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56–289 PDF 2010

PROPOSED FISCAL YEAR 2011 

BUDGETS FOR REGIONAL 

ECONOMIC DEVELOPMENT 

COMMISSIONS, 

PRIORITIES AND IMPACTS ON 

REGIONAL ECONOMICS 

AND EMPLOYMENT 

(111–108) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

April 29, 2010 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

JOHN GARAMENDI, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

VACANCY 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia, Vice 

Chair 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

VACANCY 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

VACANCY 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Gohl, Earl F., Federal Co-Chair, Appalachian Regional Commission ................. 5 

Groves, Dr. Cecil, President, Southwestern Community College ........................ 27 

Johnson, Pete, Federal Co-Chair, Delta Regional Authority ............................... 5 

Neimeyer, Joel, Federal Co-Chair, Denali Commission ....................................... 5 

Norton, Michael, Executive Director, Northwest Arkansas Economic Development District, Inc. ................................................................................................ 27 

Winchester, Leonard, Manager, Western North Carolina Education Network .. 27 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan. Hon. Russ, of Missouri ......................................................................... 39 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 40 

Oberstar, Hon. James L., of Minnesota ................................................................. 43 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Gohl, Earl F. ............................................................................................................ 47 

Groves, Dr. Cecil ...................................................................................................... 55 

Johnson, Pete ........................................................................................................... 60 

Neimeyer, Joel ......................................................................................................... 79 

Norton, Michael ....................................................................................................... 89 

Winchester, Leonard ................................................................................................ 97 

SUBMISSIONS FOR THE RECORD 

Johnson, Pete, Federal Co-Chair, Delta Regional Authority: ..............................

Responses to questions from the Subcommittee ......................................... 64 

‘‘An Action Plan for Projects and Programs to Improve Health in the 

Delta’’ .......................................................................................................... 66 

Norton, Michael, Executive Director, Northwest Arkansas Economic Development District, Inc., responses to questions from the Subcommittee ................ 95 

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(1) 

PROPOSED FISCAL YEAR 2011 BUDGETS FOR 

REGIONAL ECONOMIC DEVELOPMENT COMMISSIONS, PRIORITIES AND IMPACTS ON 

REGIONAL ECONOMICS AND EMPLOYMENT 

Thursday, April 29, 2010 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 2:10 p.m., in Room 

2167, Rayburn House Office Building, Hon. Eleanor Holmes Norton 

[chairwoman of the subcommittee] presiding. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA.. The ranking member is delayed but has indicated we should proceed so as not to 

delay the hearing. 

Good afternoon and welcome to today’s hearing entitled 

′′Proposed Fiscal Year 2011 Budgets for Regional Economic Development Commissions, Priorities and Impacts on Regional Economies and Employment.′′ That is a mouthful, but it really does say 

what we are trying to do here. 

Today, we are doing important oversight for the first time on 

three newly created Federal, regional economic development commissions, as well as, on the floor, established regional economic development commissions, to evaluate the start-up of the new commissions. 

Economic development was not a specific mission of the Federal 

Government until Congress passed the Public Works and Economic 

Development Act in 1965 and established the Economic Development Administration. EDA was created to alleviate conditions of 

substantial and persistent unemployment in economically distressed areas and regions. 

The mission of EDA today remains much the same as it was 

when it was originally founded. EDA has stated that to fulfill its 

mission it must, quote, be guided by the principle that established 

communities must be empowered to develop and implement their 

own economic development and revitalization strategies. 

As our hearings have documented, the act has been enormously 

successful, particularly in using modest Federal funds to attract 

and leverage considerably more in private sector funds. The success 

of EDA has created the impetus for the regional economic development commissions that we will hear from today. 

2 

Last Congress, the House of Representatives passed the Regional 

Economic and Infrastructure Development Act of 2007. The bill organized five regional economic development commissions under a 

common framework, providing a more uniform method for distributing economic development funds to distressed areas throughout 

the regions most in need of such assistance. The five commissions 

were the Northern Border Economic Development Commission, the 

Southeast Crescent Regional Commission, the Southwest Border 

Regional Commission, the Delta Regional Commission, and the 

Northern Great Plains Regional Commission. 

Eventually, all the regional economic development commissions 

were passed as part of the Food Conservation and Energy Act of 

2008. The Northern Border Economic Development Commission, 

the Southeast Crescent Regional Commission and the Southwest 

Border Regional Commission were created by Public Law 110-246 

in our design to address the problems of systemic poverty and 

underdevelopment in those particular regions. 

Public Law 110-246 also reauthorized the Delta Regional Commission and the Northern Great Plains Commission. The administrative and management procedures for these regional economic development commissions are all modeled after the successful Appalachian Regional Commission, the first of the regional economic development commissions. 

The Denali Commission is currently the only regional economic 

development commission under this subcommittee’s jurisdiction 

that does not have the same administrative structure, in addition 

to not being under the same authorization schedule as the rest of 

the regional economic development commissions. We are planning 

to remedy this discrepancy in the next authorization. We will need 

to bring these programs in alignment in order to properly assess 

their role in economic development and to help them to enhance 

their missions. 

Our intent in creating these commissions was to provide additional funding for projects that stimulate regional economic development and to promote the character and industries of the regions, 

without supplanting existing institutions and programs that provide funding. 

In these times of severe budget constraints, we do need to be 

mindful not to duplicate programs and to target scarce resources 

in areas that will bring the highest investment return, while addressing the needs of our most distressed communities. The subcommittee is interested in hearing from the witnesses about how 

their regional economic development commissions fit into this 

premise. 

Although unemployment is still high, there is reason for optimism that the U.S. economy is beginning to emerge from the socalled ′′Great Recession.′′ It will be important to leverage scarce 

Federal resources to help maintain gains as they emerge, and to 

focus on long-term growth strategies to buffer the American economy from further sustained disruption. 

We are especially interested in the strategies for economic development in areas that suffer chronic unemployment and high rates 

of poverty, as I said earlier. Even within my own district where 

there are many high-income and middle-income communities, there 

3 

are also severely distressed communities. For example, Ward 8 reported unemployment as high as 28.5 percent just a few months 

ago, and a poverty rate for individuals under 30 percent. 

Given such daunting statistics, Ward 8, for example, would benefit from coordinated assistance similar to that received by many 

counties, including in these newly established regional economic 

development commissions. Such distressed areas benefit from sustained planning efforts and the leverage that Federal investments 

can provide for private investment. 

The work of these regional economic commissions is part of a coordinated Federal effort to enhance economic opportunity nationwide by increasing the overall productivity of economically distressed and poor communities and, thus, their share of the country’s general prosperity. 

We look forward to hearing testimony from our distinguished 

witnesses about the status of these commissions and their work 

with local partners and their progress in carrying out their mission. 

And as we thought, our ranking member Mr. Diaz-Balart has arrived, and I am pleased to hear any comments from him at this 

time. 

Mr. DIAZ-BALART. Thank you very much, Madam Chairwoman. I 

want to thank you first for holding this hearing on the fiscal year 

2011 budgets for the regional economic development commissions. 

I also want to recognize the work and dedication of Congressman 

Don Young, who might be able to get away from what he is doing 

and hopefully spend some time with us today. He knows these 

issues well, having served as chairman of this committee, and 

being a tireless advocate for his home State of Alaska. 

Congress established the regional commissions to focus investment in the areas of distress in our Nation. And, unfortunately, 

there are many areas of our Nation that have chronic unemployment, high poverty rates, lack of infrastructure and other resources 

to spur private investment, private investment in their communities, and obviously private investment is key. So these commissions were created to help spur economic development and job creation in these communities. 

Now, included among these commissions are the Appalachian Regional Commission, the Denali Commission and the Delta Regional 

Authority. 

More recently, Madam Chairwoman, as you were mentioning, 

Congress created the others, including the Northern Great Plains 

Regional Authority, the Southeast Crescent Regional Commission, 

the Southwest Border Regional Commission and the Northern Border Regional Commission. 

Today this subcommittee is examining the proposed fiscal year 

2011 budgets of these commissions and also their priorities for the 

coming year. These regional commissions are Federal and State 

partnerships and focused to help chronically distressed communities to generate sustainable economic development for those 

areas. 

The commissions have, as I am sure we all know, relatively small 

budgets. And those represented here are requesting level fundings 

for the fiscal year 2011. Now, generally these commissions have 

4 

really been very effective in leveraging tax dollars, public dollars, 

with private investment in order to spur job growth. In 2007 a report on ARC Infrastructure and Public Works Projects, a sampling 

of just a quarter of ARC’s projects reveal that more than 17,000 

new jobs were created. This is one of the success stories. These 

projects expanded the annual personnel income by $1.3 billion. And 

of the 78 projects reviewed in the report, $1.7 billion of private investment was leveraged. 

Now, think about that. That is a ratio of $75 to $1 of ARC investment. Those are pretty impressive investments under any standards. 

And since it was created in 2000, the DRA has invested $75 million in 510 projects, attracting $1.5 billion investment of private investments; so, $75 million to attract $1.5 billion in private investment. That is a pretty impressive number. 

And DRA, as highlighted in a hearing earlier this year, uses participation agreements for its grants, and it requires guarantees to 

meet certain job creation goals. And if you remember, Madam 

Chairwoman, as we heard in this committee, if those goals are not 

met, the grantee must refund a pro rata share of the grant monies, 

something that is not done very often. 

These are just a couple of examples of how tax dollars can be leveraged to spur private investment to ensure that jobs are created 

and that those jobs will last. 

As I had mentioned in previous hearings, the Recovery Act of the 

stimulus bill should have included provisions that ensured similar 

returns on investment to the taxpayers. Unfortunately, obviously, 

they did not. 

As we review the budgets and the priorities of these commissions, I believe it is really, really important that we ensure funding 

is leveraged effectively and job creation remains a priority for these 

distressed areas, something that I have been hounding and jumping on and talking about every single time that I had the opportunity to do so. So I look forward to hearing from the witnesses on 

these and other issues. 

And I want to thank you, Madam Chairwoman, for once again 

your leadership, your active leadership in this issue. Thank you 

very much. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you very 

much, Mr. Diaz-Balart. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Representative Walz 

of Minnesota, have you an opening statement. 

Mr. WALZ. Just a brief one Madam Chair. 

Again, thank you to you and the ranking member, and I very 

much appreciate the opportunity to our witnesses here. A very important hearing. I certainly wish more of my colleagues would be 

here to listen to this because I do think it is important. 

I think the ranking member was exactly right in trying to figure 

out how to best leverage some very limited budget and see the return on taxpayer dollars. 

And these regional economic development commissions tend to 

hit rural areas which, in any economic downturn, tend to feel it 

more more so because of the lack of diversity in the economy. If one 

5 

sector is hit, we see it more so. And I think that is really important. 

