HUD to give $3.7B to 11 states, including Missouri, hit by disasters

Wednesday, June 10, 2009 | 6:20 p.m. CDT

CEDAR RAPIDS, Iowa — The federal government announced Wednesday it would give $3.7 billion in aid to 11 states affected by natural disasters last year, including $1.7 billion to Texas and $516 million to Iowa, which experienced record flooding.

Standing feet from the river that engulfed much of Cedar Rapids a year ago, U.S. Housing and Urban Development Secretary Shaun Donovan said the money would go toward rebuilding infrastructure, restoring housing and revitalizing local economies.

"No community or state should ever have to go through such a tragedy alone again," Donovan told a gathering of local and state officials.

The largest portion of the HUD funds will go to Texas, which was buffeted by hurricanes Ike, Gustav and Dolly last year. The other states promised money are Louisiana, Indiana, Illinois, Missouri, Wisconsin, Tennessee, Arkansas, Florida and California.

In Iowa, the state government will announce how its money will be allocated next week. But it could be months before the money reaches residents desperate to start rebuilding their homes or to move on.

"We're a little uncertain of (when the money will arrive)," said Cedar Rapids City Councilman Brian Fagan. "It's a little slower than we would like, but that's the nature of it."

Fagan said he's happy to hear Donovan pledge to cut some of the red tape from the disaster-relief process.

"What I really appreciate here is the fact that they've recognized the complexity and conflict between existing (federal) agencies and the rules and regulations that govern a sustained recovery effort.

"We will spend the money that comes into Cedar Rapids wisely, efficiently and effectively, but we clearly will need more to get out of this."

Donovan acknowledged that the federal government needs to do better when helping states recover from disasters. He said the he watched a video of the flooding damage in Cedar Rapids before he was confirmed to the top HUD post and came away stunned.

The money is part of a $6 billion allocation Congress made in September to states that suffered damage from natural disasters in 2008.

One-third of the money was sent to states immediately, but Iowa's Congressional representatives and state officials have voiced their displeasure with Iowa's share of that allocation. They blamed the formula HUD uses to allocate the money and have called for changes.

"The governor and the Iowa delegation were not pleased with the prior formula, and they were right," Donovan said Wednesday. "What we found was there wasn't the right data — that it wasn't looked at the right way."

Cedar Rapids suffered about $6 billion in damage from the flooding, more than half of the estimated $8 billion to $10 billion of damage incurred statewide from natural disasters in 2008.

Donovan also announced on Wednesday the creation of a $312 million Disaster Recovery Enhancement Fund that will go to states to help prevent future damage. The money will be used for buying out homes in high-risk areas and relocation payments to encourage residents to move out of such areas, among other uses.

U.S. Department of Agriculture Secretary and former Iowa governor Tom Vilsack said he understands the frustrations of people who have had to wait more than one year for federal relief.

"I know it has been a lot of months of waiting," Vilsack said. "But Iowans are a patient people and a hopeful people."

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