Black Hawk County engineer outlines FY26 road budget, equipment purchases and $10 million shop plan

Kathy Nicholas, Black Hawk County engineer, told the Board of Supervisors on the county’s FY26 budget that the secondary road fund (Fund 120) is projected to bring in roughly $9.45 million next year and that the department plans to spend about $8.49 million, leaving a projected net of about $685,000 in Fund 120 for FY26.

Nicholas said the county receives road-use tax money from the Iowa Department of Transportation and other state sources, and that those receipts are constitutionally protected for roads and bridges. She described the county’s operating priorities—design and construction administration, maintenance, and preventive treatments—and explained the reporting and submission requirements the department must meet with the Iowa DOT.

The overview laid out why the engineer’s office budgets a multi-pronged revenue mix: the DOT road-use distribution, “Time 21” DOT allocations, state miscellaneous grants, local reimbursements (for example, 28E agreements such as snow-plowing revenue from Raymond), and limited sales of capital assets. Nicholas said historically county receipts have exceeded DOT projections by about $350,000 annually, contributing to a growing fund balance.

The department proposes roughly $4.35 million in salaries for FY26, with a staff complement of about 42 full-time employees (42.06 FTEs including shared positions). Operating highlights include a $153,000 construction materials line (culverts), a $89,000 software request (including pavement-management software), a $340,000 fuels and lubricants budget, $253,000 for machine and equipment repair, and a $1.2 million aggregate/asphalt materials line for rock and asphalt for gravel road re-rocking and spot work.

On capital equipment, Nicholas said the engineer’s office is budgeting about $1.09 million for equipment rotation and listed prioritized purchases: replacement Grader/Gradall options (with dealer availability uncertain), a sign truck, disc mower replacements, three-quarter-ton pickups for foremen, a replacement chipper (the current machine is about 30 years old) with an IRVM grant request of $15,000, continued single- and tandem-axle dump truck rotation ($235,000 for a single-axle dump), and a diesel hammer for bridge work (to replace a hand-operated gravity hammer and better match the county’s recent crane purchase).

Nicholas presented a five-year equipment plan that averages roughly $5.4 million in replacements (motor graders, dump trucks, excavators and similar) and said the county will continue routine rotation to avoid large, concentrated replacement cycles.

On local option sales tax (Fund 167), Nicholas said voters approved and later renewed a countywide local option sales tax that splits revenue: 50% directed to road and bridge construction and 50% to tax relief. Finance staff project $2.04 million in local option sales tax receipts for FY26; the engineer’s office identified approximately $3.155 million in proposed projects for FY26 (including two county crew bridge replacements, a contractor-led large paving project and paving of Raymond Road where the county’s estimated share is about $1.108 million). With carryover, the FY26 local option sales tax account would still show a positive balance (Nicholas reported a carryover of about $2.361 million and a projected FY26 carryover of roughly $1.111 million after the proposed projects).

Nicholas proposed creating a dedicated “building” line item in Fund 120 to begin saving for a long‑planned replacement of the county shop at Longfellow. She said the main shop was built in 1959, is inefficient and has inadequate office and service space. Using consultant estimates and internal discussion, staff proposed using $10 million as a planning estimate for a new, county-owned vehicle maintenance and engineering facility that could service nearly all county vehicles (conservation would remain separate). She recommended moving roughly $2.5–3.0 million into the new building line item at the end of FY25 and an additional $500,000 at the end of FY26, then continuing annual transfers until the target is met. The engineer’s office emphasized the need to maintain a sizeable operating reserve—Nicholas suggested a 40% operating fund target to preserve capacity for storms, floods or heavy snowfall years.

Nicholas and finance director Michelle (surname not specified in the transcript) discussed bonding and code constraints: county staff said Iowa Code limits what may be bonded without voter approval and that building projects often trigger either low statutory bonding limits or require a public vote. Board members and staff agreed to further legal and financing review (including consulting bond counsel and examining local option sales tax language) before deciding how to proceed.

Board members asked clarifying questions about software and renewal timing, revenue sources (e.g., what counts in Fund 120 versus other funds), resale markets for specialized equipment, and whether fund reimbursements from cities (Cedar Falls was cited as reimbursing $44,000 for a seal coat) should be recorded in specific accounts. Staff said federal project funds and farm-to-market funds are handled outside Fund 120 and will be discussed with the five-year plan in March.

No formal budget adoption or vote on the engineer’s requests was recorded during this session; the presentation was informational and intended to guide subsequent budget decisions and the March five-year plan discussion.

The department asked the board for direction on next steps; supervisors expressed interest in exploring financing options, sinking funds or voter measures and asked staff to return with options and further analysis.

Nicholas said she would return in March to present the five-year plan and that staff will continue to refine equipment purchase decisions and grant applications (including an IRVM grant for the chipper).