Also what I have seen, and I am very appreciative of it, and 

while we are new in the northern border regions we are witnessing 

across the country squeezing more efficiencies out of these partnerships, maximizing it, as the chairwoman said, making sure we are 

not duplicating. So this discussion of your budgets and the budgets 

for the commissions are incredibly important because they are not 

just a reflection on fiscal priorities, they are a reflection of our 

moral values as a country. What we do for some of these rural 

areas. 

And I am appreciative of you being here and look forward to the 

testimony. I yield back. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. If there are no more 

opening statements, we will proceed to our witnesses: Pete Johnson, the Federal Co-Chair of the Delta Regional Authority; Earl 

Gohl, the Federal Co-Chair of the Appalachian Regional Commission; and Joel Neimeyer, Federal Co-Chair, Denali Commission. 

TESTIMONY OF PETE JOHNSON, FEDERAL CO-CHAIR, DELTA 

REGIONAL AUTHORITY; EARL F. GOHL, FEDERAL CO-CHAIR; 

APPALACHIAN REGIONAL COMMISSION; AND JOEL 

NEIMEYER, FEDERAL CO-CHAIR, DENALI COMMISSION 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Mr. Johnson, then 

we will go right across the line. 

Mr. JOHNSON OF ILLINOIS. Good morning—good afternoon, rather. Good afternoon, Chairwoman Norton and Ranking Member 

Diaz-Balart, thank you for allowing me to be here today, and all 

the subcommittee members. We appreciate this opportunity to 

come before you today for me to talk about the Delta Regional Authority, which I started myself some 8 years ago. And I can’t tell 

you how difficult it is to get dot-gov when you start up in your organization. But we started this at ground zero. And I want to publicly thank our friends at the Appalachian Regional Commission 

who were invaluable in helping us get this organization started, 

the Authority’s fiscal year 2011 proposed budget priorities and also 

our impacts on development and employment in our region. And 

while we were also invited to speak to our needs, the Authority 

currently has no authorizing needs to request today, and we are 

grateful that the Congress recently remedied two of our pressing 

issues. 

The Authority was reauthorized through 2012 and the 2008 

Farm Bill, and in 2009 our voting structure was extended for perpetuity. To better substantiate my statement, I would like to share 

with you some highlights from the March 2010 research report 

published by the Economic Research Service of the U.S. Department of Agriculture, where in its report, Impacts on the Regional 

Approaches to Rural Development: Initial Evidence on the Delta 

Regional Authority, the ERS made this statement: We find that 

per-capita income and transfer payments grew more rapidly in 

DRA counties than similar nonDRA counties, and these impacts 

are larger in counties where DRA’s spending was larger. Each additional dollar of DRA spending per capita is associated with an increase of $15 of personal income per capita between 2002 and 2007, 

6 

including an increase of $8 in earnings and $5 in transfer payments. 

Clearly the impact on DRA’s Federal grant program is being felt, 

and that impact is in the poorest region in this Nation. Income 

growth is a function of job growth, and that is especially true in 

these harsh economic times. 

And I would like to provide some additional facts on both jobs 

and development our Federal grant program has had during this 

period of time and it is already funded to have in the years to 

come. 

The Federal grant program is probably one of the smallest things 

that we do, but it is the most politically sensitive thing that we do. 

And so we want to make sure that it runs very well and the way 

that the Congress would have it run. Specifically, to date, through 

the DRA’s Federal grant program and the work of its partners— 

and I might pause to say that through our local development districts we are able to achieve these results—almost 11,000 jobs have 

been created or retained through those projects that we have completed. Almost 12,000 families have received new water and/or 

sewer. And more than 3,000 individuals have been trained for jobs 

in their job areas. 

One of the requirements we have in our job training is that there 

must be a letter from an employer that the individual who is being 

trained will be employed when they get out. Over the years we 

have seen programs like this that were more designed for the instructors than they were for the students. 

Additionally, we project even stronger outcomes from our other 

projects which are already funded and underway, and projects by 

DRA’s participation agreements, which were mentioned a little bit 

earlier. More than 24,000 will be—24,000 jobs will be created and 

retained, and more than 23,000 families will have new water and 

sewer, and almost 600 more individuals will be trained for those 

jobs. 

Without our strong partner of USDA and our being able to leverage those funds, we would not be able to achieve many of those results. Please remember, DRA’s participation agreements bind the 

grantees to an outcome level, which, if not met, requires the grantee to pay back the prorated share of the outcome shortfall. 

Quite simply, either the outcomes will be realized or the DRA 

will recapture that level of funding, and we have done that on occasion. 

Our budget priorities are evolving and are changing primarily as 

functions of the administration’s priorities, such as green economies, regional centers of innovation and livable communities, and 

from our own research. 

In our most recent regional development plan, ′′Rethinking the 

Delta,′′ released in 2008, we learned that the most important investment we can make to grow our region’s employment is through 

improved health outcomes. Succinctly, for every 1 percent improvement in our community’s health outcomes’ life expectancy, we estimate a 4.6 percent increase in employment. Accordingly, the Authority is providing greater support for community and subregional 

health-care initiatives. 

7 

Let me quickly provide you some context and also enumerate 

some ongoing programs, and then briefly describe our major new 

initiative. Throughout our region, we know that among working 

adults our community’s average double-digit levels of Type 2 diabetes is enormous. And that prevalence worsens every year and at 

every cohort of age, gender and race, particularly African Americans. Obviously, workers who are sick cannot be as productive as 

they want to be, nor will they enjoy the life they deserve to have. 

And a child who is sick, even a toothache, cannot learn. 

Toward that end, we have partnered with USDA to create our 

pilot diabetes management centers, which are proving to be very 

effective in improving people’s health and productivity. A fantastic 

example of best practice is what this is. We have one underway in 

Helena, Arkansas. And we are about to begin two more sites, one 

in southeast Missouri and one in northwest Tennessee. 

Additionally, the Authority has two other ongoing programs to 

increase accessibility to affordable quality health care. Delta Doctors, which is a DRA J1 visa program, has brought more than 100 

physicians in the practice areas in the region that are underserved. 

Innovative Readiness Training Program, which is the Authority’s 

partnership with the Pentagon, where more than 1,200 people in 

our region have received free quality health care, and by the summer of 2012 that number will grow to more than 7,000. Our new $1.5 million initiative is ′′Growing a Healthy Workforce 

in the Delta, an Action Plan,′′ a very bottom-up approach to improving health outcomes. In this initiative, we will better align resources through better information, technological assistance and 

our grant program. We will improve local efforts, determination 

and outcomes, while increasing accountability to greater monitoring and transparency. 

To save time, I ask that the plan’s executive summary be entered 

into the record as an appendix, Madam Chairwoman. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. So ordered. 

Mr. JOHNSON OF ILLINOIS. And I have it with me. Thank you for 

the time. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you very 

much Mr. Johnson. 

Mr. Gohl, am I pronouncing your name right? 

Mr. GOHL. Yes, you are. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. You may proceed. 

Mr. GOHL. Thank you very much. Madam Chair, members of the 

subcommittee, I am pleased to come before you this afternoon to 

discuss the President’s budget request for the Appalachia Regional 

Commission. The administration is requesting $76 million for 

ARC’s nonhighway work. This is level funding with the fiscal year 

2010 appropriation and reflects the administration’s strong commitment to Appalachia. The budget will continue ARC’s traditional 

focus on equipping communities with the basic building blocks of 

community and economic development. 

At the same time, we will help communities diversify their economies, helping them take full advantage of the emerging recovery to 

create vibrant, sustainable, local economies. 

ARC is a Federal-State partnership serving all of West Virginia 

and 12 other States from—parts of 12 other States from the southVerDate Aug 31 2005 16:03 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\DOCS\56289.0 KAYLA
8 

ern tier of New York to northeast Mississippi. Our mission is to 

help the region reach socioeconomic parity with the rest of the Nation. 

Appalachia is marked by mountainous terrain and dispersed population, serious environmental issues, and insufficient financial 

and human resources. The challenges have resulted in widespread 

poverty, unemployment and underinvestment. 

Appalachia has come a long way since 1965 when the ARC was 

established. The number of high poverty counties has been reduced—has declined from 223 to 82. Infant mortality rate has declined by two-thirds. And the region’s high school graduation rate 

now nears the national rate—the national average. 

Despite these gains, Appalachia still lags behind on several key 

economic indicators. Per-capita income was 20 percent lower in Appalachia than the rest of the Nation in 2007. Roughly 20 percent 

of Appalachia households are not served by public water systems, 

compared to 10 percent in the rest of the country. And there is a 

widening gap between Appalachia and the rest of the Nation in 

terms of the percentage of high school students who go on to college. 

Appalachia suffers economic distress in part because the economy has been heavily dependent upon manufacturing, tobacco, 

steel and extractive industries. These are obviously sectors of the 

economy that have not grown over the last two decades. The region 

lost 423,000 manufacturing jobs from 2000 to 2007, and that was 

before the economic downturn. The fourth quarter of last year, 

nearly two-thirds of Appalachian counties had unemployment rates 

higher than the national rate. 

To address these challenges ARC’s work falls within two broad 

areas: First, the 3,090-mile highway system which is funded 

through SAFETEA-LU; and second is the area development program. 

ARC’s activities are organized along four broad goals that are included in our strategic plan. First, to increase job opportunities and 

increase per-capita income. Second is to strengthen the capacity of 

local families to compete in the global economy. The third is to improve the infrastructure of the region so it is more competitive. And 

fourth is to build the Appalachia Development Highway System so 

the area is not so isolated. The highway system has been the 

linchpin of the ARC development strategy. Almost 85 percent of the 

system is now open to traffic, but some of the most challenging and 

most expensive parts of the highway remain to be built. A 2008 

study showed that completing the ADHS will produce an estimated 

return for the Nation as a whole of $3 for every dollar invested in 

the system. 

While highways are critical to regional growth, they are not by 

themselves sufficient. As a result, ARC’s area development program provides economic and community development resources 

that range from basic infrastructure, workforce development, entrepreneurship, health care and local leadership development. ARC 

emphasizes a bottom-up approach, relying heavily on the network 

of 73 development districts to identify local priorities. These multicounty planning agencies help set the agenda for ARC. 

9 

Private investment also plays a critical role in economic development in Appalachia. In 2009 ARC’s job-creating projects attracted 

$8.75 of private investment for every $1 of ARC funds. Creating 

sustainable local economies requires the diversification of the region’s economic base. Coal will continue to be a part of the Appalachian economy, but the region’s renewable energy assets can help 

broaden the economic base. Energy efficiency also has a significant 

contribution to make in job creation in the region. 

