City's Version of Beef with FEMA - Updated

You may remember I wrote last week about FEMA's abrupt decision to essentially scrap planned reimbursements to the city of Cedar Rapids for the flooded/burned Sinclair plant site, the hydroelectric dam near downtown and the old Quality Chef site in New Bohemia.

The city had planned to spend a $30 million FEMA pot from those sites, including $20 million for Sinclair, on a list of "alternative projects,"  trails, a fire substation, parking needs etc. That's all in jeopardy now.

I said, in the interest of fiscal sanity, that the feds shouldn't have offered that much money for a defunct meatpacking plant in the first place. It never felt right. It sounded too good to be true.

I dubbed it a "gravy train." Some agreed. Some disagreed. Free country, etc.

The city is now appealing FEMA's ruling. And leaders are enlisting the help of our congressional delegation.

You've read my side. Here's the city's version of events, in the form of an executive summary sent to congressional offices, council members etc.:

Executive Summary

In December of 2009, an orientation was held for newly elected Council members. FEMA was brought in for a one hour presentation to Council. Both prior to and during this meeting, FEMA representative, (name omitted) indicated that the Sinclair site might be eligible for reimbursement to the tune of $30 M or more. He made the comment that “Christmas may have just come early in Cedar Rapids.”

(UPDATE-- City Council member Chuck Wieneke, who attended the meeting and received a copy of the executive summary, said it's Todd Dolphin, FEMA's Public Assistance Group branch director, who is quoted above.)

In February of 2010, FEMA contacted the City Council and invited several small groups to the FEMA facility here in Cedar Rapids. In those meetings, FEMA indicated that the Sinclair project worksheet alone would be valued in between $31-35 M.

I'm not swayed from my original contention, but what do you think?

On April 22nd 2010, at FEMA's request, we scheduled a Council meeting to discuss “Alternate and Improved” projects. In that public meeting with media present, FEMA brought with them a signed Project Worksheet for the Sinclair property with a value of $20,743,944.00 and made a public display of handing the City this funding. We were working from a list of FEMA funding project worksheet sources to include:

• Quality Chef Warehouse: $645,002.97

• Quality Chef Mfg Building, Commercial Bldg, and Office: $1,673,206.50

• 5 in 1 dam hydro-electric facility: $13,786,951.31

• Sinclair $20,743, 944

Total Funds Promised $36,849,104.78

In addition, FEMA prodded staff and Council to get our Alternate Projects identified as soon as possible because we were already beyond the deadline for getting the project submitted. In that meeting we made a commitment to FEMA to get our Alternate Projects identified by the end of June. FEMA was satisfied with that response.

On May 19th and May 27th Council refined the list of Alternate Projects from an original list of nearly 100 potential Alternate projects to 14 projects. Behind the scenes and in our weekly City/State/FEMA meetings FEMA continued to prod the City to get the list of Alternate Projects to them. I continued to remind them that the City must follow a formal public process and I had hoped to get a resolution passed in June identifying the City's official list of Alternate Projects.

On June 8th 2010 Council past a formal resolution, (0635-06-10) adopting 14 potential Alternate Projects.

• Animal Control (Gap Funding)

• New Westside Fire Station

• New Parking Structure near Federal Courthouse

• Public Works/Fleet Maintenance (Gap Funding)

• Trails (City-Wide)

• City Market

• Community/Neighborhood Resource Centers

• Multi Generation Center

• Amphitheater feasibility Study

• Riverfront Greenway/Amphitheatre

• Parking Access & Revenue Control Systems

• Medical District

• Downtown Trails

In the weeks following the June 8thCouncil resolution we received indications from bothState Homeland Security and FEMA that our funding for Sinclair and Quality Chef was being called into question by FEMA Region VII. We requested a face-to-face meeting to bring City Council up to date on our funding status for Sinclair and Quality Chef. At the July 2nd meeting additional surprises were unveiled by FEMA. Specifically, the entire 5:1 Hydroelectric Plant repair project worksheet was de-obligated anddeemed ineligible. In addition, the Sinclair project worksheet was further revised, reducing the eligible repairs from the original scope of 625,000 square ft. to 250,000 square ft. This reduced the obligated amount from the $20,743, 944 to $9,521,249.00. Finally, FEMA applied 22 separate NFIP deductions at $500,000 each to the Sinclair site that encompassed the entire 625,000 square feet. This ruling is inconsistent; on the repair project worksheet they gave the City credit for 250,000 square feet as eligible for reimbursement. On the take away side FEMA hit City for 625,000 square feet for NFIP deductions.

1) FEMA publicly/privately committed to Alternate projects funds were available to City Council on several occasions over the course of 6 months.

2) FEMA continued to press the City to identify Alternate projects and reassured the City that we were following the correct course.

3) FEMA de-obligated the 5:1 Hydro Dam flood repairs in light of the City submitting documentation that the Dam was operational, however, under going renovation and was budgeted to be back on line in 2008. Only the portion of repairs pre-flood should have been de-obligated from the project worksheets.

4) FEMA aggressively applied NFIP deductions for both Sinclair and Quality Chef effectively reducing the residual value of the projects worksheets for Alternate Projects to zero.

5) FEMA at no time between December of 2009 and Mid-June of 2010 indicated that these deductions were a possibility until after Council passed a resolution identifying Alternate projects on June 8th.

6) FEMA has yet to provide the City with any denial letters or official bases of how these deductions took place.

The City is filing an appeal to Iowa State Homeland Security; we will be meeting July 14th to put together our joint appeal to FEMA. We will provide our Congressional delegation a copy of the draft appeal for input and questions prior to forwarding the appeal. In addition, we have received assurance from Governor Culver's Office that they will be providing support for our efforts.