Iowa Flood Mitigation Board Agrees with Cedar Rapids & Dubuque

By Rick Smith, Reporter

CEDAR RAPIDS, Iowa — City officials in Cedar Rapids and Dubuque convinced the new Iowa Flood Mitigation Board on Monday to interpret the local "skin-in-the-game" provision of a new state funding law for flood protection projects in a way that will lessen rather than increase the costs to local communities.

In the board's meeting at Cedar Rapids City Hall, Mark Schouten, administrator of the Iowa Homeland Security and Emergency Management Division and the chairman of the Flood Mitigation Board, said there was no dispute about the "ambiguity" of a provision in the 2012 state funding law that requires local communities to provide local matching funds in order to obtain state funds for flood protection projects.

The board is currently adopting rules on how to administer the program, and Schouten prefaced the board's discussion about local matching funds by calling it "a fighting issue."

Board member John Torbert of West Des Moines said the matter was not a "million-dollar question," but one that could have financial ramifications for local communities of many millions of dollars.

Dubuque Mayor Ron Buol and Joe O'Hern, the city of Cedar Rapids' executive administrator of development services, argued for what Schouten called the Dubuque-Cedar Rapids interpretation of the state flood protection funding statute.

So, too, did Sen. Rob Hogg, D-Cedar Rapids, who was one of the authors of the legislation.

At question is the law's provision that requires federal funds received by a local community for flood protection to be deducted from the calculation on how the state and local communities will help pay for a project.

Matt Oetker, an assistant Iowa attorney general, analyzed the question and said his conclusion — though not the conclusion of the Attorney General's Office — was that federal funds should be subtracted from a project's total cost first with the state and the local community then splitting the remaining cost.

Dubuque and Cedar Rapids argued that the state share should be half of the total project cost with the federal funds subtracted from the local match cost, not the total project cost.

By way of example, the city of Dubuque estimated that its current flood protection project of $150 million may receive $30 million in federal funds. Under the first scenario, the total project cost of $150 million minus $30 million in federal funds would leave $120 million to be split between Dubuque and the state. That would cost Dubuque $60 million for its share of the project.

Under the Dubuque/Cedar Rapids interpretation, the total project cost of $150 million is first split in half, half state dollars and half nonstate dollars. The $30 million in federal funds then would be deducted from $75 million in the project's nonstate dollars, leaving Dubuque to pay $45 million for the project.

Mike Van Milligen, Dubuque city manager, told the board that a formula that required Dubuque to pay $60 million rather than $45 million would prevent the project to protect 1,150 homes and businesses from frequent flooding from being built as it should be.

In his analysis, the state's Oetker foresaw the potential of a community's flood-protection project obtaining sufficient federal dollars that it might not need any local matching dollars if the federal funds were not subtracted from the total project cost rather than being subtracting them from the local match.

Amy Kaleita, the board's vice chairwoman of Ames, pointed to the city of Cedar Rapids' proposed $104-million east-side flood protection plan approved by the Army Corps of Engineers and now in front of Congress as a case in which the city of Cedar Rapids might not have to pay any local match of state dollars should Congress fund it at the 65-percent federal standard.

The city's O'Hern explained to the board that the city of Cedar Rapids' flood protection plan for both sides of the river is a $375 million plan without federal support for west-side protection and for some protection on the river's east side. The city will be using local funds for the project, he said.

Sen. Hogg emphasized to the board that state lawmakers intended that local communities provide some match for state flood-protection dollars. But he said the board always could require a local match by providing less than a 50 percent state match of local funds in an instance where somehow a community might otherwise not have a local match.

By going against the Dubuque/Cedar Rapids suggestion, the board risked requiring so much in local matching dollars that communities would not be able to approach the board for help.

"Let's makes sure it works for communities," Hogg said.

Board member Torbert made the motion to adopt the Dubuque/Cedar Rapids interpretation of the rule, noting that the state law was ambiguous, the assistant attorney general's view was the attorney's own view and not his office's view and that Hogg backed it. The board vote was unanimous.

Ellen Habel, assistant city administrator in Coralville, told the state board that Coralville was contemplating an application for state assistance to complete its flood protection work on the south side of Clear Creek along Highway 6. She called it a project with a cost under $30 million when asked by Schouten.

Board Chairman Schouten said he still didn't have an idea of how many communities might seek funds.

The board can approve up to $30 million in a year with any one project getting $15 million in a year. The revenue can be used for up to 20 years if approved by the board.

However, the revenue is coming from the incremental increase in the state sales tax in the community which is seeking flood protection funds. As a result, grants will be limited by the sales in a particular community, though Cedar Rapids expects to see a steady growth in sales tax revenue in the city.

Cedar Rapids City Manager Jeff Pomeranz on Monday estimated that the increment should be able to provide the city with $100 million or more over 10 years.

Cedar Rapids' O'Hern said the city expected to submit an application for funding to the board in the fall.

In a parting comment to the board, O'Hern told the board that they would have seen "the tension in the city" two weeks ago if they had been in Cedar Rapids when the Cedar River once again rose above major flood stage.

Mayor Ron Corbett has said the city will seek state funds to help match federal dollars for east side protection and to complete a pre-construction design study on the west side of the river.
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