Davenport City staff on Feb. 8 presented a proposed fiscal year 2026 capital budget that would fund $67.9 million in Year 1 of a six‑year capital improvement program and a $2.02 billion six‑year projection largely driven by grant awards and infrastructure projects.

City staff member Basha Gerlach opened the presentation, saying the budget is a “balanced budget that complies with financial policies and liquidity targets” and that the overall fiscal 2026 budget is about $271,500,000, a roughly 12 percent increase driven mostly by a 42 percent rise in capital spending tied to additional grant funding.

The budget packet and staff presentation emphasized three funding sources that support the CIP: the debt service levy (currently $2.05 per $1,000 taxable valuation and generating about $11.2 million for debt payments), local option sales tax (LOST) revenues budgeted conservatively at about $18.3 million in FY2026, and the road use tax fund (which returned about $14.38 million in FY2024). Gerlach noted Iowa Code limits local government debt to 5 percent of assessed valuation and reported assessed valuations of about $8.5 billion, which staff said translates to a statutory borrowing cap roughly in the $424 million range and a remaining capacity of about $219 million as described in the presentation.

Nut graf: The CIP proposal front‑loads repairs to streets and the sewer collection system and relies heavily on state and federal grants to advance large projects that the city could not fund from local dollars alone. Staff said roughly 74 percent of Year 1 spending is tied to the street network and sewer collection system, and highlighted several projects that would be paired with federal or state grant matches.

Key numbers and funding context

- Year 1 (FY2026) CIP: $67.9 million; six‑year projection: about $2.02 billion.
- Debt service levy: $2.05 per $1,000; debt service fund cash balance roughly $26 million, projected near $30 million by the end of FY2025.
- Local option sales tax: budgeted $18.3 million for FY2026; FY2024 actual receipts were about $20.5 million. Staff described the current distribution method as based on prior‑month receipts and said the state has discussed potential changes to how LOST is administered.
- Road use tax fund: FY2024 revenues about $14.38 million; FY2026 plans include using about $800,000 of fund balance as local match for CIP projects.

Major project categories and examples

Streets and traffic engineering: Staff said about $21 million of Year 1 funding is for streets, with programmatic and grant‑backed projects plotted in the packet. Notable projects called out include full reconstruction and grant matches for West 50th Street (an $11 million project with an $8.1 million federal Surface Transportation Block Grant award) and West Central Park (an estimated $3.7 million project with federal grant match). Staff outlined an arterial program for high‑volume roads, a neighborhood street program (contracted and in‑house work), an alley repair/assessment program and ongoing pavement maintenance. The presentation also covered traffic‑safety investments such as targeted pedestrian signals and traffic‑calming measures and identified locations that staff said will be evaluated for signals or reconfiguration.

Bridges and multimodal projects: Staff described ongoing bridge inspection requirements and several bridge projects in the CIP. Eastern Avenue over Goose Creek and Eastern Avenue over Duck Creek were discussed as reconstruction projects that would raise bridges and — for the Duck Creek location — create an underpass for the Duck Creek Trail to separate pedestrians from vehicles. Staff said the Duck Creek bridge design and federal/state environmental processes are expected in the design year with construction in FY2026.

Trails and sidewalks: The packet includes continued investments in the Duck Creek and Goose Creek trail networks, a West Loop Phase 2 trail to extend connections into residential areas, an ADA ramp/civic access program and the city’s “Connect the City” sidewalk cost‑share program (residential 50/50 cost share), which staff proposed at $600,000 for FY2026 and $3.2 million over six years.

Parks, libraries and community programs: The CIP includes facility maintenance for three city libraries (examples cited include roof work at Fairmount branch), an annual library materials allocation ($465,000 projected to purchase materials and database access), playground and park improvements, and a Dream urban revitalization program budget that staff said has leveraged city funds with CDBG and other sources for dozens of neighborhood projects.

Public safety and fleet: The CIP includes equipment and facility maintenance for police and fire, including a live‑fire training center refurbishment, vehicle and apparatus replacements (staff noted current market and lead‑time increases for fire apparatus), and a hazardous materials vehicle listed in out years. Staff said many public‑safety capital items will be pursued with grant opportunities where possible.

Sanitary sewers and I&I work: Staff highlighted sewer system investments and programs aimed at reducing inflow and infiltration (I&I) into the sanitary system. Program elements described included a contract repair program for emergency work, a sewer lateral repair program that offers homeowners a $500 deductible and municipal coverage up to $10,000 for repairs (staff said the program is widely used), sanitary sewer evaluation studies (SSES) for targeted basins and a rehabilitation program to convert study findings into construction. Staff said some basins (North Park, Robin Creek, Silver Creek) will produce draft recommendations in coming weeks and that a small pilot for neighborhood I&I investigation (to examine private‑side sources such as sump pumps) was prepared for FY2026 work.

Water pollution control plant (WPCP): Staff identified major WPCP projects including a digester upgrade program (presented as roughly $27 million across phases), clarifier upgrades and a new bar screen (about $5.3 million shown in CIP). Clay, the staff presenter on CIP details, emphasized that federal grant opportunities and city partners have been critical to advancing work and that continued outside funding will be needed to meet large plant capital needs.

Grants and matching strategy

Staff repeatedly stressed that many of the large, high‑cost projects are feasible only because the city has secured federal and state grants and can provide local matches. Examples cited: Surface Transportation Block Grant (STBG) awards administered by the Bi‑State Regional Planning Commission for roadway and bridge projects; federal grant contributions for airport taxiway reconstruction and trail projects; and a Protect grant (federal) being used to advance flood resiliency work tied to road raises and street repairs along riverfront corridors.

Council directions and next steps

Staff said Year 1 funding is the only year that receives appropriations; years 2–6 are projections. Clay and other staff noted they will return with project‑level design contracts, additional memos and a comprehensive infrastructure memo that staff said they will circulate ahead of a planned spring work session on flood resiliency. Staff also said they would provide more detailed cost‑per‑mile estimates for street work on request and follow up with additional information about specific traffic and intersection questions raised by council members.

Why it matters: The FY2026 CIP presentation lays out the city’s plan to use a mix of local funds, enterprise revenues and grant matches to address long‑deferred street and sewer investments and to pay for major WPCP upgrades the city said are necessary to meet environmental and operational obligations. Several projects will have neighborhood impacts during construction and staff said they will develop communication and detour plans for those areas.

Ending: Staff asked council members for further questions and said specific design contracts and memos will be added to upcoming council dockets as the city pursues federal and state matches for priority projects.