How Iowa communities are leveraging American Rescue Plan Act funds for long-term gain

CEDAR RAPIDS — When the Cedar River in 2008 flooded Cedar Rapids — damaging over 7,800 homes, businesses and public properties — Al Pierson recalls the waters wiping out much of the core neighborhoods in the northwest quadrant.

Pierson, the owner of Pierson’s Flower Shop and president of the Northwest Neighborhood Association, said area businesses including his own were “devastated.” The flood ultimately resulted in an estimated $5.4 billion in property and economic damages.

“We lost everything,” Pierson said. His store’s inventory, display, fixtures, heating and cooling systems — all destroyed.

In the approximately 14 years since the disaster, development in this flood-devastated part of town around the Northwest Neighborhood and Time Check has mostly lagged with only a few developments, but is now beginning to ramp up with much of the land cleared and primed for renewed investment.

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But the long-standing question getting in the way of full revitalization of the northwest quadrant, Pierson said, has been the matter of when protection against future floods would arrive.

“The answer now is soon,” Pierson said.

The city in October committed to allocating $10.2 million of its nearly $28.2 million share of federal American Rescue Plan Act aid toward two flood control projects in the northwest quadrant.

Cedar Rapids has long voiced a commitment to protecting the west side of the river from the threat of rising river waters. Federal funding through the Army Corps of Engineers covers permanent flood protection only on the east side because of its cost-benefit formula — on the west side, the cost of adding flood control exceeded the value of the buildings it would protect, according to the federal formula.

When the City Council in 2015 adopted the Flood Control System Master Plan, city officials estimated it would be another 10 years before the first flood protection project would start in the Northwest and Time Check neighborhoods, or around 2025. This announcement accelerates the timeline to start this summer, first with elevating a segment of O Avenue NW over the top of a levee and likely in 2023 with reconstructing Ellis Boulevard NW.

“The core neighborhoods are what make a great city, and we need to protect them, and I think (city leaders) realized that with this ARPA funding,” Pierson said.

Leveraging the onetime influx of federal funding through the overall $1.9 trillion stimulus package, signed into law last March by President Joe Biden, cities around Iowa like Cedar Rapids are giving their key priorities a boost to promote long-term growth as the nation shakes off the fiscal toll of the COVID-19 pandemic.

The state received nearly $4.5 billion in ARPA funds. Iowa counties received $612 million, 12 Iowa cities received a $335 million share of the stimulus funds and cities with a population of under 50,000 received $216 million.

The funds are intended to offset revenue losses from the public health crisis, invest in infrastructure, mitigate negative economic impacts associated with the pandemic and uplift vulnerable populations.

From spending on initiatives such as flood control and affordable housing, Iowa city officials says they are tailoring plans to distribute the funds to their community’s needs and jump-starting projects that will serve their municipalities well into the future — positioning themselves to become more resilient as new needs or sudden crises emerge.

Matching money with needs

To determine how to distribute the funds, community voices were key to guiding local governments as they contemplated uses.

In Cedar Rapids, Community Development Director Jennifer Pratt said the priority areas of flood control, affordable housing and social services, workforce and revenue loss were identified through community outreach efforts.

At the start of the pandemic in spring 2020, she said the city worked through the Linn Area Partners Active In Disasters (LAP-AID), an organization of over 30 health and service providers as well as local governments that activates when disaster strikes.

There also was a coordinated intake system with Waypoint Services to streamline needs through one entity, and door-to-door surveys of over 1,000 households in low- to moderate-income neighborhoods to identify needs after the 2020 derecho’s hurricane-force winds pummeled Linn County, downing thousands of trees and damaging hundreds of properties.

“We were really perfectly positioned to get the dollars out to where they were most needed” based on long-standing outreach efforts to understand and meet community needs, Cedar Rapids City Manager Jeff Pomeranz said.

With aid from sources such as the Federal Emergency Management Agency’s individual assistance program not being enough to fill the gaps residents faced after the derecho, Cedar Rapids and Linn County each committed $1 million in ARPA funds toward the PATCH home-repair program to fix damaged homes.

The city also has committed an initial $500,000 for a scholarship program with Kirkwood Community College for certain career and technical education programs to help meet workforce needs, a plan Pomeranz said was in the works since 2019. The county anticipates committing ARPA funds to a similar program without restrictions on the program in which recipients enroll.

