Law Could Give Cedar Rapids Flood Protection Boost
By Rick Smith and Addison Speck, Reporters
CEDAR RAPIDS, Iowa - The city of Cedar Rapids will try to be the first in line to seek flood-protection help from a new state fund created by the Iowa Legislature and approved on Thursday by Gov. Terry Branstad, Mayor Ron Corbett said shortly after the governor acted.
Corbett said the City Council will vote next Tuesday to use about a year’s worth of revenue from the city’s current 1-percent local-option sales tax, which expires on June 30, 2014, to serve as local matching funds needed to tap into the new state funding pool for flood protection.
The city’s hope, he said, is to have an estimated $14 million to $15 million in local sales-tax revenue to match a like amount from the state fund. Then, the $30 million or so that might result would provide most of the non-federal money needed to match federal dollars to build the Army Corps of Engineers’ approved flood-protection system for the east side of the Cedar River, he said.
“Remember, we’re also competing for this state money,” the mayor said. “So it’s in our best interest to try to assemble a local match as swiftly as we can. For Cedar Rapids to step up early, on the day the governor signs the bill, is going to put us in a good position as we go forward.”
Congress still has to fund the majority share of the Army Corps’ $104-million plan to protect the east side of Cedar Rapids. But Corbett said the city’s plan to combine revenue from its local-option sales tax with state funds will enhance the city’s position to secure Congressional funding.
“We’re grateful to the governor and thankful that the legislature created the state fund,” the mayor said.
“A significant bipartisan accomplishment,” Sen. Rob Hogg, D-Cedar Rapids, said last night.
Gov. Terry Branstad on Thursday called the new state flood-protection fund “a tool” that will help communities across the state.
As for Cedar Rapids, “The Army Corps is only willing to fund flood protection on one side of the river, and the community obviously feels strongly that there needs to be protection on both sides,” the governor said. “This would be a mechanism whereby the state could be of assistance.”
For now, Corbett said the city is focused on getting the Corps’ system build on the east side of the river. As for west-side protection, Corbett said it was hard to see how it would be built in the “foreseeable future.”
The mayor had pushed unsuccessfully in May 2011 and again on March 6 to convince local voters to extend the city’s local-option sales tax beyond June 2014 so revenue from it could help access additional state funds to pay for west-side flood protection. Without the additional local revenue, it’s not clear today where money for west-side flood protection will come from, he said. Even so, the mayor envisioned east-side flood protection being in place in five years and west-side flood-protection in place in 10 years.
This month, the city started its fourth year of a five-year-three-month period of collecting the 1-percent local-option sales tax for flood recovery and flood protection. Revenue in the last year of the period will be steered to flood protection and any other outstanding flood-recovery matters.
Corbett said the city has used most of the revenue — annually, about $17 million for flood-related uses plus another 10 percent for property-tax relief — in the first three years to pay individual flood victims for personal possessions lost in the flood and for the renovation of flood-damaged rental properties. Other money has gone to fill other gaps related to flood-damaged housing.
On Tuesday, the mayor said he expected the City Council also to vote to spend most of the revenue from the local-option sales tax for the year ahead — the fourth year of the tax — to cover flood-recovery spending gaps on city building projects much like it already has on the city’s library and animal control facility.
He said the council is looking to approve $10.4 million in revenue from the local sales tax for the new public works building; $1.6 million for the Ground Transportation Center bus depot; $700,000 for the northwest recreation center; $500,000 for the NewBo City Market; $675,000 for the levee portion of the riverfront amphitheater; $500,000 for City Hall renovations; and $1.2 million for part of the city’s portion of the cost of the Army Corps’ preconstruction design work.
“We don’t want to issue any more debt than we have to, so we’re using these (sales-tax) resources,” Corbett explained. “These are all flood-recovery projects. People may personally not support some of the projects. But in the end, it’s better to use sales tax than (take on debt) and put the burden on property taxes.”
City Council member Kris Gulick, who is chairman of the council’s Finance and Administrative Services Committee, on Thursday said he had studied City Hall emails and other written documents from four years ago. In those, he said the City Council made it clear that the Federal Emergency Management Agency would not pay all the costs to fix or replace flood-damaged buildings and other infrastructure.
“We knew we would have these gaps and that the local-option sales tax was one of the options to be able to fund it,” Gulick said. One of the selling points of the sales tax as it was approved in 2009 was that it would lessen the need to use property taxes to pay off some of the flood-recovery costs, he added.
City council member Chuck Swore on Thursday credited Corbett for coming up with the mechanism that steers state sales tax revenue into a state fund for flood protection and for working for two years to help get the fund established.
The state fund allows individual communities to seek a portion of the growth in the state sales tax collected in their communities for use in flood protection projects. They must apply by Jan. 1, 2016. Up to $30 million will be available statewide in any given year, with $15 million the top any one community can receive in a year. Individual communities can position themselves to tap into the fund for up to 20 years. The fund also sets aside some of the funding pool for communities that see small or no sales-tax growth.
Corbett said it likely will take six or more months for the state to set up the oversight board that will make decisions on allocating the state funds.
The state sales tax collected in Cedar Rapids and Linn County has been growing, in some part, because of all the money being spent and that will continue to be spent here in the near term on flood recovery projects, the mayor noted.
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