Flood Control System Funding Plan
At the Tuesday, September 11 meeting, City Council will vote on a plan for funding the City’s portion of the Flood Control System. The City of Cedar Rapids is pursuing permanent flood protection on both sides of the river. The system will cost approximately $550 million in today’s dollars. With inflation, the cost over 20 years is estimated at $750 million. Our plan is to complete the project sooner – in 10 to 15 years – in order to reduce inflation costs.
Permanent flood protection is needed to keep residents and property out of harm’s way, protect economic investments and encourage future investments for the entire community, reduce financial strain of building temporary protection, and ensure local businesses do not suffer loss of production and revenue during future flood fights or flood disasters.
To date, there is an estimated gap of approximately $342 million for project completion in 2034.
Secured to date:
• $117 million Federal US Army Corps of Engineers
• $267 million State of Iowa Flood Mitigation Board (35% of total cost)
• $15 million federal grants secured as of spring 2018
o $12.5 million Federal CDBG Disaster Recovery Grant
o $1.75 million Federal Economic Development Administration
• $9 million invested from local funds as of FY2019
The time has arrived for the City of Cedar Rapids to commit our resources and achieve the goal of flood protection on both sides of the river. In addition to state and federal dollars already secured, a city commitment of $110 million to the State of Iowa also exists, as well as additional funding gaps necessary to complete the entire system.
In order to create a funding plan, many sources for funding were considered, including public-private partnerships, FEMA pre-disaster mitigation, TIF redirection, special assessments, and more. After much consideration, it was determined that bonding offers the most reasonable solution for the community. In fiscal 2020, City Council would be asked to issue $20M in bonds, which would result in a property tax levy increase of 22 cent tax per $1,000 in property value. Under the plan, each year thereafter would see another tax increase, but the amount could vary depending on a variety of factors that are unknown at this point, such as the interest rate on bonds, residential rollback, change in property valuations, other revenue sources to fund system, or reducing other parts of the tax levy rate. The rate would also decrease if the State legislature approved the use of 30-year bonds.
The City Council understands the importance of keeping property taxes manageable for residents and businesses owners, and has not increase property levy rates from $15.22 for 10 years. Because of this planning, the final rate after 10 years will still be in line with other comparable cities in Iowa.
As recently flood fighting illustrates, our City has been on the defensive for far too long. Jobs, home values, and the business economy all depend on our ability to protect the city from future loss related to flooding and ongoing flood fights. Protection will also encourages future economic investment in our City. The Flood Control System is critical in order to protect the future of the Cedar Rapids community.