Backers of restoring the dam at Lake Delhi in northeast Iowa received good news last week on potential federal funding, as well as a stern reminder about the strings attached to state support for the project.

Lake Delhi was an artificial lake (technically known as an impoundment) on the Maquoketa River in Delaware County. Floodwater damaged the dam in the summer of 2008 and destroyed it two years later, causing the lake to drain in less than a day. The Federal Emergency Management Agency awarded funding to help repair the damage in 2008, but following the 2010 flooding, an agency analysis reversed that decision and rejected an application for further assistance.

A written analysis by FEMA officials said the Lake Delhi Recreation Association is a private, non-profit association formed to provide recreational services.

“The applicant does not provide any essential governmental service to the general public. The lake is not used for electricity, drinking water, or irrigation. It is used only for recreation,” the federal document said.

FEMA’s analysis also said that the “Combined Lake Delhi Benefited Recreational District and Water Quality District,” which levies property taxes to operate the dam, doesn’t meet the definition of a government agency for FEMA eligiblity purposes.

“It was not formed for a public purpose, nor does it provide essential governmental services to the general public,” the document said.

I thought that was the end of the story on federal funding for Lake Delhi, especially after FEMA rejected an appeal of that decision in March 2011. But last week the state of Iowa prevailed in its second appeal, Dar Danielson reported for Radio Iowa.

Pat Hall, the Recovery Bureau Chief for the Iowa Homeland Security and Emergency Management Division, says state FEMA officials originally said the organizations that oversee the two lakes did not qualify for funding because they were not government entities.

The other lake is in the Lakewood community in Norwalk.

But Hall says the state was able to make the argument otherwise in the appeal. “Iowa code 357-E states that they are a political subdivision. They have their own board of directors, that they’re elected, and FEMA agreed with us. Upon further review, FEMA determined that both districts met the definition of a local government,” according to Hall. […]

Studies and paperwork now have to be completed to move the process ahead. “FEMA will come up and we will work with the applicant to determine what is the eligible scope of work and what FEMA will participate in,” Hall says. He says it could take two to three months to complete the application paperwork.

Orlan Love reported for the Waterloo-Cedar Falls Courier that FEMA’s latest decision does not guarantee that the federal government will help pay to repair damage from the 2010 flood, but “makes it increasingly unlikely that Lake Delhi would have to return funds disbursed for recovery from the 2008 flood.” Paraphrasing Steve Leonard, president of the Combined Lake Delhi Recreation and Water Quality District, Love noted that funding from FEMA “would enable a much more comprehensive restoration that would include large-scale dredging, shoreline restoration, repairs to beaches and other public access points and sediment control measures.”

Private donors have contributed toward rebuilding the dam, but this project will rely primarily on public funding. The Delaware County supervisors approved $3 million in bonding earlier this year. The Iowa House and Senate allocated $5 million to Lake Delhi over two years from the Rebuild Iowa Infrastructure Fund, supported by gambling revenues.

Several non-profit organizations advocated for letting the Maquoketa River return to its natural state instead of rebuilding the dam. I would have preferred to see the Lake Delhi funding shifted toward other lake restoration projects, but the environmental and economic arguments for doing so didn’t carry the day with state lawmakers. (Delaware County is part of the new, open Iowa Senate district 48.) Governor Terry Branstad signed the appropriation into law this summer, which wasn’t surprising, since he had included the $5 million in his proposed budget.

Iowa Department of Natural Resources Director Chuck Gipp has reminded Lake Delhi backers that a lot of work needs to be done before that state money is spent. Gipp was the guest on Iowa Public Television’s “Iowa Press” program over the weekend. The video and full transcript are on Iowa Public Television’s site. Here is the relevant part of the discussion:

Obradovich: Just the news today that FEMA, the Federal Emergency Management Agency has reversed its decision on restoration of Lake Delhi up in northeastern Iowa.  Two years ago this week it flooded out and that lake was destroyed.  One of the big controversies though is about the lack right now of very much public access to that lake.  Mostly it is private homeowners who have access to that lake.  Is that something that you would make a priority for DNR to push for more public access to Lake Delhi?

Gipp: It’s absolutely going to be it and one of the conditions in the appropriation, the $5 million that would come from the Rebuild Iowa Infrastructure Fund or, once again, gambling profits, is that they have to provide a plan to the legislature by December 31st of this year in how they are going to improve public access, how they are going to deal with the wastewater issues of the homes that are around there so that it doesn’t become an environmental issue with the lake itself and how they are going to impact the water withdrawal areas.  There’s also a provision in the code that requires a fish passage, in other words, a way to get around that dam for fish to move upstream that is also a code requirement. So you can understand that my position as director is to make sure as our mission is to help enhance the natural resources that any restoration of Lake Delhi and the dam would have to make sure that we had public access to that lake that hasn’t been heretofore.

Obradovich: Will there be any state money involved in that project?

Gipp: There is $5 million of state money.  It is estimated at $17.5 million project but with $5 million you’re getting close to 20% of that.  Therefore because it is public money the public should have access to that rather than simply the homeowners that surround the lake.

Obradovich: Given all of the priorities that you have just listed with DNR is that one really worthy of $5 million of state money?

Gipp: The legislature passed that appropriation to Lake Delhi and the Governor signed that and therefore that money was charged to the DNR to make sure that it goes to that effort with the local money.  So we will do what we are charged to do.  At the same time, as you indicate, we are concerned about the public access.  That is one thing that we as an agency will insist on, public access and also wastewater improvements in that lake.

Wastewater improvements are needed because Lake Delhi is currently Iowa’s largest unsewered community. Gipp is relatively new on the job as DNR director, and I am pleased to hear him speak so clearly about the need for wastewater improvements, genuine public access and fish passage.

The $17.5 million figure Gipp mentioned during this IPTV interview is higher than the $12 million estimate cited in most media reports about rebuilding the Lake Delhi dam. Perhaps Gipp knows that meeting the DNR’s conditions for spending the appropriated money will make this project a lot more expensive than its backers anticipated.

Any relevant comments are welcome in this thread.