Where will Cedar Rapids' local match funds come from?

Where's the local beef?

There is little dispute here that City Hall has achieved victories in its quest to build a flood protection system to safeguard the city on both sides of the Cedar River.

The city spent considerable time and money to develop a "preferred" protection plan in the first months after the 2008 flood; the Army Corps of Engineers has approved a protection plan for the city's east side of the river; the U.S. Senate in May approved a bill to authorize the construction of Corps-approved protection projects; and the state of Iowa is setting up a program, designed largely by Cedar Rapids city leaders and approved by the Iowa Legislature and Gov. Terry Branstad, to provide state funds to match local funds for flood protection projects.

But there is still this question: Where will Cedar Rapids' local funds come from?

City Council members insist that flood protection is at the top of the city's to-do list, but at the same time, the council's recently approved goals for the fiscal year that began on July 1 barely mention flood protection.

Under one of the seven goals, "Create current and future financial strength," 11 targets are spelled out with "finance flood protection" listed 11th.

Under the goal, "Complete flood recovery projects," seven targets are listed with "improved flood protection" listed seventh.

Even so, City Council member Justin Shields insists that building a flood protection system is the number one priority for him, and he says that is true for most if not all of the others on the council.

"We're going to find money for flood protection on both sides of the river, somehow," Shields says.

Shields, who is chairman of the council's Public Safety Committee and who is up for re-election this year, still scratches his head when he is asked to recall that local voters, in May 2011 and again in March 2012, turned down a plan to extend the 1-percent local-option sales tax to provide local matching funds to build flood protection.

"It all would have been taken care of," Shields says of local matching dollars for flood protection.

No one now is talking about trying again to ask voters to extend the local-option sales tax, which expires on June 30, 2014, for flood protection a third time.

Fixing streets is what residents want, says Corbett, who is up for re-election.

The expectation, in fact, is that City Hall will work to extend the tax to fix streets, not for flood protection.

Five years after the city's historic flood disaster, it's easy to forget that City Hall immediately invested considerable time and money to develop a "preferred" flood protection plan for the city with the help of consultants, the Army Corps of Engineers, city staff and the public. The plan calls for a system of levees, flood walls and removable flood walls on both sides of the river that will protect the city to the level of the record 2008 flood. The city calls it a basic plan, a Chevrolet not a Cadillac, and its price tag five years ago was $375 million.

Since then, the Army Corps of Engineers has concluded that a federal formula, which requires the cost of federal-financed protection to be at least equal to the value of the property protected, limits federal participation in Cedar Rapids to a system that protects most of the east side of the river through the city.

The cost of the Corps' east-side plan was put at $104 million - $271 million less that the city's overall preferred plan - a few years ago. The cost includes $12.5 million in preconstruction engineering and design work, which is under way, and for which the city already has paid its 25 percent share. Thirty-five percent of actual construction costs must be paid by city dollars and other non-federal dollars.

However, the city's preferred plan for the east side of the river is about two miles longer and includes more expensive removable flood walls than the Corps' plan. Federal dollars won't be coming for that portion of the east side plan as they won't be coming for west-side protection.

Council member Scott Olson reports that the city recently has talked about a scaled-back version of west-side protection that might cost $100 million to $120 million or perhaps $30 million to $50 million less than the city's preferred plan estimate. One idea is to build to protect to the 100-year flood plus three feet, not the 2008 flood level, though the latter doesn't cost so much more because both approaches require the same substructure, Olson says.

Olson, Shields and Corbett all say that the city will work to get credit for the required local share of the cost of both the east-side and west-side work by including what private entities, such as Quaker Co., already have spent on flood protection. The city also will seek credit for what the city itself already has spent, for instance, at the $8-million riverfront amphitheater, which is designed to tie into a future flood protection system.

Both the proposed casino on the west-side of the river and a new office building on the east-side of the river will be built to tie into a flood protection system, and so the city, too, will work to count the portion of money spent for relevant parts of those projects as local matching dollars.

In addition, Corbett says that the city will have some funds - perhaps $10 million or more - remaining for flood protection from the existing local-option sales tax when it completes its 63-month run on June 30, 2014.

In the end, though, Olson and council member Kris Gulick, who is chairman of the council's Finance and Administrative Services Committee and who is up for re-election this year, say the city will need to take on debt and pay it off with its go-to funding streams - property taxes, the city's relatively new franchise fees on electric and gas bills and stormwater fees, for instance - to provide required local funds for flood protection.

"So potentially, there could be a substantial increase in the property-tax rate," Olson says.

Olson says the city fairly easily can provide the local match for federal dollars for the Corps' plan for partial east-side flood protection with what the city already has spent, what Quaker Co. has spent and what the state of Iowa likely will provide in state matching dollars.

The big question of local costs will come for west-side flood protection, and he says no one at City Hall wants to build east-side protection without west-side protection.

Corbett notes that Cedar Rapids likely will have to wait some years before Congress allocates money to help build east-side flood protection for the city. And as a result, he says the city initially will seek state funds from the new Iowa Flood Mitigation Board to finance preconstruction design and engineering work for west-side flood protection like the work that the Corps currently is conducting on the east side of the river.

The state program can provide a local community up to $15 million a year for each of 20 years if the community has an equal amount of local matching dollars. The state's share of money is based on the incremental increase in state sales tax collected from the community, and Corbett estimates that it will take Cedar Rapids four to six years for the incremental increase to reach $15 million. As a result, the city will apply for a smaller amount of funds initially as the sales-tax increment grows toward $15 million.

"I would hope we're in position that we have to come up with the local match," the mayor says. "And if we do, that means that the state and federal government have said, ‘Yes,' to their funding."

Corbett says it would have been nice to have extended the local-option sales tax to have local matching dollars in hand as the city pursues federal and state dollars for flood protection.

By way of comparison, the city of Fargo, N.D., which also is seeking federal dollars for flood protection, has approved a 1-percent sales tax for flood protection and the county around it has approved a half-percent sales tax.

In the end, though, Corbett says flood protection is a giant project that really should largely be a federal project, not a local one.

"It's similar to Interstate 380," he says. "It's similar to The Eastern Iowa Airport. It's no different from the (coming $200-million) extension of Highway 100. Yes, there is some local matching dollars, but most of the money is from the federal and state government. I think the people of Cedar Rapid see it that way."