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Public Works

Flood Control System Funding FAQ's

Why is permanent flood protection important for the entire community?

Permanent flood protection is critical for the entire community’s safety, economic security, and quality of life. Without it, the city continues to be vulnerable to human loss and financial risk.

Safety

  • Flood protection is needed to keep Cedar Rapids residents safe and out of harm’s way.
  • Flood protection will ensure that emergency services have access to both sides of the river.
  • Flood protection will mean entire neighborhoods are no longer at risk of flood damage and loss.
  • Flood protection will prevent the shutdown of transit and school district bus services.
Economy
  • Funding for permanent flood protection is critical in order to protect the economic investment that has taken place in Cedar Rapids over the last 10 years.
  • Protection encourages future investment in our City.
  • Protection reduces the burden of high flood insurance rates.
  • Areas of flood risk provide a disproportionate, positive contribution to our community’s tax base, assessed land value, and employment level – providing a higher level of return per dollar invested.
  • Jobs, home values, and the business economy all depend on our ability to protect the city from future loss related to flooding.

Cost of Ongoing Flood Fights

  • Permanent protection means the City won’t have to spend $10 million each time we need to build temporary protection.
  • Permanent protection will remove the estimated $25 million in local economic loss when businesses are shut down during flood fights.
What is the cost of the project?

The system will cost approximately $550 million in today’s dollars. With inflation, the cost over 20 years is estimated at $750 million. The plan is to conplete the system in 10-15 years in order to avoid the full cost of inflation.

To date, there is an estimated gap of approximately $342 million for project completion in 2034.

Secured to date:
• $117 million Federal US Army Corps of Engineers
• $267 million State of Iowa Flood Mitigation Board (35% of total cost)
• $15 million federal grants secured as of spring 2018
     o $12.5 million Federal CDBG Disaster Recovery Grant
     o $1.75 million Federal Economic Development Administration
• $9 million invested from local funds as of FY2019

Why is more money needed, after the federal government recently awarded funding?
Funding for the system is a combination of federal, state, city, and private dollars. The federal government is funding only a portion of the entire system. In addition to state and federal dollars already secured, a city commitment of $110 million to the State of Iowa also exists, as well as additional funding gaps necessary to complete the entire system.
What differences are there for the federal funds vs state/local funds?

The federal funds are in the Army Corps of Engineers (ACOE) budget, and the contracts to spend those funds stay in the ACOE budget.  Those funds do not come to the City of Cedar Rapids. Federal funds must be spent on the east side of the river. 

 The State Iowa Flood Mitigation Board (GRI) awarded a maximum $267 million 20-year award, from 2014-2034. Each year the funding formula allows up to 70 percent of new sales tax generated, up to $15M to be awarded to the City of Cedar Rapids. As conditions of this funding, the State Flood Mitigation Board funds must be matched with federal funds and at least $110M of local funds; and the entire flood control system must be completed. State funds can be spent on either the east and west sides of the river.

 

What is the plan to fund the local commitment?

In order to create a funding plan, many sources for funding were considered, including public-private partnerships, FEMA pre-disaster mitigation, TIF redirection, special assessments, and more.  After much consideration, it was determined that bonding offers the most reasonable solution for the community.  In fiscal 2020, City Council would be asked to issue $20M in bonds, which would result in a property tax levy increase of 22 cent tax per $1,000 in property value, which is an additional $18 for a $150,000 home. Under the plan, each year thereafter would see another tax increase, but the amount could vary depending on a variety of factors that are unknown at this point, such as the interest rate on bonds, residential rollback, change in property valuations, other revenue sources to fund system, or reducing other parts of the tax levy rate.  The rate would also decrease if the State legislature approved the use of 30-year bonds.

 The City Council understands the importance of keeping property taxes manageable for residents and businesses owners, and has not increase property levy rates from $15.22 for 10 years. Because of this planning, the final rate after 10 years will still be in line with other comparable cities in Iowa. 

What is the property tax paying for?

The property tax funding will go directly toward the design and construction of the Cedar River Flood Control System, including earth levees, pump stations, detention basins, gates, underground storm sewer systems, 8th Avenue Bridge replacement, and permanent and removable walls. This includes protection on both sides of the river.

Funding share is approximately 50/50.  For every $1 we put in, other funding sources are putting in $1. This is extremely rare, and is a tremendous financial benefit for the City of Cedar Rapids.

What other funding options are available?

Municipalities have limited options in raising funds for public improvement projects. Many sources for funding were considered, including public-private partnerships, FEMA pre-disaster mitigation, TIF redirection, special assessments, and more.  After much consideration, it was determined that a property tax levy increase offers the most reasonable solution for the community.

Why aren't you taxing the business district?

Businesses in these districts will contribute, but success is important for the entire community so it is important that the entire community supports protection. Both large and small businesses in this area currently incur very high flood insurance premiums, making it difficult to stay operational in our community. The economy of Cedar Rapids depends on the health of our core districts in order to provide jobs and support housing and entertainment options.  There are wide-spread economic development impacts to all of Cedar Rapids and the entire county when a disaster happens to the downtown.

Why build something so expensive when we can build temporary construction if needed?

Even with the minimal water damage sustained during the September 2016 flood fight, the construction costs of building a temporary system were approximately $10 million. This does not include the over $25 million in local economic loss to Cedar Rapids businesses, who lost production time and revenue while downtown was shut down during emergency flood response. In addition, many businesses did not receive flood insurance to help cover the loss of revenue; since there was little actual flood damage, there was also very little flood insurance to help cover those losses. These strains impact numerous downtown businesses – both locally owned as well as some of the largest employers in Cedar Rapids.

In addition to the economic impact of building a temporary system, the risks greatly increase to build a temporary system of earth levees and sand-filled barriers. This plan depends on having the time and resources necessary to construct the system before flooding hits, and a temporary system will not be able to hold back a river surge of the 2008 volume. In addition, a breach anywhere in the temporary system could compromise the entire downtown and surrounding neighborhoods and districts, making this an unreliable long-term solution.

Why can't you build something less expensive?

The design of the flood control system is based on protection needs and does not contain “extras” – there is not a lot you can take out without compromising the system.

Once nearly all funding sources are in place, what is the schedule for construction of the Flood Control System? When will it be completely finished?

The Iowa Flood Mitigation Board Award presumes the system will be completed in 20 years – 2034. The system could be completed in 13 years – 2030, based upon time needed for design, property acquisition, coordination with other entities (railroad), and construction. The City's plan is to complete the system as quickly as possible in order to keep inflation costs as minimal as possible.

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