CEDAR RAPIDS — A study suggesting damage from 2008 flooding was offset by more than $2 billion in federal disaster relief masks the ongoing personal and financial impact of the fifth-largest natural disaster in U.S. history, Cedar Rapids recovery leaders say.

Gary Ficken

Dave Swenson

They take issue with a report from two Iowa State University economists who found no “conclusive evidence of measurable and lasting reductions in overall industrial production or household consumption from the 2008 flooding.”

“I am afraid it is a different world for those of us who have been devastated by the floods of 2008,” said Gary Ficken, president of Bimm Ridder Sportswear, which was displaced by the flood, and a member of the Cedar Rapids Business Long Term Recovery Team.

ISU economists Dave Swenson and Liesl Eathington looked at the situation from a “macro perspective,” said Bob Harschnek, the Cedar Rapids Chamber of Commerce’s case management team leader. “We look at one city that had the most devastation and loss in the state.”

Nothing in his report was meant to minimize the losses Cedar Rapids sustained, Swenson said. It looked at the impact on the state economy, not a specific community.

Bob Harschnek

Scott Swenson

Although it’s estimated Cedar Rapids-Linn County sustained about half of Iowa’s $8 billion to $10 billion in damages from the June 2008 flooding, Swenson and Eathington found the local economy posted a 5.5 percent gain in Gross Domestic Product over 2007.

In “high-impact counties” like Linn that bore the brunt of the disaster, they found “their combined economies were so powerful they were able to continue to produce goods and services (without) a diminishment of the state’s overall productivity.”

That prompted former state legislator Jeff Elgin, who has been tracking recovery assistance for the chamber, to suggest the ISU economists “call their mayor in Ames and tell her the flood there last week is now a stimulus for her.”

The chamber’s “two-year snapshot” based on a survey of 600 businesses found:

• 30 percent of owners reported dipping into personal assets by an average of $92,000 for a total of roughly $17 million.
• 28 percent of owners reduced their personal income by an average of $59,000 since the flood, an amount totaling $10 million.
• More than 150 businesses have closed.
• More than 2,300 jobs have been lost.
• Business debt load has increased 65 percent.
• The average physical loss for businesses reporting less than $1 million in annual revenue averaged $423,000.
• Only 113 businesses received insurance settlements with an average 27 percent ratio of insurance to loss.
• Businesses report revenues have dropped 28 percent.

ISU’s Swenson didn’t question the accuracy of that snapshot, but said it’s not the whole picture.

“In Cedar Rapids, you know a lot about the victims, but you don’t know much about the rest of your economy,” he said. “You surveyed the victims, but many of your producers and service providers had windfall profits, had gains that year because of the boost in spending because of FEMA and other kinds of subsidies.”

Jeff Elgin

However, the chamber’s Harschnek and senior case manager Scott Swenson say one business’ gain doesn’t offset another’s loss. And as near as Elgin can determine, very little of the $2.4 billion in disaster assistance the ISU study refers to has been received. At best, it appears $1.4 billion has been allocated to the state and local governments. Much of that is yet to be received by flood victims.

The day-to-day impact is businesses can’t afford to give workers raises, may be laying off people, and can’t expand, take on new ventures or keep up with current technologies, the chamber’s Swenson said.

“We can’t afford to have this story lost,” he said. “This is a 10-year or longer effort to get this community rebuilt.”

Harschnek’s biggest concern is that the report combined with the attention more recently flooded communities, such as Ames, receive will lessen the urgency of getting assistance to the community.

ISU’s Swenson said his report is not meant as an argument against continued recovery assistance.

“But when I average it all out, I find a regional economy that is looking better than much of the state of Iowa,” he said. “It’s a hard pill to swallow, but nothing in that report was meant to minimize the consequences to the downtown area or the Cedar Rapids community.”