The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

City readying to loan local Jumpstart office cash because state money is slow in coming

In City Hall, Floods, Jim Prosser on January 27, 2009 at 7:38 pm

City Hall is readying to loan city funds to its Jumpstart office because of the state of Iowa’s sluggishness in paying flood victims’ housing claims to the local office.

The city’s Jumpstart office, which is being administered by two nonprofit agencies on contract with the city, reported a week ago that it was working with hundreds of frustrated flood victims, who had been cleared for funds to repair houses or make down payments on news ones but had yet to receive any money.

The local office is dispensing both state Jumpstart money and federal Community Development Block Grant money, and the federal funds come with additional rules and regulations that require more checks.

Just days ago, Doug Nelson, the local Jumpstart project manager for the Affordable Housing Network Inc., reported that the office had approved $11,013,689 in claims for CDBG funds, but the state office had only released $21,030 of the money.

Little had changed on Tuesday, when Nelson updated the City Council on the work on the local Jumpstart office.

Nelson reported that the slowdown is the result of the state’s checks to make sure there is no duplication of benefits. The local office has done the same thing.

Most flood victims seeking Jumpstart or CDBG money received payments earlier from the Federal Emergency Management Agency and, in some instances, from private insurers. The portions of those earlier payments intended for housing repair must be deducted from any new Jumpstart or CDBG award, and the process of checking those earlier payments has bogged the process down, Nelson has reported.

City Manager Jim Prosser said Tuesday that city staff members are still checking to make sure that the city can use its funds on a short-term basis to cover the state and federal funds that will be coming in the weeks ahead once claims are approved by the state of Iowa.

Prosser said directing city funds to the Jumpstart office would be a matter of shifting city cash for several weeks to the Jumpstart office to help the office with its cash flow.

The local Jumpstart office anticipates it will need about $15 million more in funds in a mix that includes about $9 million to $10 million more in state Jumpstart money. The office should have ample CDBG funds in the future, but it needs the additional Jumpstart funds to pay claims of those who can’t qualify for CDBG funds for one reason or another, Nelson has said.

Nelson noted that his office has taken 1,678 applications with 57 of those people ineligible because they had been renters not homeowners or because they had purchased another home outside of Cedar Rapids.

Of the 1,617 approved applications, 1,166 people are seeking housing rehabilitation funds and 451 down payment assistance and/or interim mortgage help.

To date, the local Jumpstart office has committed funds to 1,045 households totaling $20.87 million and has paid out $7.075 million, Nelson reported to the City Council. 

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