[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
STRENGTHENING RURAL OHIO:
A REVIEW OF COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAMS
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
MARCH 24, 2006
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-78
_____
U.S. GOVERNMENT PRINTING OFFICE
30-176 PDF WASHINGTON : 2006
_________________________________________________________________
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon
RON PAUL, Texas JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio BRAD SHERMAN, California
JIM RYUN, Kansas GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York
VITO FOSSELLA, New York WM. LACY CLAY, Missouri
GARY G. MILLER, California STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota JOE BACA, California
TOM FEENEY, Florida JIM MATHESON, Utah
JEB HENSARLING, Texas STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida AL GREEN, Texas
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin,
TOM PRICE, Georgia
MICHAEL G. FITZPATRICK, BERNARD SANDERS, Vermont
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
GARY G. MILLER, California, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
RICHARD H. BAKER, Louisiana JULIA CARSON, Indiana
WALTER B. JONES, Jr., North BARBARA LEE, California
Carolina MICHAEL E. CAPUANO, Massachusetts
CHRISTOPHER SHAYS, Connecticut BERNARD SANDERS, Vermont
PATRICK J. TIBERI, Ohio STEPHEN F. LYNCH, Massachusetts
GINNY BROWN-WAITE, Florida BRAD MILLER, North Carolina
KATHERINE HARRIS, Florida DAVID SCOTT, Georgia
RICK RENZI, Arizona ARTUR DAVIS, Alabama
STEVAN, PEARCE, New Mexico EMANUEL CLEAVER, Missouri
RANDY NEUGEBAUER, Texas AL GREEN, Texas
MICHAEL G. FITZPATRICK, BARNEY FRANK, Massachusetts
Pennsylvania
GEOFF DAVIS, Kentucky
CAMPBELL, JOHN, California
MICHAEL G. OXLEY, Ohio
C O N T E N T S
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Page
Hearing held on:
March 24, 2006--Morning Session.............................. 1
March 24, 2006--Afternoon Session............................ 31
Appendix:
March 24, 2006............................................... 73
WITNESSES
Friday, March 24, 2006--Morning Session--Mount Vernon, OH
Calhoun, David, Director, Department of Community Development,
City of Newark, Ohio........................................... 13
Crow, Patrick L., Inspector, Community Housing Improvement
Program, City of Mount Vernon and Knox County.................. 15
Dupps, Hon. Daniel L., Mayor, City of Heath, Ohio................ 3
Glass, Dave, Safety-Service Director, City of Mount Vernon, Ohio. 17
Graves, William J., Deputy Director of Development, City of
Columbus, Ohio................................................. 20
Hall, Hon. David, Holmes County Commissioner..................... 5
Schocken, Amy W., partner, CDC of Ohio, Inc...................... 18
Stockberger, Hon. Allen, President, Knox County Board of
Commissioners.................................................. 6
Friday, March 24, 2006--Afternoon Session--Cambridge, OH
Aaby, Aane, President, Ohio Conference of Community Development.. 49
Downing, Philip H., Local Office Director, Columbus Enterprise
Community Partners............................................. 52
Gadd, Hon. Donald J., Mayor, Village of Byesville, Ohio.......... 33
Grefe, Hugh, Senior Program Director, Toledo, Local Initiative
Support........................................................ 55
Henry, Oren J., Community Development Administrator, City of
Cincinnati, Ohio............................................... 58
Laughman, Hon. Thomas J., President, Guernsey County
Commissioners.................................................. 36
Metzger, Hon. Kerry, President, Tuscarawas County Commissioners.. 37
Montgomery, Hon. Dorothy, President, Muskingum County
Commissioners.................................................. 38
Myers, Donald R., Executive Director, Ohio Mideastern Government
Association.................................................... 60
Ricer, Gary W., Executive Director, Guernsey, Morgan, Noble Tri-
county Community action Committee.............................. 61
Salupo, Hon. Samuel A., Mayor, City of Cambridge................. 39
Wesel, Charmel, Acting Development Director, City of Marietta,
Ohio........................................................... 63
Zwelling, Hon. Howard S., Mayor, City of Zanesville.............. 41
APPENDIX
Prepared statements from the morning session:
Ney, Hon. Robert............................................. 74
Calhoun, David............................................... 76
Crow, Patrick L.............................................. 80
Dupps, Hon. Daniel L......................................... 85
Glass, Dave.................................................. 93
Graves, William J............................................ 97
Hall, Hon. David............................................. 101
Schocken, Amy W.............................................. 117
Stockberger, Hon. Allen...................................... 122
Additional Material Submitted for the Record--Morning Session
Hon. Robert Ney:
Letter from Naomi Mattingly Compton.......................... 124
Letter from Evelyn Warr-Cummings............................. 125
Letter from Dale Hartle...................................... 127
Letter from Robert M. Wiles.................................. 128
Position Statement from the Ross County Trustees............. 129
Letter from Hon. Clifford L. Mason........................... 130
Prepared statements from the afternoon session:
Ney, Hon. Robert............................................. 133
Aaby, Aane................................................... 135
Downing, Philip H............................................ 164
Gadd, Hon. Donald J.......................................... 169
Grefe, Hugh.................................................. 172
Henry, Oren J................................................ 177
Laughman, Hon. Thomas J...................................... 179
Metzger, Hon. Kerry.......................................... 186
Montgomery, Hon. Dorothy..................................... 189
Myers, Donald R.............................................. 195
Ricer, Gary W................................................ 198
Salupo, Hon. Samuel A........................................ 199
Wesel, Charmel............................................... 207
Zwelling, Hon. Howard S...................................... 203
Additional Material Submitted for the Record--Afternoon Session
Ney, Hon. Robert:
Letter from the Coshocton County Commissioners............... 205
Letter from Hon. Michael Mullen.............................. 206
Letter from Douglas R. Davis................................. 210
Letter from David Brightbill................................. 212
STRENGTHENING RURAL OHIO:
A REVIEW OF COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAMS
----------
Friday, March 24, 2006
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 8:00 a.m., in
the Knox County Commission Hearing Room, 117 East High Street,
Suite 161, Mount Vernon, Ohio, Hon. Bob Ney [chairman of the
subcommittee] presiding.
Present: Representative Ney.
Chairman Ney. The hearing will come to order. This is a
field hearing of the Subcommittee on Housing and Community
Opportunity.
And I did want to introduce the staff people here today.
Clinton Jones is here, and Jeff Riley. Clinton is with the
majority staff and Jeff is with the minority staff of the
Financial Services Committee. But they obviously work together
for the betterment of what we should do as a subcommittee. Our
ranking member, Maxine Waters of California, sends her regrets.
We have two panels today and in holding with--this is an
official House hearing, there being no objection, this is an
official House hearing, so the testimony that you will--that we
will take back from here will be valuable. We are going to do
three hearings within Ohio, and then we are going to do one in
Los Angles in Representative Maxine Waters' area. And I think
that shows you no matter how large the city, or no matter how
small the town, this issue is important. And we will take this
back for the record and share it with our colleagues, so this
will help--if you support Community Development Block Grants,
then this will help to hopefully stave off the things that are
happening right now with it.
So, I would like to welcome you this morning to Mount
Vernon. And I want to thank, first of all, the Knox County
Board of Commissioners for allowing the subcommittee to use its
public hearing room for today's important discussions regarding
the CDBG or Community Development Block Grant. So again, thanks
to the Commissioners and a special thanks to Rochelle Shackle.
I do not know if Rochelle is here but she does so many things
for the county.
The CDBG program, administered by the Department of Housing
and Urban Development, is the Federal Government's largest and
most widely available source of financial assistance to support
State and local government-directed neighborhood
revitalization, housing rehab, and economic development
activities. These formula-based grants are allocated to more
than 1,100 entitlement communities (metropolitan cities with
populations of 50,000 or more and urban areas), the 50 States,
Puerto Rico, and the insular area of American Samoa, Guam, the
Virgin Islands, and the Northern Mariana Islands. Grants are
used to implement plans intended to address local housing,
neighborhood revitalization, public services, and
infrastructure needs, as determined by local officials, of
course, with citizens' input.
The benefits of CDBG funding can be seen in local
communities across the 18th District, which I represent. Here
in Knox County, CDBG funding has allowed for the revitalization
of several downtown streets such as in Mount Vernon. The
rehabilitation of the Mount Vernon streetscape has brought a
lot of new life, and residents and visitors alike can enjoy the
renovated shops and the restaurants. And none of this would be
possible without CDBG.
CDBG funding is also vital to our small towns because it
provides necessary resources to build sidewalks and pathways
for residents to access local parks and recreation areas.
Mayor Mason, by the way, sends his regrets that he could
not be here with us today.
President Bush's fiscal year 2007 budget proposal raises
some interesting and serious questions about what role
community development should play in helping local and State
government to provide safe and affordable housing to its
constituents. In addition to recommending a new formula change
for the Community Development Block Grant that focuses more on
the neediest communities, the Administration recommended a
funding level for fiscal year 2007 that is 27 percent below
last year's enacted levels. And for those of you familiar with
CDBG, it had a cut at the end of the day, last year.
The proposal also last year, which was fought back in the
House and the Senate, would have shifted CDBG into the
Department of Commerce, which would have totally changed the
rules, the regulations, there would probably have to be new
rules and regs crafted. It would have changed--I think in the
opinion of most Members of Congress, would have changed the
total thrust of the CDBG program into something that would not
be good and would not help with the quality of life.
So our goal, or my goal, as chairman of the Housing
Subcommittee is to make certain that the Department of Housing
and Urban Development remains focused on housing and community
development and that it has the tools necessary to continue to
provide safe, decent, economically viable communities for our
citizens. With such a significant decrease in CDBG funding
levels, I question whether the Department will be able to
continue these goals that have been set forth by the Congress.
Last year, I was very vocal, again as I mentioned, in my
opposition to the ill-fated proposal to move it to the
Department of Commerce. And I think CDBG importantly is based
on the concept that local communities and States can determine
priority community development needs and then develop
strategies and programs to address those needs. The program
helps to create a web of programs designed to strengthen our
communities and also to help with adequate funding.
And with that, is there anything you would like to say?
Mr. Riley. No, thank you, sir, for having us today. Mr.
Frank and Ms. Waters send their greetings.
Chairman Ney. Thank you. And with that--usually the general
rule of the House, because this is a hearing of the House, two
things--in hearings in the House, no one in the House is
commissioned to express yea or nays--not to use my name as a
part of it--not to express clapping or booing. It is just a
rule of the House which would apply to the hearing today. And
we have 5 minutes per panel, panel member and then 5 minutes of
questions, and hopefully we will not take up all the time, so
we would have a little bit more time, a little more relaxed
about it.
So, I want to thank you again, everyone, for being here
today and we will begin with panel one. And we have the
Honorable Daniel Dupps, Mayor, City of Heath, Ohio, who
provides great service. I should put in a promotional plug here
for Heath, Ohio; I live there, so that is why, it is a real
good place, as all the communities are. And of course the
Honorable Dave Hall, Holmes County Commissioner. And the
Honorable Allen Stockberger, President of Knox County Board of
Commissioners. And we will begin with you, Mayor Dupps.
STATEMENT OF THE HONORABLE DANIEL L. DUPPS, MAYOR, CITY OF
HEATH, OHIO
Mr. Dupps. Thank you, Chairman Ney. I appreciate the
opportunity to testify today and share some information with
you and the panel. You have my written statement. I would like
to read portions of that, but also go to the past Community
Development Block Grants in Licking County. And they represent
small communities, villages, and townships, as well as the City
of Newark, City of Heath, Pataskala whose mayor is here today.
And then also in the last two pages, which gives you an idea of
the fiscal year projects and where they are located in Licking
County. And also the final page is a little highway map so you
can also see the major thoroughfares.
But in terms of the City of Heath, Heath is considered an
acquired city under Licking County Small Cities Community
Development Block Grant program. As an acquired city, we
automatically receive roughly $47,000 per year in CDBG funds
for infrastructure improvements. Since the City of Heath
started receiving these funds in 1985, we have been very
fortunate to receive $657,000; of that, $538,000 was expended.
With the $538,000 we were able to leverage an additional
$43,000 from other sources to upgrade our low-moderate
neighborhoods with tornado sirens, fire hydrants, curbs,
sidewalks, and street improvements. Without these funds we
would not have been able to do many of these projects, much
less leverage for bigger projects.
It goes without saying, if there is a reduction in funds,
every county, city, and village in the United States including
the City of Heath will lose a valuable and much needed funding
source. And I am glad, Congressman, you pointed out Los Angles
and other cities; this is a nationwide issue. Also if the funds
are reduced, then across the board, everyone's funds will be
reduced. Less funds equals fewer projects, and less projects
means more deterioration, in our particular case.
One final point: Heath has been able to attract numerous
businesses to our community in the past 20 years, thereby
providing thousands of jobs for our citizens, as well as
bringing in other residents. I believe, when a business
considers moving into an area, one of the questions posed would
be, is this a progressive community or is this a community in
decline? If the community is declining, the businesses will go
elsewhere.
Bottom line for us: I think I can speak for all in Licking
County as well, the Community Development Block Grant program
helps us grow. To reduce or eliminate it will only cause our
communities to deteriorate further and that is not what our
citizens want or need. It is not good for us, nor is it good
for Ohio.
If I could just go to the following pages, the communities
are Buckeye Lake, a very struggling community and a new village
in our county. You can see a township, Eaton Township. And you
can see some of the projects that we have, if you turn to the
third page, Heath is listed there. And you can see from 1985 up
to 2004 or 2005 some of the projects that we have done, plus
all the other communities. Hebron is here as well today. But
they range from curb cuts to handicapped playgrounds, to fire
hydrants, to tornado sirens, to park furniture, to playground
services. These are projects that have made Heath--Heath is a
community of 8,500 people; it was incorporated in 1965--
appealing to people.
If I can note a couple of very important ones in terms of
Licking County. And I do not speak for these communities, this
is on page two, again the second page. But you will see the
Hartford Wastewater Treatment Plant and Collection System.
Hartford is where we have our county fair. Again, a small
village, but without these funds, the small village of Hartford
would not be able to have a wastewater treatment program.
That is true of another small community in Licking County,
Hanover. I think this particular list really emphasizes the
broad range of projects in our communities. It is substantial
and it is very, very important.
Finally, the last two figures, the last two sheets show you
the color coded years of the projects. The kinds of communities
that we are using these block grants for, and then finally
their locations. You can read the material, I cannot emphasize
more on how important they are. They are more than the icing on
the cake. They are the difference between a deteriorating
community and a progressive community.
I thank you very much for your time, sir.
[The prepared statement of Mayor Dupps can be found on page
85 of the appendix.]
Chairman Ney. Thank you.
Commissioner Hall.
STATEMENT OF THE HONORABLE DAVID HALL, HOLMES COUNTY
COMMISSIONER
Mr. Hall. Thank you, Mr. Chairman. I appreciate the
opportunity to testify in front of this group. I am the
president of Holmes County Commissioners, and also president of
Ohio Mid Eastern Government Association. But I will be speaking
on behalf of the Holmes County Commissioners and my county.
I would like to start my testimony by saying our
Commissioners are in strong support of the CDBG program. These
local programs have been vital for local project development in
Holmes County. Through the past 24 years, Holmes County has had
a partnership with our villages, township, fire departments,
senior centers, and county transportation projects.
Holmes County has a population of approximately 43,000. We
are a very rural county. We have six villages with the largest
village having a population of less than 5,000 people. We have
10 unincorporated villages. These villages are under local
township rule. With a 24-year history of Holmes County CDBG
projects, I have Exhibit A, which starts on my third page, and
is the history of Holmes County CDBG project program from
fiscal year 1982 to fiscal year 2005.
Holmes County, over those years, has received over
$3,670,781 in total formula funds, of which $3,266,900 was used
for local projects. On page two, you will see the breakdown of
the projects. Starting on page 4, and ending on page 10, you
will see projects from 1982 to 2005. In the left column is the
total project cost. In the right column you will see the CDBG
funds that were used in the project. So, you will see that
there was local funds in some of these projects committed by
local entities.
As you see in many of these projects, there are local
jurisdictions and different jurisdictions. We use these CDBG
funds for sidewalk projects in our township villages, in our
little villages. We have used it for sewer projects, water
projects, and vans for seniors and low-income residents on our
transportation side. Street improvements, EMS equipment,
defibrillators, and other minor equipment that they could not
find and could not fund.
Early warning sirens have been vital in our county. We were
able to do a project on that level, but we still are not
finished.
Park improvement projects, water studies, money to the
senior centers for improvement, county home, sewer plan, storm
drains, and projects for the village hall, local village hall,
these funds are small in size but they are important to locals
in Holmes County.
Each year we receive over $1 million worth of requests in
project funding. Unfortunately we had $200,000 last year to
work with.
CDBG funds are very important in my county in the State of
Ohio and if asked, I would say level funding is not enough. We
cannot afford to take any decreases. Just as added--the last
two pages of my testimony here, I added, I just received a
letter from the Ohio Department of Development; it states that
Holmes County will receive a cut. I received that letter
yesterday. Receiving a 10 percent cut, so now we will be
receiving $179,000. So we are going backwards. Actually, we
need CDBG funding to be increased for the future of Ohio and
our communities.
We know our community, and this program has helped
Commissioners to help locals to help themselves. We are
starting our CDBG projects for 2006 and I have been out to
villages with my fellow Commissioners, and townships, and I
have to say we have already looked over $500,000 worth of
requests just now and we have not even started our hearing
process.
On page 11, you will see my breakdown on the Community
Housing Improvement Program. This program helps consumers to
buy homes and it also helps in improvements and repairs.
I would like to thank you for your time.
Just to add a few things. We also, on the economic
development level, our largest business in Holmes County is
looking for the CDBG program to help to do some sewer and water
projects. As you will see Wayne-Dalton, which is Wayne Door, a
nationally known company, we were able to get them in the
process of adding on and building on, with the editors on my
back project list we have added Merillat Corp, the park
projects and a few others to the CDBG funding.
Finally, this program is vital, but not complete--its
mission is not complete.
I thank you.
[The prepared statement of Mr. Hall can be found on page
101 of the appendix.]
Chairman Ney. Thank you, Commissioner.
Commissioner Stockberger.
STATEMENT OF THE HONORABLE ALLEN STOCKBERGER, PRESIDENT, KNOX
COUNTY BOARD OF COMMISSIONERS
Mr. Stockberger. First of all, I would like to address the
Formula Community Development Block Grants. I also received the
notice yesterday of the cut. Knox County's amount is a little
bit less than Holmes County and I think as I understand the
program, that's because we have a city over 5,000, so they get
additional monies that the county does not receive. But
nevertheless, it does reflect a 10 percent cut.
We in Knox County, Ohio, have appreciated the flexibility
of the formula program. We have used these dollars to bring
buildings into American Disabilities Act compliance. Without
these funds being available some of the political subdivisions
would not have been able to complete these much needed and
mandated improvements. And we have looked on CDBG as a funding
source to comply with the ADA mandates. And granted at this
point in time we are approaching compliance with ADA, but we
still have some improvements needed.
We have also used these dollars to complete projects such
as parks and improvements, sidewalks, stormwater drainage, our
local domestic abuse shelter known as New Directions, and our
local substance abuse facility known as the Freedom Center. All
these community improvements are benefitting the low-moderate
income members of our community.
The next area of testimony I wish to speak to is the
communities--the county's Community Housing Improvement
Project. My favorite component of the CHIP program is the same
as the President's. To expand home ownership and opportunity,
although I might add even though that may be my favorite, it
has been under-utilized in Knox County. We have not been able
to get the participation in the home ownership programs that we
would like. I am not completely sure why that is. But we have
had great participation in the rental assistance program
component of the CHIP program and we are not quite as
supportive of that, because philosophically we believe that it
is like giving the people a fish every day to sustain them,
rather than teaching them how to fish. And we believe the other
home ownership program is more of a teaching how to fish
example.
Now, another area of that that has worked well for us, the
home ownership concept, is that we have had several Habitat for
Humanity projects. And we really embrace those here in Knox
County and we believe it is an excellent opportunity for people
to become homeowners.
We have also utilized the CHIP monies to do some water and
sewer projects in under-served--unserved low-income
communities.
In conclusion, Knox County has appreciated the CDBG
programs. We recognize the need to be fiscally responsible. We
would suggest that if budget cuts must be made, we request that
you please save the flexibility of the programs and the brick
and mortar components of the various CDBG programs.
I appreciate this opportunity you have granted Knox County
in testifying at this hearing. Thank you.
[The prepared statement of Mr. Stockberger can be found on
page 122 of the appendix.]
Chairman Ney. Thank you.
If anybody would like to answer this, all three or one of
you. What about--I think you kind of made this statement at the
end of your testimony. Any attempts to target these funds more
stringently? In other words, into certain categories where you
could fund only certain items. In other words, more stringent
attachment to the funds. Do you have an opinion on that, if
that were to happen?
Mr. Stockberger. Yes, I do have an opinion on that. In Knox
County, our Board of Commissioners would support more
flexibility rather than less--if I understood your question
correctly. I think more stringent would mean less flexibility.
Now, I understand that to use our local State Representative's
terminology, ``the sheckles come with shackles.'' And I
understand the reason for that, obviously the Federal
Government is not going to just spray money out here in the
local communities, and we appreciate that. You have to be
responsible for the tax dollars, as we do. But we certainly
would appreciate whatever flexibility we can be afforded.
Because there are times when certain components might fit one
community very well, but they may not work as well in our
community. So, if we had that flexibility, then it gives us the
opportunity to match the needs of our communities better.
Chairman Ney. Thank you. Anyone else?
Mr. Hall. I agree with my fellow Commissioner to my left. I
agree that flexibility as a county commissioner is vital. Each
community is different. I look at my community where I have--on
the eastern part of the county I have an Amish development, the
Amish settlement. On the western, it is a lot more of the
Appalachia areas. So flexibility in my county is vital.
Mr. Dupps. I would agree as well. That's why I tried to
list so many projects in our county. They are quite diverse and
they are different in many ways, but yet they are the same.
They tend to be basic infrastructure needs, if you really look
at the list. And I would be surprised if you would see many
grants throughout the country misused. Most of them tend to be
the guts and meat of infrastructure needs in small towns and
large communities as well.