These opportunities can yield a substantial green economy in Appalachia. Creating a stronger, more diversified economy is the goal 

of the special interagency effort currently ongoing which is focused 

on Appalachia. Drawing together more than a dozen departments 

and agencies, this initiative expects to identify ways Federal programs can be better tailored and coordinated to achieve greater impact in Appalachia. 

ARC believes that a regional place-based approach to economic 

development offers the best prospect for sustainable growth. It employs strategies that are tailored to the needs of the region and 

take advantage of the region’s unique assets. 

We appreciate the support that this subcommittee has given us 

throughout the years, and we look forward to working with you in 

the common mission of ensuring Appalachia to achieve the socioeconomic parity with the rest of the Nation. Thanks so much 

Madam Chairman. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you, Mr. 

Gohl. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Mr. Neimeyer. 

Mr. NEIMEYER. Thank you, Madam Chair and the congressional 

subcommittee members. As noted, I am here to discuss the proposed fiscal year 2011 budgets for regional economic development 

commissions, and specifically the Denali Commission in Alaska. 

Like the Delta Regional Authority, we thank the Appalachia Regional Commission during our start-up years. The administration’s 

fiscal year 2011 proposed program funding of nearly $16 million is 

directly connected to improving essential life, health, and safety 

conditions and promoting lasting sustainability for rural Alaskan 

communities. 

The barriers in Alaska created by size, geography, and lack of 

basic infrastructure still cause significant portion of our rural population to live without basic public facilities and endure lower health 

standards. The Denali Commission is proud to be in alignment 

with President Obama’s place-based focus, and we are pleased to 

present to you today on this important organization. 

The Commission has impacted many lives in our State and continues to improve the lives of all Alaskans. Congress created the 

Commission 12 years ago with a vision to deliver the services of the 

Federal Government in the most cost-effective manner to rural 

Alaska. This small independent Federal agency is charged to move 

quickly to tackle systemic issues of rural development by listening 

to rural Alaskans’ concerns and working with the State of Alaska, 

local communities and tribes, to build basic community infrastructure in sustained rural economies. 

The Commission’s infrastructure projects throughout the State 

proceed in an efficient, transparent manner with the involvement 

10 

of the people they serve. Over 2,000 projects have been funded to 

date by the Commission, in almost every community of the State, 

in numerous program areas including energy, health facilities, 

training, transportation and economic development. 

Most of our communities cannot be reached by road. Mountain 

ranges, waterways and sheer distance make a statewide electric 

system prohibitively expensive. The majority of rural villages are 

not connected to a major power grid. Many communities still lack 

basic indoor plumbing. 

Driving to another community to meet basic needs is not an option to most Alaskan communities. Commissioners of the Denali 

Commission rely on well-established guiding principles: sustainability, accountability, inclusiveness, respect for people and cultures, and catalyst for positive change to meet the basic infrastructure needs so many in the lower 48 States may take for granted. 

Having participated in the development of these guiding principles during the Commission’s first year, I can attest to the directional value they provide for the staff, our program partners, and 

our stakeholders. In 2009 the Commission had over 700 active 

projects on the books, and to date the Commission has funded over 

2,000 projects. 

The Commission’s two legacy programs, energy and health, continue to evolve and succeed through partnerships with strategic entities and are making a lasting impact for rural Alaska. Partnerships with the Commission have resulted in the completion of 93 

community bulk-fuel tank farms, 48 rural power system upgrades, 

95 community clinics, 33 road projects, 30 waterfront projects, and 

many other community projects. More infrastructure projects are in 

the process of design and construction, and the Commission’s training in economic development programs continue to contribute to 

improving rural economies. 

The creation of the Denali Commission was to address the disparities in social and economic conditions that exist in Alaska. 

Someday I would like to come back to this committee and report 

to you that the job is complete. Today is not that day. In fact, there 

is much more work to be done and this work is urgent and imperative. 

In closing, I would like to share with you all, that I was appointed to serve as the head of the Denali Commission in January 

2010. I am extremely proud to serve in this important role. I would 

like to also share with you that I am the first Alaskan native to 

lead the efforts of the Denali Commission. I can tell you with certainty that the Commission impacts the lives of all Alaskans, rural 

and urban. 

Thank you for your time and the invitation to address this subcommittee. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you very 

much, Mr. Neimeyer. 

Now, it was of some interest to the subcommittee to note that all 

three of you, as Federal co-chairs in one way or the other, have 

mentioned the impact of health-care availability as a leading factor 

in economic development in your respective regions. 

Have you at this time—and I realize how preliminary this must 

be—we are trying to get ahold of this bill ourselves and some of 

11 

it, of course, goes into effect immediately—have you any at least 

broad notions of the effects that the recently passed legislation may 

have on alleviating the conditions of health-care availability in 

your regions? And I also would be interested in whether you think 

there is job-creating potential in your regions from the health-care 

bill. Whoever wants to shout out first, go ahead. 

Mr. JOHNSON OF ILLINOIS. I am going to try to respond. When 

we started this, the Delta Regional Authority up, as we began to 

look at how we best solve the problems of the poverty that has 

been a part of it for 100 years, it became apparent that unless we 

addressed the chronic health problems of the region that we were 

not going to improve the economy. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. In other words, if 

you want businesses or economic development entities to come to 

a region that is full of diabetes and health habits that mean greater insurance costs, greater absences, and the rest of it, they are 

likely to pass over you and go somewhere else where the health 

care at least seems under greater control; is that the case? 

Mr. JOHNSON OF ILLINOIS. It is the case. In the Delta region, I 

can tell you that most of our people wait until they are deathly ill 

and then go into an emergency room, and the cost escalates then. 

Easy access to affordable health care is essential to our turning the 

region around. 

Mr. GOHL. One of the facts of life in low-income areas is that 

many people in our jurisdictions—— 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Speak up, Mr. Gohl, 

please. 

Mr. GOHL. We have higher use of Medicaid and Medicare in 

many of our low-income counties than other areas of the Nation. 

And so at least many of our—high numbers of our low-income folks 

do have access to a public system, to a public option. But it is pretty clear that the health-care demands and the ability to create jobs 

through the health-care system, there really are great opportunities. 

The first grant that I signed off on was about $400,000 for a request from Governor Barber for a hospital in Tupelo, Mississippi. 

So there are great demands on our system to help support the development of the public health-care structure. But, really, there are 

great opportunities. It is very difficult at this point to project out 

what the impacts are. But I think it is pretty clear to us that we 

have great demands all across the board, whether it is diabetes, 

whether it is drug abuse, whether it is pediatric, dental care, or 

black lung. I mean all the issues are there, and they are very expensive and they are very demanding. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And Mr. Gohl you 

certainly have my condolences and, I know, the condolences of the 

committee and the Congress, for the recent tragedy in the coal 

mines in your State. 

Mr. Neimeyer. 

Mr. NEIMEYER. Yes ma’am. The primary purpose of the health 

program of the Denali Commission was about health disparities 

and less about economic development. Most of the projects serve 

rural Alaska. And the approach that the tribal health system and 

the community health system strove in the past decade is to drive 

12 

health care out to the villages, out to the smaller communities. In 

so doing, we could presume that with better primary care services 

we have better health outcomes and less likelihood leading to 

chronic and severe health issues. So that has been the focus. 

With regard to the question of what impact does the recent 

health-care bill have with us, I have had a specific discussion with 

representatives with the tribal health system. They are now analyzing it. Part of the health bill included reauthorization of the Indian Health Service, and so there is a significant amount of legislation in there that they are looking at, and then we are planning 

on talking with them. 

Part of the way we do business, we have five advisory bodies. 

One of the advisory bodies is our health steering committee. And 

we are teeing this question up this summer to talk about what does 

the new health-care bill mean to the way we do business. At this 

point I can’t tell you what that is, but we are working on it. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Well, it is very interesting to note how all three of you have linked health care to 

economic development. And in that way, I think in some ways you 

are pioneers; that people proceed in areas that conceive of themselves as better off, often without understanding the link. They 

don’t understand how people, how companies, look at particular regions and jurisdictions when deciding whether to go there or not, 

and how many factors are on the table in making that decision. 

Now, the cost of health care is, as everyone knows, the greatest 

escalating cost of all in our economy. This is very important for us 

to hear. I am just going to ask one question peculiar to each of you, 

and then I am going to go to the ranking member and the other 

members. 

Mr. Johnson, we need to know more about this notion that there 

has to be some payback if those with whom you contract do not 

meet the goals set for job development—how that would work—because it is interesting enough to us to note whether it ought to be 

replicated in the other commissions. 

Mr. JOHNSON OF ILLINOIS. Yes ma’am. Well, I bring to the table 

an encumbrance that I was a former State auditor from Mississippi, and being in that position, an understanding that I am a 

steward of tax dollars. When we began to look at these programs 

we were getting statements made to influence the Governors to recommend a particular grant. And they would overstate the number 

of jobs that they were going to create. And then when it would 

come down to it, they would state 150 jobs, they may create 25. 

And so we wanted them to understand that we needed some truth 

in this. 

So we looked at a number of States and put together a provision 

that says that if you do not meet the standard that you said, if you 

do not employ the 150 people and you only employ 100 people within the timeframe that you say you will do it, then you will pay back 

a certain amount of that money. 

One instance in particular is Textron, which is located there in 

Greenville, Mississippi. I think the grant was around $387,000. 

They were there 4 months and left, and they paid back $340-something thousand. And so it is working. 

13 

Initially there was a lot of acrimony. They were chafing. They 

didn’t want to have it. They didn’t want us to hold their feet to the 

fire. But this is not my money, it is the taxpayers’ money. And we 

were able to put that money back into the system and to get it to 

people who would keep their commitment. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Now, this has not 

deterred people or businesses or investors from coming forward because they think they may have to pay back some money if they 

don’t meet their goals? 

Mr. JOHNSON OF ILLINOIS. It has not been a deterrent at all. As 

a matter of fact, they are very pleased to do that. And we have 

clauses in there if there are economic conditions. There are some 

escape clauses that are reasonable. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Just like Katrina, 

you don’t expect people to produce, then. 

Mr. JOHNSON OF ILLINOIS. Yes. Something that is totally unexpected that they have no control over, like the tornado that went 

through Mississippi recently. Then, of course, there are escape 

clauses in there, and we work with them on that. There is no dropdead clause in there. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Do either of the 

other two of you see any issues with respect to such a clause? I 

mean, it has become a racket in this country. If you want to get 

some fancy company to move, let’s forget our regions, our economic 

development commissions for a moment, they outbid one another. 

There goes the taxpayers’ money. And I am not even sure there is 

follow-up. All that is necessary is to get this company in your jurisdiction. 

I want to ask the other two Federal co-chairs, would you object 

to something similar in your own region, or do you think it 

wouldn’t work in your region? 

Mr. GOHL. I wouldn’t object to it. But the real trick to this is asking the hard questions up front and being able to say no up front. 

