City Council approves plan for second and larger round of buyouts; 110 percent of value still possible

Owners of some 1,200 flood-damaged properties, who have been waiting 19 months for a city buyout, are now closer to seeing that take place.

The City Council last night approved an administrative plan required by the state of Iowa before those buyouts using federal funds can proceed.

After tonight's meeting, Mayor Ron Corbett said the council also must hire a firm to administer this part of the city's buyout program. He thought letters to flood survivors might start going out in a week or two.

This is the second and larger round of buyouts.

The city already is in the process of buying out about 100 homes closest to the river, with the first purchase expected in early February.

In adopting a plan tonight for the larger group of properties, the City Council left in place the plan's provision to pay property owners 100 percent of pre-flood value for their property.

However, council members endorsed Corbett's effort to see if the city could convince state and federal officials to amend the city's larger buyout plan from last year, in which the City Council concluded the city's pre-flood home values were equivalent to the fair-market value of those homes. Other cities in Iowa have made the case that their pre-flood values are less than fair-market value, and they are receiving 110 percent or more of assessed value for their buyouts.

Corbett reported to his council colleagues tonight that he had spoken to Gen. Ron Dardis, executive director of the Rebuild Iowa Office, and he said Dardis told him that the city could amend its plan. First, though, the city would have to explain why it had made a case for 100 percent of pre-flood assessed value a year ago and now wants to change that, the mayor said.

Corbett asked council members who were on the council last year how they reached that decision on 100 percent of pre-flood value, and council member Justin Shields said he was most interested in getting buyouts under way so people would get their payments quickly. That hasn't happened, he said.

Council member Tom Podzimek said last year the council looked at the data and concluded that 100 percent of pre-flood assessed value was the same as fair-market value in the flood-hit neighborhoods in the city.

Those receiving buyout letters will be able to seek their own appraisal of their flood-damaged house with the city paying up to $500 for the work. The city will recoup its money at the time of closing if the new appraisal is higher than the existing one, and it will recoup half of its money if the new appraisal is less.

Corbett and council member Don Karr both made it known that those awaiting buyouts have done their own research on the issue and are more than willing to share it with them.

Karr had some documents that seemed to suggest that the city earlier had sought 110 percent of value. However, Jennifer Pratt, the city's development coordinator, explained that the documents were ones created very early in the process as the state of Iowa was trying to assess just how much damage was done statewide from the floods of 2008.

Corbett unveiled a letter, which he said showed that the city of Iowa City is not deducting Jumpstart down payment assistance from its buyout offers while the city of Cedar Rapids is.

City Manager Jim Prosser told Corbett and the council that the city would follow up on the matter, and he said the city will make sure it is being treated in similar fashion as other Iowa cities. After last night's meeting, Prosser said he thought Cedar Rapids and Iowa City were handling issues similarly.

Also after the meeting, Corbett said he there is council consensus to move ahead with his plan to establish a “hardship advance” for those awaiting a buyout who can't wait any longer for the buyout payment.