Chairman Ney. I should also mention Representative Collier.
I do not know if he is here--in the hall--Representative
Collier, the local representative is here and has been so
helpful to us and helpful with also arranging this, so I wanted
to give him credit, with the shackles or without the shackles.
I raised this question--I wanted to let you know--why about
stringent, and I hear this from Washington. I will have people
that will come up to me and they will say well, they are using
this money for fire trucks. Yes, okay, and what's the next
question? But some people would say it is supposed to be more
of complete housing or it is supposed to be this or that. But I
do try to explain a lot and that's why I think this is good for
the record, to a lot of people, that it is a quality of life
issue here too in the communities. But also you have a lot of
community and if they do not have a certain piece of safety
equipment and that volunteer fire organization goes away,
people will not be in that area, because they would not have
necessarily a paid service that will come into it. So, I think
the quality of life does tie into jobs, in my opinion. So, I
have tried to stress that, because people say well, maybe we
should not allow it to use for fire equipment. Or maybe we
should not allow it to be used for certain things that maybe
does not make sense to them but might make sense to a
community. I think your testimony has provided that.
Would anyone like to comment on--I know Commissioner Hall
mentioned about the cut. What explanation has been given to you
regarding the cut? You said you got a letter from the State,
but have you had any explanation on it?
Mr. Hall. We were told in the letter addressed to the Board
of County Commissioners, March 23, 2006, that, ``Dear
Commissioner Hall, In fiscal year 2006, the Office of Housing
and Community Partnership expects to distribute approximately
$21.9 million of Ohio Small Cities Community Development Block
Grant Program funds to eligible communities through the
Community Development Program, which includes the formula
allocation...'', basically in the level that there was a--``Due
to a 10.2 percent reduction in the Community Block Grant
Program at the Federal level, the fiscal year 2006 Community
Development Program allocations were reduced by 10 percent.''
So we are saying that the level of cuts have now bled down and
been passed on to the locals.
Chairman Ney. I wanted to clarify, because that is the 10
percent I talked about last year. These people are saying well,
CDBG in the President's proposal is going to be cut 25 percent
and then the goal might be, well, let us get it down to a 15
percent cut. Now, if you take 15 percent and 10 percent last
year, it is still 25 percent. If the current cut is in
existence, it is 35 over a 2-year period, so we always like to
tell people, the goal is--in my opinion and some people will
disagree, some people will support the cut, but the goal is to
get it back to 25 percent, because we are already at 10 percent
from the previous time. And I think that directly reflects how
the dollars change down to an area.
Would anybody like to comment on how CDBG funds have
leveraged private sector funds for a community?
Mr. Dupps. On my list here, you will notice that there are
a number of categories. There is the grant request. There is
the actual expenditures, there is other and there is the total,
and the total entity. And the other is the numbers of dollars
that have been leveraged by various communities. So, you can
take a look at each bottom line in terms of Licking County or
Utica or other small areas in our county, what has been
leveraged. In our particular case, we have an opportunity, if
we do a bike path or if we do a park or something like that, we
can go to a foundation. If we--we do have a grant writer and we
try to match as many of our other grants with private sector
grants. And that is across the board, whether it is a Licking
County foundation or State foundation, actually the State
capital--Capital Improvements Fund is another area that we go
to.
One of the things that we did was we saved our oldest home
in our community, an 1860 home designed by Andrew Jackson
Downing, one of the gentleman who laid out some of the areas of
Washington, D.C.; it was important to us. But we were able to
leverage some money from this particular fund and then with the
State Community Capital Improvement Fund.
So it is important and that is why the list is there. It
shows you the amount of money that is leveraged elsewhere. And
without that I do not know how we would do that. Because we
have to have, you know, a certain amount of funding anyway in
terms of going out for grants. We have to show that we are
contributing. We contribute our own financial monies from the
cities. We get this particular grant and then we go out and
leverage it elsewhere. We have been very, very fortunate in
Heath to do that. And you can see other communities in Licking
County have done the same thing.
Mr. Hall. On our last 2 years, just looking at 2004 and
2005, we have leveraged dollars from other State programs. If
you look at our transportation, we were able to receive $93,600
through the State ODOT program. And in 2005, we were able to,
in our program, the Ohio Public Works Program, on a road--I
mean, on a water and sewer project, we were able to use the old
Issue Two program, which will now be the Issue One program. So
we have not received anything from the private, but we have
from the other public entities, we have received matching
dollars.
Mr. Stockberger. I believe that we have also, however, I do
not have the data with me.
Chairman Ney. The final question that I have is on the 15
percent public service cap, the limitation is 15 percent. Does
anybody think that should be raised? Or has that been an issue?
Where you could use it for health care sector, there is a cap
of 15 percent. Maybe you have not dealt with that, okay.
Mr. Stockberger. No, we have not done that.
Chairman Ney. I wanted to make a comment because you said
some interesting things about local flexibility and about the
funds and the process. And I imagine the State process is
pretty old hat for you. It has been around awhile, I assume.
You know people talk these days, you hear it across the county
about earmarks and we have to do away with earmarks. In a way,
the monies come down and then you make decisions and, you know,
different levels of government and people from communities work
with their local officials. You are taking the money down and
it is more of a local flavor to that decision. It can be a
controversial decision or not, but it is more local flavor.
This whole type of earmarks in Washington and let us do away
with earmarks, I have no problem putting our name on the
earmarks. We earmarked a cancer hospital addition here in Knox
County, a road project, $52 million worth, so I have no problem
putting the names on them. You can electronically surf any of
these bills and see whose names are in there. But this whole
phase to not to do earmarks to return taxpayers dollars means,
at the end of the day, the reverse of CDBG in a sense. It will
be a decision made in Washington. So you are going to have the
bureaucracy of Washington, D.C., saying hmm, I think maybe
Holmes County needs this. Or I think Knox County or Heath,
Ohio, needs these improvements, I do not think it is going to
happen. So, in my opinion, the earmark is a way where you hear
local opinions from local mayors and township trustees,
commissioners, State reps, and citizens, you know, everywhere.
And then that money comes back down through. So I just wanted
to say as you read this earmark fever, let us do away with
them, in a way, it is taking away the local people's desires to
have certain things in their communities. Which I think block
grants, I know you solicit opinions, I know you have tough
decisions too, on how do you chose.
Mr. Dupps. I would like to comment on it, because we talk
about that often in our deliberation with the council and, as
you know, we have been the recipients of money because of your
efforts on State Route 79. And people have asked me about that.
And without--when you have a State route through your community
whether it be a State route like 79 through my community or a
State route like 16 or 161 through Pataskala, once you have
that, that road is our responsibility to maintain, that's
everyday, you plow it, you patch it, you widen it, you do it
all. Unless you have the urban repaving, and urban repaving
comes along every 10, 20 years or so. So you are maintaining
that. The widening is almost impossible for a small
municipality in some of these. So you do need this help.
When we widened State route 79, we were dealing with
literally the Erie Canal, if you are familiar with our
community. So we had some real structural issues to deal with.
We couldn't have done that without that help. So, again, one of
the things that I would say is if people in the United States
complain about earmarking, then they have a right to vote. And
they--the system is that way. They change or, you know,
support, whatever they do. But the facts are, most communities
cannot deal with all the new infrastructure problems and
maintenance issues without the help of ODOT, without the help
of the State government, without the help of the Federal
Government.
When you talk about the wastewater treatment plants--you
know, I am talking about very small communities, Hanover and
Hartford, dealing with millions of dollars of wastewater
improvement needs. And it is very, very difficult without
higher and higher rates to put into savings for 10 or 15 years
for replacement funds when those facilities wear out, or when
they need to be upgraded for a new environmental protection
agency regulation, you must do that.
So, again, in terms of earmarks, I kiddingly say--I heard
this, but I kiddingly say to reporters, pork barrel backwards
spells infrastructure in my community. The reason I say that is
we cannot handle all of the needs and the necessities of
running these major water treatment plants, these major
wastewater plants and also maintain these highways.
Most communities are struggling without--our neighbor
Newark is struggling mightily with surface stormwater. They
have a combined plant that has been--it is a real problem for
them. They are going to have a real problem.
So that is my response. You know, we have a system here in
the United States and while I am satisfied with it, it is up to
the citizens to vote for a particular candidate or not for a
particular candidate. But without some earmarked funds, I think
we would have a real struggle. And I also trust local officials
and I trust other officials to do the right thing. Most of the
time they do the right thing for our citizens. So, I thank you
that, Congressman.
Chairman Ney. I just wanted to raise that issue. I think
again, you should have to put your name on the appropriation,
no problem, make it public. Here is your name, here is who
asked for the money, all through the bills versus being silent
on it. I think that is the way to handle it and then, you know,
this is the person that did that appropriation and then they
have to justify, you know, what they did and who they
appropriated on behalf of. So, I think that's probably the
solution versus the generic let us do away with them. So, I
just thought I would raise that.
I want to thank you for your testimony today. And we are
going to move on to panel two. But I want to thank you so much,
because this does allow us and like I said we have staff on
both sides of the aisle here. It allows us to go back and take
this testimony for the record. And I think it will have an
impact and I hope it does and the letters coming from across
the country on important issues. So, I want to thank panel one
and move on to panel two.
And then as we begin to move on to panel two, we move on
now. If you want to start around the room, if you are an
elected official and you would like to introduce yourself and
if you have statements for the record and you are not on a
panel, we will take the statements for the record. If you are a
citizen and you want to introduce yourself. I just thought we
would start, how about we start here.
Mr. Booth. John Booth, president of the city council. I
want to go on record in support of CDBG, and the council
recently passed a resolution and it has been sent to your
office and to other Representatives in support of all that. The
Mayor's report, and Amy Schocken is here today in support of
their reports today.
Chairman Ney. Anybody else? Go ahead down the row. If you
do not want to, that is fine. Now, the panel can come forward,
if you want to do that.
Mr. Calhoun, Mr. Crow, Mr. Glass, Mr. Graves, and Ms.
Schocken.
Anybody else in the room would like--yes, sir.
Audience Participant. Mayor of the City of Pataskala. We
looked at the numbers in the last 24 hours and saw that 10
percent cut as well. And I would like to make this a public
record statement that we are particularly a city that would be
taken out of the local share under that formula with a 25
percent cut. That is a great example of residents in our
community that would receive no services with local decision
making in order to solve a problem. And we are right in the
midst of an example, a water project in a low-income housing
area. The last 3- or 4-year plan was through CDBG funds, so I
would ask for any support we can get in order to keep the
funding where it is at.
Chairman Ney. The Mayor of Delaware, I know, has a
statement.
Audience Participant. I'm not the mayor, I am the city
manager.
Chairman Ney. I am sorry.
Audience Participant. We support the CDBG program as well.
We have a written statement that we would like to submit.
Chairman Ney. For the record. Anyone who has written
statements you would like to submit for the record, we will be
glad to take those. Any other officials would like--please
identify yourself, if you are an elected official.
Mr. Wise. Bob Wise, Knox County Commissioner, I just want
to go on record that we wholeheartedly support everything that
Allen presented here today. He did a fine job. Thank you.
Mr. Pfeifer. Gary Pfeifer, Holmes County Commissioner. I
just wanted to go on the record to say that, again, I support
my fellow Commissioner Dave Hall and his statement and the
local governments know what local government needs and we need
to have to that access available to assess that a whole lot
better than what Washington does.
Chairman Ney. And if there is no one else. Anybody else who
has a statement for the record, we will be glad to take it.
We will have panel two and we have Mr. David Calhoun, the
director of the Department of Community Development, City of
Newark. And Mr. Patrick Crow, Community Housing Improvement
Program CHIP inspector, Knox County in Mount Vernon. Mr. David
Glass, safety service director, City of Mount Vernon. Mr.
Graves, William Graves, housing administrator, City of
Columbus. And Ms. Amy Schocken, partner, CDC of Ohio, Inc.
Thank you. And we will begin with Mr. Graves.
Actually, we will begin with Mr. Calhoun. I need to
introduce Cindy Chetti. Cindy is also one of the fine staff
people at Financial Services and as you can see runs the three
of us in Washington, D.C. Cindy has done a great service all
this time out there. Mr. Calhoun.
STATEMENT OF DAVID CALHOUN, DIRECTOR, DEPARTMENT OF COMMUNITY
DEVELOPMENT, CITY OF NEWARK, OHIO
Mr. Calhoun. Good morning, Mr. Chairman and the members of
the committee. I'm the director of the Newark Community
Development Department. On behalf of Mayor Bruce Bain, I
appreciate the opportunity to address the importance of CDBG
and the potential impact that cuts will have on Newark, Ohio.
Our community is a community of 46,000 people. It is the
county seat of Licking County.
Newark is a community comprised of 51 percent low and
moderate income people. HUD categorizes us as an entitlement
community. Our Five-Year Consolidated Plan guides our use of
CDBG funds and reflects the high priority needs of our
community. And those needs were the result of an intensive
comprehensive assessment involving many facets of the
community.
Clearly, the cornerstone of the CDBG program is that it is
based on the needs assessments conducted at the local level.
This is vital in developing and implementing a strategic plan.
We, at the local level, can best assess the challenges facing
our citizens and service providers. Too many Federal and State
programs have homogenized mandates that force square pegs into
round holes to access funding. That has never been the case
with CDBG and that characteristic is key to its effectiveness
and value. Washington does not know the specific needs of
Newark, Ohio. The flexibility inherent in the makeup of CDBG
allows us to make the most effective use of Federal dollars.
In Newark, over half our housing stock was built prior to
World War II. For many years, the focus has been on preserving
existing housing stock, assisting development of affordable
housing, and preventing homelessness. Over 70 percent of our
housing was built prior to 1978, therefore we are implementing
lead hazard removal programs so that we can save our older
housing and prevent disabilities in children who are
unknowingly at risk due to lead based paint.
Perhaps one of the most understated aspects of CDBG is the
collaboration that it encourages. We work with numerous social
service agencies and non-profits in order to maximize resources
that help people with a variety of needs. Without it, many
people will suffer and so will our community's overall ability
to address major issues in housing, economic development, and
the prevention of slum and blight.
Local governments, private non-profit entities, and social
service agencies cannot absorb these cuts. The City of Newark
has just gone through a layoff of city employees, that has
included basic services such as police and fire. There is just
no chance that our local budget will be able to absorb cuts in
the CDBG program.
Removing setasides, such as Brownfields Economic
Redevelopment Initiative, Rural Housing, and Section 108 loans,
and pushing them into the CDBG program will have the same
effect. A forced combination as recommended by the President's
plan essentially forces the elimination of these programs.
In addition, the Administration's push for home ownership
does not necessarily meet the need of every community. Home
ownership is not the best option for everyone. Frequently, low-
income individuals and the elderly do not have adequate
resources to maintain their homes. Blindly leading them down a
path of home ownership can set them up for failure and
exacerbate our property maintenance problems.
An even larger problem is the increased rate of mortgage
foreclosures and predatory lending practices. Ohio has a
terrible rate of defaults. In Licking County, the number of
foreclosure filings increased by 549 percent between 1994 and
2004. That problem needs to be addressed instead of using CDBG
bonus funding to increase home ownership opportunities.
Sustainability of home ownership is far more important in
Newark than inflating the numbers of new home buyers.
Again, Newark, not Washington or Columbus, develops our
comprehensive multi-year plan. The strategy to identify local
needs, prioritize them, and implement programs to achieve
measured objectives and results is an important part of the
CDBG system.
I would like to just mention a few of the important
programs that Newark will--that will suffer in Newark if we
incur the cuts. There is nothing to fill the gap for home
rehabilitation for low and moderate income people if these
funds are reduced. We help persons stay in their homes through
our deferred loan--low interest loan program. Newark CDBG has
helped the elderly and persons with disabilities to live in
sanitary and safe housing. We just completed an emergency home
repair for a blind couple, including roofing and electrical
repairs. As a result of those repairs, they can maintain their
independence and live in a safe environment. Without our
intervention, this home would have deteriorated and eventually
become uninhabitable.
Last year the city established a partnership with Mound
Builders Guidance Center to develop a job tryout program for
persons with disabilities. This alliance resulted in 18 people
with disabilities gaining permanent employment. Without CDBG,
the community would not have had the resources to implement
such a creative endeavor.
Public services also play a key role in our CDBG program.
For example, we have leveraged funding of CDBG with Issue Two
dollars from the State of Ohio for several sanitary sewer
projects. Approximately 450 homes now have sanitary sewer
services that could not have been accomplished without this
funding.
The ability to leverage funding cannot be overstated. Every
dollar invested in CDBG has a multiple rate of return. Our
local homeless prevention agency has obtained multi-million
dollar grants because the City of Newark has provided CDBG
dollars as local match.
CDBG has already incurred significant cuts over the past 3
years. The impact of those cuts have had--inflicts long term
damage to communities nationwide. An additional cut as
mentioned of about 27 percent would be devastating for Newark.
CDBG has a 30-year history of reaching out and delivering
services to millions. CDBG has helped Newark assist members of
the community who would have fallen through the cracks. CDBG is
not a handout, it is a helping hand and I hope Congress and the
Administration will not slap that hand, but continue to extend
it to the people of Newark.
Thank you for the opportunity.
[The prepared statement of Mr. Calhoun can be found on page
76 of the appendix.]
Chairman Ney. Thank you. Thank you, Mr. Calhoun. Mr. Crow.
STATEMENT OF PATRICK L. CROW, INSPECTOR, COMMUNITY HOUSING
IMPROVEMENT PROGRAM, CITY OF MOUNT VERNON AND KNOX COUNTY
Mr. Crow. Good morning, Mr. Chairman, and members of the
committee. I thank you for the opportunity to testify this
morning. My name is Pat Crow. I reside in Danville, Ohio, a
small community of approximately 1,000 people, where I served
as mayor for 12 years. I have been working in Knox County area
community service and development positions for 20 years. My
wife Sandy and I operate a family business. We are self-
employed. The name of the company is Downtown Options and we
provide management services on projects such as the Woodward
Opera House, the Downtown Revitalization of Mount Vernon, and
many local CHIP funded projects.
I am currently the housing inspector for the local
Community Housing Improvement Program, also known as CHIP. And
this is a Community Development Block Grant funded program.
In my spare time, I am the executive director of the
Convention and Visitors Bureau for Knox County, a part-time
job.
I would like to quickly summarize the areas for which I
have had personal experience and the resulting impact of the
history of the CDBG dollars spent in Knox County.
In downtown Mount Vernon, three major CDBG revitalization
projects were implemented and completed including parking
improvements, streetscape improvements, and over 60 downtown
building rehab projects. In addition, many other projects were
stimulated not using funds from CDBG, but I believe the result
of, including our conference center and hotel that we currently
have in our downtown.
The overall work utilized approximately $1 million in CDBG
funds. This investment stimulated directly over $4 million in
other public and private development dollars being spent. These
efforts have also resulted in recent heavy investments by local
developers committed to the long haul type efforts needed to
assure the continued economic growth of the downtown well into
the 21st Century.
The initiative that started the Woodward Opera House
restoration had its beginnings within a community development
block grant. Once the Woodward restoration is complete, it is
projected that the programming and retail expansion will
stimulate over an additional $1 million annually in increased
economic benefit to the community.
As I served as the Mayor of Danville, I recognized that
there are literally millions of dollars that have been invested
over the years in the aging and decaying infrastructure
throughout Knox County. More specifically, I have recently been
the inspector and construction coordinator on over 60
individual CHIP projects in Knox County and in Mount Vernon.
These programs are designed to assist needy property owners.
Perhaps this defines the essence of the CDBG program. This has
been a most humbling experience for me. I often see folks in
circumstances that cry out for relief. Some examples, I found a
hole in one roof so large you could stand by the client's bed
and see blue sky through the fallen down plaster ceiling and
the gaping hole in the slate roof shingles. In several cases,
we have found ourselves contracting to clean up lead-based
paint contamination in homes where little children were
potentially being poisoned by this harmful substance so
plentiful in many old houses. We have, for just a few dollars,
moved appliances to the upstairs of houses so that the elderly
can continue to live at home and not be a burden to their
family or to the government. We have replaced dangerous
furnaces, leaking hot water heaters, and collapsing basement
walls in homes with single mothers working full time to support
their children. We have replaced and repaired countless roof
leaks, fallen gutters, and installed toppers so the elderly
would not have to climb ladders to remove the fallen leaves
that plug the downspouts resulting in future severe home
deterioration.
We have helped young couples buy their first home and made
certain that the current building standards are met to assure
the longevity of their stay. We have helped the handicapped
build ramps, constructed fire exits to assure the safety of
children living in upstairs apartments, and repaired plumbing
and replaced floors to eliminate the health hazards from
dangerous sewage soup holes in deteriorated basements.
We have replaced frayed electrical wiring and electrical
boxes hot from overloads, to bring clients' homes up to safe
living conditions. We have covered, contained, and re-sided a
home recently that was shedding lead based paint particles all
over a neighborhood full of children playing nearby. We
installed a new furnace to assure winter heat for a couple
where the young wife was going through the excruciating
experience of chemotherapy treatments for her cancer.
I could go on, but if you want to know how important this
CDBG program is, I would like for you to have a chance to go
talk to these folks. Almost without exception, they are the
most grateful group of Americans that I have ever known,
thankful for these seemingly small and insignificant grants. I
believe that we all have a responsibility to make a difference
in these people's lives, in these kids' lives, in these
grandmothers' lives, in the lives of the sick, the ailing, and
the frail.
This important CDBG program has had a huge impact on those
that are being served and it must continue. Mr. Chairman,
members of this committee, please campaign for the continued
support of the Community Development Block Grant Program at
least at its currently funded levels. But more money is needed.
In addition, please do not allow the dilution of this
program through the inclusion of unrelated programs that have
previously have been funded otherwise.
I thank you for the opportunity to address you this day.
Thank you.
[The prepared statement of Mr. Crow can be found on page 80
of the appendix.]
Chairman Ney. Mr. Glass.
STATEMENT OF DAVE GLASS, SAFETY-SERVICE DIRECTOR, CITY OF MOUNT
VERNON, OHIO
Mr. Glass. Good morning. I am Dave Glass, Safety Service
Director for the City of Mount Vernon. And I am going to read a
prepared statement from the Mayor who could not be here this
morning.
