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New USDA projects funded but budget concerns rampant

USDA announces funding for 16 projects in 10 states. Projects to shore up rural communities, provide short- and long-term benefits. Agriculture Secretary discusses coming budget cuts, restrictions.


Ten states are set to benefit from USDA-backed funding of 16 projects aimed to bring rural communities jobs and long-term economic potential. On Tuesday, Agriculture Secretary Tom Vilsack announced the projects, which are being funded through the Rural Economic Development Loan and Grant Program (REDLG).

Vilsack also didn’t shy away from questions on budget concerns and an expected slashing of USDA’s budget in an effort to cut deficit spending.

"The funding I am announcing today will help rural communities create jobs, support agricultural education, expand access to quality health care and support business development," said Vilsack. "As the President said in his State of the Union Address last week, these investments plant the seeds of progress for our country, and good-paying, private-sector jobs for the American people as we work to win the future."

For a list of the projects, scroll down.

Asked how many jobs each project might provide, Vilsack said “it’s hard to specifically designate the number of jobs per grant, or loan.”

Pointing to an industrial park project, Vilsack said the benefits will reach into the future. “They’ll be creating in the industrial park, for example, to install sewer lines, water lines, electric lines or whatever it might be. That, in turn, will allow for development of … buildings used by small manufacturing facilities.

“The point is not only (to provide) immediate jobs, today, but to build a foundation, the infrastructure, that will allow communities to attract business in the future.

“As we focus on new innovations … and manufacturing again in this country, building the infrastructure and strengthening communities is what will help attract small manufacturing concerns to rural America.

Another example: grants and loans to modernize and renovate an Illinois hospital.

“This will allow that hospital to stay in business and retain 1,614 and job and create 17 new positions. More importantly, strengthening the hospital will make it easier for local economic development officials to attract business and industry to that area because they know that workers who may be injured or family members who may need hospital care will be able to get it.”

In funding these and other USDA projects, Vilsack said Recovery Act resources are exhausted. “For the most part, (Recovery Act funds) have been obligated by USDA. We’re in the process of making sure projects are operating on a timely basis. Roughly 3,800 water and sewer projects, 1,400 community facility projects, and 700 business and industry loans are being financed through the Recovery Act.

“What we’re dealing with now are regular funding resources.”

The budget situation is “complicated,” said Vilsack. “It’s complicated by the fact that we still don’t have a 2011 budget. We’re working under a continuing resolution. There’s a lot of discussion (in Congress) about reducing the 2011 budget and the difficulties that will create for USDA and all other agencies is simply in managing, in a relatively short period of time in the remaining fiscal year, whatever the reductions are going to be.”

Consider a scenario where the “House proposes that USDA’s discretionary funding is reduced by, say, 15 percent. That may be something that would be more easily managed during the course of a 12-month fiscal year as opposed to managing it over six months. In effect, what you’re doing with a 15 percent cut is imposing a 30 percent cut, if you will, on the remaining part of the budget year.”

Unless Congress specifically delegates where those reductions are to take place, “you’ll have to take a look at how to best manage … in a way that maintains services important to folks in rural America to the extent you can. … Oftentimes, you’ll look at loan guarantees and what kind of fees will be charged to reduce the budget impact of those guarantees so you continue to allow for significant lending capacity.”

Funding for the newly announced projects “is contingent upon the recipient meeting the conditions of the loan or grant agreement,” according to a USDA press release. The agency is “investing more than $8.5 million to help rural communities. The loan funds will be leveraged by more than $80 million in private and public financing; while grant funds will be leveraged by more than $54 million in public/private funding.

The projects are:


  • The Farmers Mutual Telephone Company of Stanton -- $300,000 grant to help build a multi-purpose community center which will include a preschool center, library, recreation and fitness facility and a safe shelter for residents.
  • Heartland Power Cooperative -- $740,000 loan to help fund a biodiesel refinery that will be located outside of Forest City, Iowa. This project will create an estimated 16 jobs.
  • Linn County Rural Electric Cooperative -- $300,000 grant to help finance a library expansion that will offer more educational programming and training opportunities.
  • Sanborn Electric and Telecommunications Utility -- $176,000 grant to enlarge Prairie View Home, nursing home facility.
  • Western Iowa Telephone Association -- $300,000 grant to capitalize a local revolving loan fund to help develop office space in Moville.


  • Coles-Moultrie Electric Cooperative -- $100,000 grant and $740,000 loan to modernize and renovate the Sarah Bush Lincoln Health Center hospital. This project is expected to retain an estimated 1,614 jobs and create 17 new positions.


  • Blue Valley Tele-Communications, Inc. -- $740,000 loan to build and equip a new 5,000 square foot convenience store and retail space in Marysville, Kan, creating an estimated 12 jobs.
  • Bluestem Electric Cooperative, Inc. -- $192,000 loan to help construct a new building and purchase equipment and expand a saw mill in Belvue, Kan., a community of 228.
  • Prairie Land Electric Cooperative, Inc. -- $300,000 loan to purchase a digital X-Ray machine for the Cloud County Health Center.


  • North Itasca Electric Cooperative -- $740,000 loan to remodel and expand the Bigfork Valley Hospital. This project includes building an outpatient pharmacy, a new 24-hour wellness area, dietary kitchen, conference, and dining room, restrooms and a gift shop.


  • Grundy Electric Cooperative, Inc. -- $740,000 loan that will be used to assist North Central Missouri College with the construction of a new agricultural and natural resources campus to expand their educational program. This project will enlarge enrollment in the program to 200 students and is expected to retain an estimated 21 jobs, and create two new positions.

North Dakota

  • Northern Plains Electric Cooperative -- $740,000 loan to help a local company construct a 30,000 square foot warehouse to be located near Jamestown, N.D. This project is expected to retain an estimated 48 jobs and create six jobs.


  • Alfalfa Electric Cooperative -- $740,000 loan to purchase and develop a 500-acre tract that will house a regional industrial rail park along the transcontinental Burlington Northern Santa Fe Railway line. The project will facilitate the transport of materials and manufactured goods.

South Carolina

  • Pee Dee Electric Cooperative, Inc. -- $740,000 loan to help construct a national brand hotel that will consist of 90-100 rooms and multiple meeting spaces. This project is expected to create approximately 40 jobs.

South Dakota

  • West River Electric Association, Inc. -- $720,000 loan to replace water utility lines and make street repairs in the city of Wall. This project is expected to save 200 jobs.


  • Volunteer Energy Cooperative -- $248,000 grant to help finance the purchase of a 23-acre tract that will be developed into an industrial park that will help recruit new employers to the area.
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