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

State development chief says unraveling “mystery” necessary for fair share of fed’s disaster relief

In Floods on February 10, 2009 at 4:58 pm

Michael Tramontina, director of the Iowa Department of Economic Development, was in Cedar Rapids on Tuesday and stopped by The Gazette for a chat.

It’s nice to see a genuinely enthusiastic guy. He was reading the front page of the Tuesday Gazette, excited about the prospects of the federal stimulus package providing funds to upgrade the nation’s electrical delivery system. Such investment will get Iowa’s wind power to market and help the emerging wind power industry in the state, he said.

He imagined, too, that the federal government might find money to build an ethanol pipeline to get Iowa’s ethanol speedily to market.

But Tramontina stopped by to field questions on the federal government’s delivery of disaster relief funds to the state, and in particular, the U.S. Department of Housing & Urban Development’s delivery of Community Development Block Grant funds to Iowa.

Tramontina said the latest stab at quantifying the state’s unmet disaster needs are $900 million in housing assistance, $900 million in assistance to business and then some untold amount for public infrastructure.

He didn’t think all the losses that Iowa businesses sustained to disaster in 2008 would ever be recovered.

Most interesting was Tramontina’s discussion about the amount of CDBG money that Iowa has seen to date.

It has become something of a statewide and Cedar Rapids-wide truth that Iowa has not gotten all the CDBG funds it should have from the federal government.

In the shortest of shorthand, Tramontina noted that the federal government dispensed $85 million and then $72.5 million to Iowa from an initial disaster relief allocation made on June 30. The money has now arrived.

A second Congressional appropriation at the end of October called for spending $6 billion on disaster relief, with about one-third of it to be allocated in short order.

One great thing had changed from June 30 and Oct. 30, Tramontina said: Only a few states were included in the first pot of money; now more than 30 are as a result of hurricanes on the Gulf Coast, wildfires in California and much more.

He said HUD nicely explained to the state of Iowa some months ago how they determined which states would get what from the first Congressional allocation for disaster relief last summer.

In the second allocation, in which Iowa is slated to receive $125 million of the first $2 billion of $6 billion in relief, the formula for allocating the money is what Tramontina calls “totally a mystery.”

SEE who got what at http://www.hud.gov/news/release.cfm?content=pr08-179.cfm

To date, Iowa has not received any of the $125 million in the second allocation, thought Tramontina said the federal procedure is moving ahead on that. He said HUD must publish a Notice of Funding Availability (NOFA), the state must submit an action plan for its share of the funds, and then HUD approves the plan and begins to make funds available. The NOFA has not yet been published, but it is expected to be shortly. Iowa intends to file its action plan with HUD before that.

Tramontina used the analogy of an ATM machine. HUD doesn’t simply write Iowa a big check, but it puts money aside for the state. The state then accesses it, case by case, he said.

Any decisions about how the remaining $4 billion in disaster relief will be parceled out to states remain in the future.

Tramontina said Iowa’s Congressional delegation, including its senators and Congressman Dave Loebsack and Bruce Braley, are working hard to make sure that the HUD formula used for the next $4 billion in relief uses factors that are fair to the state of Iowa.

Asked what the state of Iowa was doing to lobby Iowa’s Congressional delegation about HUD’s CDBG money, Tramontina said, in truth, “They don’t need to be lobbied.”

“The Congressional delegation is working real hard,” he said.

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