Because an ounce of prevention in reviewing and asking the tough 

questions and pushing back is so much easier than down the road 

trying to fix something that someone has misled you about. I mean, 

that is the first key to this of not, you know, not taking in, being 

able to say no, asking the hard questions and not, you know, listening to all the fancy talk that you get when people first walk into 

your office with a project. 

But going back and being able to hold people accountable, I think 

that Mr. Johnson said it best, this isn’t our money, this is the taxpayers’ money, and you have to have a great deal of respect for 

that and understand their hard work when people have made a 

contribution to their tax system to pay for these programs, and it 

is our obligation to hold individuals accountable. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Mr. Neimeyer. 

Mr. NEIMEYER. I would be very supportive of it. In this year’s fiscal year 2011 proposed budget is language that requires the costshare match, which is the first that we have seen. And when representatives from OMB asked me about it, I was very supportive. 

We believe that there should be skin in the game in projects. And 

I think this is just another example of skin in the game. Whether 

it is up front or even after the fact, I think it is important that the 

14 

agencies and the nonprofit organizations we work with know that 

we want serious work done. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. The subcommittee 

is going to have to take this testimony into account, particularly 

since I think it may be unique in Federal spending, frankly, Mr. 

Johnson. It may have to be taken into account way outside of the 

commissions, because it seems to have worked so well there. 

I am going to go to the Appalachian Commission with a question, 

and then to the Denali Commission. 

I was interested, Mr. Gohl, in your listening session with the 

U.S. Department of Agriculture where you seem to be looking for 

greater coordination among Federal programs and agencies, and 

that we really want to get on top of. Why did you find it necessary 

to have the listening session? Have you been working with the Economic Development Administration on this issue? Are you finding 

that there is ready and good cooperation when you need it from 

other Federal agencies? 

Mr. GOHL. Well, to answer your last question first, we have great 

cooperation with the other Federal agencies. We work very closely 

with EDA and also USDA on a number of projects, as well as 

Transportation. In fact, they manage our construction projects. I 

mean the reason why we can have a small staff and do infrastructure and construction and highways is because we use other agencies to manage those contracts. 

But in terms of the listening sessions, there were two reasons for 

the listening sessions. The first is that this year we are required 

to rewrite—to review our strategic plan. And so part of the listening sessions were to go out and talk to our constituents about our 

goals, our mission in the development of our strategic plan. 

The second element is that about 6 months ago the environmental quality folks at the White House brought together a group 

of agencies to work and to examine ways that they can work together to strengthen the Appalachian economy more towards a 

transitional green economy than the current structure as it is now. 

And part of that process—— 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Could you talk more 

into the microphone, Mr. Gohl? 

Mr. GOHL. Part of that process of working with the interagency 

group was to go out and do these listening sessions. And we have 

done five of them in Alabama, North Carolina, Kentucky, West Virginia and Nanticoke, Pennsylvania. And a number of Federal agencies have gone with us, as well as nonprofit groups from throughout the region, representatives of State and local government, and 

they really had the opportunity to sit down and work through some 

of the critical development issues and the long-term planning 

issues of particular regions. And we hope that coming out of that 

will be a number of ideas and direction on where we should be 

going the next 5 years with our strategic plan. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Mr. Gohl, this is another idea. With Mr. Johnson, we have the idea of true accountability: Pay us. Pay back. The notion of these listening sessions, 

which you apparently have taken throughout your region, does 

seem to us to be very beneficial and an idea perhaps that should 

be spread to other commissions, considering that many of them are 

15 

multi-State or all of them are multi-State, except for Alaska, of 

course. 

Mr. GOHL. And this is one of the strengths of the small agencies, 

that we are not stuck in the basement of a big agency, captured 

by a big bureaucracy, but we have the ability to move quickly, to 

respond and to be creative in the things that we do without a lot 

of bureaucracy that begins to hold us back. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you very 

much. 

Now, Mr. Neimeyer, you are really unique, you are different, because you don’t cover a number of States, you cover one State, and 

I must tell you, you don’t have a population much bigger than the 

District of Columbia. But you are an extraordinary territory of land 

in our country, a very valuable territory of land, with some miserably poor people. Many of them, of course, are Native Americans. 

And you have got to somehow bring all of this together. And it 

could just as well be multi-State because I can see your challenges. 

There have been some concerns about this Commission. And I 

wonder if you think this Commission would benefit from some of 

the administrative structure of the other commissions that have 

not had some of the difficulties that the Denali Commission have 

had; a similar structure to the kind that, for example, is typical of 

these commissions. Do you think that would be useful? 

Mr. NEIMEYER. Yes, ma’am, I do. We have had active discussions 

recently with the commissioners on this, and we talked with the 

delegation and with representatives of the Office and Management 

Budget. We do know that the way the act was written, it has created some initial administrative problems, and it is something that 

we should address. 

Having said that, I do need to note that we don’t have counties, 

we have 200 tribes; and the structure of the other commissions are 

set up in a different manner. And so if we go through the process 

of trying to look like the other commissions, which we are supportive of that, we do have to take note that we don’t lose that 

voice, that tribal voice. That is, a significant amount of our work 

is done in tribal areas, and so we want to make sure that they 

have that opportunity to participate in the process. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. It could not be a 

more important point, Mr. Neimeyer. You may not be Multi-State 

but in some ways you are more complex even than the States. And 

we are very pleased you are opening to whatever—you can call it 

whatever you want to—the reforms that would bring you into some 

kind of administrative structure. We don’t like to see any of our 

commissions ever attacked for any reason when we know what excellent work goes on in those commissions. And if it would take 

some change of the administrative structure, let’s just get that out 

of the way, because you have a huge and glorious mission that you 

must do. 

Your notion about tailoring could not be more important. Yeah, 

we got these other structures; Appalachian; the ARC, of course, is 

a longtime structure. But I think you will find that each of the 

commissions has been tailored more easily perhaps to meet the 

structure that conformed to the particular commission’s mission. 

16 

I am going to ask Mr. Diaz-Balart if he has questions at this 

time. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. If it would 

be all right, I would like to ask unanimous consent to have the 

Honorable Mr. Young from the State of Alaska, former chairman 

of the full committee, to please be able to sit on the committee. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Always a pleasure 

to have my good friend here with us. 

Mr. DIAZ-BALART. What I would like to do also, Madam Chairwoman, if that is all right, I would like to give him the time that 

I have at this moment. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. So ordered. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. 

Mr. YOUNG. Thank you, Mr. minority member, and thank the 

chairman for having these hearings. My interest here, of course, is 

all three commissions, believe it or not, and especially the Denali 

Commission. And, Madam Chairman, this has been an outstanding 

example of success. I recognize that there has been some question 

about how they operate. But as Mr. Neimeyer said, we are a little 

bit different. 

All due respect, there is more land east of the Mississippi, and 

that is Alaska. We have over 227 tribes in the State, and of course 

we have other communities within the State. And I am proud of 

what has been done with all the commissions. 

And Mr. Gohl, you said it rightly. Unfortunately, we have a lot 

of agencies that just don’t seem to function too well and jobs don’t 

get done, and the Commission stepped into that place in that 

arena. So I am quite happy with that. 

We have a unique thing in Alaska because of the high cost of 

fuel, Madam Chairman, that we have a migration problem now 

that is occurring into Anchorage and Fairbanks by Alaska native 

people because they can’t afford to live in the rural areas. And the 

Commission is probably the only way we can solve this by, quite 

frankly, improving living conditions, making sure that there are 

fuel tanks that have passed the EPA requirements and all the 

other requirements which have been very successful; building clinics so that they can have health care. And you have been quite successful in those. So this is overall a successful unit, and I want to 

compliment the whole Commission. 

I will say that I have had some worries about the Commission 

over the years because you are out in the open. In this Congress 

we have a tendency to attack that person. The single bull is the 

one that usually gets shot, not the one that is in the herd, so we 

have to consider that as we go through this business. 

But I have three questions, Madam Chairman, if I can, to Mr. 

Neimeyer. Does the Denali Commission complement but does not 

duplicate the work of other Federal Government agencies? 

Mr. NEIMEYER. Yes, sir. When I applied for the position, to me 

that was the most exciting part about what the Commission can do. 

Mr. Johnson talked about the grant-making with Delta Regional 

Authority. The grant-making is very important, but it is that aspect of working with the State and Federal agencies, with the regional corporations, in fulfilling village and local community needs. 

I think it is an important thing from my experience. 

17 

I served 25 years as an engineer mostly in rural Alaska, serving 

rural Alaska projects. If you don’t get that community voice, 

projects are not well-maintained thereafter and they may not be 

well thought out. And I think that is where the Commission can 

serve best, to ensure that the community voice is heard. 

So what I would like to see is that we work with agencies to hear 

that community voice and develop projects. Specific to complementing but not duplicating, the State of Alaska—this is an example—recently passed legislation for $300 million worth of weatherization upgrades to residential housing all across the State. A lot 

of the housing work, a lot of those energy efficiency projects that 

are being done are done by construction crews that have received 

training dollars from the Denali Commission. So the Denali Commission can’t take credit for the State’s good work of that $300 million. But what we can say is that $300 million has gone farther because those crews are trained. 

It is those kind of opportunities we need to look for how we can 

complement but not duplicate the other agencies that I look forward to working on. 

Mr. YOUNG. This is a follow-up question, and you partially answered it. The Commission’s programs that resulted in economic 

development, job creation, and growth— and you just hit upon 

some of that because you tied in with the State in their weatherization program by using some of your dollars to train the people to 

go ahead and do the work. So this has been a benefit not just for 

projects, but actually for their future employment. 

Mr. NEIMEYER. Yes, sir. One of the things that—the training program that we had in the very beginning, we targeted opportunities 

for projects that we funded. In other words, if we are building a 

rural bulk-fuel project, we provided training for welders and so on 

and so forth. Now, those are short duration jobs. They may last the 

length of the project. But what we are hopeful for is that those individuals who receive that training then have the skill sets when 

other construction projects come in their town that they would be 

successful in competing for those jobs. 

The other part of it is there are some projects, especially the clinic projects, where you are not dealing with a commodity such as 

storing fuel or electricity; you are actually dealing about people; 

you know people are providing the service. And so we have a very 

successful program with the University of Alaska to provide training for allied health careers for individuals to serve in those small 

community clinics. 

Mr. YOUNG. Madam Chairman, if I could, I hope that you in the 

position of the chair would take and request from the Speaker an 

airplane—and maybe you can come to the State of Alaska and not 

only visit the grandiose mountains but go out and see some of the 

challenges my people have in an area that is huge. There are no 

highways. It is all air travel, boat travel, and adverse conditions, 

and how they have adapted; but how well the Commission has 

done their work and the benefits from it which wouldn’t have been 

done if the Commission didn’t exist. 

