Dayton Council weighs building its own South Dayton water system as Maple Grove contract nears 2036

Dayton City officials spent a June 9 work session reviewing long‑term options to secure water for South Dayton, hearing staff warn that the city’s current reliance on Maple Grove for supply, storage and treatment carries cost and control risks as the contract approaches its 2036 end date.

Jason Quizber, who led the presentation, told the council the current agreement allows Maple Grove to supply up to 5 million gallons per day (peak) to Dayton and averages about 2.8 MGD under normal conditions; Dayton’s current use is roughly 1 MGD. Quizber said the contract does not specify storage guarantees and staff has conservatively assumed approximately 1 million gallons of storage is available in Maple Grove’s system for Dayton use. He urged the council to view the discussion as mid‑ to long‑term planning rather than an immediate service change.

The staff presented four broad scenarios: (1) Dayton builds a 100% independent supply, treatment and storage system prior to 2036; (2) a split 50/50 arrangement in which both utilities supply portions of the south; (3) remain on Maple Grove but pay for Maple Grove’s plant expansion and increased capacity; and (4) delay further action and reassess later (a ‘kick the can’ path). Quizber said the 100% Dayton option carries the highest up‑front cost but the lowest long‑term cost, while options that rely on Maple Grove are cheaper short term but reduce Dayton’s operational control.

Council members pressed staff on the assumptions behind the cost tables. Participants discussed that Maple Grove’s stated 5 MGD capacity may require plant expansion and additional storage; staff noted recent cross‑connection improvements improved flows but that achieving higher peaks could force Maple Grove to build additional wells or a treatment expansion. Staff estimated Dayton has paid about $5.9 million to Maple Grove to date (including an original payment and ongoing connection/‘whack’ fees), and councilmembers questioned whether all of that money is recognized as a credit toward future capital costs.

Financial tradeoffs drew sustained attention. Staff gave illustrative figures showing that producing water locally could improve utility margins versus buying water at rates tied to Maple Grove’s resident rates; for example, staff modeled producing water at roughly $1.25 per 1,000 gallons versus a retail sale price near $4 per 1,000 gallons, noting these were high‑level estimates. Representatives also ran simple bond examples: roughly $35 million over 25 years at 5% might cost about $2.5 million per year in debt service, a figure staff characterized as illustrative and dependent on final scope, grants and connection‑fee policies.

Council members repeatedly asked for a formal financial analysis and rate/revenue plan. Several said they favored pursuing a Dayton‑owned system in principle but wanted staff to model multiple scenarios, focusing first on a '100% Dayton' plan and the Maple Grove expansion/buy option, with clear sensitivity to inflation, timing and likely developer connection revenues. Quizber told council members Maple Grove staff has indicated design for a plant expansion could begin in 2031–2032 with a possible online date around 2034, creating a practical planning window that could require Dayton to provide direction or be asked to contribute pre‑design costs.

No formal motion or vote was taken in the work session. Council members directed staff to prepare a more detailed financial analysis, including funding scenarios (bonding, connection fees, user‑rate impacts and potential grants), a pacing and phasing plan for wells and towers, and sensitivity runs showing outcomes if Maple Grove proceeds with a plant expansion. Staff said it would return with those analyses and noted the council may need to provide clearer direction by late 2026 if Maple Grove begins its design process in 2027.

The council closed the session without making a policy decision; staff will report back with the requested financial scenarios and implementation timelines.