DeKalb council signals support for $3 million in road work, asks staff to return with options

At a joint City Council and Financial Advisory Committee meeting on Aug. 18, members signaled support for dedicating up to $3 million toward the city’s annual street program for FY2026 and asked staff to return with budget options and implementation details.

City Manager Nicholas explained the city’s motor fuel tax (state and local) and other dedicated transportation revenues total roughly $1.75 million annually and that the city’s proposed $3 million streets program would require using reserves to bridge the gap. He described a one-year proposal in which the additional funding would come from the city’s general fund balance.

Nicholas said the city had previously transferred about $3 million from the general fund to a one-time road program and that carrying forward a comparable amount next year would reduce the city’s fund-balance percentage from roughly 63% to about 58% of expenditures, using the preliminary revenue and expenditure assumptions in the packet.

Why it matters: Council members and staff said increasing annual street spending would address a backlog of failing roadways and alleys. Alderman Emerson said the council’s goal is to reach a sustainable replacement rhythm for vehicles and streets so future councils inherit a more manageable maintenance schedule.

Alderman Smith pressed the practical effect on taxpayers and city finances, asking whether the city would need a tax increase to continue long-term street funding without drawing reserves. City Manager Nicholas replied that continuing the $3 million program without using reserves would require a tax increase or other revenue source; alternatively, the council could reduce the program in subsequent years.

Several speakers raised project-management and oversight concerns tied to a ramp-up in capital work. Alderman Perkins urged a better process for identifying project variances and communicating change orders to avoid surprises once contracts are underway: "The wish list piece is a key part of the budget process...the sooner we can identify those surprises, communicate those things, then we can develop some corrective actions," he said.

Nicholas said staff will develop a budget option that includes a proposal to add a project-management or management-analyst position to help track contracts, change orders and contractor pay requests; he told council he would present options in October.

No formal funding decision was taken at the meeting. Council members indicated a majority interest in pursuing a FY2026 budget that would fund $3 million in road work using reserves if the finance advisory commission and staff concurred with the approach and if updated revenue numbers support the plan.

The council also discussed program details such as targeting failing streets, addressing alleys that lack adequate base and drainage, and the relative costs of alley work versus full-width street replacements.