116 3rd St SE
Cedar Rapids, Iowa 52401
FEMA changes leave C.R. short on funding for sewer plant repairs
Oct. 31, 2011 9:40 pm
CEDAR RAPIDS - The city is facing a shortfall of more than $50 million in expected funding after the Federal Emergency Management Agency reassessed the extent of flood damage at the city's wastewater treatment plant.
Mayor Ron Corbett said Monday that the new FEMA ruling is particularly jarring because the city has paid or obligated $16 million in repair work to make the first of the necessary repairs to the Water Pollution Control Facility's sewage-sludge burning incinerator with the expectation that FEMA would reimburse the costs.
“So it's a big issue for us,” the mayor said.
Corbett said the city also is in the middle of a previously announced, multimillion-dollar dispute with FEMA over payment for the removal of demolition debris from the former Sinclair meatpacking site. The work at the site has cost the city $21 million, but FEMA has reimbursed the city only about $5 million.
Corbett led a City Hall contingent to Washington last week to make the city's case with FEMA chief Craig Fugate.
“We're sitting in limbo and need to continue to move forward, and so this trip was to reiterate the exposure Cedar Rapids has financially because we've paid for the contracts for repairs at the WPC and for the Sinclair demolition,” the mayor said.
Barb Sturner, external affairs specialist at FEMA's regional office in Kansas City, Mo., confirmed that FEMA formally notified the city on Wednesday that the agency had “de-obligated” $50 million in disaster payments at the city's wastewater plant, 7525 Bertram Rd. SE.
“That means we are taking back some of the money that was once set aside for that project because those funds were identified for things that are, in the end, not eligible for reimbursement,” Sturner said in a written comment.
Joe O'Hern, the city's flood recovery and reinvestment director, said FEMA analysts spent months at the wastewater plant in 2008 and 2009 documenting damage and preparing paperwork identifying reimbursable expenses. A new FEMA analyst returned to the plant in March, spent much less time there, reached different conclusions and “threw out” all the previous work, O'Hern said.
O'Hern said FEMA's policy directs the agency to help fund the cost to replace equipment like a flood-damaged incinerator if the disaster has caused more than 50 percent damage to the equipment.
Replacing an incinerator takes three to five years of regulatory approval and design, so FEMA also agreed to help fund repairs to the damaged incinerator so it could operate until a replacement was in place.
However, FEMA's new analysis concluded that the existing incinerator had less than 50 percent damage and so the agency will not pay to build a new one, O'Hern said.
He said FEMA earlier put the cost to repair the existing incinerator at $33 million and the additional cost to replace it with a new one at $30 million.
Now, he said FEMA has told the city it will pay $8 million for the $33 million repair bill and nothing to replace the incinerator.
He said the new FEMA ruling creates “a very tough situation” because it forces the city to change course after spending the last two years working on plans to build a new incinerator.
O'Hern also said the city and FEMA are $7 million to $10 million apart on a final payment for the demolition and debris removal from the Sinclair site.
The city has paid $21 million for the work, with FEMA saying it will pay $65 a ton for debris removal, which cost the city $117 a ton, he said.
The city has appealed the Sinclair debris ruling and plans to appeal the Water Pollution Control decision.
On another FEMA issue, the city had hoped to get some $35 million in FEMA payments for use on alternative projects because the 2008 flood damaged the Sinclair facility and the city's hydroelectric plant at the 5-in-1 so they could no longer be used. FEMA has rejected the request, and O'Hern said the city is still awaiting word on its second appeal for about $22 million of the original $35 request in alternative-project funding.
An aerial view of the city of Cedar Rapids' wastewater treatment plant at 7525 Bertram Road SE. (City of Cedar Rapids)