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

Deadline for news on huge pot of federal buyout money has passed; City Hall upbeat that good news will arrive soon

In City Hall, Floods, Jim Prosser, Justin Shields on May 7, 2009 at 8:41 am

It’s been something of the Great Waiting at City Hall.

State officials who have come to Cedar Rapids in recent weeks, and city officials themselves, have said that the federal government would make a crucial disaster-funding announcement by the end of April on how it intended to divvy up a huge, $4-billion pot of national disaster relief.

It’s May 7.

These federal Community Development Block Grant funds are the ones that City Hall intends to use to pay for most of the buyouts of 1,300 flood-damaged Cedar Rapids homes. The city has put the cost at about $175 million.

In a talk yesterday, May 6, council member Justin Shields and Sue Vavroch, the city’s treasury operations manager who doubles as a key legislative point person for the city, both noted that they and others at City Hall were sitting on the edge of their chairs on Friday, May 1, expecting an announcement on the crucial federal funds.

Shields said there were “wild rumors” circulating. But nothing came.

Shields and Vavroch said the expectation now is that the announcement will come within the next couple of weeks.

“We are frustrated that we haven’t heard. But we are very hopeful,” Vavroch said.

Shields said he remains upbeat and confident that the dollars will come in.

A big concern of City Hall’s and of the state of Iowa’s has been the way the U.S. Department of Housing & Urban Development dispensed an earlier allocation of CDBG disaster funds last year. The thought is that Iowa got shortchanged in favor of former President George Bush’s state of Texas, Cedar Rapids and Iowa officials have suggested.

This week, Shields and Vavroch said that it was likely that the federal formula used to divide up the latest $4 billion in CDBG money will be more favorable to Iowa.

City Manager Jim Prosser characterized the arrival of the expected new round of CDBG funds as “huge.”

He noted that the city has been busy putting into place a buyout registration system so that it can begin the process of buyouts as speedily as possible once money arrives.

Vavroch emphasized that the announcement of the new allocation comes first. Actual allocation of funds will take another couple months at least, Prosser said.

Buyouts in the proposed greenway along the Cedar River – there are 192 properties there – will be made with flood-mitigation funds from the Federal Emergency Management Agency. Those funds are expected to arrive in the next few to several months, city officials have said.

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  1. I am so confused. Wasn’t the whole campaign behind the 1% Loacal Option Sales Tax predicated on 90% being used for BUYOUTS? Or did I miss something? I guess when the city receives and uses CBDG funds for buyouts, they the City will in return reimburse the State with LOST funds when that money begins to be collected by the City, or were there ommissions of truth in the support of the LOST tax. I would welcome a HONEST explanation as to what is what.
    Remember the campaign phrase “For our neighbors”

  2. Craig,
    The city will use local-option sales tax funds for buyouts. Those come in slowly over five years and will pay for only a portion of the buyouts. CDBG money will be needed to supplement and to get the job started as quickly as possible.

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