The derecho that hit Cedar Rapids on Aug. 10 caused $60 million to $80 million worth of damage, according to the city.
Overall, the August derecho caused $7.5 billion worth of damage, according to estimates from the National Oceanic and Atmospheric Administration. The Washington Post reported that no thunderstorm or tornado has caused “as much economic devastation as the derecho.”
Cedar Rapids was one of the cities hit hardest. Schools, homes and businesses were destroyed. Tens of thousands of residents in the city were without power, with many not getting their power back for weeks. More than two months after the derecho, city crews are still working on the first round of debris pickup.
“Right now the [cost] range continues to grow,” Finance Director Casey Drew told the Cedar Rapids City Council’s Finance and Administrative Services Committee last Thursday.
“This is just the cost to pick up what’s been damaged or fix what’s already out there,” Drew said, adding that this estimate does not include what it will cost to replace the city’s destroyed tree canopy. The city lost about 65 percent of its trees during the storm.
Between $12 and $16 million is damage to facilities, including Kernels Stadium and parking structures, Drew said. He added that the “good news” is the city’s property insurance will pay for the replacement value of damaged facilities after the $100,000 deductible. The deductible can be submitted to the Federal Emergency Management Agency (FEMA) for reimbursement.
Drew said the derecho damage won’t receive the same FEMA reimbursement as the 2008 flood, which “was considered 100 percent funded” with FEMA paying 90 percent and the state paying 10 percent.
For the derecho damage, FEMA will pay 75 percent of the eligible cost, with the state paying 10 percent and the city paying 15 percent.
“If we feel we have potentially $60 million of eligible FEMA costs, the bare minimum that the city is gonna have to contribute to that is $9 million,” Drew said. “Now, it could be more if we get into stuff where we have a dispute about what’s eligible or not, but the very minimum is, if people have picked up $60 million of cost, we’re gonna be on the hook for $9 million.”
The money will have to come out of the general fund reserve, Drew said. The city has a 32 percent to 33 percent reserve balance, so it is able to “incur some of these costs,” Drew said. But the general fund will have to be monitored so it doesn’t go below 25 percent.
Councilmembers Ann Poe and Scott Olson both mentioned how it’s good the city has these reserves.
“We benefit so greatly from having a strong reserve, and that’s what gets us the 14th best-run city in America is because we are financially strong,” Olson said. “I don’t want to take those reserves down because of the historic event, and then that costs us in the future on all the bonds we issue for streets and other things. We’re just in an unusual time, both COVID [and] the derecho.”