And if you haven’t been up there, I would urge you to set up a 

trip. And I am not on the committee but maybe I can show you 

around. If you don’t want me, you can go on your own, but come 

18 

to my State. I get to see your area all the time so you owe me one. 

Thank you, Madam Chairman. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. I would say to my 

good friend that I would love to come, especially if your wife will 

help guide me, who is also a good friend who knows these areas 

very well. And I have been to Alaska only once, and saw Alaska 

when it was a different time of day and night there than it was 

anywhere else in the world. But I have never been to some of—of 

course, I was to the part of Alaska, the capital, which is not unlike 

other capital cities in some respects. But I am impressed with what 

you speak of, the need to get an understanding—you know, there 

is poverty and there is isolation and then there is Alaska, where 

you have tribes who most Americans know nothing about, know 

nothing of their way of life or their particular challenges. 

Talking about tailoring, if we want to be helpful here, because 

we are not trying to wean people from their way of life, we are simply trying to bring them some of what they are entitled to as Americans. So I do think that in this committee, perhaps even a site 

hearing at some point might be in order, considering how very different Alaska is. 

Now, before I go any further, and I know it would revert to me, 

but I am going to ask Mr. Cao if he has any questions. 

Mr. CAO. Thank you, Madam Chair. And all of my questions will 

focus on Mr. Johnson. 

Mr. Johnson, in your 2009 annual report, the report states three 

goals that you have for Louisiana: advance the productivity and 

economic competitiveness of the Louisiana workforce; strengthen 

Louisiana’s physical and digital connections to the global economy; 

create critical mass within Louisiana communities. 

My question is, what programs have you implemented in Louisiana to achieve these goals and what is the status of these programs? 

Mr. JOHNSON OF ILLINOIS. Well, first of all, thank you and let me 

say I am a native Louisianian. I was in Cheneyville last week, and 

my relatives established the first church west of the Mississippi in 

Evergreat, Louisiana at Bayou Chico. So I have a special place in 

my heart since I went to high school there. 

The programs that we have implemented, and in particular 

where we think it will have the greatest impact, is through our IDelta program. Three years ago we recognized the digital divide 

that was going on in the rest of the country and the need to provide high-speed broadband to rural areas. We started getting applications in, and I deemed those applications as falling within basic 

public infrastructure. So in particular, those efforts are underway 

throughout Louisiana. 

Mr. JOHNSON. [Continuing.] We have all but I think about eight 

of Louisiana’s parishes in our region. And Louisiana, the way that 

the dollars that are appropriated come into the Delta Regional Authority, Louisiana gets the lion’s share of those dollars. We have 

worked very closely with each of them. 

Mr. CAO. When you say the lion’s share, based on your 2010 

budget, it was appropriated $13 million. How much of that would 

go to Louisiana? 

19 

Mr. JOHNSON. Well, I would have to say I believe Louisiana gets 

about 17 percent of the dollars that come in, if I remember correctly. It is a complicated formula that takes into consideration 

land mass, it takes into consideration the number of people unemployed, the total population, and the number of parishes that you 

have. And for that reason, Louisiana will get more money than any 

of the other States. 

Mr. CAO. And I am just looking ahead with respect to the oil spill 

in the Gulf Coast. Obviously, one of the most distressed communities in Louisiana would have to be the shrimping communities 

along the Louisiana coast, Plaquemines Parish, I think St. Bernard. And I am just thinking about the potential devastation to 

these communities because of the oil spill. 

Have you looked into possibly programs to help these communities? 

Mr. JOHNSON. We are limited by congressional mandate in our 

legislation as to what we can invest dollars in. And we do set aside 

money each year, it is a nominal amount, to meet unexpected 

events that might happen. But we are limited to investing a portion of our dollars in basic public infrastructure, transportation infrastructure, workforce development, and business development. 

And so to meet an emergency need outside of those, we are limited 

by Federal law, and we would be unable to address any of the economic impacts unless it affected the infrastructure. 

Mr. CAO. Now, when you are looking at economic development 

initiatives and you say that you are bound by the letter of the law 

to see what you can venture into, who makes the final decision 

with respect to what can or cannot be done? 

Mr. JOHNSON. I do. 

Mr. CAO. Okay. And I am pretty sure we can be very creative in 

looking at ways to help distressed communities. Can’t we? 

Mr. JOHNSON. Well, that has been a real challenge as I have 

dealt with governments of the eight States. They have wanted to 

venture outside of that. And I think one of the reasons that the 

Delta Regional Authority enjoys the credibility that it does is because we have followed the law very carefully to make sure that 

we met congressional intent. And for that reason, you have graced 

us with more money to be able to invest. 

Mr. CAO. Right. And you have to understand my frustration with 

interpretations of the law. For example, for the past year and a 

half I have been fighting FEMA for the recovery of New Orleans 

and the Second District, and they have interpreted the Stafford Act 

much more rigidly and narrowly than I would interpret the act. 

And those are some of my concerns, because, obviously, when you 

read a law or an act of Congress, different people might have different interpretations. That is why we have the court system. And 

I am just wondering whether or not some of these plans, some of 

these initiatives that you say cannot be done cannot be interpreted 

otherwise. 

Mr. JOHNSON. Before we make decisions that are outside of those 

that we previously made, we consult with the Office of Management and Budget to ensure that it is consistent with the administration’s interpretation of the law. And so we work through that 

process. It is not a one-man show. 

20 

Mr. CAO. Just one last question. With respect to the fiscal year 

2011 budget, what other initiatives do you seek to implement in 

Louisiana, especially? And do you have any programs in the New 

Orleans Metropolitan Area? 

Mr. JOHNSON. We have no specific programs in the New Orleans 

Metropolitan Area. We respond to local development districts and 

to the mayors and the Governor in particular as to the projects 

that they want to fund. 

And I might comment that that is a challenge, and I think was 

alluded to a little earlier, that because of the amount of the dollars 

that come through our agencies, they don’t generally get the kind 

of attention that you would hope they would from the Governors 

themselves. And oftentimes you will have someone, who is not next 

to the Governor and directly involved in the process, they look oftentimes more toward the grants program than they do what we 

can do to improve the overall economy of Louisiana. 

And with regard to ongoing programs, our Delta program is huge 

and will transform Louisiana, as will our highway program that we 

hope that the Congress will consider implementing that is similar 

to and mirrored after the very successful Appalachian highway program. And we think that will transform much of Louisiana. 

Our program with health and affordable health care and access 

to affordable health care is another part of what we hope will help 

Louisiana. 

Mr. CAO. Well, if my Governor is not interested, I am very interested. So all of your money can go through me. 

Thank you very much. I yield back the balance of my time. 

Mr. JOHNSON. Thank you, sir. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. All right, Mr. Cao. 

Let me try to put on the record a few more answers from you. 

I am interested in knowing whether your programs, whether the 

Recovery Act, the so-called stimulus funding, has helped your communities through your programs in any way that you could tell us 

about. 

Mr. NEIMEYER. I will begin. About 6 years ago, the Commission 

funded the planning and design, in essence, the preconstruction activities for the proposed Indian Health Service Nome Hospital, and 

I think it was about $15 million. What happened was, is over the 

course of 5 years the organization, the Norton Sound Health Corporation with the Indian Health Service, moved that project forward so that it was effectively construction ready, shovel ready. 

And when the stimulus package came through, it was one of two 

hospitals across the country that was picked for the Indian Health 

Service for funding. So $160 million of stimulus money went into 

the project. 

What is really a fun part of the story is that I have been informed there was a town in Montana that does steel fabrication, 

and the company was about to go out of business until they got this 

pretty sizeable order for this Nome Hospital. So the town was impacted by stimulus money from Alaska. And then the story continues. There was a steel foundry town, I understand, in Arkansas 

that also provided the steel. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Mr. Neimeyer, you 

are having effects well beyond Alaska then. 

21 

Mr. NEIMEYER. Yes. And I think the interesting part of that story 

is the Commission had no hand in the stimulus money at all. All 

we did is we served as an agent to help bring the players together 

to develop the Nome Hospital. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. You had the shovelready hospital. 

Mr. NEIMEYER. It was to the point where it was shovel-ready. 

And so when the stimulus money was there, it moved. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And so the materials needed to get it started, to get it going. 

Mr. NEIMEYER. Are there, and they are under construction now. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And those came 

from several other States. 

Mr. NEIMEYER. Right. 

Ms. NORTON. So the stimulus funding reached Alaska because 

you were shovel ready. And then you were able to reach to, is it 

Wyoming? 

Mr. NEIMEYER. Montana and Arkansas. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. This is a classic 

stimulus tale, and we need to put on the record more about that 

and how it happened. But that is the kind of example that makes 

us understand what has happened, because it is sometimes hard to 

trace when you have got money. But here, we have traced money 

not only to a commission activity, but beyond it to what it takes 

to get that activity going. And it takes materiels and all that goes 

along with that. 

Do any of the other two of you have examples? 

Mr. GOHL. Madam Chairman, last week I was in Magoffin County, Kentucky, which is a small eastern Kentucky community, about 

15,000, extremely low income. And over the last number of years, 

Magoffin County has been working to be able to have a new building for its health department. Now, the health department in 

Magoffin County is more than a health department. It is everything. It is health, it is environmental permits, it is basic services. 

And over a period of years, ARC was able to provide funds to the 

point where they were able to build their building with local funds, 

our funds, and other Federal support. And as the building was 

coming together and was getting to the point of being completed in 

terms of construction, the stimulus program showed up and they 

were able to receive $100,000 for equipment to equip the center, so 

that as they moved into the center they were able to have stateof-the-art equipment to go into this new facility to provide services 

to this county that doesn’t have a hospital and doesn’t have a lot 

of services. And it serves a very, very low income population. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. That is another extraordinary example, Mr. Gohl. 

Mr. Johnson. 

Mr. JOHNSON. We have seen a significant impact primarily in improving access to markets with the paving of highways that have 

gone that were almost untenable and roads within communities. 

And our central office is located in Clarksdale, Mississippi, and our 

mayor was able to make infrastructure improvements that were dilapidated and the town was falling apart. Thanks to this stimulus 

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22 

ple put to work as a result of it. And I might comment that Clarksdale is the home of the blues and Morgan Freeman. We would love 

to have this committee come join us, and I am sure he would be 

delighted to be there when you come. 

But we have seen it have a huge impact over the region. And it 

took a while for it to take effect, and there was a great deal of frustration and people calling in wanting to know why it hadn’t hit and 

blaming us for it and so on. But when it started to literally hit the 

road in our region, they began to see the effect of it, and we are 

grateful for it. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. It is interesting how 

roads continue to be such a factor in whether or not investment 

will occur in the region. 

