Nearly two years ago, the city of Austin received $2 million from the state of Minnesota to purchase homes that had been damaged by flooding.

So far, not a dime of that money has been spent and state legislators from the area are concerned the city will lose the funds in July 2003, the end of the fiscal year.

The cause of the hold-up seems to be rooted in the Federal Emergency Management Agency (FEMA), which is in charge of $2.5 million the federal government earmarked for flood relief in this area.

According to Austin Public Works Director Jon Erichson, while the money from the state was granted with almost no stipulations, the FEMA dollars will only cover the most severely damaged homes. So the public works department must evaluate all homes in the flood plain in order to determine which can be paid for with the FEMA money. Only when those dollars are spent, will the city be able to use the state funds for the homes that couldn't be purchased with the FEMA money. "We have to make sure we're buying parcels by (FEMA's) rules," Erichson explained.

Those rules include evaluating the depth of the flooding, determining if the home is inhabited by its owner, if it's part of a row of houses which were damaged by floods and examining the infrastructure of the street.

The evaluation process takes time and the city has "more homes than money," Erichson said.

"It's really frustrating that the $2 million has not been used. I fear those dollars are sunsetted," and with the deficit, it's unlikely the city would be able to get that money back, said Senator Grace Schwab (R-District 27), who, along with Senator Dennis Frederickson (R-District 23), met with Erichson Friday to discuss the matter. "My understanding is that the money is only allocated for the biennium and then they will be absorbed into the system."

Erichson said he anticipates "we will be buying the homes by the end of the year, potentially. We really want to insure we buy homes from the people who were impacted the worst first."

So far, the city has purchased 160 homes and Erichson said the monies from FEMA and the state should buy 60 to 70 more.

In the meantime, Schwab remains concerned. "If we come in too far behind (the use of the federal money), the state dollars will not be available," she said. "FEMA is a tough organization, as I think Austin is finding out. Hopefully, this will get FEMA moving so (Austin) can use all of the $4.5 million in funding.

"I commend the city with its patience, but I'm not sure they thoroughly realized the backlog of red tap they would have to deal with when they got this money."

Amanda L. Rohde can be reached at 434-2214 or by e-mail at :mailto:amanda.rohde@austindailyherald.com