CHICAGO -- Gov. Terry Branstlad of Iowa said this week he is considering calling a special legislative session to discuss how to pay the state's share of flood-related costs.
While final costs associated with flooding along the Mississippi River and its tributaries this summer are not yet available, state officials estimate that Iowa's obligation could climb to $70 million.
The Federal Emergency Management Agency earlier this month said it will reimburse states for 90% of flood-related damages if the losses exceed $64 per resident. The agency will pick up only 75% of the damages if losses are below that threshold.
Iowa currently estimates total public infrastructure losses at $117 million. Damages in the state would have to exceed $177 million in order for the state to be eligible for 90% reimbursement, state officials said.
Branstad, Iowa lawmakers, and officials in other affected states are urging the federal government to reimburse states for 100% of flood losses.
"We're disappointed with the situation," said Richard Vohs, Branstad's press secretary.
President Bill Clinton last week told Branstad that he will "look into" the issue, Vohs said.
If the federal government does not reimburse states for all flood damages, Iowa may be forced to dip into about $85 million of cash reserves that were set aside for elimination of the state's estimated $336 million deficit, as measured on a generally accepted accounting principles basis, Vohs said.
"We would hope we would not have to use it," Vohs said.
He said the governor is expected by the end of October to make a decision about whether to call a special session. By that time, Vohs explained, the state should have a better assessment of how much federal assistance the state will ultimately receive and the effect of any early frost threats to crops. Iowa's total flood-related damages, including crop losses. are estimated at $2.7 billion, he said.
Clinton in August approved $6.3 billion of federal disaster funds to provide relief for damages caused by the heavy rains and the overflowing Mississippi River and its tributaries. Total flood losses in the Midwest are estimated at $12 billion.
Vohs said many small Iowa towns with populations of 2,000 or less already have exhausted their reserve funds and do not have any more money to rebuild their communities.
However, local governments, which are currently under a statewide freeze on property tax increases, also have the option to appeal to the state to exceed the limits in the event of natural disasters, according to state officials.
In a related matter, Minneapolis-based Piper Jaffray Inc. said in a commentary on the flood that many Midwest communities are determining the cost-effectiveness of rebuilding flood control systems breached by the flood.
Instead of rebuilding levees and floodwalls, some groups support the restoration of wetlands and the development of a flood-plain management system that will help prevent future flooding, Piper Jaffray said.
Piper Jaffray pointed out that flooding damaged 1,043 nonfederal levees that are locally owned. About 164 of those levees are eligible for federal aid.