Prior to that though, I would like to tell that I worked
for the city for 27 years and been involved in these grants for
that entire time, and they are extremely beneficial to all the
residents of the community.
We are pleased to give testimony to the Subcommittee on
Housing and Community Opportunity at the field hearing held
here in Mount Vernon, Ohio.
We understand that the public hearing is entitled,
``Strengthening Rural Ohio: A Review of the Community Block
Grant Program.'' The City of Mount Vernon has received many
grants since the CDBG program was created in 1974. The city has
identified specific target areas in the city that have low to
moderate income neighborhoods. We have offered home
rehabilitation projects, home repair projects, home buyer
assistance programs, and rental rehab programs. Along with
these private sector programs we have used CDBG funds combined
with city funds for the improvement of sidewalks, curbs and
gutters, storm drainage, and public handicapped restrooms all
located in these target areas. The CDBG program is a prime
example of how private-public partnership can improve low and
moderate income segments of the community. Citizens of all ages
who are in compliance with the income guidelines can fix up
their homes and have input on the general improvement of their
neighborhood.
The City of Mount Vernon also participated in what Pat said
before, the three downtown revitalization programs. Like most
cities, both large and small, our central business district has
been impacted by the strip malls being located on the perimeter
of the cities. Mom and Pop businesses that we knew as we grew
up disappeared because of their inability to compete with the
large merchandisers. However, many of these small businesses
were able to make the transition to meet the needs and demands
of today's consumers. The downtown revitalization program
allowed both the landowner and the tenant to fix up their store
fronts, the interior, and, in some cases, the roofs of the
downtown buildings. This enabled the entire central business
district to take on a new look. It has energized the downtown
area.
The private-public partnership was received with a great
deal of enthusiasm in the central business district. In the
last funded project, the City of Mount Vernon did a complete
rehab of the streetscape, and new sidewalks, flowerbeds, street
lighting, and storm drainage were all added to improve the
downtown area. This would not have been possible without the
Community Development Block Grant Program.
We have also been the recipient of the CDBG Competitive
Grants. In the north end of our city, we were able to go in and
improve storm drainage, and put in sidewalks that allowed
residents from several apartment complexes catering to low and
moderate income residents to walk more safely from their
apartments to the community swimming pool and playground and to
the shopping areas. Prior to this construction project, the
road they were located on was narrow and had a deep ditch
making it necessary to jump into the ditch to avoid cars. The
construction of the drainage and the new sidewalks and the
crosswalks made it a much safer area for the children and
adults to walk.
We have recently been awarded another competitive grant
that will be used in the west side of our city to improve
streets and gutters, storm water drainage, and improve
handicapped access to Riverside Park. All of these projects
have had a positive impact on our city for over 30 years. As
you can see, a 27 percent decrease in funding, which we believe
is only the beginning of a plan, will have a negative impact on
our ability to rehabilitate these low to moderate income
neighborhoods.
Over the years, I have talked with senior citizens living
primarily on Social Security who were able to procure a new
roof with the CDBG helping hand enabling them to live
additional years in a safe, dry home. I have also talked to
people who lived in substandard housing with faulty septic
tanks, who were able to connect to the central sewage systems
as part of the rehab program. I have talked to young and old
people alike who lived in areas of the city that were built
before storm sewers were the responsibility of the developers.
After every rainstorm, the areas of their house, and driveways,
and sidewalks if they had them, were all submerged for hours or
even days until the water would evaporate. The storm sewers
that we have been able to build with this program have dried
out numerous areas of the community.
In conclusion, I believe the continuation of a fully funded
Community Development Block Grant Program is necessary to
maintain small businesses, assist seniors to stay in their
homes longer, assist young people who have limited income to
rehab older homes, to improve property values, and make
roadways and sidewalks safer in target neighborhoods. Also, the
improvement of handicap accessibility in the public parks and
restrooms have all been a very positive impact on the City of
Mount Vernon and the surrounding area.
[The prepared statement of Mr. Glass can be found on page
93 of the appendix.]
Chairman Ney. Thank you.
Ms. Schocken.
STATEMENT OF AMY W. SCHOCKEN, PARTNER, CDC OF OHIO, INC.
Ms. Schocken. I am Amy Schocken, and I want to thank you
very much for the opportunity to speak today. I am a partner in
a community development consulting firm that assists rural
communities throughout Ohio with their CDBG programs. And in
the 22 years that I have been in this business, I have seen an
invaluable resource with the CDBG funds.
And I have been very fortunate to work with Knox County and
Mount Vernon for several years. And to expand a bit on the
programs that we have done in Mount Vernon and Knox County,
Dave was just talking about the Taylor, Wooster, McGibney Road
project. And that was a wonderful collaboration between Knox
County, Mount Vernon, and Clinton Township in identifying a
great need of a neighborhood of over 730 people, of whom 93
percent were low to moderate income. There is a municipal
swimming pool on one side of the neighborhood, an elementary
school and ball parks on the other side. There were no
sidewalks for the kids to get from one to the other, they had
to walk either in the middle of the road with no room or on the
berm of a State highway. And with the use of city, township,
county, and CDBG funds as well as State Issue Two Funds, we
were able to use $452,460 in CDBG funds which leveraged
$357,920 in other funds to complete this project and now
everyone has a safe place to walk.
Another project was the rehabilitation of the New
Directions Domestic Abuse Shelter. They house over 75 people a
year and they benefit approximately 500 people annually with
their services. This building was in great need of
rehabilitation and the county used $31,000 of their CDBG funds
to leverage over $41,000 in county general funds, local mental
health funds, and also local United Way funds to rehabilitate
this place so that there is a safe place for these people to go
in Knox County.
The City of Mount Vernon is currently undergoing major
rehabilitation in their west end neighborhood. A total of
$670,000 in CDBG funds are leveraging $746,000 in other funds
to make vast improvements to this neighborhood. The
neighborhood contains 2,747 people, of whom 63 percent are low
to moderate income. Improvements underway include storm sewers,
curb cuts, street paving, improvements to the neighborhood
park, rehabilitation of an old train station into a community
center, and home repairs for 14 low to moderate income
homeowners. Also, Habitat is building one new home.
In addition, the village of Danville is undergoing a
substantial improvement. This is a small rural village of about
1,100 people, of whom 58 percent are low to moderate income. In
this village the county is utilizing over--almost $631,000 of
CDBG funds to leverage $310,000 other funds to undertake 31 low
to moderate income homeowner home repairs, Habitat is building
two houses, storm sewers, fire protection and water line
improvements.
And this is just a very short list of what has happened in
the last few years in Knox County and Mount Vernon. And much of
what they accomplished is due to competitive programs that the
State offers. Unfortunately, they only can fund about ten
community distress grants a year, which are $300,000 grants to
do State-community revitalization projects. They also have a
housing program that funds about 60 communities a year. And in
order to undertake any of these programs, communities are
required to do two planning studies. One is a community housing
assessment, community housing improvement strategy which
focuses on the housing needs of a community. And the other is a
community assessment strategy that focuses on the
infrastructure, public service, public facility needs. And
those studies have to look at the community as a whole and
target what areas of low income population have the most needs
and put their money toward the most distressed areas.
And the other way that--with the housing programs in Ohio,
they also, the State of Ohio has small communities access
housing funds, through what they call the CHIP Program, which
you have heard. And that is a combination of CDBG Home
Investment Partnership funds and Ohio Housing Trust funds. It
enables communities to utilize the flexibility, and what all
three of those programs have to offer in a comprehensive manner
to address the individual needs of that community and it really
builds on the flexibility that is needed. Each community, as
you have heard, has completely different needs. Some may need a
park improvement. Some may need economic development. Some have
housing, almost all have housing needs. You can get sanitary
sewer lines, where there is raw sewage running down the street.
You can help a ball field. So, these are all greatly needed
quality of life issues.
In addition to the competitive programs, the State of Ohio
funds the CDBG program through the Small Cities Program. And
since 2004, these funds have been cut over 14 percent. The
proposed cuts will reduce it another 27 percent. The proposed
formula changes would reduce the amount Ohio receives
significantly more. In 2004, Ohio had 116 small cities that
received a direct allocation of CDBG funds. In 2006, that
number is down to 84. The proposed cuts would take that number
down to 58; that is a 50 percent reduction in the number of
small cities that would get direct allocation since 2004.
In Knox County and Mount Vernon, in 2004, they received
direct allocations of $148,000, and $85,000, respectively. The
proposed cuts would reduce these allocations to $95,000 and
$54,000 which is a 36 percent decrease since 2004. These cuts
would just be devastating to rural Ohio. These small
communities have the smallest budgets, and the least
opportunities to find other resources to fund the low income
neighborhood community revitalization activities. And I
seriously believe that any further cuts in this program would
just basically eliminate any kind of targeted low income
housing and low income revitalization in Ohio.
And I think if you really want to see the benefits of the
program, you just need to take a walk in downtown Mount Vernon
and see the revitalization needs or walk on McGibney Road and
see where these kids used to have to walk, or talk to any of
the social service providers and--or any of the individual
homeowners that we have assisted. It is just a remarkable
program and a vital role in the community development. Thank
you.
[The prepared statement of Ms. Schocken can be found on
page 117 of the appendix.]
Chairman Ney. Thank you.
Mr. Graves.
STATEMENT OF WILLIAM J. GRAVES, DEPUTY DIRECTOR OF DEVELOPMENT,
CITY OF COLUMBUS
Mr. Graves. Thank you, Mr. Chairman for the opportunity to
testify today; it is most appreciated. I am here on behalf of
Michael Coleman, Mayor of the City of Columbus. Unfortunately
he could not attend today and he sends his regrets.
My name is William Graves and I serve as the housing
administrator for the City of Columbus. The City of Columbus is
an entitlement community receiving Community Development Block
Grant funds from HUD. I have worked with CDBG and other HUD
funded programs since 1981.
CDBG has a proven track record for helping local government
to address specific needs and focus on community issues as
identified in the communities consolidated plan process. Of
critical importance is that the CDBG program enables
communities to identify and target these Federal resources to
needs that are most critical to the community. The broad range
of eligible activities within the CDBG program and the flexible
approach of HUD in allowing communities to target these dollars
enables recipients to use this program to maximize assistance
to low income families. As such, CDBG continues to be an
essential asset to help communities fight blight, improve
neighborhoods, and focus on activities that benefit low income
individuals and pockets of poverty.
The Administration's current budget proposal will
drastically reduce CDBG, and to give bonuses to communities
that succeeded, would leave thousands of communities unable to
address the basic needs of low and moderate income people.
Essentially the Administration is proposing to strip $1 billion
out of the program by proposing the lowest level of funding for
CDBG since 1990. The proposed reduction in CDBG is further
evidence of the Administration's reverse Robin Hood approach to
budget making. The CDBG program was already reduced by 15
percent over the past 3 years and the President's budget
proposal would further cut the program by another 25 percent.
Again, further evidence of the President's mission to reduce
all funding for low income Americans. This reverse Robin Hood
approach comes at a time when the needs of urban America is at
a critical juncture requires increased funding not funding
reductions. As such, I urge anyone interested in community
development as a means to assist low income households and
preserve neighborhoods to advocate for at least $4.5 billion in
formula funding for CDBG in fiscal year 2007. The President's
budget calls for $2.7 billion for formula grants for cities and
States. This is reduced from $3.7 billion in Federal fiscal
year 2006. Certainly the City of Columbus, as does a broad
coalition of community development advocates--and I attached
that coalition to the written testimony--sees these cuts as
evidence that the Administration is abandoning its commitment
to America's communities in the guise of reform. The coalition
members also expressed concerns, as mentioned above, that the
25 percent reduction would pose serious threats to communities'
abilities to provide important services and economic recovery
for low income citizens.
For the City of Columbus, this continual erosion is
extremely critical and is evidenced by the sharp reductions
during the past several years. In 2003, the City received $8.7
million. In 2006, the allocation was only $6.6 million, a
reduction of 24 percent during this period. Another interesting
point is that the administrative oversight requirements for the
CDBG and other HUD funded programs continues to go up while
funding goes down. Such a situation not only creates
frustration for grantees but also erodes the ability of
recipients to undertake projects as more and more time is spent
handling administrative and reporting requirements while
funding for projects to benefit low income housing is reduced.
The City of Columbus targets its block grant resources in
order to focus investment and create impact. Certainly, given
the small amount of CDBG dollars received this is the best
method for an entitlement recipient such as Columbus.
Typically, the city selects six neighborhood pride areas each
year and these locations serve as the target zones for housing
rehab and other activities that benefit low income households.
The city also selected 11 neighborhood commercial
revitalization districts to focus block grant economic
development activities. In addition, the city creates or uses a
CDBG service area to determine, based on demographics and
housing standards, which is then used to focus code enforcement
and other initiatives to improve the quality of life for the
residents.
Outcomes for a portion of the housing related activities
benefitting low income households, are as follows:
In 2003, the city was able to assist 131 low income
households through housing rehabilitation activities to provide
decent, safe, and sanitary housing; 143 low income elderly
households received minor home repair, preserving the housing
quality and enabling those homeowners to remain in their homes;
28 disabled individuals were provided with accessibility
modifications; 583 low income households received emergency
repair assistance to correct substandard conditions protecting
their health and safety, and again, allowing these low income
citizens to remain in their houses.
In 2004, 78 low income households received housing
rehabilitation assistance; 172 low income elderly households
received home repair; 12 disabled individuals were provided
with accessibility modifications; and 553 low income homeowners
received emergency repair assistance. Again, to correct unsafe,
substandard conditions and protecting the health and safety of
those individuals.
In 2005, 55 low income households received housing
rehabilitation; 247 low income elderly households received
minor home repair assistance; we had 22 disabled individuals
receiving home accessibility modifications and 53 deaf
individuals received assistance to enable them to live
independently; and 583 households received emergency repair
assistance.
As demonstrated above, these reductions in funding are
impacting the city's ability to provide housing rehab
assistance. There are continually more and more households
denied assistance due to a lack of CDBG dollars. Such a
situation is extremely frustrating, creating a tenuous
situation. As housing stock deteriorates, low income households
must make dire choices on where to spend limited resources--fix
the house, pay the medical bills, pay utility bills, or eat.
The City of Columbus urges Congress to not reduce this much
needed program and strongly requests that funding for Federal
fiscal year 2007 for CDBG should be $4.5 billion.
Thank you for the opportunity to testify, Mr. Chairman.
[The prepared statement of Mr. Graves can be found on page
97 of the appendix.]
Chairman Ney. Thank you very much.
Starting with Mr. Calhoun, I think you raised some
interesting issues, today we have talked about CDBG in a lot of
different ways, which is the way the program is supposed to
work. You focused a lot on housing and, you know, there is an
attempt to, of course, get as many people into housing as
possible in the country. It used to be about 68 percent of
Americans had a house, now it is about 72 percent. The minority
rate is still low. It is about 50 percent or less, which is
unacceptable. So there is a lot of effort to help anyone with
housing, but also to focus on helping minorities to be able to
acquire housing. You raise a different picture too about the
predatory lending, which is interesting. Senator Padgett has
passed a bill and we have a bill--I have a bill with Paul
Kanjorski and also we are proud to have a lot of significant
and important members of the Black Caucus Democrats on that
bill. So, I think it is a good beginning point. There is going
to be another hearing or a markup coming up this week with
Spencer Bachus on predatory lending.
So, the goal is to have some standards across the country
where they do not exist in a lot of States, but North Carolina
seems to be something that everybody is looking at. So you
bring in another aspect to it too of trying to stop flipping,
to have counseling and the government can put money in
programs, but you have got to have counseling and education on
the issues so the people know to the best of their ability what
they are signing. I just thought you brought an interesting
component that, you know, people would think, well, here is
CDBG and here is the funding. But there is other aspects the
community has to watch. I just thought that was--
Mr. Calhoun. Well, we are in the process of putting
together with our local housing coalition group a counseling
program that ties the people that we serve into resources for
mentoring and a financial literacy program. And I think it is
important that we are able to use what we are doing in the
housing rehab and tie that to some counseling services and CDBG
allows the flexibility to bring those resources together. They
received an AmeriCorp Grant to provide the financial literacy
program, we can tie into that with the CDBG program. And we
have families all the time in foreclosure and it is a major
concern I think, statewide, to address the foreclosure rate and
predatory lending practices.
Chairman Ney. Are communities also active with brownfields
elimination and do you have any thoughts on brownfields in the
smaller community when we look at it?
Mr. Calhoun. We were very close to obtaining a brownfield
grant. The project basically got stalled, but it is an
important program and providing the redevelopment of that kind
of area and bringing in jobs makes the rest of the efforts that
we do worthwhile. It helps solve the problem. Jobs in the
community are a basic function. If we cannot do that, then the
housing problems, the other problems just multiply. So I think
it is an important program to preserve. Putting it into CDBG
just dissolves and dilutes the program. It does not provide the
same benefit.
Chairman Ney. There is an effort to change the CDBG
formula, which now recognizes older housing stock. Do you have
any views about the need to change that?
Mr. Calhoun. I think changing the formula needs to be done
carefully and within the context of the current CDBG program.
We should identify the most important needs and recognize
differences in communities to do some targeting. But I would be
very concerned about that formula penalizing smaller
communities and putting all the money into the major
metropolitan areas. If that formula--and we have seen that in
some other cases where the number of problems outweighs the
percentage of concentration of problems and we lose funding as
a result of that. But I think equalization and a review of the
funding formula may need to be done, but it needs to be done
carefully.
Chairman Ney. The other aspect you raise, again, you know,
it is important to get people into homes, we have the American
Dream down payment that we passed, overwhelming vote on that to
help with up to $5,000. Something else the House has done and
we worked with Congressman Barney Frank, Congresswoman Maxine
Waters, Chairman Oxley who chairs the committee, and myself and
others, passed--I am trying to remember what--we passed the
Affordable Housing Fund and GSC reform, Fannie Mae and Freddie
Mac had to have a reform and we put into their fund. And we
took, I think it was up to 5 percent of Fannie Mae and Freddie
Mac's profit and put it into a fund that would help the poorest
of the poor and some of that, there was also some amendments
about some, you know, Katrina-related issues or if you had a
catastrophic event. But the bottom line is we put that in
there. And one of the reasons we did that is not everybody will
have the availability to own a house. And so therefore, I think
the housing fund that we created, which I hope the Senate will
act on, we passed it in the House, is a wonderful thing to
help, again, the poorest of the poor. Section 8 is something
that we look at all the time, because our subcommittee is the
authorizer for HUD so we oversee HUD and the language part of
it. We always look at Section 8 and the housing authorities.
I just think that you raised a good point, you know, with
CDBG and what you can utilize. Then the other types of housing
you utilized. And Habitat for Humanity was mentioned here
earlier. It is not a one-size-fits-all for the community and
the more we can recognize that you have to help people who have
different needs is good. So folks--home ownership is an
absolute must. But there are other ways that you help people
with their living conditions that may not be able to own a
home. This is, I think, an important thing for CDBG.
Mr. Calhoun. We have both programs in existence in our
program, assisting our program. Assisting in home ownership and
a down payment assistance program. But it needs to fit within
the strategy that we are trying to implement. If you change the
funding formula to provide bonus funding for that kind of
thing, you may disrupt the balance of that strategy and
overemphasize a need that may not fit in the community as well.
Chairman Ney. Thank you. Mr. Crow, you mentioned when you
were the Mayor of Danville, you witnessed firsthand the
neediest residents, is there any other message that we should
give Washington on their desire to change CDBG. Things that
maybe they want to do, that you may not be happy with? Or are
there other things maybe that should be done within the
program?
Mr. Crow. Well, I believe, and I cannot speak for the
village, I am no longer the Mayor, but I am still a resident
and familiar with what is going on. I would echo what we have
heard from several here; the distress that is in the smaller
communities is because of loss of business, because of the
socio-economic changes that happen in America where business
flees the little towns and moves to the larger communities. And
the need to improve the sewer and water and keep them up to
date with the changing EPA regulations that are Federal
mandates is impossible without the CDBG funding. It is just--
well, what we will see is communities like the village going
into violations with the EPA because they do not have the money
and funding. The answer sometimes we get from--no disrespect--
but from bureaucrats and the EPA is just raise your rates.
Well, when water rates and sewer rates in the village of
Danville climb to $100 to $200 a month for a family of three,
we are reaching beyond the ability of these people to pay the
bills. So, the termination of CDBG funding for those kinds of
activities would be devastating to the communities like the
village of Danville, both water, sewer, and infrastructure
improvement projects.
We need to be focusing not only on just infrastructure, we
have heard a lot about that today, but you mentioned earmarks
earlier, and I have a great concern about only focusing on
helping people--I think Commissioner Stockberger mentioned
giving them fish versus teaching them how to fish. We need to
focus on asset creation kind of investments and you have helped
us with the Woodward Opera House project, a prime example of a
community development project, which is not just a quality of
life issue with respect to performing arts, but also an
investment in the downtown district where there is a commercial
element to it that would create jobs, it will keep jobs
downtown, and spawn other development in the central business
district. So, there are many aspects to CDBG that are really
subtle and hidden that are benefits to the community.
Chairman Ney. Thank you. You never offend me if you
complain about overzealous bureaucrats.
[Laughter]
Chairman Ney. Mr. Glass, do you want to elaborate on the
CDBG money, because you have mentioned a lot of different
projects where it was utilized when you had a public-private
partnership development as a result of the project.
Mr. Glass. Well, I mean I can just echo what we have done
in Mount Vernon, for the last, like I said, I have worked here
for 27 years in the engineering department before I took this
position. And I have been involved in these block grants the
entire time. And we have just done tremendous amounts of
beneficial things for the neighborhood, the storm sewers
especially, when we put the storm sewers into different
neighborhoods to resolve these water problems. I do not get
involved in the day-to-day housing rehab, those kind of things.
I would like to change my hat a little bit. I am on the
village council in Fredericktown and I would echo the past
sentiment. We have a $6 million sewer improvement coming up, a
sewer plan improvement coming up there that there is just no
way that we will ever be able to afford it.
Chairman Ney. We have communities all over this district--
Mr. Glass. Oh, I understand.
