Governor Culver held a press conference at noon today (Friday) to announce a new state flood-related program and why he feels he does not have to call a special session.

He said two important thresholds were met this week. First, the state reached the threshold for a 90/10 split with FEMA on most FEMA programs. While the Governor took credit for this (and gave some of the credit to Witt and Associates – his high-priced consultants), this was due to the dollar amount of damage and had nothing to do with any pressure exerted by Culver or his consultants. Second, the $85 million in Community Development Block Grant funding approved earlier this summer will be coming to the state “in short order”. (He had previously said if FEMA denied 90/10 – which under law they cannot do – or the $85 million was held up by red tape, he would call a special session.)

Culver then announced a new $40 million state program called Jumpstart. It will have two $20 million components – housing and small business.

On the housing side, Iowans who have lost their homes or have serious damage can receive up to $60,000 in down payment assistance. An additional $10,000 will be added for including energy saving components in the rebuilding. In addition, qualifying homeowners would be eligible for $1000 per month in mortgage assistance for up to one year. The money is in the form of a loan but it will be forgiven if the homeowner stays in the home for 10 years. Otherwise, 10 percent per year will be forgiven until the homeowner decides to sell. The maximum amount awarded will be $72,000.

The Iowa Finance Authority will administer the program. The Governor expects IFA to approve emergency rules on September 16 and then make awards to the cities the week of September 25.

The funding for the housing side will come from: $12 million from River Enhancement Community Attraction and Tourism (the new RECAT program approved last session), $2.5 million from the Power Fund, $1.9 million from the existing Community Attractions and Tourism (CAT) program, $1.6 million from DAS routine maintenance, $1 million from DAS property acquisition and $1 million from the DNR low-head dam program.

When asked about how homeowners are going to be able to pay their property taxes, Patty Judge said they could use some of the $1000 in mortgage assistance to pay property taxes.

On the small business side, $20 million will be spent on forgivable loans. It will be based on 25 percent of what the business is eligible for in SBA loans, up to a maximum of $12,500. The loan will be forgiven if the business reopens within 6 months. The funding will come from $10 million from the Values Fund, $5 million from the Power Fund and $5 million from CDBG. He expects DED to approve emergency rules by September 18 and the money to start going out the week of September 25.

He said he was taking Jumpstart “on the road” next week to see if it sells with those in the flood-impacted areas. He hinted that if it doesn’t, he could still call a special session.

Finally, he said state agencies have given him another $33 million in FY 09 appropriations that can be used for flood relief. He had no details on which programs would not be funded, or funded at a lower level.

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