MUNSTER | Flood-weary homeowners Wednesday flocked to Munster Town Hall, where Hammond Mayor Thomas McDermott Jr. pitched creating a sales tax increment financing district to speed the completion of the federal levee project.

Several years ago, state officials turned down the city's request to use STIF to help bring Cabela's to Hammond, saying it could not be used for retail development.

"This isn't retail," McDermott said Wednesday. "It's a flood wall."

If approved by the state, McDermott offered to dedicate the entire sales tax benefit toward finishing and maintaining the levee.

Bowing to the poor economy, McDermott used a figure of $50 million, half the expected amount in revenues from Cabela's, as the basis for estimating a $3.5 million annual cash infusion toward the levee project, a project that will benefit not only Hammond but Munster, Highland, Griffith and Gary.

"We need to come up with the local match for the capital costs, and we need to come up with the continuing costs that are going to be here 20 years from now," McDermott said. "If we don't do our maintenance, we're going to have another disaster like this 20 years down the road."

McDermott urged the four other communities to jointly petition the governor's office to permit the effort and the immediate use of the money.

McDermott said the Hammond City Council is expected to adopt a resolution toward that end when it meets Monday. He urged other local officials to do the same. "If we don't come up with our own answer, it's not going to be until July 1st that we see a penny," McDermott said. That means another rainy season for every town.

McDermott made his remarks before a standing-room-only crowd at the monthly meeting of the Little Calumet River Basin Development Commission.

The commission had presented only a tentative 2009 funding request to the State Budget Committee on Wednesday morning. The panel's operating funds have dwindled to less than $100,000. Its shaky financial picture has forced the commission to suspend some capital projects as it awaits funding from the state, whose fiscal year begins in July.

In addressing legislators, Ron McAhron, one of three newly appointed commissioners, said he proposed a preliminary figure of $10.5 million to complete the capital phase of the project. McDermott said the estimated $3.5 million infusion of local money could leverage some three times that in federal money, or some $10 million.

McDermott's proposal met with the approval of several commissioners, but Munster Town President Helen Brown registered some doubt. Leery of the economy, Brown said, "I don't think I would put my hat on Cabela's at this time."

McDermott's proposal did little to appease angry homeowners intent on assurances from the commission it will come up with a budget and a timetable to finish the project. McAhron staunchly defended the commission's current efforts while conceding there had been many mistakes all around.

The "final" figure sought by both the Legislature and the homeowners would be readied by the commission's next meeting Jan. 7, said Kent Gurley, the commissioner's treasurer.