Chairman Ney. --been working with them for years and we
will try to comply and EPA will come in and, you know,
basically maybe sometimes obviously say drinking water would
not meet a certain standard so then they are going to put the
people to the point where they do not have water. So, there has
to be a sound science and a balance there. Or in a community
that is so impoverished where it simply is not going to be able
to get the money, there has to be a way, you know, and we try
to do that, work with communities to help out to alleviate
the--
Mr. Glass. It is a very difficult situation, for the real
small communities.
Chairman Ney. Ms. Schocken, you mentioned about the low
income, well, low and moderate income benefits of CDBG. Is
there anything that you would like to elaborate on--on the low
income?
Ms. Schocken. Well, one of things that I know President
Bush is pushing for is targeting of funds and maybe targeting
to the lowest of income. And these programs, you know, most
neighborhoods, if you target a neighborhood in Knox County, you
are not going to find the whole neighborhood is 35 percent or
less of county median income. There is going to be a mix there
and as we talked about the McGibney Road project, that area is
93 percent low to moderate income. And there are a lot of
apartment complexes that are Section 8 subsidized that are very
low. But there are also homeowners in that area, too. And they
are also more moderate but still in the low to moderate income
range. And I think that if you get rid of the moderate income
element of the CDBG beneficiaries, you are going to get away
from the home ownership activities. Those are the people who
can afford to purchase a home.
You are going to get away from benefitting a village that
overall is low income, yet it is not very, very low income. And
so the vast majority of the needs in our State are in, you
know, there are things that help the very low income like
tenant rental assistance program, Habitat for Humanity, which
tend to be within the CDBG umbrella but not directly CDBG
funds, they're part of, as I spoke earlier with the housing
programs that we can fund with, Ohio Housing Trust Fund dollars
and Home Investment Partnership Funds as well as CDBG.
So I think that, you know it's very important, with the
flexibility and with actually meeting targeted needs to be able
to keep the low to moderate income and not just focus on the
very low income.
Chairman Ney. That is a point--Clint had made some notes,
we make notes to each other, there was a question that he
wanted to ask, which I think is very pertinent, as the
President wants to change this saying that CDBG funds or the
White House is insinuating or saying that basically they are
used for higher level or maybe not the lowest of the low and
they want to change that. But in order to change that and I
hear that you are already doing projects for the neediest. So
that change may revert that money from 200 different cities as
I understand it, when you are already trying to target the
neediest. What you are saying is that is not necessarily a good
move?
Ms. Schocken. Right.
Chairman Ney. It sounds good, when they take the money and
move it to the neediest, but when there is already service
being done to the neediest and that move will affect the
general program.
Ms. Schocken. Right, and what we talked--I mentioned that
in Ohio, which I think is a little different than maybe some
communities, they are really stressing that communities do
planning. And they have to put together five-year comprehensive
housing and infrastructure plans that do result in targeting
the most distressed areas and the populations with the most
needs. Be it housing for MRDD people or work with Habitat or
doing a major sanitary sewer project in a village. So, you have
to--they are requiring communities to really examine and target
their funds to the most distressed areas. So, I think that is
being done in Ohio already.
Chairman Ney. Before we move on with the other question, I
have, just for the record. Naomi Mattingly Compton, Alexandria
Village Council has a statement for the record. Clifford Mason,
Mayor of the Village of Hebron, who sends his regrets--he could
not be here-- has a statement for the record. Evelyn Moore
Cummings, Marion County Regional Planning Commission, has a
statement for the record. And Dale Harris, Director of the Ohio
Regional Development Corporation has a statement for the
record. So, without objection, the statements will be entered
into the record.
And also, I wanted to note that the written statements of
all of the second panel and the first panel, will be made part
of the record. And also that the record will be left open,
without objection, for people to ask additional questions of
you, or additional material be entered by Members of Congress
who are not here today. Without objection, we will leave the
record open. Just a piece of business.
Mr. Graves, in your previous position you were involved and
director of the State CDBG program and now that you are out of
that position, do you have any reflections about the Small
Cities Program?
Mr. Graves. Mr. Chairman, regarding that program, the one
thing the State does is use the money extremely wisely and I
think Ms. Schocken talked about that, the reduction in the
direct assistance provided. The formula program and also CHIP,
there are a number of other programs, community distress, and
water and sewer that is used out of the State's CDBG program
that I believe if, it is just my opinion looking back it drives
a lot of development in those small rural communities to link
with public works money, USDA money, other resources for
infrastructure, water and sewer that but for the State's CDBG
money would not happen. It would be a continual standoff
between EPA and these small communities to meet the water
requirements, it is critical. And then coupled with the CHIP,
it continues to erode the ability of small communities to
survive, quite frankly. That is not my hat now, but, that is
looking back as you said, Mr. Chairman. That is kind of what I
am seeing.
Chairman Ney. Do you want to elaborate any of--I have dealt
with a lot of issues and worked with Mayor Coleman as we do our
district and mayors from across the State, any reflections on
some of the housing, the importance of the housing aspects of
the CDBG?
Mr. Graves. Simply that, Mr. Chairman, that the CDBG--the
prime issue is the flexibility and the ability of communities
to target those resources. Whether in small areas where there
is infrastructure needs or a city like Columbus where we have
adequate infrastructure dollars but we really need to target
resources to preserve housing stock and help low income. The
HOME money does a lot of the housing development activities and
the home buyer assistance activities to buy a home. Without
CDBG we could not preserve the existing housing stock, which is
critical in neighborhood development. It lets the current
units, when folks are, especially the elderly, they cannot
maintain their properties. We can go in with small amount of
money from block grants and stabilize that structure and enable
them to stay in their home. And we do that in a targeted way.
And I think that is extremely critical for a block grant. I
will, as a side note, indicate that we do also with our block
grant money pay three agencies to do home buyer education. We
train them to educate the individual in foreclosure prevention
and then we use the HOME money, the America Dream down payment
initiative to actually assist them in buying that house.
Last year, the ADDI program was cut like 50 percent. So, I
am not certain why that happened, but I am more sure what is
happening in 2007. But certainly home ownership and that whole
initiative and I appreciate what Mr. Calhoun said, because we
do a lot of other activities besides homeowner. But certainly
that is an extremely important component.
Chairman Ney. Just a question for curiosity, we also had
the first, this subcommittee with Congresswoman Maxine Waters
and the staff and the members went down to New Orleans, and
Gulfport, Mississippi. We actually had the first hearing of the
U.S. House, official hearing, down there and it was a pretty
intense 2 days--11 hours total between the 2 days. We had about
9 or 10 members who were down there. And so we looked at the
whole issue with Hurricane Katrina. How has it been about
Section 8, maybe you don't know about this situation, but I
assume maybe you would. Section 8 and people who have come from
the Gulf, from New Orleans, up into Columbus, have you dealt
with that?
Mr. Graves. Mr. Chairman, yes, we have an agency called
Southside Settlement that does a lot of the work with the
Katrina victims and also the housing finance--the housing
finance agency set up a strategy statewide, targeting
resources, keeping database referrals. The situation with
Section 8, as you said, Columbus Metropolitan Housing Authority
is doing what we can to help them move through the system. I am
not sure of the numbers that have come in. It certainly gets
dicey as far as the waiting list and what have you. I mean,
right now there are 9,000 individuals on the waiting list for
Section 8 vouchers in the City of Columbus. So, while we are
moving and assisting in that and actually landlords and
apartment owners are helping too, the ability to get vouchers
is not as strong as one would like. But it is moving through
and they are doing the best that they can.
Chairman Ney. Has there been--were you able to get the
emergency vouchers to follow the residents from the Gulf?
Mr. Graves. Mr. Chairman, I do not know that. I would have
to ask Dennis Guest from CMHA, but I do not know off the top of
my head.
Chairman Ney. I am just curious, we met with the housing
authorities from here in Ohio, last week in Washington and we
just continue to look at that issue, because it affects the
community here. We passed emergency vouchers and supported
them. I do have a concern and then there was FEMA money, which
we did take some of that money and we put it in to what, Hope
VI, several different programs, because we felt it needed to be
directed versus FEMA having a free hand to just spend it at
certain places. But I think that the Section 8, we need to
watch that because, that should be paid out of emergency monies
and that is to locate people. Personally, I think people ought
have an option. I do not think you give an option when you say,
why do not you know go to a different city across the United
States and then that is your option. Because for example, in
Mississippi there are 30,000 trailers with electric and people
were able to stay home. It would be like something catastrophic
happened in Knox County, and they said, your option is to go to
Seattle, Washington, or New York City, but options to go to
Holmes County is not one. You know, obviously you know what you
would try to choose.
But I mention the Section 8 and for the communities,
because I do think that as these emergency vouchers are
created, which they have to be to help these people that are
scattered across the United States to have their housing until
they hopefully can back home, we have to watch that at the end
of the day FEMA--or I mean HUD--is not instructed to then take
it out of the hide of the existing Section 8, which would mean,
well, we do not have enough money to continue these emergency
vouchers so guess what, we are going to take it out of Section
8, which would impact, you know, communities on housing. And
that is something that I want you to know we are cognizant of
and trying to deal with.
Ms. Schocken. Just for the record, Knox County has used
some of their CHIP tenant based rental systems Section 8
voucher programs for one displaced family from Katrina.
Chairman Ney. Oh, they have.
Ms. Schocken. Yes.
Chairman Ney. Let me just say that I really appreciate--do
you have any questions?
Mr. Riley. No, thank you for having us today. I have
enjoyed it and the ranking members, of course, look forward to
working with Mr. Ney and keeping the CDBG funding at least at
last year's levels or higher.
Chairman Ney. You know you may hear that the--that the
Democrats and Republicans are ripping each other apart every
single hour. And there are disputes, and disputes within
parties, but we have, I think, with Chairman Oxley, the
Republican from Ohio who chairs the committee, Barney Frank
from Massachusetts, the ranking member of the Full Committee,
myself, and Maxine Waters, our subcommittee ranking member,
actually been able to work together to come to a lot of
agreements. So, I think we all sang the same tune to try to
protect the communities.
And that is the other thing, we have to balance, I
understand that we have a deficit. But if you look into the
budget presented to us now by the Administration and then the
House has to do something and the Senate. But if you look at
that particular budget, you will see increases in some areas of
$100 million or $1 billion, but yet you will see decreases in
the CDBG of 25 percent so that does not seem to be a fair way
to balance, to take it out and to one aspect.
I want to thank you again for all of your time and your
testimony is helpful. The committee is adjourned, thank you.
[Whereupon at 9:50 a.m., the subcommittee was adjourned.]
STRENGTHENING RURAL OHIO:
A REVIEW OF COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAMS
----------
Friday, March 24, 2006
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 2:00 p.m., in
the Guernsey County Commission Conference Room, 627 Wheeling
Avenue, Cambridge, Ohio, Hon. Bob Ney [chairman of the
subcommittee] presiding.
Present: Representative Ney.
Chairman Ney. Okay, the subcommittee will come to order. I
want to thank--we have a wonderful turn out. I see a lot of
faces in the crowd from different areas.
We have two panels and I want to welcome everybody to
Cambridge. We just left Knox County this morning with a
hearing. I want to thank Commissioner Tom Laughman and the
Guernsey County Commissioners, all of them, for allowing this
subcommittee to use this public hearing room here for today's,
I think, very important discussions. Probably more important
than in past years about the Community Development Block Grant
Program.
The Community Development Block Grant Program--most of you
would know what it is--but there are some people I am sure,
here in the room, and in the public, who may not be completely
familiar with it. But it is administered by the Department of
Housing and Urban Development, HUD. It is the Federal
Government's largest and most widely available source of
financial assistance to support State and local government
directed neighborhood revitalization, housing programs, rehab,
economic development activities, and the formula-based grants
which are allocated to more than 1,100 entitlement communities
(metropolitan cities with populations of 50,000 or more, and
urban counties). The 50 States, Puerto Rico, and the insular
areas of American Samoa, Guam, the Virgin Islands, and the
Northern Mariana Islands are also included. Grants are used to
implement plans intended to address local housing, neighborhood
revitalization, public services, and infrastructure needs as
determined by local officials with citizen input. I think that
is an important point too. These monies come from Washington,
but they are arriving at the local level, and you have a lot of
input. It is a better way than the one-size-fits-all of
Washington telling you what to do.
The results and benefits of the CDBG funding can be seen
throughout this district. Right here in Guernsey County, the
City of Byesville has used CDBG. Mayor Gadd of Byesville uses
it to create new jobs, create economic growth, and maintain the
safety of the community. Mayor Gadd of Byesville will discuss,
I am sure, in his testimony, how CDBG purchased fire trucks and
emergency vehicles, an expense that small towns and villages
cannot afford on their own. Mayor Salupo, of course, is here
and discusses in his testimony how Cambridge used a $400,000
grant to revitalize and renovate their downtown. Today, this
downtown area is the center of bustling economic activity and a
great place for residents.
We have the County Commissioner from Muskingum County and
the mayor. Tuscarawas County, of course everybody has worked
with these funds to better ways of life in their counties.
Now, in the President's budget for 2007, it raises some
interesting and serious questions about what role community
development should play in helping local and State governments
to provide safe and affordable housing to its constituents. In
addition to recommending a new formula change for CDBG, which
the President's budget does, that change focuses on more of the
neediest communities. The Administration recommended a funding
level in fiscal year 2007 that is 27 percent below last year's
enacted levels. The struggle last year was this program going
to the United States Department of Commerce, and the House and
Senate stopped that, but there was still a 10 percent cut. So
this year, the issue is not as much the program going to
Commerce, but it is trying to save the money. So, the 10
percent cuts there, if you add the 25 percent, that is a 35
percent cut over a 2-year period of time, if this cut was
successful.
HUD's Community Development and Housing Program has built
home ownership, supported neighborhood revitalization, and also
increases access to affordable housing. These activities not
only help individual communities, but they also strengthen our
Nation's economy as a whole. Last year, over a billion dollars
of Community Development Block Grant funds were used for
housing, resulting in homeowners receiving assistance to
rehabilitate their homes, families becoming first time home
buyers, and rental housing units being rehabilitated. In
addition to housing, CDBG serves as a valuable tool for
infrastructure enhancement, job creation, economic development,
and public service projects. Without adequate funding from
CDBG, critical improvements such as new storm sewers, road
widening, and job development programs simply would not have
taken place.
So our goal, and I am chairman of the Housing Subcommittee,
is to make certain that the Department of Housing and Urban
Development, known as HUD of course, remains focused on housing
and community development and that it has the tools necessary
to provide safe, decent, economically viable communities. But
with such a significant decrease in these funding levels, I
question whether the Department will be able to meet the goal
that the Congress has actually laid out for it.
Let me just say that this is an official hearing of the
House. It will be recorded and transcribed, and taken back to
Washington, as the Knox County hearing was. So everything will
be on the record, and of course, distributed to members. We
have another hearing; the fourth hearing that we are going to
have is in Los Angeles. The ranking member of our subcommittee
is Maxine Waters, and she has asked for a hearing in Los
Angeles. We are going to go there. I would venture to say that
Los Angeles is going to equal, no matter that it is a size
larger than us, exactly what you say. So we are going to drum
up support that way.
So, the hearing is important, it allows us to go back to
D.C., and say; this is what people think.
With us today, we have Clinton Jones, our counsel; he is on
the majority side, so he is a Republican. We did not sit him to
the right because of that. And we did not sit our good friend,
Jeff Riley, who is with the minority, Democrat side, and he
works for Congressman Barney Frank of Massachusetts, who is our
ranking member. And Congressman Mike Oxley of Ohio is our
chairman. And I do assure you, as I said earlier, you might see
how we all battle each other, but actually we do work together.
This committee might have some differences, but Barney Frank,
Maxine Waters, Mike Oxley, and myself, as well as the Members
on both sides of the aisle have done some productive things for
housing. And so, you know, you might see disagreements, but
once in awhile, we do work together, believe it or not.
So I am happy to have the staff. They are an important
element. Cindy Chetti is also here, from Washington, D.C. So I
took them and got them a good local meal and they are very
happy. And with that, Jeff, do you want to make any comments?
Mr. Riley. No. Thank you for having us today. Greetings
from Mr. Frank and Ms. Waters.
Chairman Ney. Also, for the record we have a joint petition
from the Coshocton County Commission, by the county
commissioners. And Dana Schrock, Kathy Thompson, Rick
Dougherty, and Douglas Davis, the county engineer from
Muskingum County, also have statements. Without objection, we
will enter them as a part of the record.
And if there are any other statements for the record that
you have, also from people in the audience, we will be glad to
accept those.
Panel one, we have the Honorable Don Gadd, Mayor, Village
of Byesville; and on the panel too, the Honorable Tom Laughman,
president, Guernsey County Commissioners; the Honorable Kerry
Metzger, president, Tuscarawas County Commissioners; the
Honorable Dorothy Montgomery, president, Muskingum County
Commissioners; the Honorable Samuel A. Salupo, Mayor, City of
Cambridge; and the Honorable Howard Zwelling, Mayor, City of
Zanesville.
And welcome to all of you and we will start--and the way
the House rules run, basically you have 5 minutes, everybody
gets 5 minutes, then we have questions and other comments that
you might have. And then for the audience, the way the House
rules operate, we do not show signs of clapping or booing, even
though you might want to. Just a protocol that we use in the
House. It does not offend me too much if you do a little bit,
but, you know, not too much. With that we will start with Mayor
Gadd.
STATEMENT OF THE HONORABLE DONALD GADD, MAYOR, VILLAGE OF
BYESVILLE, OHIO
Mr. Gadd. Mr. Chairman, gentlemen. Thank you for the
opportunity to address this hearing today. As I know your
schedule is busy and we all have pressing issues, I will keep
my comments as succinct as possible.
As with the proposed budget cuts in the Local Government
Fund by the State a couple of years ago, no issue will probably
impact local governments more than the CDBG cuts in the
Administration's current budget proposal.
At that time, local officials from all over Ohio convened
at the statehouse to impress upon our legislators the absolute
importance of Local Government Funds and informed them that the
lack of same would have a significant impact on our grassroots
government here in Ohio. Because, here in the heartland, at the
local level, we work hard to get a dollar's worth of progress
for a dollar's worth of grant money. With community support, we
get much more than that dollar.
Additionally, I lobbied hard for the passage and approval
by the voters of the State of Issue I, formerly called Issue
II, as it is at the core of Ohio's ability to rebuild roads and
bridges needed to compete with today's modal industry. Ohioans
recognized its importance and passed this issue overwhelmingly.
As you know, I have been the mayor of a small village here
in southeastern Ohio for several years. During those years, we
have seen a significant renewal of job opportunities and
replacement of a blighted downtown due, in part, to the
securing of CDBG grants.
Currently, we are working on tier grants for an additional
$400,000; that, along with the engineering and architectural
design will redevelop our downtown into a stop along the
Nation's tourism highway. A local initiative creating a 501C3
corp will provide a tourist train with historic renditions of
our coal mining heritage and eventually end up at the Wilds,
the largest game preserve of its type in North America. These
grants will be the catalyst to get the owner operators to buy
into our economic future. Job creation at the local level is
grassroots America and this buy in is not possible, in most
cases, without a grant incentive.
Over the next 18 months, the village will be involved in
securing grants for a new wastewater plant, working with the
Ohio Department of Development and others to secure grants,
including CDBG, for approximately $27- to $30 million worth of
industrial and commercial expansion in my town of 3,000 people.
The job opportunities and expanded local economy alone will
more than pay for the initial monies put forward by these
projects.
As I have traveled much of rural Ohio, being in the energy
business, let me assure you that each and every small town,
township, and county has something to point to that was
initiated, supplemented, or completed because of the Community
Development Block Grants. From fire trucks, to infrastructure,
to enhancement projects these competitive funds have been a
source of creating a better America that would not have
otherwise been possible. To take this away would end rural
Ohioans' dreams of making a better place to live and work.
On another note, being one, much like yourself, with deep
roots in this area, I am involved in other activities that are
sometimes off the scope of my being mayor, and sometimes within
my jurisdiction, so I can help out. I am speaking of the local
Habitat for Humanity, of which I have been the president these
last 3 years, and the Community Housing Improvement Program,
both of which have created dramatic improvements in the
community and for the individuals benefitting therefrom.
I am well aware of the chairman's help in securing funding
from the House for the one new house Habitat built in
Byesville, as I was the one who got the land donated for it.
The recipient of that home now sits on our local Habitat Board
and is involved in getting others the home that they could only
dream about a few short years ago.
Since then, the local chapter has solved most of its
funding issues over the last several years. We have received
CDBG grants for $50,000 each year that go to build not one, but
two homes each year, each home bringing pride of ownership and
the American dream to those who did not even envision it for
themselves or their family. One such case is a local man whom I
have asked to share a story.
This man is the ``American Dream'' and his story is the
essence of all we do and what we believe in as public servants
and people responsible and caring about those around us. For
you see, when he first applied to Habitat, he lived in a very
small and old, two bedroom home on a relative's acreage. He was
a divorced father of five, including one with physical
handicaps, with some learning disabilities of his own. He had
held down the same job for 20-plus years, but couldn't afford
to believe his life would change.
On the initial visit to this home, we found the wringer
washer on the back porch, the windows all caulked shut as best
as possible, the vents missing in the floor because the trailer
was too old to find replacements, and the floor moved up and
down as we walked through it.
However, on that initial visit, and subsequent visits, the
home was always neat and clean down to the kid's mementos and
play things pinned or shelved on the walls. As the place was
too small to store their individual things, each child had
space on the wall for his or her things.
Today, that man and his children live in a split level, six
bedroom home that they put more than their required sweat
equity into. Their home cost was $39,000. $25,000 by CDBG
grant, and the rest through local contributions and help.
They participate in our other projects, and he was
extremely proud to tell me that he has found a new job that
pays more and provides better for his family. His outlook on
life is much brighter now, and he, like the others, has hope
for himself and his children's future.
Mr. Chairman, this would not have happened without CDBG
grants. Nor would have home ownership happened for others
without the CHIP program, nor would have local enhancement
projects solely or partially funded by CDBG. As with the Local
Government Funds, grassroot local government gets much more
done with a buck than just spending it. We create jobs,
households, social wellbeing, and improvements in the
communities in which we live. I urge you and your fellow
Congressmen to keep the CDBG intact, as it adds to our great
country at its very roots and simply put, from a small town
mayor, that's where America starts and that's what government
is all about.
