IOWA CITY, Iowa - A federal government decision to pay to replace three flood-damaged University of Iowa buildings at new sites is good news for progress on university recovery, officials said, but also has implications for flood recovery projects in Cedar Rapids.

The ruling by the U.S. Department of Homeland Security, announced Wednesday, settles a months-long dispute about whether the federal government will pay to repair the three UI buildings at their current sites or to replace the facilities at new sites, which was the original determination of the Federal Emergency Management Agency.

During the dispute over the three projects, the UI moved forward with design work for a new Hancher Auditorium, School of Music and Art Building East, all damaged in the 2008 flood, and that continued work means progress was not slowed much, UI officials said.

"We've done that all along ... from day one," Doug True, UI senior vice president of finance and operations, said. "It's a decision (the regents) took to keep us on track and now we aren't behind by even a month."

The final ruling about the UI projects also likely is good news for Cedar Rapids flood recovery, because several replacement projects there, including the new downtown public library, were determined using the same replacement funding criteria by FEMA that was called into question in this UI dispute, Mark Schouten, administrator of Iowa Homeland Security and Emergency Management, said.

"We hope this decision is broad enough and gives FEMA enough authority that the decisions they made in respect to Cedar Rapids also will be affirmed," Schouten said. "So it's a good decision for Cedar Rapids as well as Iowa City and the University of Iowa."

In the university's case, about $83 million was at stake that had been obligated to the UI by FEMA. That's the difference between the estimated costs to repair the buildings at the current sites versus replacing them at new sites.

The final action on the federal funding for the replacement buildings "clears the way for construction -- and we are ready," UI President Sally Mason said in a statement.

Mason just late last week told state legislators that further protracted delays on the federal decision would cost time and add expense for the three UI projects. But Mason said at that time that she hoped a decision was imminent, so that the impact to the projects budgets and timelines would be minimal.

True on Wednesday said officials hope the projects will remain on schedule and at the projected budgets.

"We believe that we can achieve the dates that we've set out," True said. "And the costs are best estimates, but the costs will be validated when we bid. That's when we find out if our estimates are right."

It's expected the three replacement projects will cost about $420 million total, with FEMA covering about $270 million of those costs, True said. The UI has already spent about $35 million on the replacement projects, including design costs and purchasing land, True said, so it's key that Homeland Security upheld the FEMA ruling about replacement. The first bid on the new Hancher site work should go out in the next several weeks, he said.

The federal dispute was over a FEMA ruling that it would help fund the replacement of the three UI flood-damaged buildings at new sites. A June report by the U.S. Department of Homeland Security’s Office of Inspector General said FEMA should not pay to replace those buildings at new sites, and that FEMA made mistakes in the process of reaching that decision. FEMA officials in August officially sided with the UI, standing by the original ruling that the buildings should be replaced. The final decision rested with federal Homeland Security.

State Board of Regents President Craig Lang said the support of Iowa's congressional delegation and Gov. Terry Branstad throughout the process was crucial.

"We are pleased that the University of Iowa can now move ahead with certainty to replace these damaged buildings," Lang said. "The opportunity to replace these facilities is long overdue."

Branstad, Sen. Tom Harkin, D-Iowa, Sen. Chuck Grassley, R-Iowa and Rep. Dave Loebsack, D-Iowa City, all said in statements Wednesday they are pleased the final determination about funding for the UI projects has been decided.