TIF frees up money for bridge repairs in Iowa County

MARENGO — “I’m going to show you why we need more money,” Iowa County Engineer Nick Amelon told the Iowa County Board of Supervisors last month.

Budget season has cities and counties looking for ways to fund necessary projects amid inflation and falling revenue.

Now that tax increment financing is available to Iowa County, Amelon suggested the county use TIF funds to pave roads, freeing up some of the farm-to-market funds for gravel and maybe patching or striping.

That will free up local funds so the county can continue to upgrade equipment and replace box culverts and bridges in-house rather than through the Iowa Department of Transportation.

The county can use local revenue and road use tax on anything, Amelon said. The fund will be about $1 million short next year.

Basic necessities, which include $3.8 million in salaries, $1.9 million in rock, and $450,000 for bridges and culverts, will need about $8.4 million.

In fiscal year 2023, revenue was only $7.8 million, including $1.3 million in property tax money, $1.7 million from local option sales tax and $4.1 million in road use tax.

Amelon wants to continue in-house bridge and culvert projects because he can save the county money. The cost is about $100,000 steel and $50,000 pile driving using county labor.

Going through the DOT costs half a million dollars, Amelon said. The county can save $350,000 by doing it themselves.

Box culverts let to the DOT cost about $250,000. A concrete bridge costs nearly $1 million a year. “They’re real expensive,” Amelon said.

Receipts from property tax levies were $1.3 million in fiscal 2015 and about the same in fiscal year 2023, according to a report Amelon prepared for supervisors.

Revenue from local option sales tax increased 12.9% over those eight years, from $1.5 million to $1.7 million.

Local funds — property tax and local option sales tax — are going the wrong direction, Amelon said. A graph he presented shows 2022 revenue below 2014 amounts, falling in 2021 and 2022.

Amelon said the funds will show an increase again in 2023, but not by much.

Road use tax increased significantly in 2015 when the state raised the gas tax, according to the graph, and it spiked again in 2020 when the state gave COVID stimulus money.

But that revenue is falling.

Inflation has increased costs more than 20% since 2014, the graph shows.

From 2015 to now, property tax is not up at all, LOST is barely up and is on the way back down, Amelon said. In eight or nine years its increased almost 7% while construction costs are up 100%

Construction costs in the last two years alone are up 20 to 30%, Amelon said. “We have quite a shortfall.

About $1.2 million in farm-to-market funds has always been used to pave roads, Amelon said. But now that the county has tax increment financing available, it could use some of that money to paving projects, such as H Avenue and F Avenue.

Without the change, the county will have to cut back on spending for gravel, new equipment, box culverts and bridges. “I’ve got to find new ways to pay for that.”

If the county uses TIF instead of farm-to-market money to pave roads, it can use about $500,000 from farm-to-market to cover the cost of rock for those roads. That frees up local funds that the county can use to replace bridges.

“That TIF … it’s great for our road system,” Amelon said.

The county can save half a million dollars using its own labor for bridge replacements. Amelon said. “We can do a new bridge for $170,000 plus our guys, and we’re paying for our guys anyway.

Some bridges, like those on W Avenue and Q Avenue, are on dead ends, Amelon said. The county wouldn’t want to put a half-million-dollar bridge there.

If the county doesn’t make some changes, it won’t we able to replace bridges, and more county bridges will be posted for lower weight or closed completely.

“Anything under 33 feet, we can do those ourselves,” Amelon said. If the county takes this new route, it can repair three or four bridges a year.

Amelon can design the projects, saving the county about $60,000 a year. His crew has replaced enough bridges that they know exactly what to do, Amelon said.

Supervisors gave verbal approval to Amelon to budget projects according to the plan he laid out. “These bridges are going to become a problem in the future,” Supervisor Chris Montross said.

Last week, Amelon reported that he’d inspected locations for spring bridge projects and is trying to get a game plan together. He’s preparing letters to obtain rights of way for the projects and is having five wetland delineations prepared to prove no wetlands will be disturbed during construction, eliminating stream mitigation costs.