Let me quickly ask, Mr. Johnson, you had the misfortune to have 

Hurricane Katrina in part of your Commission’s area. Have you 

seen progress in the Katrina-impacted counties as a result of your 

programs in particular? I realize huge amounts of money have had 

to come into two States. But when you look at your programs, 

whether or not you were able to leverage any of that and work with 

any of that or to be stimulated through any of that. 

Mr. JOHNSON. We have seen some effect of that. And probably 

the best example—and to talk about what Mr. Neimeyer and Mr. 

Gohl have talked about with our being small and the effect that we 

have. Shortly after Katrina, Congressman Melancon called me, and 

there was an application pending in the Polian bill for a water line 

to go out to the construction crew that would help rebuild that parish. And it was pending and he needed it very quickly. 

I called the Governors of the eight States together on a conference call the next morning, got them to approve the grant. The 

next day I was down there with the check, and they got the water 

going. We are able to turn on a dime. 

I must say that, because of the limited dollars that we have had 

and that the Governors have had to work with us, that we did not 

see an inordinate amount put into directly Katrina-related projects. 

We did see some water systems improve because they were overloaded overnight. In Waterproof, Louisiana, the population went 

from 400 to 1,200 people overnight, and they could only run their 

water for a few hours during the day to give the water tower time 

to fill back up. So we came in and helped with that as we have in 

other areas. But because of the limited dollars that we have had, 

we haven’t been able to see the huge effect. And I must say that, 

in this instance, because of our ability to leverage—and DRA dollars are the only dollars in this region that can be used to leverage 

other Federal dollars. And so these economically distressed areas, 

that they may be able to apply for a USDA grant but they don’t 

have the money for the matching money. Well, our dollars can be 

used for that matching money, and it has changed people’s lives. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. A very important 

point you make, Mr. Johnson, that leverage—the Federal dollars 

for the commissions can leverage the Federal dollars. The impacts 

are very, very significant here, and you make a very good point. To 

ration money here while letting money go through other normal 

kind of State match prisms fails to understand the enormous 

leveraging effect, including leveraging Federal dollars, in commuVerDate Aug 31 2005 16:03 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\56289.0 KAYLA
23 

nities that couldn’t possibly apply for Federal funds at all without 

a commission. 

So over and over again, we are seeing that penny wise and pound 

foolish does not pay when it comes to these commissions. If you 

really want to fund—and we have put gazillions of dollars into 

these States without the kind of leverage to the private sector, not 

to mention the Federal sector that your testimony has revealed. 

I am going next to the Appalachian Commission, because Mr. 

Gohl has mentioned outbound migration as still a significant problem in terms of long-term viability of the region. 

In deciding to make investments, how do you assure that you 

have not invested in a region or part of a region that in 10 or 15 

years may be significantly depopulated? You know, it may be poor. 

But don’t you have to make sure that you are dealing at least in 

some kind of, I won’t say long-term, but some basis to believe that 

you are not simply throwing money in a region where all of the incentives—or parts of the region, excuse me—are to leave, for whatever reason, making it very difficult for the small amounts of 

money that you have at your command to reverse such a large 

trend? 

Mr. GOHL. Well, there are a couple things. First of all, in the 

awarding of dollars, every project that comes to us is something 

that a Governor wants to do, and it has been through a process, 

a review, an analysis, and a lot of questions asked. And we also 

have that responsibility. I am someone who often is overly skeptical about proposals. But last week, I learned a couple of things. 

We were in Pikeville, Kentucky, and we were walking down the 

street. And a person we were with pointed out to me a retaining 

wall that the agency had helped fund. And I said, a retaining wall? 

Well, the retaining wall was put in place and, as a result, they 

were able to provide about 30 or 40 new low-income housing units 

along a street that had been devastated. There had been a series 

of a variety of problems in terms of deterioration and blight to the 

community, and also helped create and stimulate development of 

the Pikeville College. So it was obviously a long discussion and a 

lot of planning about that retaining wall, something that I would 

be inclined not to fund, in all honesty, if you just came to me about 

a retaining wall. But it was because there was planning, there was 

buy-in by the local community, and there was a plan for how to 

move ahead and how to create investment. 

So I think the answer to your question is a little long, but it is 

about the involvement of the partnership and the plan, and the 

commitment of the local officials and the local community to, this 

is what their idea is and this is what their dream is, and this is 

how they plan to get it. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. It wasn’t long at all, 

but it was very informative. And it is just the way these commissions are meant to operate, not in isolation. You are dealing with 

economic development in a State or a region, going through various 

parts of the matrix to make sure that what you are doing here has 

an effect on you and the region or the State. Very important to 

know that you don’t just sit there and say eenie meenie miney moe, 

this is what we need. But you are working within the larger reVerDate Aug 31 2005 16:03 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\DOCS\56289.0 KAYLA
24 

gional context, and these are regional commissions. Except, Mr. 

Neimeyer, this is a State commission. 

And, Mr. Neimeyer, I have got one or two questions for you, because for reasons known to Alaska you have gone from a peak, an 

enviable peak of something over $140 million in Federal funding in 

fiscal year 2006 to a fraction of that for fiscal year 2011, $15.9 million. I would like to know what effect from 140 plus million down 

to 15.9 million, I would like to know what effect this decreased 

funding has had, and have you seen an increase in applications for 

grant funding or how—how is this Commission able to operate 

when they are seeing a matter of only a few years such a takedown 

of funds I suppose it had become used to? 

Mr. NEIMEYER. Well, on a number of fronts we are responding. 

The first thing we are doing is, like I said, we had five advisory 

bodies. We are teeing up a question to each and every one of them: 

How do we start winding down our programs? And what does that 

mean? Because the way that I look at it is the Federal Government 

invested almost $1 billion over the course of 12 years for the Commission to develop very significant relationships, very significant 

working relationships with a number of partners. So I think that 

the Commission continues to add value based upon those relationships that have been built. 

I don’t know what the right number is that would continue that, 

but I do know that we continue to add value, and we have to look 

for those opportunities where we leverage other dollars. And we are 

starting to see other partners step up saying, well, the Commission 

doesn’t have money. We need to start moving forward ourselves. 

So what we are doing is we are trying to explore the niche of 

what we can do with less dollars. 

Earlier this week, I was in Fairbanks at a statewide energy conference, and that was one of the questions we were discussing: 

What are some of the things we can do? And it is not decided, but 

a lot of the stakeholder groups are saying you need to be investing 

in planning and community development. And those opportunities 

to reduce energy consumption, not by 50 percent, but 10, 15 percent here and then 10, 15 percent there, and then as you start 

doing so, it starts adding up. But I think, even with reduced funding, we will continue to add value based upon the historic relationships that have been built. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. We will be watching 

the Denali Commission very closely given the strains that obviously has been put on you, to see—most commissions used to rising 

a little bit at a time and not to this kind of takedown of money, 

especially where that money is so necessary. 

But you mentioned energy and energy conservation, which has 

been of course one of the most significant focuses of the Commission, and particularly in some of Alaska’s most isolated communities. Now, there was a 2007 request for information indicating a 

need for 185 projects, energy projects, totaling $2 billion. Now, with 

no conceivable way to fund this kind of need in the near future, 

how do you plan to address this need? Or is that just off the table? 

Mr. NEIMEYER. No, ma’am, I wouldn’t say it is off the table. A 

lot of what you are looking at is that we have power plants that 

have not been replaced that we do need to replace, older techVerDate Aug 31 2005 16:03 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\DOCS\56289.0 KAYLA
25 

nology, the transmission systems may be of older technology and 

may not be as efficient. So if you are thinking about it as an airplane, we have got a lot of 707s out there and we don’t have 737s 

in play. So that is a lot of what the $2 billion is about. And so what 

it results in is a higher cost, unit cost kilowatt hour to the residents. And so it is a matter of changing out those systems so that 

the costs are reduced. 

We have been particularly struck hard by energy costs. We are 

paying double, triple what we were just paying years ago. And it 

is very hard on our communities. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Well, I can understand why you gave it such priority and the crying need in this industry rich State as it turns out. 

I am going to ask the ranking member if he has any questions. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. Actually, 

just one, going back to an issue that I mentioned before to Mr. 

Johnson. 

Earlier this year, we received testimony that the DRA uses participation agreements for its Federal grant program. And as you 

highlighted in your testimony, that if the specific outcomes do not 

take place, do not materialize, that the grantee is required to return a pro rata share of its funding. We appreciate, by the way, the 

follow-up that we received from that hearing on the issue and I 

want to thank you for that. Are these agreements working? And do 

you have examples of when funds may have been needed to be recouped? If you could just kind of give us a little bit of some 

thoughts on that. 

Thank you. 

Mr. JOHNSON. Well, I must say, when we first implemented the 

program, that it was met with a great deal of resistance. And we 

were tested only once. We audit these projects while they are in 

progress. Our local development districts help us audit them, and 

then our staff will go into the field and work with our local development district representatives to audit them to make sure that they 

are achieving. We actually go into their books and look at their 

books to see that these are legitimate employees, and we don’t just 

walk around and see how many people are working. So we audit 

their books to make sure that they are achieving these levels. 

The initial resistance came in the application process. And once 

they realized that we were serious about it, we really haven’t had 

much difficulty in recovering any funds. 

I can tell you that we are watching a couple of projects very 

closely because we just are very skeptical as to whether or not they 

were being truthful and whether or not they were telling their Governor the truth. And so we are following them very carefully. We 

hope that they will be able to achieve the levels that they said they 

would; but if they don’t, we will get the money back. 

I mentioned earlier that the example that jumps out at us first 

and is one of the biggest was with Techtron, and when they did not 

employ the number of people that they said they would for as long 

as they said they would. There is a time factor in here that they 

are able to ramp up to that employment level that they tell us and 

so that they can achieve it within a reasonable period of time. 

26 

It is not an unreasonable document at all. It is very fair. It says 

the only thing we are asking you to do is we ask you to do what 

you tell us you are going to do. And if you don’t do it, then pay 

us back a reasonable amount of that money that would be fair. And 

we think it works very well for us. 

Mr. DIAZ-BALART. If I may, Madam Chair, just to follow up. Do 

you think the fact that you have that language in there, the capability of going back and getting some of those funds if they don’t 

do what they said they are going to do, do you think that is part 

of the reason that you are not having to go back and get some 

money, because of the leverage? 

Mr. JOHNSON. Yes, sir, I do. I think that is a big part of it. I 

mentioned earlier, I was the Mississippi State auditor and I conducted over 1,100 investigative audits and 3,500 routine audits and 

I put a number of people in jail. So they knew that I was serious 

when I said that I was going to come and get that money. And I 

think that had an impact on it. It didn’t take long for them to realize that we were going to get our money back. Yes, sir. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. 

