LOST funds to be used for CR buyouts

Call it an unintended consequence.

The city is prepared to use up to $1 million of its $80 million in local-option sales tax revenue to buy out nine properties that it had expected to buy out with federal dollars.

However, federal Community Development Block Grant funds, which are being used to buy out most of some 1,300 flood-damaged properties, cannot be used on properties that did not sustain 50 percent damage in the 2008 flood.

Nine homes no longer meet that damage threshold because of the city's success in increasing the awards to property owners from 100 to 107 percent of a property's pre-flood value, city staff members report in a memorandum to the City Council.

All nine properties now below the 50-percent damage level had been hit with between 50-percent and 53-percent damage until the city increased the value upon which payouts are based.  The city says it intends to review the damage assessments to see if they might be increased and so qualify for the use of federal buyout funds.

The council plans at its Tuesday meeting to approve the use of up to $1 million in local-option sales tax revenue for these nine properties if needed.

Basing buyout payments on 107 percent of pre-flood value has increased the amount of federal funds going to owners of flood-damaged properties by more than $750,000, the city reports.