The pandemic and derecho have exacerbated some needs in the community that have persisted for years. The storm’s high winds damaged an already-low supply of affordable housing, while COVID-19 disruptions to physical interaction upended normal business operations and fueled existing challenges employers faced for recruiting and retaining a skilled workforce.

“When the money became available, we knew it was not only still a priority, but probably even a greater critical need than it was before the pandemic,” Pratt said.

The city of Dubuque — which has a population of about 60,000 in northeast Iowa along the Mississippi River — is exploring similar boosts to infrastructure with the $27 million it is slated to receive in ARPA funding. Dubuque officials plan to improve its sanitary sewer and water systems, make flood wall improvements and update and expand its trails, said Teri Goodmann, the director of strategic partnerships for Dubuque.

Goodmann said the city held various public meetings to review how the pandemic affected the Dubuque community, who and what was hurt most severely and how the community could address the needs left behind by the pandemic.

“We identified who was hurt most and where we needed to focus our efforts,” Goodmann said. “People living paycheck to paycheck were the most impacted, restaurants, other small businesses, our emergency personnel. But we also talked about giving a shot in the arm to infrastructure.”

The city has awarded about $20 million in ARPA and non-ARPA grants to local businesses, but has also aimed to use the funds to improve water and sewer infrastructure in particular. The city plans to use ARPA funds to take on various projects that will cost tens of millions of dollars.

In addition, the city also will use a portion of its funding to make some finishing touches on flood control. Dubuque recently completed a $236 million flood mitigation project, Goodmann said, but is finding an even higher need for flood protection with the effects of the worsening climate crisis and flash flooding.

“This is a once-in-a-lifetime opportunity to fund these very big projects. It won’t come again,” Goodmann said. “You can’t just put these projects on residents, and what this does is allow us to jump-start with federal funding and take care of the costs while leveraging additional dollars. That’s critically important for communities.”

In Sioux City, the state’s fourth-largest city with a population of over 83,000, the goal is to use the influx of federal funding to get years ahead on infrastructure needs and save residents money in the long run without having to raise property taxes or sewer and water rates.

City Manager Bob Padmore said Sioux City, which will receive over $40 million in ARPA funds, said the city and the council has decided to put the vast majority of the aid toward water and sewer infrastructure.

Padmore said money will be invested into the wastewater treatment plant, which will be switching from treating water with chlorine to ultraviolet light. The city’s former wastewater treatment plant superintendent was sentenced to federal prison last year for violating the Clean Water Act and cheating on environmental testing.

“We see this as an opportunity to start to future-proof our community so 10 years down the road, these things don’t need to be replaced since we’re doing it now,” Padmore said.

'Determine our destiny’

As ARPA funds do not have to be obligated until Dec. 31, 2024, and unexpended dollars are not subject to return until 2026, Iowa communities vary in where they’re at with allocating ARPA money.

For instance, Des Moines as of February was reviewing results from resident surveys as officials contemplate how to dole out nearly $95 million in aid, the Des Moines Register reported. Possibilities have included money for undocumented workers and additional funding for parks and recreation, among others.

Communities also are getting an additional boost from the state’s ARPA allocations. Gov. Kim Reynolds has committed $100 million to expand affordable housing options, $100 million toward Iowa’s eight commercial airports including The Eastern Iowa Airport in Cedar Rapids and $200 million for broadband grants.

Cedar Rapids officials say they are maximizing how their ARPA dollars are spent by leveraging other funding sources, including any state and federal money as it becomes available. Collaboration with nonprofits and social service agencies already on the ground doing the work and with Linn County, which has $44 million in ARPA funds to distribute, through a request-for-proposals process has been key to making the most of the funding influx, Pratt said.

As Iowa’s growth stagnates, Goodmann said it’s ultimately important for the entire state of Iowa to see individual communities make good use of federal funding.

“We are able to determine our destiny and that’s linked to Iowa and Iowa has been losing population,” Goodman said. “If we’re going to be a vibrant state, we have to have successful infrastructure. As cities and towns prosper, so will the state.”

Comments: (319) 398-8494; marissa.payne@thegazette.com

Gage Miskimen of The Gazette contributed to this report.