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Cedar Rapids, Iowa 52401
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Flood buyouts dividing new City Council
Jan. 14, 2010 6:31 pm
The hot-button issue, 13 days into the life of the new City Council, is the call by three new members and a fourth member of the nine-member council to give owners of flood-damaged properties more money.
However, the last council, of which six current members were a part, approved without disagreement the city's current flood buyout plan that calls for owners of flood-damaged properties to receive 100-percent of pre-flood assessed value.
Not 110 percent of pre-flood value, as new Mayor Ron Corbett, new council members Don Karr and Chuck Swore, and council member Monica Vernon now want.
Those four lost on a 5-4 council vote on Wednesday evening on their move to up buyout payments to 110 percent of value in the face of some unanswered questions.
The council group of Corbett, Vernon, Karr and Swore tried but failed to use a piece of the city's local-option sales tax revenue to supplement federal and state dollars to provide buyout owners with 110 percent of pre-flood value.
On Thursday, Pat Roberts, a buyout project manager with the Iowa Department of Economic Development in Des Moines, answered one of the crucial questions of about the foursome's plan.
Roberts said using local funds to boost the Cedar Rapids' buyout payments an extra 10 percent would reduce the amount of federal and state funds for the buyout by an equal amount. The federal law is clear, Roberts said: It is a prohibited “duplication of benefits” if the city wants to use its money for the same purpose that either Federal Emergency Management Agency or Housing and Urban Development's Community Development Block Grant funds are used, in this case, for buyouts.
This is the point City Manager Jim Prosser and his staff made to the City Council on Wednesday evening, and council member Kris Gulick asked the council to wait for further information about the issue before a vote. Corbett called for the vote, nonetheless, and he lost it.
Roberts explained that each individual city presents a “methodology” to both FEMA and HUD to justify why each believes a certain buyout percentage is justified based on assessed values and fair-market values in the city.
Council members Chuck Wieneke and Vernon on Thursday had different takes on why the last council settled on the buyout figure of 100 percent of pre-flood assessed value in Cedar Rapids.
Wieneke said he never publicly heard any of the nine council members on the last council advocate for paying owners anything more than 100 percent of value.
Vernon, though, said the prior council's position on the matter was determined largely by information provided by City Manager Jim Prosser and his staff, information she now questions.
Now the new council, Vernon said, looks up and sees other Iowa cities receiving federal and state buyout funds to pay more than 100-percent of value. Why can they do it, and Cedar Rapids can't? Vernon said.
Buck Clark, Waterloo's new mayor, on Thursday said Waterloo is able to pay 120 percent of value in its buyouts because he said assessed values of property in Waterloo were not in line with fair-market value for the properties at the time of the flood.
In its letter to residents offered a buyout in Iowa City, the city noted that it did a survey of sale prices in the affected neighborhood and found them to be 112 percent of assessed value. Iowa City, thus, is paying 112 percent of pre-flood assessed value.
Cedar Rapids' Prosser on Thursday said the city of Cedar Rapids was not able to make a case that its pre-flood assessed values were out of line with the price homes had been selling for before the flood in the city's flood-damaged neighborhoods.
Scott Labus, Cedar Rapids' city assessor, on Thursday said most of the city's flood-affected neighborhoods had assessed values of between 95 and 99 percent of market value at the time of the flood, except for flood-damaged homes on the city's southeast side, where assessments were at 89 percent of fair-market value. However, the market value in that area was based on only six sales among 708 parcels of property, which makes conclusions harder to make about market value, he said.
Prosser noted, too, that the city of Cedar Rapids had in place at the time of the flood its own local ordinance that stipulates that the city will pay 100 percent of assessed value in the event of property buyouts related to a flood.
A city, Prosser said, can't just on a whim decide it will seek 110 percent of value or 120 percent of value without the evidence to support it.
“That would be wrong. That would be fraud,” Prosser said.
Wieneke remembers the time many months ago when the City Council actually was making its decision about how much it would pay for buyouts, a time when it was far from clear if the city would have near enough money to buy out all 1,300 properties damaged sufficiently for a buyout.
“Back then, we kept saying, ‘We're going to keep fighting to get 100 percent,” he recalled. “No one on the council ever said 110 percent.”
Prosser noted that some number of flood victims will be able to qualify for up to $25,000 in additional money in down payment assistance for a new home.
He and Vernon both said the city needs to keep working to see what other “gaps” exist in which local-option sales tax revenue might be funneled to people without it counting against their buyout payments.
Mayor Corbett on Thursday said he didn't want to battle who was right and wrong. But he said 110 percent of value is “morally” right, and he said one possibility is to amend the city's buyout request to FEMA and HUD. Neither Prosser nor the state's Roberts were sure that would be quick or easy to do.uau