Cedar Rapids gets first state check for flood protection

CEDAR RAPIDS — The check isn't in the mail. It's here.

The city of Cedar Rapids has received its first installment payment from the state of Iowa of what will be $264 million over as long as 20 years to help the city build a flood-protection system.

The checks will come four times a year. The first check is for $1,556,797.66, Casey Drew, the city's finance director, said Wednesday.

Drew said the money goes into a special city revenue fund to pay for flood-protection projects that will be built in phases in the coming years.

City Manager Jeff Pomeranz on Wednesday said the first arriving state funds will have an immediate use: The City Council already has decided to seek proposals for a demonstration project for a system of removable flood walls to be used throughout the downtown, at Kingston Village and at Czech Village. The cost for the demonstration project is estimated at $250,000.

In addition, the first state funds also can help support the hiring of HR Green Co. to design west-side flood protection and to hire Stanley Consultants to help complete the design of the east-side protection, Pomeranz said.

The city manager said the state funds are coming from a funding initiative first conceived by Mayor Ron Corbett and then promoted by Cedar Rapids city officials in the Iowa Legislature, where it won bipartisan support and then the backing of Gov. Terry Branstad.

The funding initiative allows communities that have been hit by a natural disaster to keep 70 percent of the growth in state sales tax in the community for up to 20 years to help pay for flood protection. No community can receive more than $15 million a year, and the state funds cannot be used to pay for more than 50 percent of the cost of a flood-protection project.

The Iowa Flood Mitigation Board, which was created as part of the Cedar Rapids-proposed legislation, has put the cost of Cedar Rapids' flood-protection system at $570 million. Of that, the state will pay $264 million; the federal government, $78 million, and the city, $110 million. Another $117 million already has been spent in federal disaster payments, which have been used for property buyouts and other flood-protection programs.

Pomeranz said the state funding program also is benefiting other Iowa communities, including Dubuque and Coralville, and the state of Iowa as it is benefiting Cedar Rapids.

'From a Cedar Rapids perspective, flood protection was a dream of the community for a long time,' the city manager said. 'And what this mechanism is going to allow us to do is the actual construction. It is going to help us realize long-term protection for the city.

'And from a state perspective, what that means is that Iowa's second largest city will have a strong and viable economy that will again benefit the entire state.'

Mayor Corbett on Wednesday said the sales-tax rebate idea is pushing Cedar Rapids to get its local economy growing to benefit Cedar Rapids flood protection and to benefit the state.

'That was the whole concept that we wanted — shared benefit and shared growth,' he said.

Finance Director Drew said the state of Iowa established a base year of 2013, and 70 percent of the growth in state sales tax collected in a community over what was collected in 2013 goes into the flood-protection grant to the city.

Drew said the state had projected that the city would receive $2.5 million from sales in 2014.

The city would see $6 million in the first year of payments if the three subsequent quarterly payments match the first quarter payment of $1.5 million. However, Drew said he expected payments would fluctuate over time as the amount of sales tax fluctuates.

The state projected sales-tax growth would allow Cedar Rapids to reach the per-year maximum of $15 million in the sixth of 20 years of funding. However, if the city reaches it quicker, the city could get to its $264-million grant limit sooner than 20 years.

Ellen Habel, assistant city manager in Coralville, said on Wednesday that the city of Coralville had not received its first check from the state fund.

Coralville is expected to receive $620,772 from sales tax in 2014 toward its total state award of $9.8 million, Habel said.