Thank you for the pleasure of addressing you.
[The prepared statement of Mayor Gadd can be found on page
169 of the appendix.]
Chairman Ney. Thank you, Mayor.
Commissioner.
STATEMENT OF THE HONORABLE THOMAS J. LAUGHMAN, PRESIDENT,
GUERNSEY COUNTY COMMISSIONERS
Mr. Laughman. Thank you, Congressman Ney. Before I begin, I
just want to welcome, on behalf of Guernsey County, you and
your staff, and the other guests that we have here today. I
would also like to say that we, as a county, are very, very
appreciative for everything that you are doing for us here in
Guernsey County, especially in the area of the water line
improvements that you have given us. That certainly is not
forgotten.
Community Development Block Grants are, and have been, very
crucial for Guernsey County in the 19 townships and 10 villages
of which we are comprised. Since the year 2000, block grants
have provided $354,000 in street paving projects for local
governments within Guernsey County. Since the year 2000, block
grants have provided over $132,000 in much needed fire
protection for the volunteer fire departments located within
our county. Since the year 2000, block grants have provided
$42,000 for recreational facilities in the various parks within
our county. I have attached an itemized breakdown of this as
part of my testimony.
Since 1999, block grant funds have provided over $375,000
in emergency home repairs in Guernsey County, excluding the
City of Cambridge, which would not have been possible without
these very vital dollars.
Under the cuts proposed for Community Development Block
Grants in the year 2007, Guernsey County will receive $110,000.
Were that to happen, using the figures from the 2005 projects,
the village of Quaker City would not receive the needed funds
for a new fire engine used in the protection of life and
property. Again, using these same figures, the villages of Old
Washington and Valley Township would not see much needed street
paving for the benefit of the residents residing there as well
as for the traveling public.
All local government funds are dwindling. Expenses are on a
constant rise while at the same time revenues are at a
standstill, if not decreasing.
Several years ago revenue sharing was the answer for local
governments. That was eliminated and replaced with Community
Development Block Grants. Now is not the time to remove or
replace this most important program.
This is rather the time, under the current budgetary
climate, to not only increase block grant funding, but also to
change the rules in order that townships may use these funds
for much needed CHIP and SEAL projects for their township
roads. This action would not only continue to improve our proud
quality of life here in Guernsey County, but at the same time
provide for a base for future paving projects within our
townships. As you know the current block grant program must
have a life of at least 7 years, CHIP and SEAL simply does not
do that. It just does not go that long, but it would be a real
savings to our township.
We ask that this program not be altered to a lesser degree,
but rather to a much higher and much better standard.
Thank you.
[The prepared statement of Mr. Laughman can be found on
page 179 of the appendix.]
Chairman Ney. Thank you, Commissioner.
Commissioner Metzger.
STATEMENT OF THE HONORABLE KERRY METZGER, PRESIDENT, TUSCARAWAS
COUNTY COMMISSIONERS
Mr. Metzger. Thank you, Congressman Ney, for the
opportunity to speak before the committee today. You know,
while we realize that Congress and the President have a shared
responsibility as stewards of the Nation's financial resources,
it is difficult to imagine any other Federal program that
touches as many lives as the Community Development Block Grant
Program. It must be understood that in today's budgeting
environment, there is no local revenue source to replace the
proposed 27 percent cut in the CDBG appropriation. The fiscal
year 2007 budget plan would require tightening of low income
targeting to communities with little resources, which would
necessarily channel those reduced CDBG funds to the lowest of
the low income communities, even though those projects may not
dramatically affect as many people. It is not difficult to
imagine a scenario where funds best used to develop the
infrastructure to support housing and/or an economic project in
one community, would need to be diverted to a community with
less development potential just to meet a CDBG program
guideline. We feel that our county and the other CDBG
recipients across the Nation are best qualified to determine
the proper use of these funds under current guidelines and we
would like to share with you our experience in Tuscarawas
County with the CDBG program.
The program has been an integral part of all phases of
community development within Tuscarawas County for close to 3
decades. The program is unique in that it allows, and in fact,
requires county government to assist in the planning and
development of projects that have been identified by local
political subdivision officials as important to the growth,
stability, and wellbeing of their communities. The opportunity
for communities to share in the benefits of the program is
guaranteed by a mandatory and closely monitored citizens'
participation plan and a series of public hearings. It is
perhaps the best example of direct citizen involvement in the
expenditure of tax dollars.
The program can be used for many things. In our county the
most pressing need is for improvements to existing, or the
construction of new, infrastructure. This could be something as
basic as a street and sidewalk improvement or could involve
more important health issues such as safe drinking water or the
proper treatment and disposal of sanitary sewage. The CDBG
program makes these improvements possible by leveraging very
limited local funds with Federal dollars. We can also achieve
maximum effect from both Federal and local dollars by combining
similar projects, such as paving, into one large project,
thereby ensuring more cost effective bids on these projects.
The end result of these efforts goes beyond the mere
infrastructure improvements. They bring about a sense of
community pride and with reliable infrastructure in place often
lead to more housing and economic opportunities.
Perhaps the key to success in the program is in the word
community. Over the years we have completed a number of
projects that have become the focal point of a community. One
of the best examples in our county started with the drilling of
a water well for one of our rural townships. In times of
drought that well became the only public source of potable
water available to the residents of the township. A few years
later, right next to that well, we built a senior center and a
community center and it quickly became a source of pride for
the people of the community and a place where residents of all
ages come together. Today, in addition to its original
purposes, that center is used for food distribution, medical
screenings, educational instruction, voting, and it is a
distribution center for the Tuscarawas County Public Library
and bookmobile. The facility is now being supported by a
special tax levy. The seed that was planted here by the
Community Development Block Grant program has germinated and
the fruit that has developed helps feed a community.
This is only one of the many success stories in our CDBG
experience. Unfortunately, we believe that such dramatic
results will become an exception rather than the norm under the
proposed budget cuts and tightened guidelines.
Thank you for the opportunity to testify.
[The prepared statement of Mr. Metzger can be found on page
186 of the appendix.]
Chairman Ney. We thank you, Commissioner Metzger.
Commissioner Montgomery, welcome.
STATEMENT OF THE HONORABLE DOROTHY MONTGOMERY, PRESIDENT,
MUSKINGUM COUNTY COMMISSIONERS
Ms. Montgomery. Thank you, Congressman Ney, for the
opportunity to testify before your today. It is a pleasure to
speak to you about the use of the CDBG funds in Muskingum
County. My fellow county commissioners and I are concerned
about the proposed cuts to the program and I would like to
share some of those concerns today.
In Muskingum County, we have been fortunate to have
completed many worthwhile projects with CDBG funds. Just since
2000, we have installed water lines, completed storm sewer
improvements and sanitary sewer improvements, paved roads,
installed and repaired sidewalks, renovated parks, and repaired
and installed culverts.
With the approximately $200,000 that Muskingum County
receives each year, we are able to reach out to various
townships and villages in the county to address some of their
most urgent needs. These areas, which are struggling
economically, would not be able to complete the majority of
these very necessary projects without the assistance of CDBG
funds. This year, we are planning to complete six projects in
six different parts of the county. And these infrastructure
improvements will have an effect on hundreds of Muskingum
County residents.
Infrastructure is not the only area where CDBG funding has
an impact. CDBG programs also stimulate the domestic economy by
creating jobs and expanding home ownership, which empowers
struggling neighborhoods. This is important, since there is a
direct correlation between the condition of housing and the
performance of our youth in school which has a long-lasting
impact upon society as a whole.
The reduction in the amount of allocated funds granted to
Muskingum County will certainly affect the nature, scope, and
number of projects that we will be able to undertake in the
future. From expanding water lines to repairing roads and
sidewalks, CDBG funds have been used to improve neighborhoods
and change lives. Our community will most certainly feel the
ill effects as a result of these proposed cuts.
My fellow County Commissioners and I, along with our CDBG
coordinator, would greatly encourage you to support the CDBG
program in its current state and reject any proposed funding
cuts.
Thank you for the opportunity.
[The prepared statement of Ms. Montgomery can be found on
page 189 of the appendix.]
Chairman Ney. Thank you.
Mayor Salupo.
STATEMENT OF THE HONORABLE SAMUEL A. SALUPO, MAYOR, CITY OF
CAMBRIDGE
Mr. Salupo. Excuse me. Thank you, Congressman, for giving
us the opportunity to testify here today. I would also like to
echo Commissioner Laughman in saying that we are grateful to
you; you have been a loyal friend to all of us here in
southeastern Ohio and serve as an outstanding representative
for all of us, both Republican and Democrat, so thank you very
much.
Having said that, the Community Development Block Grant
Program was developed by a Republican President and a
Democratic Congress over 30 years ago. It replaced a hodgepodge
of specific grant programs which were designed and approved
according to the dictates of bureaucrats in Washington. CDBG
put funds and decision making at the State and local level. It
permitted communities to try and deal with their needs locally
through locally developed programs and activities. This program
has served the country well in most places. CDBG, and attendant
programs such as ARC, EDA, HOME, etc., have improved housing,
local economies, and infrastructure primarily for lower income
households and communities. They have done this with local
rather than Federal decision making.
CDBG funding over the past 10 years has been stagnant. It
has not even kept up with inflation, and last year it was cut
in real terms by 10 percent. Given the good this program has
done in Cambridge and hundreds of other communities, this
simply is not acceptable. It is not acceptable to balance the
budget on the backs of lower income households. To believe this
program can survive another 25 percent cut and continue to
serve hundreds of thousands nationwide is simply folly. What is
needed, and what we would like to see, is full funding for the
CDBG program at no less than $4.5 billion. Even this does not
begin to make up for the year's budget amounts not covering
inflation.
CDBG remains crucial for rural areas such as Cambridge. For
decades, the Federal Government has been a strong partner for
our community to ensure that our city can provide housing,
community and economic development opportunities, and other
things for our residents. This partnership has resulted in
lasting and positive changes for our community by producing
affordable housing and creating jobs through business and
commercial development. These programs have greatly benefitted
our city, and to a greater more specific extent, our elderly,
our children, and our low to moderate income population.
It is critical for our Federal Government to remain a
strong partner, to keep CDBG as a Housing and Urban Development
administered program, and to retain the current funding levels.
The Federal, State, and local governments have a duty to ensure
that all residents have safe and sanitary housing, adequate
public infrastructure, and access to employment opportunities.
Our community deserves a better quality of life, a quality of
life made possible through the assistance of CDBG funds.
To many who do not understand the program, CDBG represents
a Federal Government slush fund. I submit to you today, that it
is a comparatively small amount of public dollars to leverage a
huge amount of private sector funding. As has been said many
times by others, CDBG is truly a leg up, and not a handout.
Let me try to illustrate some of the important projects
that the CDBG has made possible in our community for the past
few years, and is demonstrative of the programs made possible
through CDBG throughout its 30-year history.
We now enjoy a beautiful, vibrant downtown area, made
possible by the Downtown Revitalization Grant totaling
$400,000, with an additional $150,000 of discretionary funds
through the Ohio Department of Development Office of Community
Partnerships grant programs. These funds made it possible to
save a dying downtown, which has, in turn, encouraged the
private sector to invest heavily in our efforts to preserve a
historic piece of small town U.S.A.
Our community, as many throughout the Nation, has directly
benefitted from CDBG formula funding, in the amount of $498,000
over the past 5 years. We have been able to fund projects such
as street improvements, renovation of our fire department
facilities, curb and sidewalk replacement, and street
surfacing, just to mention a few.
The water and sewer CDBG funded program through the
Department of Development has provided $450,000 of critical
funding to replace two lift stations and 4,600 linear feet of
sewer lines, which benefitted 1,273 households.
CDBG, HOME, and the Ohio Housing Trust Funds make up the
funding for the Ohio Department of Development Comprehensive
Housing Improvement Program, the CHIP program. The CHIP funding
from the last three 2-year grants totaled $1,655,000, and has
greatly assisted the City of Cambridge with its neighborhoods--
in preserving our neighborhoods. CDBG has provided home
ownership opportunities for low to moderate income population
with new construction programs, it has assisted our elderly,
single mothers, and large families with emergency repairs that
otherwise would not have been possible, and allowed for the
rehabilitation of current housing stock for homeowners who
cannot obtain conventional financing. CDBG has helped create
partnerships with rental property owners to renovate rental
units, providing safe rental housing, while allowing rent
amounts to remain at an affordable level. Additionally, the
funds provided a strong partnership between our local Habitat
for Humanity and the city for creation of new housing.
The Appalachian Regional Commission further provided CDBG
funding in the amount of $460,000 for sewer and water projects,
for rail improvements, paving projects, and funding to support
our Community Improvement Corporation, or CIC, efforts to
strengthen and attract economic development and job creation
for our area.
So, in conclusion, CDBG is a program that serves
communities and lower income households well. It has made a
significant difference in the City of Cambridge, and has
improved living conditions for numerous lower income
households. We ask that Congress fund this program at a level
of no less than the $4.5 billion in the coming fiscal year 2007
Federal budget.
[The prepared statement of Mayor Salupo can be found on
page 199 of the appendix.]
Chairman Ney. Thank you very much, Mayor.
Mayor Zwelling.
STATEMENT OF THE HONORABLE HOWARD S. ZWELLING, MAYOR, CITY OF
ZANESVILLE
Mr. Zwelling. We welcome you also, and we appreciate what
you have done for Zanesville in the past years. You are a
Congressman who sincerely takes his constituents to heart and
we appreciate you for it.
Being last is not unusual to me, and I said to Mayor
Salupo, did they save the best for last? He said, no, it was
alphabetical order.
[Laughter]
Mr. Zwelling. In this climate of deficits and budget cuts,
the Community Development Block Grant Program has been
criticized for lack of measurable impact. I strongly disagree.
I am prepared to give you many examples about the positive
impact these funds have had on our citizens and community, but
I also want to note the devastating impact that the reduction
or the elimination of these funds would have on us as well. To
make cuts in this program is to ask the most from those who
have the least to give.
Nearly 57 percent of the population of Zanesville is low to
moderate income. CDBG funds have helped us address the needs of
our citizens who do not have the sufficient income to pay local
taxes to cover the cost of providing themselves with the basic
services. Each year, we have the Citizens Advisory Committee
review applications from city departments and local non-
profits. After reviewing this information and the city's
community and housing assessment plans, they make
recommendations to me as to which projects to fund. This is an
example of home rule functioning at its best. Local citizens
are prioritizing projects in their own community. Since 2000,
we have been able to make the following improvements with these
funds:
1,439 linear feet of sewer lines and repairs; 5,300 linear
feet of water lines and repairs;
7,680 linear feet of curbs and sidewalks in the City of
Zanesville;
5,291 linear feet of street repairs; home repairs for 48
low-moderate income owner-occupied households;
And we purchased over 2,300 pieces of electronic equipment
and supplies for local non-profit organizations dedicated to
community outreach.
Often, we have utilized matching funds from other sources
like HOME and the Ohio Housing Trust Fund to get the maximum
benefit from this investment.
It is important to note that CDBG has not, and does not,
provide sufficient funds to address the comprehensive total
needs of low and moderate income people. Each year, we have to
deny applications for very worthy projects because there is no
money. These include new water lines, sewer separation
projects, equipment purchase, and capital improvement projects
for non-profits.
Over the past 6 years, the City of Zanesville has spent, on
average, approximately $184,000 on projects dedicated to
assisting individuals living in low or moderate income homes
and communities. However, with the projected reductions in CDBG
funding, many more projects may be limited or eliminated
entirely. Looking at these reductions in 2004, the City of
Zanesville received full CDBG funding of $175,000. Since then,
CDBG funding has been reduced by 5 percent in 2005 to $165,000,
10 percent in 2006 to $149,000, and a projected 25 percent
reduction in 2007 to $112,000.
With this proposed reduction in place, our ability to
assist those living in these targeted areas is drastically
reduced and instead of performing four or five projects every
fiscal year, we would only be able to execute one, possibly two
projects per year while crippling our ability to aid those in
the greatest need of assistance.
In conclusion, looking at both President Bush's comments
for reducing the funding for CDBG's as well as the stated
purpose of those block grants, what the City of Zanesville, as
well as many other communities around the Nation, is doing is
implementing policies mirroring these stated goals by the
Administration. CDBG funding is going directly to community
outreach programs as well as infrastructure and home repairs in
many low or moderate income communities. By restructuring and
reducing this funding, the Administration is only perpetuating
this dire situation already in place in many communities as
well as limiting the accessibility of these funds to
individuals who need the assistance the most.
Thank you.
[The prepared statement of Mayor Zwelling can be found on
page 203 of the appendix.]
Chairman Ney. Thank you, Mayor. I appreciate your time. I
have a question, if somebody would want to answer it. Just, if
somebody could just elaborate on your experience that you had
with the administration of CDBG and the State's Small Cities
program. Are they good? Are there any things that needs to be
refined in regard to the Small Cities program, anybody?
Mr. Zwelling. The money crunch that has gone from
Washington down to the small communities has had its impact on
all of us. And the projects still remain lined up and ready to
go, but the cutting in the funding seems to be cutting to the
core some of the projects that are most direly needed by areas
that cannot otherwise afford it.
Chairman Ney. Does the process still work? I mean the money
has been cut like 10 percent, but is the process still a good
process?
Mr. Zwelling. Yes, it is.
Chairman Ney. Not the money side, but the process seems to
work?
Mr. Zwelling. The process works.
Chairman Ney. Mayor Gadd, in your testimony you mentioned
the largest game area, of course the Wilds. And I think it is
interesting if you have an example or anybody else had an
example of something where you used Community Development Block
Grant monies to leverage private sector money?
Mr. Gadd. That is what we have done. We did a block grant
that was in 1997-1998 for the exterior in the downtown. If you
are familiar with Byesville, it was pretty run down at that
time. And we have been trying to get ourselves around an idea
to redevelop and have a buy in of downtown. And a couple years
ago we went around town, believe it or not, in 9 days with a
hat and raised $11,000 and brought a little railroad to town,
which still sits there and around that railroad we have had a
lot of enthusiasm. We have about 35 to 40 busloads of people
now coming to ride our railroad every year. And what we are
trying to do is enhance it and make it, instead of a weekend
operation, a 6-day-a-week operation.
By having the Tier Two Grant and enhancing the downtown--
this area was one of the largest areas for coal mining around
the turn of the century. They said the coal taken out between
Guernsey County--there were 13 mines between us and the town
just south of us--the pull cars will stretch from Washington,
D.C., to San Francisco, and back to Chicago, so we were big in
coal mining. And we have explored that heritage on our train,
by redeveloping downtown into the small quaint shops and the
chocolate shops and the soda things. People are willing to
reinvest into downtown.
The future is bright doing that because tourism is a good
dollar, for every dollar you bring into your area, it revolves
around your economy 7 times. So, we are hoping that all the
dollars that we attract to this area creates additional jobs.
Mr. Salupo. I am sorry, Congressman, I just want to add
onto that. I could probably go on for about 45 minutes about
the impact that CDBG has made to our community. Just take the
downtown for example, about 4 or 5 years ago, like most small
rural cities, downtown was dying, and all around us some of
them are having a difficult time. With the help of the downtown
revitalization grant of $450,000, and I am not exaggerating,
literally millions of dollars of private investments over the
last several years. We have virtually no empty stores downtown.
We have competed with the--terrifically with the Wal-mart
expansion and the retail expansion down on 209. We have added
over a dozen new businesses in our downtown area. It is growing
and flourishing right now, as a direct result of CDBG.
Also, just recently a county program, the FedEx expansion
down on 209, not to mention the millions of dollars of the
expansion with Detroit Diesel and the Ridge Tool area down
there. So, this has made a tremendous impact on our local
community. And I can even go back 7 years to the cooperation
between Byesville and the City of Cambridge and Jackson
Township, CDBG was also instrumental in the expansion of the
newly annexed area down by the Wal-mart complex, which has
generated dozens of new retail businesses and I might add that,
probably the largest employer in our community in one specific
area is in the retail area, $37 million of payroll directly
related to the retail industry. So, it has made a terrific
impact on our local community. A small amount that is
generated, that, millions literally, millions of dollars of
private investments, which has increased our employment. We
reduced our unemployment rate and we have about 2,000 more
people working today than we did 6 years ago. So, this can all
be attributed to this partnership.
Chairman Ney. I had another question, it came up in Knox
County and the second panel also might want to comment on this,
but, the Administration's proposal has a change in it to take
some of the money and redirect the formula to the neediest of
the needy. That takes away from 200 other recipients of this
and then switches it down. The question that I had though and
the kind of answer I want to take back to Washington of your
feelings, do you also--I mean, you try to service everybody, I
understand, but do you also have things you can point to where
you are trying to take care of the needy and the neediest and
that way we maybe do not have to adjust this formula. Because
at the end of the day, if you adjust the formula everybody will
lose some. I just wondered if anybody had any comments on
trying to take care, you know, the poorest of the poor?
Mr. Laughman. For us, it is the emergency vehicle program
that we are doing, I see that as really taking care of the
needy because a lot of these volunteer fire departments just
simply cannot afford to replace equipment and we are not only
going with fire trucks, we are going with ambulances also. I
mean, you have been around, you see some of the conditions of
some of those vehicles that they are forced to use. I am afraid
if cuts are made that is going to cut right into those kinds of
things. And we do, we try and hit every village and township
that we can, but it is like everything else, you know, $350,000
worth of requests for $170,000 is there.
Mr. Gadd. We do that in my certification in every 4 or 5
years, my guys go around and do it; a lot of the towns,
especially the older the town is there is a lot that are
covered under the low to moderate income. And the focus is not
so much the neediest of the needy because by working for
everybody you actually enhance the needy also. And what Mayor
Salupo and the Commissioners talked about, we tried to provide
an avenue that will enhance everybody's life and bring up
everybody's standard of life, but if you just focus on one
group and leave other projects go, it is not enhancing
everybody that way.
Ms. Montgomery. Well, I think is covered by the roads that
are provided so that the fire trucks and the EMS vehicles can
get to, and I can testify that sometimes the rides in those
ambulances are not very comfortable. And we will not go there,
as far as bumps are concerned.
