a weather impact and also we

had an emergency shutdown. So, if you have a lot of rain, we can't take out the raw materials, so then we can't produce the lime to sell it. So, that's why this is down if you look at >> in year over

year of 2025 to 2026. >> So, as we move over to expenditures, you're going to see that our personnel costs are up. A part of the personnel cost being up is that you have the line movement. You have

the adjustments for the health insurance holiday, which was discussed by aviation and the general fund. But, we also have a We're also starting to fill positions, which for us is also a good news

story because now we're starting to have that reliability in operations because you don't have so much overtime, which is offsetting that increase that we're seeing in overall wages. So, that's

starting to go down as we continue to fill those positions. As you go over to the capital equipment, you can see those it that's up as well, but that's as we continue to go through and do our

replacement schedule. As we start to look at the age of the equipment and the cost to actually fix the equipment. So, some of that is up 22% but it's also because we replaced some of our more

expensive equipment like boom trucks. As we move over to our contracts and materials, that is up as well, but one of the drivers of that is going to be the utility. So, if you guys remember last year

we kept talking about we weren't paying utilities, now we're starting to see those utilities um being paid and that's where you're going to see that we have that increase. But, if you look on the

other side for our professional services, those costs are down. So, this is where you're going to see our uh residuals removals are down, but also we managed to insource some of our work on the

professional services side. So, in the well field we have well cleaning and since we actually have the trucks there and we filled those positions, we've actually been able to clean some of the wells

in house and that averages us about a 40 to 50,000 dollar savings depending on the size of the well. So, this for us is a a cost saving measurement, but it's also helping us develop our personnel as

well. So, now we've moved you over to the sanitary fund. >> So, for our sanitary fund revenues are up uh 1.7% or almost 650,000 when we compare to this time last year. Again, we have our two largest

uh revenues categories, which are city customers that drove these increases with a 7.5% increase or 1.3 million from our city customers and then eight and offset by an 8.7% decrease of about 1.2

million from other jurisdictions customers, largely due to bill timing. We'll speak to that in the coming slides. We also had increases in our other charges for services in the sanitary fund as well.

Those were up 1.1 million dollars for uh our BOD and SS charges for our industrial customers. So, the fund really benefited from those in this quarter. Looking at our expenditures or uses, those were

actually down 2.7% or close to a 805,000 dollars when we compare to this time last year and that was largely due to decreases in capital improvements and capital equipment, although we did have some

offsets and increases in contracts and materials and costs. And as our revenues clearly outpaced our expenses for this time period, we did not have to use cash reserves. >> [clears throat] >> So,

going into some of the details again, the sanitary fund did finish up, but we did have some offsets that did that were lower. So, as you look at the customer base for the city, those were up 7.5%.

However, we were we did have a 9% increase that we did not fully realize again because of the accounting um adjustments we made similar to what we did on the water side. You'll see the same thing on

the sanitary side. Look at our other jurisdictions, that was down. However, we expect as we get to the fourth quarter and finish out the year that this will all finish up on pace as what we expected

it to do for the budgets. So, as we look at other revenues, this was down as well. However, this was due to the R&E project again as we talked about last year. We had a one-time credit that you

associated with that project. However, if you look at the 2026 numbers, we think this is what we're predicting that we will see as we go through. And we're hoping when we get to the next year we'll be

able to actually see a realized trend that we can actually discuss. But right now we think we're a little early, but 2026 numbers are what we're actually expecting. And again, as we talked about for

several years or several quarters, our other our other charges due to biological oxygen demand and chemical oxygen demand were up. As we look at our expenditures, again you're going to see these are

up. This is due to a one-time the wage increases that we had, but also the increase in holiday was at a different timing here. Our overtime is up as well on the sewer side, but as you know we had a

very wet August. So, a lot of our WIFO crews were out responding to some of those sanitary backups. As we go over to our capital equipment, you're going to see that that was that those expenses are

down, but that's due to some of the one-time purchases that we made in 2025 were less than some of the one-time purchases that we were making in 2026. As we move over to contracts and materials, this

is up again as well, but this is due to some of our utility billing that we've been talking about on the water side. You're now seeing it on the sanitary side as we continue to catch up those bills.

As you look at professional services, those were up again that's due to a lot of bill timing. So, this was offset by large by lower sludge removal fees, but also by decreases in our fleet billing

because as we continue to make sure that our equipment is upgraded, the replacements that we're having on the fleet side are less. So, moving over to water and sanitary fund, we uh basically finished

up our we're reading up as compared to what you saw in 2025 for the city side. As you look at our other service charges on the water fund, you can see a lot of this is driven by our service fees and

our lab testing. And then on the sanitary side, you can see those are up due to higher biological oxygen demand and suspended solids. If you look at our 2025 compared to 2026 personnel, those are up,

but again, it's because we continue to fill those vacancies. So, for us, this is actually a good news story as opposed to um being a negative. Our contracts and materials are up, but again, this is

largely due to the utilities being up as we continue to resume those payments compared to 2025. And again, if you look at our cash reserves, we had a very small usage on the water side, and we did not

use our cash reserves on the sanitary side. Any questions? >> Thank you. Commissioners, any questions? Commissioner Beckham? >> I'm good. >> Commissioner Faircloth? Commissioner Shaw? Commissioner

Joseph? >> Just I love the insourcing. That's awesome. I really appreciate that. I know that over the years we've found some interesting and creative ways to do that. I really appreciate you guys

doing. >> Thank you, and likewise. Appreciate the work. Thank you. >> Thank you. Thank you, Mayor Commissioners. I could start briefing.