Council declines to apply this year for $4 million Highway 65 lane project after cost review

Council heard an update on a proposed lane-addition along Highway 65 between Girard Avenue and Highway 92 and elected not to move forward with a grant application this year after staff detailed higher costs and local funding risks.

Public Works Director Kilesh Powell said the project construction estimate increased from $3.3 million to $4.0 million because of impacts to traffic signals and other costs. "Currently, as it sits, it is estimated at $4,000,000 construction cost only," he told the council, adding the city would be on the hook for the 20% local match — roughly $800,000 — plus engineering and easement-acquisition costs estimated at $800,000 to $1.2 million.

Powell cautioned that the application deadline (June 6) means the city would be committed to the project if it applied. Council members raised concerns that, without grant awards, absorbing the $1.6'$2.0 million local obligation could push other capital projects back or require bonding. One councilor said the project would be valuable for safety and truck traffic but acknowledged that the timing and fiscal pressure made it difficult to commit immediately.

Council discussed alternative, lower-cost options that had been presented previously — signal improvements, a three-lane conversion and gateway treatments — and reviewed maps and corridor impacts. A vote to proceed this year failed on the record, and staff was asked to re-evaluate options and consider pursuing the grant next year instead.

Powell said if the city were eligible for certain Iowa DOT funds the 20% construction match might be covered, but the engineering and easement obligations would remain. Staff noted grant competitions are competitive and outcomes uncertain; council asked staff to return with updated models and to consider applying next year when more information is available.