But I think Mayor Salupo mentioned about the coal mining
that has taken place in this area, and the horrible water
conditions that some people have, they either have none or
perhaps what they have is really not drinkable, and we have
been allowed to lay a lot of water lines and the sewer
situation is certainly no better. So, I really think we are not
only reaching the poorest of the poor, but in doing so,
inspiring and helping those along the way who are in those same
neighborhoods.
Mr. Metzger. Well, one of the things we do in Tuscarawas
County is, we routinely, with our CDBG funding, always set
aside some money for what we call SEA, which is Society for
Equal Access. My concern would be, if the rules were changed,
that they would not be able to utilize those CDBG funds and
maybe they might be able to fund some of those folks who just
need access to transportation needs. And you would limit the
number of people who actually need that particular help. That
would be a large concern there. So, by changing the rules, I
mean, we may be--if the rules end up being changed you may end
up in a situation, as I said in the testimony, where you may
focus on helping, maybe one or two individuals, when there are
still people who are needy who may rise a little bit above the
lowest of the low income, but they would not be able to access
those dollars, the CDBG dollars to help them. Because that is
what we look at in Tuscarawas County, is not only just the
income, but the number of people who are helped by that CDBG
funding. So, you know, we take both of those things into
consideration when we decide where those funds are distributed.
Mr. Salupo. Just to expand on what everybody has already
said. My fear would be that if we change the way we are doing
the formula right now that it would take away local discretion
and what we have been able to work through our community
assessment strategies of a comprehensive plan that ultimately
benefits everybody. You are allowing a local community to
determine what the needs are and how to affect the quality of
life for everybody totally, in the whole community. And so I
think it would be critical to continue to leave it the way it
is so that we can make the decisions locally.
Chairman Ney. Mayor Zwelling.
Mr. Zwelling. I think it is hard, perhaps difficult for the
President to realize that there are still a lot of areas in
this country where people do not have adequate water and
sewage. Zanesville is such a place and CDBG funds are sorely
needed to get these bare necessities to the people who need
them the most.
Chairman Ney. I have one final question, and then if you
have anything else you want to add. But I have one final
question. It was geared towards housing. This subcommittee that
I chair is Housing and Community Opportunity, and so we look a
lot at the housing issues. In the housing spectrum, about 72
percent of Americans own a house; I believe that is a pretty
accurate figure. The minority rate is way lower, it is about 50
percent, which is unacceptable, it needs to be raised up. And
you look at different, you know, aspects of housing, when you
say housing, the ownership of the house, we have some great
building statistics. But also, not everybody can own a house,
this was pointed out too up in Knox County today, not everybody
can own a house, or maybe not everybody will ever qualify.
Maybe there are situations where it is not the way to go for
them. So, you have other types, of course your apartments,
Habitat for Humanity, as Mayor Gadd mentioned, Section 8
Housing under HUD, and a lot of Community Development Block
Grant monies have been utilized, obviously CDBG, for housing.
And if anybody had any brief comments you want to make on
the housing aspect of this, how the programs are working or not
working.
Mr. Zwelling. We partner with Habitat also, as somebody
else mentioned, and the very type of housing that you just
mentioned, we use CDBG funds for that; it is very crucial to
us.
Ms. Montgomery. Several have mentioned the CHIP program
and, you know, the roofs or maybe a heating system, just a
multitude of things that--and it does not have to be a senior
citizen who is in need. But there are just a lot of poor
situations out there.
Chairman Ney. Yes.
Mr. Laughman. Our CHIP and housing programs are
administered through the City of Cambridge, through Steve
Gerhard, and Evelyn and their assistants and they do an
excellent job. That has really made a difference here in
Cambridge.
Mr. Salupo. It has, and it has provided an opportunity for
people who might not have been able to own their own home. That
is without question, but in addition to that, it has improved
the aesthetics and the quality of our neighborhoods. The
partnership with Habitat has all combined to provide other
assets to the community. So that has also been, the CHIP
program is an outstanding program.
Chairman Ney. Yes.
Mr. Gadd. We are doing three CHIP homes in Byesville this
year. The ones that they built previously were sold quickly,
because of the write down, the way that they could do it. We
found, what we were talking about earlier, there are some
people qualified for those homes, because they, well, I think
one of my police officers applied for a home this year. But
they qualified, because they have an income and stuff. Through
our Habitat for Humanity, which we still get money through the
CHIP program, we are finding people who never even dreamed of
having a house or that opportunity. When you take $39,000
across 20 years, you are talking maybe $225 or $275 a month
that family is paying for that house. But it is their house,
their dream, their future. And they have been wonderful with
it. It makes such a difference to see a family who now has a
place that is their home. There is nothing more important in
this world than having a family home that you can go to, even
as you grow up. You go back and see Mom and Dad, that is their
home, it is not a rental, it is not someplace that they keep
moving around to. That is their family home and that is
important, especially here in rural America.
Chairman Ney. Yes. On the housing aspect, we passed the
American Dream down payment bill, which I think was a good
bill, carried by Katherine Harris; Congressmen Oxley and Frank,
and Congresswoman Maxine Waters were instrumental. We worked
with them and passed that out of our subcommittee and that is a
bill that will help down the road. Also, we did just--I think
it is really important to a lot of people--we also did a
housing fund that we created, we took 5 percent, I think it
was, it was Fannie and Freddie, Fannie May, Freddie Mac, put it
into a fund so that they will carry out their charter mission
of Congress, and I do not know how much that fund was.
Mr. Riley. $500 million the first year.
Mr. Jones. $500 or $600 million the first year.
Chairman Ney. $500 to $600 million the first year and it
will grow into the billions from there, 5 percent of their
profits basically. That is a good fund. And it is to be used to
help the poorest of the poor and for different housing
initiatives throughout the country. You know, we have to look
to the other body, in Washington you cannot say the word
Senate, believe it or not, on the Floor of the House, here you
can, we do not have metal detectors or C-Span so we can say all
manner of things. But we are hoping the Senate will come along
and will help us on this. I think it is a really important
thing that communities will be able to utilize.
With that, I do not have any other things except, do you
have any questions?
Mr. Riley. No.
Mr. Jones. No.
Chairman Ney. I do want to say one thing because we are
going to go to the second panel. If there are elected officials
in the room who just want to give your name and your title, we
can do that as we are shifting panels here.
But I want to thank all the elected officials. And I also
wanted to address something about earmarks. You are hearing
about earmarks all the time now in Washington, D.C., we have to
stop the earmarks. You know, if they want to put our names to
the earmarks, and our name is attached, then that is fine. They
can print it all day long, our name will be attached to
earmarks, I have no problem with that. And it will be in the
bill, they can put our names in parenthesis so that they know
who did an earmark. You know, this has all started with
Congressman Cunningham and the earmarks. But if they want to
put our names to them, I think that is just fine I think with
most members.
But the thing here I think people have to remember, they
are saying do away with earmarks. CDBG, what we are talking
about today, you cannot--that money comes down from Washington
goes to the State and you all sit and have your hearings where
you are getting requests of $700,000, you only have $100,000 to
spend. You have your hearings and you have your input, citizens
are available to have their say here. If we would do away with
earmarks I can tell you that a lot of projects, I look around
the room of projects that we have done, I see people and faces
and I see dollars too of projects we have done.
I promise you that the United States Government would not
have returned taxpayers dollars by saying let us build a cancer
center over in Knox County. They would not have said, let us
put $100,000 in a Tuscarawas County study to see about raising
those roads. I mean, I can go on and on and on, water and sewer
systems. And I just think that the earmarks are still local
because we do not sit there and make those things up. Local
officials tell us, we need that, we need this, citizens, local
development districts tell us. So in this great fever of
earmarks, if we want to make it fully open and shut, the sun is
shining, transparent, I have no problem. But to just say let us
stop and let the unelected people in Washington, who are
Cabinet Members of any President, whether it is the previous,
the current, or the next, who make those decisions, I do not
think we want to do that. And so, I just want to assure you, I
still think earmarks are a real honestly local way. It comes
from here out to us to bring it back.
Thanks for your time and all that you do for your
communities. And we will go on to panel two, which will be Mr.
Aane Aaby, president, Ohio Conference of Community Development.
Mr. Philip Downing, local office director, Columbus Enterprise
Community Partners. Mr. Hugh Grefe, senior program director,
Toledo, Local Initiative Support. Mr. Oren Henry, community
development administrator, City of Cincinnati. Mr. Don Myers,
executive director of OMEGA, and Mr. Gary Ricer, executive
director, Guernsey, Morgan, Noble Tri-county Community Action.
Some of the people in the audience if you want to or if you
are just a citizen and you want to say hello and give your
title, I mean, go ahead. Why do we not start in the audience.
Mr. Heard. John Heard, Noble County commissioner.
Ms. Carter. I am Linda Carter and I administer the CDBG
program for the Noble County Commission.
Chairman Ney. Okay, can we start over back here.
Mr. Lace. Ken Lace, Washington County.
Mr. Stein. Henry Stein, director of development, City of
Matins Ferry.
Mr. Warner. Russ Warner, I am the office chief for the Ohio
Department of Development's Housing and Community Partnerships.
We administer the CDBG, HOME, and ESG.
Mr. Moore. John Moore, township trustee, Harrison County.
Mr. Norton. Gene Norton, township trustee in Muskingum
County. I have received CDBG funds regularly.
Chairman Ney. Anybody else?
Voice. Township trustee.
Voice. I am her husband.
[Laughter]
Chairman Ney. Why do not we start over here.
Mr. Gromont. Tom Gromont, director of Neighborhoods
Department for the City of Toledo.
Mr. Davis. Doug Davis, the county engineer for Muskingum
County.
Ms. Montgomery. Dorothy Montgomery.
Voice. We receive CDBG.
Voice. Jefferson Newspaper here in Cambridge.
Voice. Township president, Muskingum County.
Chairman Ney. And J.P. Dutton, raise your hand. J.P. is
with our office He is working out of Zanesville; he covers most
of your counties, and he does appropriations and general office
work. and also David Popton from Washington works for us. He
used to work for John Kerry, Senator John Kerry. The Ohio
Senator John Kerry. Got you.
We will start, Mr. Aaby, go ahead.
STATEMENT OF AANE AABY, PRESIDENT, OHIO CONFERENCE OF COMMUNITY
DEVELOPMENT
Mr. Aaby. Thank you, Congressman Ney. My name is Aane Aaby
and I am the community development director for the City of
Massillon, Ohio. I have been employed by the City of Massillon
since 1973, when I was hired as a project coordinator for the
City's Neighborhood Development Program, or NDP. An NDP was a
type of categorical grant program administered by the U.S.
Department of HUD and was a type of limited purpose urban
renewal program. It is with a sense of some irony that I report
that on the very day that I was hired by the City of Massillon
in 1973, then-President Nixon had imposed a moratorium
suspending all HUD categorical grant programs. So I had been
hired to administer a program whose future funding was in
limbo.
However, President Nixon, and later President Ford, had a
plan for local communities to return to them some of their tax
dollars in the form of block grants, giving local communities
the flexibility and discretion to use these dollars as we saw
fit, provided these dollars were used wisely to achieve certain
federally mandated objectives, namely the provision of decent
affordable housing, the creation of a suitable living
environment, and the expansion of economic opportunity, all
objectives primarily for the benefit of low and moderate income
persons. Initially called the Better Communities Act, the
program eventually passed Congress as the Housing and Community
Development Act of 1974.
In 1975, I was appointed assistant planning director for
Massillon and given the responsibility for administering the
City's Hold Harmless CDBG Entitlement. Massillon was designated
a Hold Harmless community because although we were not large
enough at the time to qualify as an entitlement grantee, we had
previously received categorical grants from HUD and were
allocated CDBG funds to maintain the continuity of our efforts.
In 1985, Massillon was officially designated by HUD as an
entitlement community, and in 1988 I was named community
development director for the City, a position that I still
hold.
However, I am also appearing before this subcommittee as a
representative of another organization. I am currently the
president of the Ohio Conference of Community Development,
OCCD, a 165-member organization of local government community
development officials. OCCD has a broad membership representing
the spectrum of communities in Ohio from large urban areas such
as Cleveland, Columbus, and Cincinnati to some of our most
rural villages and counties. Four times a year, our membership
gathers for a day and a half to meet with HUD, Ohio Department
of Development representatives and others to learn about the
newest initiatives at the Federal and State level, to hear
presentations on topics of interest in the field including best
practices and award winning projects, and to receive training
and instruction on important programmatic elements involving
housing and community development issues. We are now in the
process of instituting a statewide training and certification
program for community development officials. OCCD is an
important organization for Ohio communities and I am pleased to
be able to serve the members as their current president.
So, I am here before the subcommittee wearing two hats,
representing both the City of Massillon and the Ohio Conference
of Community Development. But I am here with one purpose, to
advocate for the restoration of full funding for the Community
Development Block Grant Program.
The last 5 years have seen dramatic decreases in CDBG
funding for Ohio communities. In 2001, Massillon's entitlement
grant was $956,000. In 2006, our CDBG grant will be $749,597 a
decrease of over $200,000, or a 21 percent loss of funding over
a 5-year period. This year will be especially difficult as our
entitlement amount for this year alone was reduced by almost 11
percent.
For all 43 Ohio entitlement communities, the total loss of
CDBG funding over the 5-year period from 2001, is more than $26
million, $12 million in the last year alone. The State of Ohio
is responsible for administering and allocating CDBG funding to
Ohio's small cities and non-urban counties. During the last 5-
year period the State's CDBG program has lost over $8 million
in CDBG funding with a $5.5 million reduction in the last year.
And now we read that President Bush has proposed further
cuts for 2007, effectively reducing funding for community
development by another 27 percent. I have estimated that Ohio
communities will lose an additional $30 million and the State
of Ohio would lose another $13 million. If the budget is
enacted as proposed, Massillon's CDBG program would have
suffered a total loss of 42 percent of its block grant funding
from 2001 levels.
But how do these funding reductions affect my community?
How are Massillon's programs being impacted? In Massillon, we
use CDBG block grants to operate such programs as housing
rehabilitation, code enforcement, neighborhood street
improvement, demolition and clearance, and youth recreation. We
also provide funding to a variety of local organizations,
including: Massillon Main Street which provides exterior
renovation and facade restoration grants to downtown commercial
buildings; the Walnut Hills Residents Association, a
neighborhood based organization designed to promote the
revitalization of their neighborhood; the Massillon Urban
League, which provides housing counseling services and teen
pregnancy prevention classes; Stark County Community Services,
which operates the Family Living Homeless Shelter in Massillon;
the Domestic Violence Project, which operates a domestic
violence shelter in Massillon; West Stark Medical Clinic, which
provides free health services for low income uninsured
households; West Stark Family Services, which provide homemaker
services to elderly and handicapped households; the YWCA of
Massillon, which helps pay for child care services for families
in crisis; the Massillon Commission to Advance Literacy, which
provides adult literacy training; Faith in Action of Western
Stark County, a faith-based organization which provides
caregiver services to the frail elderly; and Lighthouse
Visions, which provides life skills education classes for
foster children.
Reductions in funding inevitably lead to loss of services.
Every $5,000 reduction for housing rehabilitation programs in
Massillon means one less home repair project that will assist a
single parent household or elderly homeowner. Every $5,000
reduction for demolition and clearance activities means one
less vacant dilapidated structure can be torn down resulting in
the continuation of blight in low income neighborhoods.
Reductions in funding also mean loss of funding to local
organizations for their programs, meaning less funding for
homeless shelters, domestic violence shelters, free medical
clinics, housing counseling, child care, and elderly services.
The city does not put together its CDBG program in any sort
of arbitrary fashion. We put a lot of time and effort in the
preparation of a 5-year plan called a Consolidated Plan for
Community Improvement. The Consolidated Plan provides an in-
depth analysis of the city's housing, homeless and community
development needs and establishes objectives to be achieved. A
strategic plan is prepared to achieve our objectives and after
that an annual plan is prepared each year to allocate our CDBG
dollars to specific projects and activities designed to reach
these objectives.
All of this planning is done through a citizen
participation process designed to provide input from local
groups and organizations. These steep funding reductions, both
real and proposed, which we are facing are causing a number of
problems locally. Loss of funding means fewer activities, less
funding or no funding for local organizations. We identify all
of these housing, homeless, and community development needs in
our Consolidated Plan, and then with Federal cuts we are denied
the monies needed to make meaningful progress in addressing
these problems. We ask for community input from local
organizations on one hand, and then are forced to offer only
limited, or maybe even no funding, for their programs. The
proposed 27 percent funding reduction for 2007, will in all
likelihood, if enacted, mean the end of funding to any local
organizations in Massillon. Loss of such funding will
definitely impact the quality of services available to serve
the neediest of Massillon residents. Those elderly and single
parent households living in substandard housing, those families
in crisis facing homelessness, in need of child care, or in
need of medical services, and those elderly in need of
homemaker and caregiver services.
Cities like Massillon need these community development
dollars. The activities provided with these funds cannot be
carried out with general fund dollars. The city has no local
funding for housing rehabilitation, home repair assistance, or
for local public services. Economic downturns have strapped our
city budget, making it extremely difficult to provide for such
services as police and fire protection, pothole repair, snow
removal, and the like. CDBG is part of the implied pact between
local and Federal Governments returning a portion of Federal
tax dollars back to local communities, giving local governments
the flexibility to use these dollars as needed to meet real
identified community needs, while still adhering to a federally
mandated framework of regulation and oversight. The institution
of performance measurements is an important step in the ongoing
process of monitoring and evaluation needed to better document
the results and the benefits from the expenditure of CDBG
dollars.
Massive funding reductions will not destroy CDBG, it will
only--will not reform CDBG, it will only destroy the program,
signaling the Federal Government's abandonment of local
communities and the neediest populations within our
communities, leaving local government lacking the very
resources needed to help solve some of the Nation's most
difficult problems. And ultimately that is what it is really
all about. These are not just Massillon's problems. They are
Cleveland's, Dayton's, Cambridge's, Guernsey County's.
Collectively, these are the Nation's problems and that is why
we need a national program to address them. That is why we need
a fully funded Community Development Block Grant Program.
Thank you for your attention.
[The prepared statement of Mr. Aaby can be found on page
135 of the appendix.]
Chairman Ney. Thank you so much.
Mr. Downing.
STATEMENT OF PHILIP H. DOWNING, LOCAL OFFICE DIRECTOR, COLUMBUS
ENTERPRISE COMMUNITY PARTNERS
Mr. Downing. Good afternoon, thank you, Chairman Ney.
Before I proceed, I just wanted to let everyone know, although
it does state that I am a local office director of Enterprise
Columbus, I actually hail from Wapakoneta, Ohio. So I have a
rural connection and I spent probably half of my professional
life working in rural communities. So, I have kind of an odd
mix of urban and rural.
Chairman Ney. One of Neal Armstrong's--
Mr. Downing. Yes, as matter of fact, I lived on Neal
Armstrong Drive. That is a very small town. Well, thank you, I
appreciate that.
Thank you for the opportunity to discuss the Community
Development Block Grant Program, and other key Department of
Housing and Urban Development programs that facilitate the
production of affordable housing and community improvements
nationwide.
Enterprise is a leading provider of the development capital
and expertise required to create decent, affordable homes and
rebuild communities. For more than 2 decades, Enterprise has
pioneered neighborhood solutions through public-private
partnerships with financial institutions, local governments,
community organizations and others that share our vision.
Enterprise has raised and invested $7 billion in equity grants
and loans, and is currently investing in communities at the
rate of $1 billion a year. Enterprise's two Ohio offices
located in Cleveland and Columbus, work statewide with a host
of urban, suburban and rural community development partners.
Enterprise plays an important role in the housing and
community development finance system. To our grassroots
partners, we provide resources, expertise, and access to
additional capital. To our philanthropic and corporate
partners, we offer assurances that funds are invested with the
maximum impact. To the Federal Government, we ensure taxpayer
dollars are appropriately targeted, efficiently used, and
leveraged to the greatest extent possible.
In fiscal year 2006, Congress recognized the value of the
Community Development Block Grant, and nearly unanimously
rejecting the proposals in the budget to eliminate the program
entirely and transfer authority to the Department of Commerce.
This year, while the proposal would leave the program authority
at HUD, the proposed budget significantly reduces funding for
the program. For the second year running, the Administration
has proposed to cut funding for CDBG and several other programs
under the auspices of the Strengthening America's Communities
Initiative.
The fiscal year 2007 budget proposes just $2.7 billion in
formula funding for CDBG. This is a reduction of $936 million
compared to the appropriated level for fiscal year 2006. To
make matters worse, the fiscal year 2006 funding level
represents a 10 percent reduction in the funding from the
appropriated level in the fiscal year 2005 budget. Since fiscal
year 2001, CDBG formula funding has declined by nearly 16
percent. We have grave concerns about these funding levels and
the trend that they represent. These reductions have real and
harmful consequences for communities across the country.
The CDBG program represents the glue in the community
development tool box. Without these flexible dollars that CDBG
brings to affordable housing and community development
facilities projects in both urban and rural areas, these
developments often would not be able to come to fruition.
The CDBG statute is very clear, the program's three
national objectives are the elimination of slum and blight,
addressing urgent needs that pose imminent threat to health and
welfare of a community, and addressing the needs of low
income--low and moderate income families. We have made great
strides in the past 30 years towards these objectives, but we
by no means have achieved them. CDBG is an essential tool in
rebuilding of communities. Without it much of the progress we
have made is in jeopardy.
Even as the CDBG program was slashed in the budget request,
both Congress and the Administration have recognized its
flexibility and strong past performance and have channeled
$11.5 billion in Gulf Coast rebuilding funds through this
program via supplemental appropriation bills. After the trio of
hurricanes devastated the Gulf region, America's housing crisis
was unveiled for the world to see, and for our own citizens to
recognize. The budget proposal looks the other way as families
across our country, seeking stability, struggle to find fit,
affordable housing.
This committee and many of your colleagues in the House and
Senate deserve the thanks of the community development industry
and the low and moderate income families we serve for
preserving CDBG last year. We hope that you will again join
with us to ensure that this program can continue a strong track
record of success. Accordingly, we urge Congress to fully fund
the Community Development Block Grant program in the fiscal
year 2007 budget at $4.5 billion.
