Block Grants Benefit
Rural Areas in Missouri

By Laurie Thompson, Program Director NADO Research Foundation

Since 1974 the Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) program has invested billions of dollars in urban and rural communities. These grants are awarded to states, and HUD requires communities to work with their citizens to develop a wide range of activities that best serve their own particular development priorities, and “they must benefit low and moderate-income families; prevent or eliminate slums or blight; or meet other urgent community development needs.”

As one of the nation’s largest federal grant programs, the impact of CDBG-funded projects is seen in the housing stock, the business environment, the streets and public facilities of many communities, especially in urban areas. Traditionally, the largest single use of state CDBG funds has been the provision of public facilities. In the last few years, however, the program has played an increasingly key role in stimulating economic development activities that expand job and business opportunities for lower income families and neighborhoods.

HUD’s 1995 report, Federal Funds, Local Choices: An Evaluation of the Community Development Block Grant Program, focused on urban-based CDBG programs and did not address the impact of the CDBG program in rural areas. However, evidence suggests that rural communities have yielded much success as a result of their CDBG grants. In many cases, regional development organizations are instrumental in securing CDBG monies for projects in their regions.

Bringing Access to Small Towns

The Southeast Missouri Regional Planning and Economic Development Commission, (RP&EDC) an EDA funded district, is working with the City of Iron Mountain Lake, a small lake community of about 700 that was in dire need of paved roads, water and sewer lines, and storm water drains. “The community is primarily composed of retired couples, but more younger families with children are attracted to the city. The roads were so bad that the school district was hesitant to send school buses to pick up the children. Emergency response vehicles had difficulty reaching residents for emergency services, and the regional transit service was considering cessation of their services due to road conditions. So we helped them package the financing,” said Tom Tucker, Executive Director of Southeast Missouri RPC. The project was funded with $357,000 in voter approved bonds and $400,000 from the CDBG. The city was able to get the engineers involved to reduce their normal project fees so that additional money could be spent on the actual construction project.

The Regional Planning and Economic Development Commission had also previously worked with a nearby water district on a Community Development Block Grant to extend potable water supply to the City of Iron Mountain Lake. Upon completion of this water system project, the city itself applied for Community Development Block Grant funds to construct wastewater collection lines and a sewage treatment facility.

The RP&EDC has also secured $252,000, under the CDGB industrial infrastructure program for a project in Fredericktown, population, 4,000. The project involves bringing infrastructure including roads and water and sewer lines, to an industrial site that is being developed with $1.25 million from EDA.

Increasing Services for Populations in Need

Located in Warrenton, Missouri, the Boonslick Regional Planning Commission has combined CDBG funds with grants from EDA, local governments, Missouri Department of Transportation, and private sources to provide programs and services aimed at special populations. $299,000 in CDBG funds helped the Warren County Council Against Domestic Violence construct an addition to a domestic violence shelter. $148,000 helped leverage $400,000 in private funds and build the Warrenton Area Child Care Center. With $100,000 in CDBG funds, Boonslick established a microenterprise loan fund that leveraged $60,000 in local support and is expected to create 25 jobs. Boonslick was also able to combine $300,000 in CDBG funds with rural development loans and $270,000 from the Lincoln County Council on Aging to open a senior center that provides social services and meals to the county’s elderly.

In March 2002, Boonslick, an EDA funded district, launched a public transit service that runs on a set schedule five days a week; CDBG funds were part of the financing. CDBG funds also helped Boonslick work with a small town to create emergency housing for natural disaster victims. Steve Etcher, Executive Director of Boonslick RPC said, “CDBG gives us a flexible funding source to address critical community needs that can not be addressed solely with local funding sources.”

For More Information Contact: Steve Johnson, CDBG Small Cities Program at 202/708-1322, ext. 4548 or steve_Johnson@hud.gov; Tom Tucker, Executive Director, Southeast Missouri RPC at 573/547-8357 or semorpc@idd.net; Steve Etcher, Executive Director, Boonslick RPC at 636/456-3473 or etcher@boonslick.org.

Other Examples of Regional Council Involvement in CDBG Funded Initiatives:

In South Dakota, the Northeast Council of Governments helped Lake Area Hospital complete an expansion project with CDBG funds. CDBG funds have also been instrumental in promoting community involvement and participation by funding community centers and firehalls -- places where community groups typically meet.

The Gateway Area Development District in Kentucky secured CDBG funds for the City of Mount Sterling to provide housing for the elderly.

The Issaquena County Prison Facility Overflow Prison project in Mississippi, funded in part with CDBG funds, was accomplished under the direction of the South Delta Planning and Development Commission.

In each of these examples, the CDBG funds were a piece of a larger financial package. For example, the prison overflow project in Mississippi was a $42 million dollar project; the CDBG portion was $725,000.

Possibilities for more regional councils to secure CDBG funds administered through their state exist. Steve Johnson, Director of HUD’s CDBG Small Cities Program, reported that President Bush’s proposed budget for fiscal year 2003 includes $1,328,700 for the states and small cities that do not fall under the entitlement distribution formula that is aimed at urban cities and counties. This allocation equals 30 percent of the total CDBG line item.

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