I just want to commend you for your efforts. And people have a 

hard time coming up with money, and we have a responsibility to 

make sure it is well spent. And I have rarely heard of an example 

as specific, concrete, and as effective as what you are doing. I know 

it is easier to just ignore it, but I want to thank you for it. Thank 

you. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you very 

much, Mr. Diaz-Balart. You see, Mr. Diaz-Balart is just as interested as I am in the notion of a rebate of some kind. And, of course, 

we have for the record that there is no objection of the others for 

such a provision. We are, of course, looking at the next reauthorization as well when we have these budget hearings. And after consultation with the commissions, based on what appears to be a 

quite successful procedure used in the Delta Commission, we would 

certainly like any reauthorized bill to authorize other commissions 

to employ such procedures. 

And what Mr. Johnson said about auditing is so important. You 

know, if you work with people all along, you don’t get to the atom 

bomb. You know, you don’t need the nuclear remedy if you help 

them all along and they know you are watching. If they think you 

are not watching, that is a license to walk away with the taxpayers’ money and just say, look, that is the best I could do. So we 

not only are looking at your model for possible use by the other 

commissions; we are also looking at it in the larger context of Federal spending in the same way and we recognize the uniqueness in 

many ways of Alaska. But the notion of making sure that the kind 

of coordination you are getting, Mr. Gohl, is endemic in the way 

these commissions operate. 

The notion of these listening sessions, going to parts of the 

States which may not even think about having communications 

with Federal agencies that may have the greatest impact on the 

particular jurisdiction, and USDA or the Department of Agriculture 

is a classic one for many of these commissions. But the whole notion of actually having a conversation with the Federal agencies 

when you are a small community may seem to be well beyond you. 

27 

Well, it shouldn’t. They are there to serve the smallest along with 

the ones you hear about all the time, the big cities which have 

staffs who can speak for them and keep in regular touch with 

them. 

So we are also interested as we look to reauthorizing the bill to 

greater coordination and empowering and suggesting and authorizing commissions to engage Federal agencies directly with smaller 

communities that may never have had a direct communication, and 

we ought to start it right up through these commissions. 

I want to thank each of you for this testimony. It has been very 

informative. You have educated us. We don’t have hearings just to 

find out what is happening out there. We have hearings essentially 

as problem-solving hearings. We can’t solve the problems sitting up 

here in Washington, but you have certainly helped us to solve problems for the greater good of the commissions that we are now beginning to proliferate across the United States. And thank you very 

much. 

And I am going to call the final panel as I dismiss this panel. 

Michael Norton, no relation. We are pleased to have Michael 

Norton of the Northwest Arkansas Economic Development District. 

Leonard Winchester, Western North Carolina Education Network. 

And Cecil Groves, President, Southwestern Community College. 

And if we begin with Mr. Norton, we would be pleased to receive 

testimony from all of you now. 

TESTIMONY OF MICHAEL NORTON, EXECUTIVE DIRECTOR, 

NORTHWEST ARKANSAS ECONOMIC DEVELOPMENT DISTRICT, INC.; LEONARD WINCHESTER, MANAGER, WESTERN 

NORTH CAROLINA EDUCATION NETWORK; AND DR. CECIL 

GROVES, PRESIDENT, SOUTHWESTERN COMMUNITY COLLEGE 

Mr. NORTON. Chairwoman Norton, Ranking Member Diaz-Balart, 

and members of the subcommittee, thank you for the opportunity 

to testify today on behalf of the activities of the Federal-State Regional Commissions. My name is Michael Norton, and I serve as 

the Executive Director of the Northwest Arkansas Economic Development District in Harrison, Arkansas. I also currently serve as 

President of the National Association of Development Organizations. 

There are four points I would like to briefly mention from written 

testimony. One, the existing and emerging Federal Regional Commissions need consistent Federal support to capitalize on the 

unique intergovernmental partnership model. 

Two, a key element of the successful regional commission model 

is the link made at the local level by the network of multi-county 

local development districts. 

Three, given current economic conditions, the Federal Regional 

Commissions are uniquely positioned to provide distressed regions 

of the country with the resources and attention needed to overcome 

persistent economic distress. 

And fourth, the Federal Regional Commissions are not intended 

to replace or duplicate other Federal programs. 

I would like to focus my oral remarks on a success story that was 

made possible through the support of the Delta Regional Authority. 

28 

Often characterized as a one-stoplight county that is too small for 

a McDonald’s or Wal-Mart, Searcy County has a poverty rate that 

is among the highest in the State of Arkansas and almost twice the 

national average. In Searcy County, the City of Marshall water and 

wastewater system were in need of significant improvements, specifically within the commercial and business area of the city along 

the U.S. Highway 65, which runs near the Searcy County airport 

and industrial park. Our organization worked with community 

leaders to secure a $257,000 grant from DRA for water and wastewater improvements. During this time, funds were also provided 

from the Arkansas Department of Economic Development to construct a new health unit that was to be located in the industrial 

park. 

Petit Jean Electric Cooperative, which is the local electric service 

provider, was also looking for a site to construct a new work facility. However, the Searcy County industrial park’s wastewater service was considered unusable for such a facility and was almost 

passed over until the DRA provided funds to make the necessary 

improvements. As a result of DRA’s investment, Petit Jean purchased a site in the park and then donated land back to the county 

in which to locate the Searcy County Health Unit. 

In addition, as a result of the improved infrastructure in the 

park, the Highland Court Rehabilitation and Resident Care Facility decided to also locate in the industrial park. It is a 78-bed, 

30,000 square foot physical therapy center that was completed in 

2008. 

The seed funding provided by DRA allowed more than $10 million in additional public and private sector funding to be leveraged 

and generate more than 80 jobs in the rural community with a population of roughly 8,000 people. The project would have represented 

a lost opportunity were it not for the targeted assistance provided 

by DRA. 

Thank you. And I would like to welcome any questions. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you, Mr. 

Norton. 

Leonard Winchester, Manager, Western North Carolina Education Network. 

Mr. WINCHESTER. Thank you for this opportunity to share with 

you some of the details of a model project funded partially with 

ARC funds. 

WNC EdNET, Western North Carolina Educational Network, involved connecting all of the public and charter schools in a sixcounty area in western North Carolina and the Cherokee Indian 

Reservation. It is a cradle-to-the-grave-type project, built on the 

foundation of communication, collaboration, and cooperation. We 

operate with the unanimous consent of our member institutions. 

On this foundation then followed the construction contracts, 

equipment acquisition, installation, configuration, training, staff 

development, and, today, widespread use. A success story. 

This required approximately 500 miles of fiber in the rural area 

involving some of the most difficult terrain you will find anywhere. 

Much of this was new construction. This summer, we will complete 

the last school and end up within budget of just over $6 million. 

29 

The pricing that we got from Balsam West FiberNET was much 

lower than the market price. 

Through this low pricing and volume pricing agreements that we 

negotiated with other vendors, many of the schools did things outside of the scope of our project. They connected bus garages, maintenance facilities, offices, and acquired a lot of additional equipment. WNC EdNET connected each school to a central hub. The 

State of North Carolina leveraging e-rate funds connected the hubs 

to a State network and, in turn, to the rest of the world. 

We have today a world-class fiber-optic network operating in 

western North Carolina. It is currently serving over 20,000 students. One example is that this year we had 1,175 students taking 

online courses. Prior to WNC EdNET, this could not have been 

done. Student teachers can remotely observe model teachers in distant locations. This knowledge and expertise sharing is easily done 

with this technology. The applications are endless. 

In a sister project, we also connected Graham County governmental facilities, providing them with additional fiber marketable 

for economic development. ′′If you build it, they will come′′ may not always be true, but if 

you don’t build it, they can’t come. A major tech company could 

come to our mountains now, set up a company, and get direct access to 56 Marietta. I call 56 Marietta our connecting point. Like 

Silicon Valley, it is a major connecting point in the Southeast. 

This is transportation infrastructure. It transports information. 

Its uses are unlimited, both good and bad. The same highway that 

someone builds may provide a bank robber with a quick getaway, 

but it also provides a doctor with a quick trip to the hospital that 

saves somebody’s life. We don’t want an emergency situation where 

the only resources are the few people who happen to be standing 

right in front of us. We want immediate access to the knowledge, 

skills, and resources as the rest of the world. We also believe that 

we have knowledge, skills, and resources to offer the rest of the 

world. This information transportation infrastructure can’t be accomplished without Federal help and Federal intervention. 

In asking you for continued support, I offer you this. WNC 

EdNET is a model project, a poster child-type project. When you 

have taxpayers say, show me what we get for our money, send 

them to see me. We will show them some good old-fashioned southern hospitality and an infrastructure project that will knock their 

socks off. 

Thank you, Madam Chair. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Thank you, Mr. 

Winchester. 

Finally, Dr. Cecil Groves, President of Southwestern Community 

College. 

Mr. GROVES. Madam Chair, thank you very much, members of 

the committee, pleased to be here and support also the testimony 

of Mr. Winchester. 

Our story—and I do have a document, as I said today and will 

comment today, but also another document that relates and reflects 

also to the same subject. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. We will accept that 

for the record, Dr. Groves. 

30 

Mr. GROVES. Thank you very much. This is an extraordinary 

achievement. It is a success story of how planning, integrated with 

support, can lead to great outcomes. 

In 1999, Southwestern Community College was faced with a 

problem of what to do about an infrastructure to where we were 

required to go to a digital-related infrastructure to continue our 

interactive television program. We found out at that moment in 

time we simply could not afford the costs associated with doing 

that, and we would have to cancel the program or find alternative 

sources. 

We went to the Appalachian Regional Commission and said, we 

have a problem, but so does all of far western North Carolina: We 

can’t get digital access. We don’t know what the process is. We 

went to the State and others in trying to get explanations of what 

the cause of these problems were, and we really couldn’t find out. 

And Appalachian Regional Commission, along with matching funds 

from the State and other independent providers, provided Southwestern Community College roughly $1,500,000 to do a detailed 

study of what was the issue associated with lack of access to rural 

Internet access for broadband resources. 

This project took 3 years in study. We went to numerous businesses, industries throughout our region. We studied this from the 

legal point of view, from the political point of view, from the technology point of view, understanding the business cases associated 

with this. We looked at various access of strategic partners who 

could work with us. What could we do to solve a problem that was 

enormous in our region that would limit any future development 

unless it was resolved? We learned some critical lessons. 

First, it was confirmed that the digital divide, given our rugged 

terrain, our mountainous region and sparse population, was a tremendous limitation for any telecommunication provider to come 

into that region. 

Second, we learned that the more traditional economic demand 

model used classically was simply not going to work in favor of our 

region. 

Third was, as most of the proposed funding models that had 

State funds involved exclusively or Federal, were all short-term. 

They didn’t allow for a long-term resolution to the issue, particularly for our isolated region. 

