Cedar Rapids City Council discusses how to spend local-option sales tax

The City Council Wednesday night talked for an hour about the flood-recovery “gaps” that an estimated $90 million in local-option sales tax revenue expected over 63 months can help to fill.

City Manager Jim Prosser told the council that the city is taking in about $1.6 million a month in local-option sales tax revenue, 90 percent of which voters, who approved the tax in March, said should be spent for home buyouts and rehabilitation and related flood-recovery matters. To date, the city has received $8.1 million in sales tax payments.

Prosser said potential funding gaps are these:

$14 million for the buyout of properties not covered by federal buyout funds.

$17 million for inequities during the buyout process, perhaps to include paying down payment assistance on newly purchased homes for those who received such assistance but might lose it under the federal government's “duplication of benefits” criteria.

$3 million to rehabilitate 50 homes as part of neighborhood rehabilitation programs; $4.5 million to rehabilitate properties the city buys out and that aren't demolished; $7 million for the rehabilitation of rental units.

$15.1 million for property stabilization, consisting of $10 million for backflow valves in rehabilitated homes, $5 million for alley repairs and $100,000 to muck and gut homes.

$1 million to relocate and rehabilitate historic structures; and $5 million for local matches to qualify for federal funding on, for instance, affordable housing complexes.

That would leave an additional $23.7 million to fund other potential future gaps, he told the council.

Council member Pat Shey asked Prosser about the timeline for spending the money, and both agreed that most of the first spending will come as the city begins to buy out flood-damaged properties by the end of the year.

The council had talked little about the sales tax revenue since voters put the 1-percent tax in place even as the revenue has been coming into the city.

The council's silence has prompted questions from some whose property was damaged by the June 2008 flood and by some campaigning for a seat on the council, including mayoral candidate Ron Corbett.

Council member Chuck Wieneke, who represents the flood-damaged Time Check Neighborhood, seemed to explain best why the city has yet to spend any of the local-option sales tax revenue when he said last night that the city still needed to find out what earlier benefits someone might lose if they benefit now from the city's local-option sales tax revenue. Prosser said the city is still working to find out that answer.