Cedar Rapids will get FEMA funds for damaged hydroelectric plant

CEDAR RAPIDS - If a City Hall can be giddy, Cedar Rapids' is.

City officials here have been informed that the Federal Emergency Management Agency headquarters in Washington, D.C., is sticking by its decision to reimburse the city for $13.8-million in flood damages to the city's hydroelectric plant at the base of the 5-in-1 bridge.

"I would say that's good news, wouldn't you?" Mayor Ron Corbett said. "We thought we had all the facts on our side, and we're grateful for FEMA's decision."

The damage award has been a back-and-forth close call for FEMA, in part, because the city's long-underperforming hydroelectric plant, which opened in 1986, was disabled and out of commission at the time it was further damaged by the June 2008 flood.

The city's argument, though, prevailed. It insisted that the city was planning to fix the plant at the time of the flood and so the plant qualified for FEMA disaster dollars.

FEMA's regional office in Kansas City, Mo., had disagreed and determined that the plant did not qualify for FEMA disaster payments, but FEMA headquarters subsequently decided that the plant did.

However, in May 2013, FEMA's Office of Inspector General (OIG), FEMA's own internal watchdog, concluded that Cedar Rapids should not receive disaster money for the hydroelectric plant. OIG called on FEMA headquarters to review its decision.

Now, in a letter to Congressman Bruce Braley, D-Waterloo, FEMA headquarters has informed Braley that it conducted a new review as requested by OIG and informed OIG on Aug. 22 that it, not OIG, is correct. As a result, FEMA headquarters states that it will follow through on its plans to award Cedar Rapids disaster payments for the hydroelectric plant, the FEMA letter, which has been sent to Cedar Rapids city officials, concludes.

The $13.8-million disaster award will translate into a somewhat smaller amount of money because the city is using the funds for an alternate project, as permitted by federal law, and not to fix the hydroelectric plant.

In this case, the city will use the money for the new parking ramp now under construction on the south side of downtown.

Federal rules say FEMA pays 90 percent of FEMA's 90 percent share of any damage award when money is used for an alternate project. Under that formula, FEMA will pay the city about $11.18 million in federal funds for the hydro plant damages with the state of Iowa paying 10 percent more. In total, the city will receive about $12.3 million, said Joe O'Hern, the city's executive administrator of development services.

An adverse ruling from FEMA headquarters would have left the city to scramble to find money for the parking ramp project.

"This is important for our community," City Manager Jeff Pomeranz said of the FEMA ruling. "We're appreciative, we think it's absolutely the right decision, and it's time to move on."

As for the city's hydroelectric plant, it will remain mothballed and out of service.