Grassley, Ernst, Blum Outline Financial Conditions for Cedar Rapids Flood Funding

WASHINGTON – U.S. Sen. Chuck Grassley, along with Sen. Joni Ernst and Rep. Rod Blum, sent a letter to Cedar Rapids Mayor Brad Hart and Cedar Rapids City Manager Jeffrey Pomeraz in response to an August 8 letter from the City of Cedar Rapids regarding emergency flood funding from the Army Corps of Engineers. In their response letter, Grassley, Ernst and Blum clarify the breakdown of financial obligations for both the federal government and the City of Cedar Rapids.

“After a decade of bipartisan efforts, 100 percent of the City of Cedar Rapids project will now be provided up front so construction can start promptly and be completed as fast as possible. In addition, any applicable lands/easements and the like that the city has to provide will be credited against the $41 million non-federal cost share, as would any work-in-kind,” Grassley, Ernst and Blum wrote. “It is our understanding that most of the non-federal cost share will be covered by credits for lands/easements of for design and construction work already underway. A minimum cash contribution of at least 5 percent of the total cost is required by law. The balance may be repaid upfront or over a finance period, which begins when the project is complete. Depending on the terms of the agreement the city reaches with the Corps, the city could only be required to pay 5 percent of the total project cost, which is $5.85 million of the $117 million project.”

Grassley, Ernst and Blum have worked closely with the entire Iowa delegation, Governor Reynolds and the City of Cedar Rapids to help facilitate federal funding after severe flooding that devastated Cedar Rapids and its surrounding areas.

The letter is available here and below.

September 7, 2018

The Honorable Brad G. Hart                                      Jeffrey A. Pomeranz

Mayor                                                                          City Manager

City Hall                                                                     City Hall

101 First Street SE                                                      101 First Street SE

Cedar Rapids, Iowa 52401                                         Cedar Rapids, Iowa 52401

 

Dear Mayor Hart and Mr. Pomeranz:

On July 5, 2018, the Army Corps of Engineers announced that the City of Cedar Rapids was awarded $117 million to complete the Cedar Rapids flood mitigation project. The award was the result of a joint effort of the entire Iowa federal delegation, State of Iowa officials, City of Cedar Rapids staff and many others.

Since the 2008 floods, the City of Cedar Rapids has consistently lobbied the Iowa delegation and the Corps to build a portion of the city’s flood mitigation project. Since the authorization of the Cedar Rapids Flood Risk Management project in 2014, the federal portion of this project was estimated at $76,232,000 with the non-federal cost estimated to be $41,118,000.

The Bipartisan Budget Act of 2018 appropriated approximately $15 billion in construction funds to invest in long-term resiliency by expediting funding for critical flood-risk management projects in areas that suffer from recurring flood events. Of that amount, $10.4 billion was allocated to states specifically impacted by Hurricanes Harvey, Irma, and Maria, with $4.6 billion available to other impacted states. Further instructions in the Budget Act directed that ongoing construction projects could be completed at 100 percent federal cost, but that new (not-started) projects would be funded up front by federal dollars, with the normal cost share and applicable cash requirement eligible for repayment over a 30-year finance period.

After a decade of bipartisan efforts, 100 percent of the City of Cedar Rapids project will now be provided up front so construction can start promptly and be completed as fast as possible. In addition, any applicable lands/easements and the like that the city has to provide will be credited against the $41 million non-federal cost share, as would any work-in-kind. It is our understanding that most of the nonfederal cost share will be covered by credits for lands/easements of for design and construction work already underway. A minimum cash contribution of at least 5 percent of the total cost is required by law. The balance may be repaid upfront or over a finance period, which begins when the project is complete. Depending on the terms of the agreement the city reaches with the Corps, the city could only be required to pay 5 percent of the total project cost, which is $5.85 million of the $117 million project.

The letter from the City of Cedar Rapids, dated August 8, 2018, was presented to the federal delegation at the “Thank You Celebration.” Staff of the federal delegation communicated immediately with city staff, answering the letter with the most up to date information, including the confirmation that the entire amount of the project, both the federal and local share of $117 million, would be provided up front so construction could start and be completed promptly and that the city would receive a credit for work-in-kind and any lands/easements towards the non-federal portion of $41 million.

As the City of Cedar Rapids is experiencing yet another threat of damaging flooding, we know how important completing this project is for the community. We are thrilled that the city has secured federal funding to build and complete the entire federal flood mitigation project, as the award of this funding is above and beyond the normal expectations of projects through the Army Corps of Engineers. We look forward to continuing to work with the City of Cedar Rapids on this and other projects to improve your community.

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