That is not an uncommon issue with cities. You can explain that your mill is not the kind that creates dust, that if it did make powder you would have a mash impossible to brew with. That might work.
One time I had to install a nitrogen gas injector to the malt stream going into the mill when the fire dept had their panties in a bunch. This makes them all giddy as the nitrogen knocks down the oxygen level to below combustibility.
Try showing them screen analysis of milled grist and show that it can't combust the way they expect. Their concern should belong with flour mills.
Do explain that you have a magnet on your mill to prevent any ferrous object entering your mill.