In additions to cuts in the CDBG program, we are also
concerned about the eliminations to the brownfields program,
Section 108 loan guarantees, and rural housing and economic
development programs. Each of these programs meets a specific
need that communities face when tackling their affordable
housing and community development problems. We encourage
Congress to reject proposals to eliminate these essential
programs, as well as to reject proposals to cut funding for the
Section 202 elderly housing program and the Section 811
disabled housing program.
Another key program slated for elimination in the fiscal
year 2007 budget request is the Section 4 affordable housing
and capacity building program. The Section 4 program is another
critical instrument for revitalizing communities. It equips
community development corporations and other neighborhood based
non-profit organizations with the tools and resources that they
need to address local issues.
The Section 4 program provides seed capital that community
and faith-based groups use to attract private investment for
housing, economic development, and other revitalization
activities. It helps local communities use programs like block
grants much more effectively. In 2005, each Federal Section 4
dollar generated $67 in community activities. I think that
speaks to the leverage issue you were talking about earlier,
Mr. Chairman. It is a very effective program, leveraging
private sector dollars. As you are aware, HUD administers
Section 4 primarily through Enterprise and the local initiative
support corporations, Mr. Grefe, representing them to my side
here. The Nation's two largest non-profit community
intermediaries. In 2005, Enterprise and LISC used $30 million
in Section 4 investments to help grassroots groups generate $2
billion to produce more than 12,000 affordable homes with a
wide range of other economic development activities.
To provide one example, in Fayette and Fairfield Counties,
the Section 4 program supported training that enabled Community
Action to expand its service area and self-help housing program
from Fayette and Fairfield Counties into Ross County and to
complete the second phase of Arbor Village in Washington Court
House. Arbor Village is a community of 30 new affordable for-
sale homes made possible in part by the buyer's sweat equity.
Additionally, Section 4 funding assisted Fairfield Affordable
housing in developing 50 apartments, as well as providing case
management and supportive services for low-income seniors.
Additionally, in Columbus, Section 4 has provided capital
to our local funding intermediary, the Community Development
Collaborative of Greater Columbus, leveraging significant
resources from financial institutions and philanthropies. This
effective private-public partnership from financial
institutions has proven effective in building capacities in
over 15 local community development organizations, catalyzing
construction of thousands of affordable homes and 120,000
square feet of commercial and retail space in Columbus. Recent
evaluations by OMB and GAO point to the effectiveness of the
program.
The bottom line is that community based organizations
across the country are building affordable homes, starting
small businesses, developing commercial and community
facilities. They are connecting people to jobs, providing child
care and other services, and making streets safer. They are
building that better world, quite literally, by providing the
economic tools people need to pull themselves out of poverty.
But they cannot do it alone, they need our help.
We at Enterprise strongly believe that Congress should
demand performance and accountability of Federal programs. We
are committed to working with Congress and the Administration
to improve the performance of these policies and programs. We
encourage Congress to continue to support and fund innovative
models, test new approaches, and preserve successful programs.
We are pleased that the subcommittee has brought this panel
together today and I hope this dialogue will continue. We look
forward to working with you to ensure that the best possible
outcomes occur for not only the expenditures of public dollars,
but also for the low and moderate income families struggling to
find affordable housing in safe neighborhoods across our
country.
[The prepared statement of Mr. Downing can be found on page
164 of the appendix.]
Chairman Ney. Thank you, sir.
Mr. Grefe.
STATEMENT OF HUGH GREFE, SENIOR PROGRAM DIRECTOR, TOLEDO, LOCAL
INITIATIVE SUPPORT
Mr. Grefe. Thank you, very much, Chairman Ney, and thank
you for assuring that Ohio is the home for these hearings this
year; we deeply appreciate it.
My name is Hugh Grefe and I am the senior program director
for the Toledo office of the Local Initiatives Support
Corporation. LISC is a national non-profit community
development support organization working through our 34 local
offices in over 100 cities and 80 rural communities across the
United States. Each year we invest close to $900 million in low
income neighborhoods and rural areas. Since 1980, LISC has
raised over $6 billion in grants, loans, and equity from
supporters and has invested it to generate over $14 billion in
community development. These funds have created over 160,000
homes, 25 million square feet of business and service
facilities, and helped to employ 60,000 people. LISC works
through local non-profit community development corporations and
other non-profit community based development organizations
along with local government and local private sector partners.
Our financing includes investments, loans, loan guarantees, and
grants. Organizational assistance includes advice, training,
management analysis, and operational support.
In Toledo, I have been responsible for leading LISC work in
community development for 12 years, and previously served as a
senior executive at a local hospital serving Toledo's oldest
and poorest neighborhoods. In Ohio, LISC has local offices in
three cities; Toledo, Cleveland, and Cincinnati. We also work
through our rural LISC office working with program partners and
two rural non-profit developers, the Adams/Brown Counties
Economic Opportunities, Inc. and with WSOS Community Action
Agency in northwest Ohio.
LISC's work with our non-profit community development
partners is structured around efficient and strategic use of
public funds. One of the critical building blocks of community
development is the Community Development Block Grant Program.
In Toledo, a weak market city with a struggling economy and
a continuing loss of population and loss of jobs, CDBG is a key
resource. With few local private foundations, CDBG is the main
source of operating and public investment funds for community
development and human services organizations. Significant goals
to build new neighborhoods around new schools and a major job-
producing riverfront development must have CDBG investment to
succeed in the coming years. As an example, the Pontiac and
Ontario Place development provides a wonderful study of a
broad-based neighborhood revitalization aided by the CDBG.
Forty new and rehabilitated homes for low income families have
been built within sight of the location of the new Chase
Elementary School. The use of CDBG in this first project in
Pontiac/Ontario has now attracted $3.5 million in new, private
investment to the neighborhood and created the basis for the
next steps in the new schools, new neighborhood program.
In Cincinnati, Ohio, CDBG supports the infrastructure of
community development corporations which are the backbone of
neighborhood-based development in that city. Working with our
partner, Cincinnati Housing Partners, 18 blighted properties in
the Carthage neighborhood have either been rehabilitated or
have seen new constructed homes and sold--who have built them
and sold to working families creating equity for first time
home buyers and hope for a whole neighborhood. The CDBG program
was key to this neighborhood turnaround through its flexible
uses in acquisition and infrastructure improvements.
In Cleveland, CDBG funds have been extremely important
tools in strengthening community economic development. Funds
are used to repair homes, provide operating support to CDCs,
provide shelter and care for the homeless, repair neighborhood
storefronts, and provide supportive care for those living with
AIDS. In Cleveland, along with the LISC grant, CDBG funds were
used to support the Spanish American Committee, Ohio's oldest
Hispanic non-profit organization, to develop the only HUD
certified bilingual housing counseling program in the City of
Cleveland, to increase home ownership in the fast growing
Hispanic community. This relatively new program has been
amazingly successful in helping to increase home ownership
among Cleveland's growing Hispanic community.
In rural Ohio, through our partner organizations, Adams/
Brown Counties Economic Opportunities, serving Adams and Brown
County and WSOS Community Action serving Ottawa, Sandusky,
Seneca, and Wood counties, affordable rental housing and home
ownership is being built for low and moderate income families,
senior housing is in the planning stages, businesses are being
assisted using critical job-producing strategies through micro
enterprise development and IDA initiatives, child care centers
are being built, homeless are being assisted and more, all with
the assistance of CDBG funds.
Along with other specialized Federal programs including the
HOME program, the Section 8 tenant assistance program, the
Community Service Block Grant programs, Section 4 and others,
CDBG plays an extremely important role as one of the most
flexible of all programs in the tool box created to support
community revitalization and support. Among its strengths are
the following: CDBG is the venture capital of change,
leveraging significant private capital into communities that
have had difficulty attracting new investment. For example, in
Toledo, over the last 10 years, CDBG commitments from the City
of Toledo entitlement have resulted in $5.00 for every single
dollar of CDBG, just from LISC alone. And when the project
financing commitments that the CDC's have been able to attract
is added, it brings it to nearly $9 in total leveraging impact
from the City of Toledo's commitment.
CDBG encourages local elected leaders to work with
community based and run organizations to set priorities for
investments that produce results in difficult-to-develop areas.
CDBG allows communities to take the long view and develop
strategies to address the corrosive effects of decades of
negative economic and social trends.
Because it is flexible, CDBG can be carefully targeted in
ways that enhance the effectiveness of more focused investments
of HOME funds, Section 8, Section 202, and other Federal funds.
Overall, CDBG allows local communities to develop and carry
out neighborhood and community transformation plans that make
the project or transactional work supported by HOME, Section 8,
Section 202, and other funds have more long term and lasting
impact.
CDBG is a 30-year old program and it works. From LISC's
national perspective we have seen the benefit of the
flexibility of the program in cities as diverse as Los Angeles,
California and Duluth, Minnesota. In rural America we have seen
the usefulness of small cities grants funded by CDBG which
helped to jump start the revitalization of a faltering main
street as we just heard about here in Cambridge or the
acquisition of land in order to start a self-help home
ownership program in a community that had not seen new
construction in decades.
We thank Congress for your past support, particularly last
year, and applaud your vision and partnership with local
communities in supporting CDBG.
If reform is to happen to the CDBG program, we urge
Congress to include community-based stakeholders, both rural
and urban, in this decision making process. We understand that
times are tough in Washington. Tough decisions must be made
over competing priorities. CDBG works, it helps communities
work. Deep cuts will strike at the very heart of communities
reinventing themselves. Discussions concerning changes to the
CDBG program or how the allocation program or formula is
determined must not be kept within the Beltway but to be
brought here, as you have done today, where we are, to be
discussed.
I appreciate the opportunity to testify before this
committee. I am happy to answer questions. And I wanted to
comment on your question about direct support for low income
persons, as a result of that. In Toledo, Ohio, every year the
City of Toledo's allocation of CDBG to family resource centers
and other non-profits including homeless shelters, soup
kitchens and other feeding programs, etc., amounts to about $1
million a year and it is direct service to the very lowest of
low in our community.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Grefe can be found on page
172 of the appendix.]
Chairman Ney. Thank you.
Before we go on I wanted to, the Mayor of Vincennes is in
the room. We introduced everybody, so the Mayor of Vincennes is
here. I just wanted to say that.
He was my mayor for 13 years, so I wanted to introduce him.
Voice. He used to be my resident and I could tell him that
he may have his power in Washington, but on weekends he
belonged to me.
[Laughter]
Chairman Ney. We got redistricted and we had to move, I
might get redistricted and have to move back.
Voice. That is important.
Chairman Ney. He was good when I lived there.
Mr. Henry.
STATEMENT OF OREN J. HENRY, COMMUNITY DEVELOPMENT
ADMINISTRATOR, CITY OF CINCINNATI, OHIO
Mr. Henry. Thank you, Mr. Chairman, thank you. Before I
begin my comments, I want to thank you for having this hearing
and it is nice to be back in this part of the State. I live in
Cincinnati now, but I was born and raised in Newark, Ohio.
Chairman Ney. Okay.
Mr. Henry. I was their community development director for
16 years and had many successes there with the block grant
program, and then moved on to the Ohio Department of
Development, and was the deputy director of the community
development division there. I currently sit on the board of the
Ohio Housing and Finance Agency, but I am wearing a different
hat today. So I will begin my comments.
Okay, thank you, Chairman Ney and the members of the
subcommittee, for allowing me to testify today on the
importance of the HUD Community Development Block Grant Program
to our communities, and the need for continued stable funding
for the program.
I am the Community Development Administrator for the City
of Cincinnati and I have held that position for approximately 5
years. In that time I have seen Cincinnati's annual CDBG
allocation decrease 21 percent from $17,343,000 in 2002 to less
than $13,742,000 in 2006. The substantial annual cuts in
funding are increasingly making it difficult to administer
effective programs to add new and sustain existing jobs,
provide decent affordable housing in safe neighborhoods, and to
offer needed public services for our citizens. In order to
maintain effective programs, please fund the Community
Development Block Grant formula program at a minimum of $4.3
billion for 2007 and beyond.
We are very concerned about the President's proposed cuts
in the fiscal year 2007 budget proposal that would reduce
overall CDBG program funding by 27 percent and would provide
for dramatic changes in the funding formula. I understand HUD
will be pursuing a new formula that would cut the CDBG
allocation for Cincinnati by an additional 25 percent. If all
these so-called reforms are enacted as proposed, the city could
see its CDBG allocation shrink from a high of $17,343,000 in
2002 to only $7,523,000 or 43 percent of what was received just
5 years ago. Add in the effects of inflation and Cincinnati
will be operating with only about a third of the resources the
city recently received.
Like all cities, Cincinnati has a unique history. In 1880,
Cincinnati was the sixth largest city in the United States and
had a solid industrial base. As the city matures, it finds
itself landlocked and with one of the lowest home ownership
rates in the Nation at just 39 percent. And it is only 29
percent for minority populations. As manufacturing is still a
large part of the economy, many of the old factories and sites
need serious brownfield remediation to be marketed and reused
for new industry and jobs. Obsolete, old neighborhoods need new
approaches and well designed infill redevelopment to meet the
needs of existing citizens, to halt the exodus to sprawling
suburbs, and to offer exciting and innovative alternatives to
attract new residents into a mixed income and diverse
environment.
While pursuing a number of redevelopment initiatives, our
leadership currently is taking bold action to address the
ongoing problem of vacated buildings. There are documented
complaints on over 1,700 vacated buildings that contribute to
the blight, harbor illegal activities, and provide an incentive
for disinvestment. The city is dramatically increasing fees and
fines on negligent property owners. Our goal is to cut the
number of vacated structures and to motivate owners to
immediately address safety issues and to rehabilitate and reuse
their vacated building. The owner may also sell their building
or donate it to the city and neighborhood-based redevelopment
groups. CDBG funding is a key part to this effort by enabling
us to have ample resources to pursue all of these buildings in
a reasonable time frame. When the transition of these blighted,
vacated structures begins, CDBG will continue to be a strong
element. CDBG funding will be utilized to demolish, clean up,
and rebuild some sites or will leverage funding in the
renovation of others. Our strong actions in dealing with
vacated buildings will be a tremendous start to the
revitalization of some of our most challenged areas.
But the proposed funding cuts and formula reallocations
threaten new initiatives as well as our existing community
redevelopment efforts. The 21 percent cut in funding we have
experienced over the past 5 years has meant cuts in
neighborhood programs and public services in all areas. Of
significance, CDBG regulations generally limit expenditures of
CDBG funding for public service activities to 15 percent of the
grant including program income. As the CDBG program has been
cut 21 percent, a corresponding cut has been made in public
service activities, such as youth development programs or drug
elimination activities. At the same time, CDBG funded programs
are under increased scrutiny, and more reporting information is
requested, increasing staff time. We have no issue with being
held accountable for the expenditure of public funding, but we
cannot continue to offer high quality programs that truly
address the needs of our neighborhoods with significant annual
cuts.
In order to maintain effective programs, please fund the
CDBG formula program at a minimum of $4.3 billion for 2007 and
beyond. We understand the periodic need to examine formulas to
ensure they are fair, but for a city with a declining
population base, large numbers of vacated building of which
many are historically significant, numerous brownfield
industrial sites, and extremely low home ownership rates, it
does not seem plausible that a cut of 25 percent is a
reasonable adjustment. Ideally, formula funding could be
increased to maintain funding to existing cities while boosting
those that seem to have unmet needs. In today's budget
environment that may seem unrealistic, but to not reinvest in
our neighborhoods and communities seems totally unrealistic.
Thank you for your consideration and thanks so much for
your support of the programs over the years.
[The prepared statement of Mr. Henry can be found on page
177 of the appendix.]
Chairman Ney. Thank you.
Mr. Myers.
STATEMENT OF DONALD R. MYERS, EXECUTIVE DIRECTOR, OHIO
MIDEASTERN GOVERNMENT ASSOCIATION
Mr. Myers. Thank you, Congressman Ney. Before I start, I
just would like to note, as you are well aware, four of the
board members on the original panel were OMEGA members which I
represent and we are honored for that privilege and that
invitation. It is also good to have the Honorable Congressman
Frank, the ranking member of this important subcommittee, here
today. And for this privilege of testifying before this
committee today, and to you we thank you.
I testify to express my comments and those of the Ohio Mid-
Eastern Governments Association Board in its entirety, to seek
your consideration and support to fully restore funding to the
HUD Community Development Block Grant Program in the amount of
fiscal year 2004 levels of $4.3 billion. In addition and most
importantly, we ask that you and the committee support
retraining--retaining the original mission of the program as a
flexible local-driven program that provides valuable assistance
to county commissioners, mayors and development directors
working to improve local communities and the economic
development initiatives needed in our region.
As executive director of OMEGA, I represent a Council of
Governments, a local development district, and an economic
development district serving 593,221 people.
At our most recent annual board meeting, 92 officials were
in attendance, from a variety of walks of life, and all of them
spoke of the critical importance of the CDBG program. At our
most recent meeting held 2 days ago, March 22, 2006, we spoke
of this subcommittee hearing, its importance. And the board in
its entirety asked that we express no in uncertain terms the
importance of the Community Development Block Grant Program to
rural Ohio and to our region.
As a former development director in Belmont County, I have
had the privilege, Congressman, of working with you on three
very important projects to me and to you. You were both a state
senator and a United States Congressman. We worked on $80
million Electrolytic Tin Plating Plant, called Ohio Coatings.
We worked on the Shadyside Stamping Plant in Shadyside, Ohio,
together at a cost of $32 million. The Electrolytic Tin Plating
Plant was at $80 million and we worked on the Belmont
Correctional Institution together at a cost of $38 million.
When I left Belmont County as its development director in
2001, these three projects alone had created 900 jobs, and they
had a payroll and fringe benefit package in excess of $35
million. Belmont County and its people today benefit because of
these developments. These projects could not have happened, and
would not have happened, without the Community Development
Block Grant Program, which you are very familiar with.
Records in our office, the OMEGA office, and we do not have
all records for the HUD program, but what we have found is,
just in the year 2004 we had $3,015,000 for 15 county and city
formula grants, $885,000 for two water and sewer grants, and
$5,839,000 for 12 CHIP grants. These CDBG grants are so
important to our region and to the individual counties and
cities that they benefit and serve.
Our infrastructure needs today are many, not only here in
rural Ohio, but throughout the country. Last year, the American
Society of Civil Engineers prepared a report that addressed the
12 primary categories of infrastructure in America. The grade
given by this quality group of people was a D. Both drinking
water and wastewater received a grade of D. The report further
states that the Nation's 54,000 drinking water systems are
aging rapidly and some sewer systems are in excess of 100 years
of age. And Congressman, you personally know one in our region
that is 100 years of age, your former hometown. We need quality
programs like Community Development Block Grant that address
these issues of concern and importance.
You have done much for the people of Ohio and for the
economic disadvantaged citizens throughout the United States.
We ask that you continue to look out for those in need and in
the shadows of life. With a very sluggish economy and three
major floods that have hit our area recently, our 10-member
counties need your help and that of Congress more than ever. We
ask that you support these quality programs and restore funding
of the CDBG program to the fiscal year 2004 level of $4.3
billion.
Again, for this privilege and this honor to speak of this
important program, and on behalf of OMEGA, we thank you for
this consideration.
[The prepared statement of Mr. Myers can be found on page
195 of the appendix.]
Chairman Ney. Thank you very much.
Mr. Ricer.
STATEMENT OF GARY W. RICER, EXECUTIVE DIRECTOR, GUERNSEY,
MORGAN, NOBLE TRI-COUNTY COMMUNITY ACTION
Mr. Ricer. Thank you very much. My name is Gary Ricer and I
am the CEO of Guernsey, Monroe, and Noble Tri-County Community
Action, Inc. On behalf of the residents of Guernsey, Monroe,
and Noble counties, I would like to submit this testimony of
the need for the continuation of funding for the Community
Development Block Grant Program. GMN Tri-County CAC has
administered the CDBG program for the Noble County
Commissioners for the past 12 years. This program is
discretionary funding, which permits the local elected
officials to complete much needed projects within a local
jurisdiction, which they could not do without the critically
needed CDBG funds.
During the past years, we have been able to complete the
following projects in Noble County:
Help purchase fire trucks for volunteer fire departments;
Purchase needed supplies for the fire departments;
Install sidewalks;
Install water lines;
Dry fire hydrants;
Demolish buildings;
Renovate buildings;
Help purchase senior citizen vans;
Purchase park equipment for small villages; and
Pay engineering fees for proposed sewer lines, just to name
a few.
We have received a significant reduction in grant funds
over the past 3 years, and for this rural area it went, in 2004
from $67,000, 2005 $63,000, 2006 $57,000. So you see the
pattern. I am urging your support of the continued funding for
the Community Development Block Grant Program.
And in summary, I would just like to say as a former county
commissioner, as well, that I think it is really critical when
you look at--this is the last of the discretionary monies, that
I feel for the rural communities. And with all due respect,
many times when State and Federal Government has allocations of
funds available for disbursement they pretty much direct or
tell you where those monies are going to go. But I think in
this case with the CDBG and with the public's input, it really
does give the voter, the taxpayer, the resident, and the
communities a strong voice on exactly where that discretionary
money is going. Of course we all know that it is generally ten
to one the request of the monies that is available for what is
to be actually disbursed, but it is really important, I know to
a lot of these public and--public organization service and
civic youth groups and such.
I know in the past, historically from e-squad
defibrillators, to sidewalks in slum and blight areas, and from
a new roof for community centers to replacing a pumper on a
fire engine; that is really critically important for the
locals. And what you said earlier, Congressman, to the first
panel about if the guidelines are changed to look more at the
poorest of the poor so to speak, the hardest to serve, the
under-served and under-privileged, I feel that it would have a
detrimental effect, because what that actually is going to do
is, let us say hypothetically, you take 200 that were funded
and you cut that back to 20 of the hardest to serve, then
before you know it, the moderate income is going to be the low
income. Because they are going to be affected as well. So I
think it is critical if you would, with all due respect, be
mindful of that fact as well.
