Regional Development Organizations: Building Communities and Creating Local Jobs

Regional Development Organizations Make Things Happen Locally

When Tim and Debra Schaefer needed a loan to expand their small business in Wayne, Nebraska, a regional development organization — the Northeast Nebraska Economic Development District — joined forces with a local bank to provide the necessary funds.

The Federal Emergency Management Agency and the Georgia Emergency Management Agency turned to the McIntosh Trail Regional Development Center for assistance as they processed claims from a devastating ice storm in 2000. Because McIntosh Trail works with local governments through their geographic information system, they had the most accurate maps available.

When Nissan selected Canton, Mississippi as the future location of a $930 million plant, the Central Mississippi Planning and Development District (CMPDD) took the lead in analyzing the economic impact the plant will have on the region. Staff from CMPDD visited regional organizations in Tennessee to learn how Nissan plants had affected their local economies. They also convened representatives from CMPDD local governments to assess the plant’s ability to bring jobs to the region.

Through the Comprehensive Economic Development Strategy process required for planning grantees of the Economic Development Administration (EDA), the Southeast Tennessee Development District helped McMinn County implement a strategy to become debt-free within two years, the first time in the county’s history.

A $100,000 investment from a revolving loan fund managed by the Kennebec Valley Council of Governments in Maine helped a local hand-sewn shoe company stay in business, retaining 75 full-time jobs.

Regional development organizations across America are taking the lead in helping local governments undertake transportation planning; respond to housing needs; identify and recruit new industries or businesses; coordinate comprehensive regional planning efforts that address infrastructure development, water quality, wastewater treatment, business retention and recruitment and social service delivery; establish disaster mitigation plans; promote cultural programs; initiate workforce investment strategies; and participate in a variety of other program and service delivery efforts.

Across the country, more than 500 regional development organizations work on a daily basis with local governments, businesses, academic institutions, nonprofit organizations and others engaged in community and economic development. Regional development organizations manage a diverse array of programs and services for the 82 million residents of rural and small metropolitan America, including comprehensive planning, workforce development and job training, small business development and finance, transportation planning, water and wastewater management, emergency services coordination, aging programs, youth development and a varied slate of initiatives aimed at promoting employment opportunities. This issue of the Economic Development Digest is dedicated to telling the story of regional development organizations. Most have been aggressively, and successfully, implementing regional approaches to local development for almost 40 years. This issue features 33 organizations from 27 states, demonstrating their critical role in building strong and sustainable economies, and their impact on local and regional economic viability. In addition, this issue presents a brief history of the evolution of regional development organizations, current information about programs and services delivered by regional organizations throughout the country based on the NADO Research Foundation’s 2000 survey, and examples of their impact.

Laying the Groundwork for Regional Approaches to Development

Street Scene in Winchester, Kentucky

Formal institutionalization of intergovernmental cooperation of regional organizations began in 1959 with the Section 701 planning program in metropolitan regions under the agency that became the US Department of Housing and Urban Development. The major impetus for rural and small metropolitan regions came in 1965 with the creation of EDA’s Economic Development Districts and the Appalachian Regional Commission’s (ARC’s) Local Development Districts in the 13 Appalachian states. (Today there are 71 ARC regional development organizations.)

Most regional development organizations were created by EDA in the 1960s and 1970s. Of the more than 500 regions across the country existing in 2001, 346 are EDA designated districts and 325 received planning grants in fiscal year 2000. Seeing the inherent benefit to working together to coordinate services and programs, some local governments established regional agencies before EDA and other agencies began funding planning and other activities. As a result, regional development organizations are known by many names including: councils of governments, economic development districts, regional planning commissions, planning and development districts and local development districts.

During the 1960s, the federal government promoted regional planning for economic development, land use planning, conservation and development, and created metropolitan planning organizations. By the 1970s, there were 47 programs requiring a regional plan or a regional organization as a condition of funding. By 1981, many categorical programs were folded into block grants to the states, reducing or eliminating many regional planning requirements and funding. Of the 47 federal programs that required regional planning approaches in the 1970s, only 13 were continued in the 1990s.

Is it a Regional Organization? Yes, if... ... it is a formal organization with a professional staff ... it has a legal basis through state statute, executive order or local contract ... it is a public organization ... it is a multi-jurisdictional organizaion ... it serves a regional community of local governments joined voluntarily in a common economic and social concern ... it has a broad and comprehensive agenda, primarily based upon planning programs, and operational programs ... its board is comprised of a majority of local elected officials.

As a result of devolution, in recent years federal agencies have turned to regional organizations to deliver programs at the local level, because they offer federal agencies a cost-efficient and effective mechanism. The 1998 transportation legislation, the Transportation Equity Act for the 21st Century (TEA-21), cites the use of regional planning and development organizations as a forum for state officials to facilitate the involvement of rural elected officials in statewide transportation planning and to ensure rural officials have input into state transportation investment decisions.

As part of the 2001 budget process, Congress encouraged the Federal Emergency Management Agency to work with regional development organizations to update the nation’s flood maps, recognizing their relationship with rural local governments.

The Delta Regional Authority, established in 2000, is a federal-state-regional-local partnership modeled after ARC. In addition to outlining clearly defined roles for the federal co-chair and Delta governors in the eight-state region to help coordinate economic development efforts at the local level, the new authority will use the 40 existing EDA-funded regional development organizations to coordinate development efforts at the local level.

What’s in a Name? Regional Development Organizations are known as: • Area Development District (ADD) • Business Development Corporation • Council of Governments (COG) • Economic Development Commission (EDC) • Economic Development District (EDD) • Local Development District (LDD) • Planning and Development District (PDD) • Regional Development Center (RDC) • Regional Planning Commission (RPC) and over 100 other names

Regional Development Organizations Have Staying Power

During the past 40 years, regional organizations have expanded their funding and enhanced their menu of services and programs to meet local, state and federal needs. The ultimate goal remains the same: to help local governments in their regions define and meet their common needs through inclusive and coordinated program planning and implementation.

“For nearly 40 years, regional development organizations have provided the institutional infrastructure necessary for distressed communities to obtain and manage funding for programs and services that promote regional solutions to local economic development challenges.” —Aliceann Wohlbruck, NADO Executive Director

Today regional development organizations are multi-functional, multi-jurisdictional planning and development agencies that provide assistance to local governments, businesses and nonprofit organizations. Most receive funding for an array of programs from federal, state, local and private sources. Programs vary by region and reflect local priorities. These regional organizations are created as governmental units or nonprofit public and private institutions. In some states, they are created by state legislation, in others by executive order or local agreements. While a few have taxing authority, most are dependent on federal, state and local grants, contracts and service fees.

In 2000, the NADO Research Foundation conducted a survey of regional development organizations and received information from 292 regions in 48 states. The NADO survey revealed that the typical regional development organization was founded in 1969, serves a population of 220,000 in six counties and 33 cities and towns, has 16 employees and a budget between $1 million and $1.5 million.

Editor’s Note: Some information from this article was excerpted from publications by Bruce McDowell of the National Academy of Public Administration.

Source: NADO Research Foundation Survey, December 2000. Percentage values represent median score per budget source.

February/March Index | Next Page