Lack of funding stymies Iowa city's flood recovery

A woman talks on her cellphone on the front porch of her house in Cedar Rapids, Iowa June 12, 2008.

CEDAR RAPIDS, Iowa (Reuters) - Amanda Brandt is frustrated at what she sees as unmet promises to help her and her Iowa neighbors rebuild homes ruined by rain-swollen rivers that spilled over their banks one year ago.

"The city is lacking some leadership and direction," Brandt said. "It seems every time we are told an important date is coming up, it gets pushed back."

Thousands of flood-damaged homes lie vacant in the core of Cedar Rapids, a city of 120,000 hard hit by June 2008 flooding that inundated towns and farms across the Midwestern United States.

"Are we satisfied with that progress? No, clearly not," Cedar Rapids City Manager Jim Prosser said. "A lot of people whose lives aren't even close to being whole yet have a lot of unanswered questions, bills to pay, and don't have the resources to recover."

Cedar Rapids' struggles echo recovery efforts in New Orleans and the Gulf Coast, flooded after Hurricane Katrina nearly four years ago, and in Galveston, Texas, following Hurricane Ike in September.

Brandt, who has moved into a different home but bears the costs of her ruined old one, said officials make promises but no one takes responsibility when funding only trickles in.

More than 10 square miles (26 sq km) containing 5,400 homes and 700 businesses were flooded by the Cedar River, which winds through the city. The muddy waters inundated the headquarters of the fire and police departments, city hall, the courthouse and the main library.

City officials said they have received a small fraction of the estimated $5.7 billion needed to rebuild.

An announcement earlier this month of a $517 million grant from the U.S. Department of Housing and Urban Development to help flood victims only triggered fresh doubts.

Thousands of residents are in limbo without knowing whether or when they would get the money to rebuild.

"We were told that buyout funds would arrive in June, then we are told it would be this fall. Once the money comes, it may not be distributed to flooded homeowners until two-and-a-half years after the flood. To me, that is unacceptable," Brandt said.

Prosser said no one intended to mislead the public.

"I think we've been careful not to over-promise because we realize that good intentions from the federal government and even from the state doesn't translate into getting the cash in hand," he said.

Iowa Governor Chet Culver has said he will ask the federal government to speed up aid.

'TREMENDOUS FRUSTRATION'

Many displaced families are living with friends, family or in rental apartments. Nearly 270 families live in trailers provided by the Federal Emergency Management Agency.

Some 1,300 property owners in neighborhoods that resemble war zones have asked the government to buy them out, but the city cannot act until funding arrives.

"There's a tremendous amount of frustration", said Jim Ernst, an official with the city's housing task force.

"If this was a foreign country, we would send billions of dollars without the red tape," said Frank King, president of a neighborhood association.

"We need more money, we need it quicker, and we need it in more flexible programs," said Doug Neumann, head of a Cedar Rapids business group.

In the immediate aftermath of the flooding, residents heaped praise on the government response, but Neumann said government programs were inadequate for the rebuilding phase.

Even so, three-quarters of downtown business closed by the flood have reopened, he said.

"When you look at the assistance that they have gotten compared to the overall damage, inventory loss, economic loss, and additional debt, most businesses have shouldered almost all the rebuilding cost themselves," Neumann said.

(Editing by Andrew Stern and Paul Simao)