Panel endorses sales-tax grants to flood victims

The City Council-appointed Local-Option Sales Tax Oversight Committee has shifted gears and endorsed what is by far the council's largest expenditure of the revenue from the city's 1-percent sales tax.

The committee, in a 5-2 vote on Thursday evening, said the council was correct in using revenue from the sales tax to pay flooded homeowners up to $10,000 each for personal possessions lost in the June 2008 flood.

The committee recently approved similar funding of up to $4,000 for flood-impacted renters, and the committee's revote on funds for flood-hit homeowners was designed to line up with the vote on assistance to renters.

The committee's role is to weigh in after City Council decisions on the use of the tax revenue to comment on whether or not the decisions are in line with the ballot language of the referendum of March 2009 that put the tax in place through June 30, 2014.

The language says that 10 percent of the revenue must be used for property-tax relief and 90 percent for flood-recovery matters. Specifically, the 90 percent must go for the acquisition and rehabilitation of flood-damaged housing or to match federal funds for flood recovery or flood protection.

At issue has been the word “match.”

Typically, the concept of matching related to federal dollars is referred to as money needed to secure federal funds. However, in the city's personal-possessions program, the sales-tax money was not needed to secure federal funds. The recipients already had secured federal funds without condition.

Nonetheless, the City Council chose to use a more expansive use of matching, saying it also applied to matches of federal disaster payments to individuals already paid without condition.

The Iowa State Auditor's Office sided with the council's decision, which, in part, has fueled the Oversight Committee's new decision, Gary Ficken, the committee chairman, said on Friday.

Ficken said, too, that the majority on the committee feels comfortable with the payments for personal possessions now that they see how the program has worked.

Also noteworthy, Ficken said, is the city's latest report that shows the city now has spent nearly all of the $25-plus million in LOST revenue taken in to date and designated for flood-related spending. The tax is expected to bring in about $80 million for flood-related programs by the time it expires on June 30, 2014. To date, the council has obligated about $70 million for use.

Ficken said the city's latest spending report will put to rest critics who say the city is not spending LOST funds.

“Anyone who uses that argument obviously isn't in touch with reality,” Ficken said.

The City Council said it will ask voters to go to the polls on May 3 to extend the sales tax for 20 more years to help the city to fix streets and to pay for a “preferred” flood-protection system, which will protect both sides of the Cedar River. The city hopes to use sales-tax revenue along with federal and state dollars to get the system built.