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Austin, Minnesota

Community uses local sales tax to help fund flood mitigation

After a devastating flood in 2004, this Minnesota town focused on proactive mitigation efforts, building structural protection around high-value commercial areas. With funding from FEMA, Minnesota Department of Natural Resources (DNR) grants and a sales tax initiative, the city was able to implement $24 million worth of projects to reduce flood risks to residential and commercial property, including the plant of Hormel Foods, a key local employer. These efforts prevented losses during another major flood in 2008 and have helped to attract new business and economic development to the city.

Photo courtesy of flood mitigation staff

Community facts

Source: US Census Bureau.

Mitigation actions

Sitting at the fork of the Cedar River and two tributaries, Austin, MN is a community of about 25,000 people. The town has endured repeated flooding events, with several exceeding the 1-percent-annual-chance flood level. Initially, flood mitigation focused on acquiring damaged homes in the floodplain that were deemed cheaper to demolish than to protect—which saved millions of dollars in damages and evacuation efforts during subsequent floods.

In 1991, Austin joined the Community Rating System (CRS) program, which incentivizes communities to invest in floodplain management activities. Since then, its rating has improved from Class 9 to Class 5, raising discounts on flood insurance premiums for property owners from 5% to as much as 25% currently.

Benefits of mitigation

Economic benefits
$38.2 million
Total monetized benefits
Return on investment
Estimated return on investment
Benefit-cost ratio
Benefit-cost ratio of the Austin projects
Source: Federal Emergency Management Agency (2013): Loss Avoidance Study, Austin, Minnesota, 163 Building Acquisitions; update of March 2001 study.

Project challenges

One of the key challenges for the community was pulling together funding

After the 2004 flood, citizens demanded a more proactive approach to reducing flood risks to Austin’s most valuable assets. The city proposed a 20-year, 0.5-cent sales tax to fund proposed mitigation projects, explaining how the monies would be spent and how the whole community would benefit. Passed in 2007, that initiative, along with Minnesota DNR grants, FEMA grants and state money, has funded $24 million worth of projects to date.

So far, 11 of the 12 mitigation phases are complete, including a $1 million floodwall and berm to reduce the flood risks to the lift station near the Hormel plant and a $5 million project to build 1,100 (lineal) ft. of floodwalls and berms along Main Street. The city has also built levees, raised roads, extensively upgraded storm sewers and pumping stations, and launched the Cedar River Watershed District to reduce flooding from farms due to wetland tiling.

“Having a local funding source has made our projects more economically feasible to the state and other funding agencies... It shows that we are coming to the table with our own dollars, which extends the ability of the grant dollars to go farther”
Steven Lang, director of public works, Austin

Future considerations

Landscaping of flood walls protect local homes and businesses.
Photo courtesy of flood mitigation staff
"The city of Austin has strived to remedy as far as possible the effects of major flooding events," notes Austin's mayor, Tom Stiehm. "While we will never be able to mitigate all the effects of our floods, we have extensively limited major damages through our efforts."

Austin’s efforts have paid off significantly. In 2008 the city experienced the third-highest flood in its history, yet this had minimal impact on homes and businesses. The project investments have also helped city leaders attract new businesses and support Hormel’s expansion plans, with assurances that their facilities will be protected.

Flood mitigation resources

Below is a non-exhaustive list of other flood mitigation information resources.