Again, I thank you on behalf of the citizens of Guernsey,
Monroe, Noble Tri-County. And I appreciate your efforts; I know
the work for all of you, you have kind of got your work cut out
for you as well. We are always asked to do more with less
funding. So good luck and I appreciate the opportunity to
testify.
[The prepared statement of Mr. Ricer can be found on page
198 of the appendix.]
Chairman Ney. Thank you.
Ms. Wesel.
STATEMENT OF CHARMEL WESEL, ACTING DEVELOPMENT DIRECTOR, CITY
OF MARIETTA, OHIO
Ms. Wesel. Thank you for allowing me to speak. My name is
Charmel Wesel and I am the acting development director for the
City of Marietta. We currently are an entitlement community for
CDBG funding. Last year, we received $505,971. This year we
will receive $450,554.
To echo the sentiments that you have already heard, CDBG
funds are an incredibly valuable tool in assisting our low
income families. Here is just a brief rundown of a few of the
programs, a few of the ways we have used our CDBG dollars. Last
year we assisted 15 families with emergency home repairs. We
have given 17 families the paint and supplies to paint the
exterior of their homes. We helped 13 local businesses make
improvements to their store fronts and provided more than 100
children with summer playground program activities, while
providing five local teens summer jobs. We awarded more than
300 scholarships to families admitting them to our new Aquatic
Center. We supplemented our local public transportation system
with $40,000, and placed new playground equipment in two of our
neighborhood playgrounds. We installed historic street lighting
in a slum and blight area to provide residential safety and we
assisted our local food pantry with the purchase of new
refrigeration equipment. We hosted a building doctor clinic for
our many residents living in older or historic homes. As you
know, Marietta is the oldest city in the State of Ohio, so we
have a lot of older homes. We also hosted a DART visit with
Downtown Ohio Incorporated last summer that began an ongoing
drive to the Main Street program in our downtown for
revitalization efforts. We provided lead paint education for
several families. We worked with our Washington County Career
Center to create some new wrought iron trash receptacles that
were placed throughout our downtown and our new bike path and
planted more than 40 trees throughout a slum and blighted area.
We completely reworked a city street and resurfaced a public
basketball court. And in addition to that, thinking about
leveraged funds, we worked with our community action program in
Washington County, and supplemented their CHIP program with
$40,000 of funds which go to help fund $400,000 to provide home
rehabilitation efforts.
This is not a complete listing of the projects we did last
year, but it is very indicative of just how valuable the
dollars are that we receive from CDBG every year. Please do
keep in mind that all of these projects are done in areas that
have been identified as low income or slum blighted areas,
using census tract data.
We are very fortunate to receive these funds. Their
flexibility is crucial in allowing us to create the programs
that will directly impact those low income residents who really
do need our assistance.
A brief example of the wonderful flexibility of the CDBG
program came to light following the two devastating floods we
suffered in September of 2004 and January of 2005. These floods
ravaged our town affecting some 300 plus businesses and
thousands of residents. Most of the residents affected were low
income. It affected our trailer parks and some low income
housing areas that were directly in the flood plain. A lot of
trailers were destroyed; homes were completely flooded out.
FEMA came to assist us but they could not really provide the
adequate funding that we needed. We were, as a city, able to
move funds in our CDBG program directly into our emergency
repair program to assist those homeowners with new furnaces,
new hot water tanks, new electrical, whatever they needed. We
also created a new project in our CDBG funds to help flood-
affected businesses. We provided $1,000 apiece to over 35 local
businesses to help them get back open as quickly as possible.
I do not know of any other Federal program, and I am new to
government, but I do not know of any other Federal program that
would allow that flexibility with the same funding in such a
short time frame. We were immediately able to react and respond
to the needs of our citizens.
One other issue to address is a little bit more specific to
our region. Appalachian Ohio continues to lag behind the rest
of the country in terms of economic growth. I hear every night
on the nightly news that our country's economy is growing; our
local economy, however, remains stagnant.
We continue to have homeless issues resulting from the
floods. Many of our homeless are going unreported; they are
sleeping on their friends' sofas or sleeping in their cars. Gas
prices continue to stick at $2.50 a gallon. Our population in
Marietta is shrinking and our employer base is declining as
well. Our manufacturing base has shrunk dramatically leaving
what few job openings are available only in the service
industry, which means lower wages and fewer benefits.
These items affect our city government's pockets pretty
deeply and that means we can provide fewer infrastructure
improvements and services. CDBG is our strongest hope to
provide much needed assistance to those in dire need. While I
realize that our Federal Government has to be fiscally
responsible, CDBG is not the area in which to make such drastic
cuts. Unfortunately the reality of life for our low income
citizens across the country is this, a one time assistance from
a CDBG fund will not move them out of their low income lives.
CDBG is, and must remain, an ongoing flexible funding program
to allow communities to help those in need. Whether that is
creating jobs, providing funding for home repairs, or
maintaining an adequate infrastructure. CDBG answers all of
those needs and more. I urge you to look for other alternatives
to find the funding to balance the Federal budget. Do not take
away from those who already have nothing to give.
Thank you very much for your time, I appreciate it, thank
you.
[The prepared statement of Ms. Wesel can be found on page
207 of the appendix.]
Chairman Ney. Thank you. A very good panel and I appreciate
all your time.
I wanted to mention on the floods, we have, we meaning the
staff in Washington, in fact had a hearing way ahead of the
curve prior to Hurricane Katrina on flood insurance, was it in
Tuscarawas County, I think?
Mr. Riley. Last August.
Chairman Ney. Last August, so we were ahead of the curve.
We all know more than we want to know maybe about flood
insurance laws now. And the House placed flood insurance with
some reforms, I only mention this because in our area it is
flooding too. You have not only got it in Cincinnati, you know,
in other river areas, in Tuscarawas County, all over the place.
But we put some reforms in that and the Senate did not move.
Now, we did another round of flood insurance.
But FEMA too, we are trying to find out, you know, what
FEMA does and does not do to help and they do some things to
help and some they do not. So, I wanted to mention one in
particular, on Powhatan Point, Ohio, we--FEMA, the trailers
would be moved, be pulled, trailers and not modular, would be
pulled away and then the water would come up. And then when
they went to bring them back, FEMA said, well, you can bring
them back, but you are going to put them on 30 foot blocks and
then you have to run the plumbing up, you have to spend
thousands of dollars for the trailer.
Well, the point was no, when we know it is going to flood,
the river does not really flash flood, and--but we can just
pull them out. And it just so happens, I just want to tell you,
Clinton Jones, and Cindy, and anyone else who worked with Mr.
Beerider at the time, they put the amendment in to force FEMA
to let you pull those trailers out of Powhatan, across the
United States.
I just thought I would mention that. So, they did do that,
so we try to look at some of the situations, the block grants
are good too, for the flexibility of the flood. That is what we
have done with the Gulf States now. They have an appropriation
for block grants, they can use it in various ways. Some of them
are using it maybe retroactively on flood insurance, and some
are using it for direct payments for the houses. So, I think
the flexibility aspect of the block grant, during Katrina, of
the horrible thing--our subcommittee, by the way, went there.
We were the first subcommittee of the House, period. Well, the
first committee of any type to go down there and view it, you
know, and to have the hearings down there. So, I think the
flexibility of block grants and applied right into Katrina was
the better, quicker way probably to do a lot of things to help.
I was going to ask about Cincinnati and that is 39 percent,
do the vacant buildings have something to do with the home
ownership rates?
Mr. Henry. While the city, as I mentioned, was the sixth
largest in the country many years ago, but, you know, it is
kind of down. It is not in a flood plain, but there is the flat
area between the hills there, so the population is very dense
and--and it led to the development of a lot of rental units, or
older housing that is kind of obsolete and they have been
turned into rentals. And as people earn more money and could
afford a home, they moved out to the suburbs. So now, we have
an inner city that only has a 39 percent home ownership rate
and, you know, that is far below national average. I am forced
to try to sustain a community, we have to do something about
that. And that is why--
Chairman Ney. That is why the District of Columbia,
Washington, D.C., which is a very high cost area, obviously to
buy and I think it is 50 percent--50 percent would be home
owners, so I was just--
Mr. Henry. Yes, and we are not that high of cost. I do want
to mention the flexibility of block grants. We have a number of
Katrina families who were relocated to Cincinnati that--and we
are using block grants to help them through the transition and
with their FEMA assistance, and we do have people now, in fact
just yesterday I received a report of five families who have
bought houses, so they are now going to be residents in
Cincinnati from the Gulf.
Chairman Ney. I saw something on television about that,
too. The first families who came up, I saw something on TV,
they came to Cincinnati, this was 6 months ago.
Mr. Henry. It is helping reverse our population decline. We
put them in homes.
Chairman Ney. One thing we noted earlier too, for Section 8
purposes that, you know, FEMA, we had stipulated that some of
the funds would have to go to HOPE VI and some different ways
they were going to spend their money. And Congress on a
bipartisan basis had agreed that they would spend, I do not
remember exactly what we appropriated, we had HOPE VI, what
else was there, do you know?
Mr. Riley. A variety of HUD programs.
Chairman Ney. And we said, here is the FEMA money that is
going to be spent down at the Gulf and here is how you are
going to spend some of it. So we had directed it. And I think
too, if you are dealing with Section 8, the Congress has to be
careful because as emergency vouchers were provided for people
to, you know, go across the United States and take that
emergency voucher, go to Cincinnati, Columbus, or Seattle,
wherever people went, although, I personally think people need
options to remain there, if you want my opinion. I think that,
you know, in Mississippi there are 30,000 trailers so people
could remain there and rebuild and, in New Orleans, there are
2,000 trailers. And there are a lot of reasons I can cast the
third sin fed, third sin state, third sin local city. And if
you wanted to do that, but I just think that if people, you
know, did have to disperse across the country and did not have
the option unfortunately to stay at home, they need that
Section 8 and those vouchers to follow or as we create
emergency vouchers, we have to be careful later on in future
Congresses that somebody does not come back and say look it is
a tight budget and those emergency vouchers came out originally
out of this pot of money. Now we are going to make HUD assume
that cost, and therefore, you short communities on your
standard vouchers that were out there. I think in my opinion
that is something that we have to watch.
Anybody want to just mention anything else about the
brownfields, do you work with the brownfields?
Mr. Grefe. In Toledo, which is a classic midwestern
industrial city, brownfields are dominant--they play the role
as an immovable storm cloud that hangs over neighborhoods, and
they can either be vacant land itself or simply abandoned
buildings. So brownfield redevelopment is a profoundly
important part of our rebirth. It represents an opportunity for
very efficient and high impact use of the existing
infrastructure, rather than--you know, I do not want to get
into a big long discussion about sprawl versus--but when you
can reinvest in those old parts of the community where you have
already have an infrastructure that the public through its
taxes and its local jurisdiction has to support anyway and you
cannot not support it any more. It is very good government to
promote the reinvestment in those areas where possible.
One additional thing to consider about brownfields that we
learn the hard way a lot of the time is, most of them seem to
be 19th and early 20th century configurations. The 21st century
economy has a different set of needs, and so when we think
about rebuilding brownfields, we are actually talking about
reinventing our industrial base. The kinds of industry that
today would use something that was configured to be a factory
in 1895 and its location and so forth, is going to be a very
different kind of industry, but it represents opportunity for
creativity. So it is very important not to lose that resource.
Chairman Ney. Mr. Henry.
Mr. Henry. Well, you know, going back to Cincinnati's
history as an industrial community, we have lots of inner city
brownfield sites and all that need to be redeveloped and, you
know, all the good reasons about trying to eliminate sprawl and
all that. Also, we have the infrastructures set up for it, you
know, the Ohio River still transports a lot of commerce. We
have two interstates, we have a very active airport, so it's
important to continue to have the reinvestment there in the
city.
But one of the things you were asking earlier about private
dollars being leveraged, we do not find a lot of difficulty in
getting companies to come in and, whether they are doing
manufacturing or, you know, whatever their business is, if we
can come in and hand them a clean site. But it is getting those
properties, getting them cleaned up, pulling in the resources
and it takes a city to be able to do that. A private business
just cannot take that risk of going in and acquiring a site and
not knowing if they are going to run into PCB's or asbestos and
get it tied up, that could be devastating. And so we have a
very active brownfield program, we modeled it after one that
has been very successful in Chicago and we are turning
properties over regularly, large pieces so that we can attract
people back in and put them right on route 50 or I-75 or
whatever.
And I find too, I mean, you know, it is not just
Cincinnati, I had the same kind of problems in Newark, they
were certainly on a smaller scale, but every community has some
old mill or some old plant that dumped something and that land
would be perfect to do something with. But a private business
cannot go in and do it. It has to come in, you know, we have to
be the ones that do the clean up.
Chairman Ney. We found that out now in refineries. The bill
that I supported in the past, the Federal Government will
actually build the refinery, go through the permitting process
etc., with itself. And then it will be sold to the private
sector. We have not built a refinery since 1976, there is a
reason, either government then mandates you, the company will
build the refinery, which you cannot do or we build the
refinery or we fast track it so that they will have an
incentive to build a refinery. So, you run into these problems
everywhere.
New Orleans, the Army Corps was telling people that you
need to, or here is what we want you to do with the levees. The
companies came in, the companies got sued immediately by
groups, and the companies said fine we do not have to be here.
So, you know, you are running into this, and I think that the
governments or the development groups give, you know, a bit of
a push in there with a better feeling to be doing developing.
Has anybody ran into problems of--I am just curious, about
permitting, getting the studies done, the environmentals, or
does that run pretty smooth?
Mr. Myers. Congressman, they are difficult but in many
cases they need to be difficult.
Chairman Ney. Because of the past history?
Mr. Myers. Exactly. It is a quality program and, you know,
as it is right now it could be slightly better, but we also
need the guidelines. And we will follow the guidelines believe
me, just to have the worthiness of the programs.
Mr. Grefe. We do not want to lose the resource.
Chairman Ney. I want to ask about capacity building, you
had mentioned that, is that the 1994 program?
Mr. Downing. Correct.
Chairman Ney. Senator Bond?
Mr. Downing. Correct.
Chairman Ney. Okay, so that is back in my youth, 1994.
Mr. Downing. Yes.
Chairman Ney. Yes, and it has certain provisions of, you
know, who can be involved in it?
Mr. Grefe. That is correct.
Chairman Ney. Now you want to just expand on that a little
bit?
Mr. Downing. Sure. Basically the Section 4 program, as you
mentioned, originated back in 1994. The program right now in
the past year has contemplated $26.5 million, which is really
divided between Enterprise and LISC to support specifically on-
the-ground capacity building activities. And what we do in
Columbus is invest a great deal of the money in the capacity,
the ongoing day-to-day activities of community development
organizations. Those folks are the best, most in tune with the
needs of their neighborhood, their communities. We in turn work
with them to effect housing, to effect change, be it commercial
revitalization or whatever they need. So that money really
serves significantly and the leverage amount that I gave you
was specifically for Section 4, and I think it is really
prudent of--it is a highly effective program. Because we will
use it with the private sector. We go to the banks and we show
the investment that is being made by the government and then we
leverage that at a minimum, three times. And then in our local
programs we are seeing numbers that Hugh was talking about, the
$7 to $8 being leveraged by a single dollar of Section 4
funding.
Mr. Grefe. As I think you are aware, the Section 4 program
is the one that is scoring, the park scoring is rated as the
highest performing HUD program, that may be a result of being a
fairly modest one. So, without hoping to be argumentative at
all, we would hope that this little $30 million, now $26
million program would not get lost in the rounding somewhere.
It is a highly effective program and it is the best rated
program in the department. It is also powerful, because we are
able to be value added with it.
What Phil is saying is that, at least what we do with it in
Toledo, is we are able to take the baseline, which the City of
Toledo is willing to invest in CDC's, you do not have as much
money as the cities block grant allocation makes available. But
we are able to add an extra layer that we can be careful about
targeting. So it can be all about whatever the necessary
competitive edge is or moment of excellence, whether it is
training, computer capacity, there is a whole lot of things we
can do to help those get really first class impact.
Chairman Ney. Don Myers mentioned about, and I was asking a
question about wireless. I know that you had a project
$300,000, I think it was, for that high speed wireless?
Mr. Ricer. High speed wireless, $383,000.
Chairman Ney. Two years ago. I just wondered for the more
rural areas, or parts of the urban areas too that may not be
up--up to speed. A lot of people and it is my opinion too, if
you can wire and provide the high speed, you are ahead of the
ball game there. There is a company in Wheeling, West Virginia,
and a law firm has come from San Francisco and hired, I
believe, 20-some people, paying an average of $46,000, which
down here is a lot. And it may not be a lot to you all with the
fortunes you pay for your houses and, I feel bad for you in
D.C., but a lot of money. And they do all of their billing out
of there right now. And they do payroll and the law firm in San
Francisco is saving $4 million a year by doing it down here,
because they would have had to pay a fortune on rent out there.
A house that cost $100,000 here is $1 million out there. The
cost of the salaries would go up because of the cost of the
house. That is all because they got the wiring down there. And
I just wondered if anybody use--yours was a direct grant?
Mr. Ricer. USDA through Rural Utilities.
Chairman Ney. Does anybody use CDBG in any way to--for
wiring, I call it wiring. I am a teacher by degree, a history
teacher, so I call it wiring. Getting it up to speed.
Ms. Wesel. We did a weekend--we have a festival every fall,
and we did just a trial run, we brought in a company and we
used CDBG funds to actually purchase or loan a camera that we
put right downtown at the levee, right where the festival is
and also used CDBG funds to buy, I believe, some of the--I
cannot recall exactly, that was right before I came on board.
We bought some pieces of the puzzle to use for that weekend.
And so that we could have that in place hopefully to expand and
make this a permanent fit for us. Because we do not have, we
are severely lacking in broadband and wireless.
Chairman Ney. I just think with kind of the high tech
industrial parks, and I want to close here. I do not want to
hold you, but just a couple of things I think, I know you
talked about with the LDD's, some of you. When we got--when 9/
11 occurred it made us start to think about our systems. When
the U.S. House got anthrax and the three office buildings had
to close and 10,000 people had to move around D.C., our
computers were over in the Ford Building, and nobody could get
in there because they were searching for whether it was anthrax
or not. They developed leaks inside. And so they had to send
the--the EPA detector people in to act as plumbers. And the
leaks were coming down through the computer systems. We had no
redundancy. There was no second grid. All the information at
the U.S. House would have just evaporated or vanished if
something happened within there. In fact we had to encase--
where the daycare center was had to be encased in concrete,
because that was where the anthrax came through. So, it taught
us a lesson about redundant systems. Then it taught--maybe I
putting in much more information than you want to know.
Mr. Myers. My son was going to daycare.
Chairman Ney. His son went to daycare. It is gone, it has
been encased and removed. I am sorry, Don, you are fine. And
that is not classified information. No, it is fine down there.
But anyway--I never talk about that, it would scare people. But
we learned too, maybe things ought to not be all in D.C., or
New York. You know, the trade center, or L.A. I think areas
have opportunities in other cities, whether you are a large
city or whether you are a small area. If you are wiring
equipment there might be something in the future that the
government might continue to have their systems outside of one
central center.
Mr. Ricer. In remote areas.
Chairman Ney. I just thought I would throw that out there.
And one other thing, Don Myers too, I will tell you, he
said about the prison it is true. He was viciously attacked as
were the commissioners for building onto that piece of land
that sat there and nothing was on it. And all of a sudden
somebody says, let us put 900 jobs on there. Well, the same
thing happens today, if you go to a community sometimes and you
build the system, well, what are you building it for. It is
building it for a reason. So, you know it is a good thing to
do, it is preventive.
Mr. Myers. Could I bring up one item, we did not want to
speak individually about line items, but after the last
meeting, three mayors and two development directors came up to
me and asked if I would report it today. A line item for
demolition, you know, that is a tough issue, but we ask that
and--and the mayors and the development directors wish that
that line item, major importance on the riverfront, that that
line item if possible stay in the CHIP program. There are tough
guidelines on it. We are willing to follow the tough
guidelines, but we need the right to tear down houses that are
beyond repair using CHIP dollars if at all possible.
Congressman, the final thing, your friend and mine, Ann
Pope, donated $500,000 from Washington in discretionary for the
three floods. And the floods we had in 2004, we are just
starting to use those dollars right now. FEMA came in and did
an environmental on each and every one of those damaged
properties. And because it was ARC dollars coming to the State
of Ohio we had to go out and do all new environmentals on
activities that are just replacements. And, you know, those
people needed that money. This act of kindness and it was, in
getting the approval and everything else, and to help the
Powhatans and Columbiana County, and Jefferson, and Belmont
County, and the world of Mariettas, we are just starting to use
those dollars now because we had to go out and do all new
environmentals. We did not accept FEMA's environmentals. And,
you know, I know that those are difficult times, but you know,
sometimes we just shake our heads when action like that, we
understand the importance of environmentals. But there are
times when, if one government organization does it, why can we
not accept it?
Chairman Ney. Sure, I understand.
I want to thank you all for your time. You have come long
distances, and from a wide variety of backgrounds, which is the
purpose of this hearing. And we have from larger cities,
development corporations and everything, rural areas, that
helps us. And I believe it helps us and I believe it helps us
as a State, to go back, Mayor Coleman sent someone today to
Knox County. So, I think it is a wonderful--we have the larger
cities and I think it is a wonderful partnership with the rural
areas. Our next hearing again will be in Los Angeles, we think
Los Angeles will mimic here, although a larger place, and will
help us and try to stop the cuts. I will also tell you in
closing that it is not going to be easy. I looked through the
budget, there are things that are funded with increases this
year, so I do not understand why it all comes out of the CDBG.
We have to push, because if it is a 25 percent cut and then
they say well, we will only cut it 10 percent. Well, that is 10
and 10 from the previous year, so that is 20.
And the other thing adverse to this, if we are building our
economy these are truly monies that go to build the economy.
This is--not the place, you know, to cut back on.
Ms. Wesel. Exactly.
Chairman Ney. Maybe another mission to Mars in the next 2
years we will not do that or something. I really believe a lot
in these funds. You helped us a lot by making this official
testimony, we can take it back. I want to thank all of the
staff for your time and diligence, thank you.
[Whereupon the hearing was adjourned at 4:25 p.m.]
A P P E N D I X
March 24, 2006
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