SIOUX CITY -- Woodbury County Engineer Mark Nahra had hoped to begin a five-year project to improve the county's gravel roads in 2020.
That plan was placed on hold after the Sergeant Bluff-Luton Community School District sued the county, challenging its funding mechanism for the improvements.
The 750 miles of roads targeted for several inches of new gravel continue to be in need, Nahra said.
"We've lost a full year of work," he said.
Attorneys on Tuesday made their final arguments to a judge on whether the Woodbury County Board of Supervisors followed the law in July when voting to use tax increment financing to fund $10 million in improvements for those roads.
The SB-L school district contends the county's plan does not meet the definition of an economic development area as defined in the state's urban renewal law and, because of that, the board can't legally issue bonds.
"The board's actions subvert the state's urban renewal laws," the district's attorney, Sarah Franklin, of Des Moines, said Tuesday in Woodbury County District Court.
The county is using the tax increment revenues to fund its regular responsibility to maintain roads, she said. The hundreds of miles of roads in the plan should not be included in an economic development plan unless linked to a specific project such as construction of a shopping mall or other development.
Franklin asked District Judge Tod Deck to declare the board's actions illegal and void them.
The county intends to use the $10 million to excavate and crush an estimated 1.5 million tons of gravel from county land near Little Sioux Park at Correctionville. The board approved the project in response to rural residents, who have for years raised concerns about the condition of county roads, saying that the gravel layer on many of them is too thin to support heavy agricultural equipment and they become sloppy in wet weather.
County finance director Dennis Butler said the county has not borrowed the $10 million while waiting for the lawsuit to be resolved.
To repay the bonds, the county would use tax-increment financing generated from property included in the Grow Woodbury Urban Renewal Area that includes a large portion of the SB-L school district. The so-called TIF funding is used by governments to divert increased property taxes from new construction to pay off money borrowed by issuing bonds to pay for public improvements that spur economic development.
The board's actions were in accordance with powers the Legislature has given counties to pursue economic development, the county's attorney, Bill Miller, of Des Moines, said.
"The (school) district believes it should be in charge of determining where this tax revenue goes. At the end of the day, that decision belongs to the (county) board," Miller said. "All will benefit in the long run."
Woodbury County established the urban renewal area in 2010. The area has been expanded since then, including a 2013 addition that included CF Industries' $2 billion expansion in the Port Neal Industrial area. CF's expansion, completed in 2016, has significantly increased the SB-L school district's property valuation base and potential for TIF funds generated within the urban renewal area.
Deck told lawyers he hoped to issue his written ruling "in the not-too-distant future."
Nahra said if Deck were to rule in the county's favor, it would take two to four months to hire a crew to excavate and crush the gravel and begin building a stockpile. Depending on when the ruling is issued, Nahra said, gravel could be spread on some roads yet this year.
The project by then would be nearly two years behind the initial schedule, and the county will continue to do what it can to keep roads from deteriorating.
"Our roads aren't getting any better," Nahra said. "We're maintaining the status quo."