Finally, by doing this project we learned and gained sufficient 

technical, legal, regulatory, financial knowledge that was required 

in doing this how to do a fiber-optic deployment in our region on 

our own. 

So armed with that information made available by the study we 

did, funded and supported by the Appalachian Regional Commission, we decided in our far western region to solve our own problem 

and do what it took to get fiber-optic network high-speed into our 

region, understanding the demands that was possible. 

So we went to two primary providers—persons of interest. One 

was a company located in Franklin, North Carolina, Drake Enterprises, that had a very large operation providing financial products 

to various accounting firms, tax accounting firms, and the Eastern 

Band of the Cherokee, located in Cherokee, North Carolina. 

31 

The college had our needs to try and upgrade our system to a 

digital base, and we gathered together and said, how can we resolve this problem? Is there enough mutual interest here to find a 

solution that helps the people of our region? 

Fortunately, Drake Enterprises, privately owned, was a very beneficent organization. It had supported the region with that family 

owning that going back five generations living in the region. The 

Eastern Band of the Cherokee, resulting from resources that they 

had received, also interested in remodeling and redoing their economic base, said we are interested. And the college, we were trying 

to tie together our campuses. And, with that, we decided to take 

on a project of building a fiber-optic network throughout six westernmost North Carolina counties, including the adjacent counties of 

Tennessee and Georgia. 

We were told when we started this project: It can’t be done. You 

can’t build fiber-optic backbone through a mountain. It is just too 

difficult and simply too expensive. We were told that at the State 

level and nearly all levels that it is just not possible. 

Well, thanks to Appalachian Regional Commission funding, we 

now have over 300-plus miles of fiber-optic backbone throughout 

the mountains of North Carolina. Not only that, that has now been 

extended another 150 miles, and it is all placed underground, and 

in the most safe, secure processes, along with electronics, with it. 

And it was built by a local company and local labor. 

Second, it was said, assuming you could build it through the 

mountains, who would pay for such a costly venture? Where would 

you even get the money to consider it? Fortunately, Drake Enterprises and Eastern Band of the Cherokee, understanding their 

needs and a willingness to commit to serve the communities, what 

we call patient capital, to understand the investment that is going 

to take place to keep the money in the region, said: We will put 

the money up, and they put up $15 million. We built then that 

fiber-optic network through those mountains and made it operational. 

This now represents 10 years since this project started. It has 

now been in operation and business itself now 4 years. It forms the 

backbone that allowed the public schools to organize and tie their 

communities together electronically. 

Then, incidentally—I need to add a couple things. There was no 

way, we were told, that you could get a private company to work 

with a sovereign nation, the Eastern Band of the Cherokee. How 

could you form a business enterprise between two such diverse organizations? We did. And we did it because it served a mutual public good. And I would say, when public good can be served through 

a private sustainable endeavor, you have the best of both worlds. 

Everybody had a common need in mind to serve the people and 

serve the community in here. 

Finally, the most difficult part, I might say, was not the technology, it was the politics, the issues of putting that together and 

the legal issues associated with it. We were able to work through 

that process, again thanks to Appalachian Regional Commission’s 

funding, to understand the business of the telecommunication business and put our plan together. 

32 

Today, over 300 miles of fiber in place, 50 more miles of that 

comes through metro areas, 113,000 fiber miles, 600 conduit miles, 

operating at technology levels equivalent to any major telco in this 

country. It meets OC-192 speed, one of the highest speeds you 

could find. 

Our goal when we started was to provide the people in rural 

North Carolina with the lowest possible cost, accessible, comparable to what they would pay if they were in the urban areas, 

at the same quality level of service as if they lived in urban areas. 

That process has been in place, it is in place now. We serve our 

hospitals, our public agencies, our public schools, and we serve as 

the backbone of connectivity for our public schools throughout the 

region. 

And one classic example of the importance of this. Before we 

started this project, if you had had a car wreck and you were taken 

to one or more of the local hospitals and you had to have an x-ray, 

it was faster to drive the x-ray once it was done to the neighboring 

doctor’s office than it was to transmit it electronically. It saves 

lives, it saves money, it saves resources, and it is a classic example 

again where proper planning supported by public dollars to private 

investments of funds in a situation that everybody said you 

couldn’t do. 

Rural America has capacities and capabilities if given the opportunity often to resolve issues. Fortunately, we had two great enterprises, Drake Enterprise and Eastern Band of Cherokee, who 

looked at this process, looked at our study, looked at the materials 

put together, and said: We will invest in this, and it is important. 

There is no public funds or State or local in the building of this 

network. 

Thank you. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Having heard from 

all three of you, I say, wow, because the testimony has been quite 

instructive. For example, Mr. Groves, your commission starts out 

with only—I use that word advisedly—a study. In effect, what you 

did was the marketing study, the feasibility study for Drake. Now, 

normally Drake and similar companies would have to care enough 

or have the funds enough to want to expend that themselves to see 

whether they ought to do it. 

You speak of all of the barriers. They are extraordinary. Did your 

study show that Drake could turn a profit within a certain amount 

of time? 

Mr. GROVES. Yes. What we looked at with the studies, Drake 

knew full well, as did the Cherokee, the length of time it would 

take for them to return. We call that patient capital. They said, We 

will invest. It is good for our company. They understood the financial world; that was their business. But it is good for the people of 

North Carolina and it is good for the people especially of western 

North Carolina, and we will return the profit that we need. We 

may not do it in 1 year, but we will do it within 3 years. Today, 

that operation is profitable and it works. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. Today it is profitable? 

Mr. GROVES. Yes. We are expanding very rapidly and meeting 

the needs of our area. 

33 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And normally when 

broadband or new technology comes in, there is a—pardon me— 

stickup of the local jurisdiction or the State to say, okay, you put 

in some money and then maybe the company will put in some 

money. 

You say this is—there was no Federal or there was no State 

funds? 

Mr. GROVES. Madam Chair, in the building of the fiber, no. That 

is wholly owned by Eastern Band of the Cherokee and Drake Enterprises. They put up all the money. The Federal dollars were the 

Appalachian regional dollars, matched by—it came out to $1.5 million, allowed us to do the study that took 3 years that laid the 

predicate to do all this. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. $1.5 million has leveraged—and give us the figure at the moment. Has leveraged 

what? In terms of dollars. 

Mr. GROVES. It leveraged a hard asset, a dollar value of $15 million put in and asset value far more than that. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And growing. I must 

say, when you say the hardest thing was the politics, wow. I can’t 

imagine politics would be hard. If a company wants to do this on 

its own dime and in a locale which presents nothing but barriers, 

geographic barriers and, I might add, some demographic barriers, 

who in the world was against this? I mean, how could anyone be 

against it? 

Mr. GROVES. A lot of people didn’t understand what we were 

doing and didn’t think we could do it. It was impossible. And I 

think there is always that uncertainty. And then there was some 

control issues, too. It was, actually, if we could do it, maybe others 

might, too. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And apparently 

there wasn’t much risk, because the risk was going to be with the 

company, and the Federal Government had already funded the 

study, saving the company and the private sector that, and 

leveraging what was apparently an extraordinary study, if it could 

make people spend money the way you made Drake feel it should. 

Let me ask, Mr. Norton, beginning with you. Here we find our 

regional commissions in a worse turndown than every other part 

of the United States, 50 States, all the Territories and the District 

of Columbia all went out at the same time. 

Could you give me some notion of the impact on programs operated by regional commissions you, who are I believe the chairman 

of the commission representing NATO and president of the board 

of directors representing these commissions. They find themselves 

in the middle of this catastrophe that we called the Great Recession. Here, they are trying to just move where the rest of the country is. 

How do you keep going when you find yourself doubly and triply 

disadvantaged by having perhaps what you have, the progress you 

have already made retracted? And have you found that that has occurred? What is your view of how these commissions have been 

able to continue to operate? Have they been able to continue to 

make progress not withstanding this economy? 

34 

Mr. NORTON. Well, you are exactly right, Madam Chair. These 

regional commissions were created to serve the most poor counties 

in our Nation. In our case, and the Delta Regional Authority is an 

example. It affects many States up and down the Mississippi and 

42 counties in Arkansas alone, many more in Louisiana and Mississippi. And you are exactly right, that these programs help bring 

together planning on the part of those commissions. 

One of the important issues to always remember is these dollars 

can be used to match other Federal dollars and leverage those dollars. So that is a very important factor among these regions. 

Although there were disaster money in Louisiana, Mississippi, 

and Arkansas, and those who received catastrophic and Federal 

designation, the congressional requirements to meet those programs did not change at all. But, by a result of the regional dollars 

through the Delta Regional Authority, you could use those to match 

some of those Federal dollars, so that was very important, and provide them. 

And you are right. For some of these communities, you are merely trying to open the door to the economic development. If businesses were knocking at their door, there might not be a need. But, 

again, you are trying to serve amongst the needy. And they don’t 

have the dollars. Those who are in the greatest need do not have 

the matching money to meet many of these Federal programs. So 

this program leverages Federal dollars that comes to their region. 

Ms. NORTON OF THE DISTRICT OF COLUMBIA. And of course, the 

commissions are known for doing what Dr. Groves has described, 

doing the homework for the investor. And you are so right, Mr. 

Norton. They are not going to come knocking at your door and say, 

What have you got for me that maybe I can invest in now? We find 

through our committee that even at the top realm of, for example, 

developers, they are having trouble getting money themselves. And 

these are people who usually find it very easy to get money. So the 

notion of being able to continue to make progress even if not in actually doing what you were doing, let us say, 5 years ago, would 

seem to me to be most important. 

Do you, Mr. Winchester, and you, Mr. Groves, find that there are 

ways to keep moving forward in this climate when investors can’t 

get funding themselves from the banks? Is there a way for—that 

studies or other things you can do to make sure you don’t suffer 

a setback even if you can’t move ahead to do some of the things 

with the private sector you would otherwise have done? Can you 

make preparations, in other words, for what will surely be, we are 

already seeing, a turnaround in the economy? 

Mr. WINCHESTER. Yes, Madam Chairman, there are things you 

can do. But probably the biggest thing that you can do is very simple, and that is just not to give up. A lot of times you don’t know 

what the next step is going to be. You do not know right now four 

years from now what door will open financially. 

When we were working on the planning on this there was not a 

Balsam West FiberNET. This company they created. You know we 

knew what we needed, but we did not know where it was going to 

come from or how we were going to pay for it. And then we didn’t 

know too that when Phil Drake and the tribe formed this company 

that was one business enterprise. They had their fiber network 

35 

they wanted to bill for their business case. The schools wanted a 

fiber network. When we put that out for bid, this company, their 

bid was like a factor of 10 under any of the other bids we got. That 

is returning something to the community. The difference between 

two companies bidding on a project like this is how much they 

mark it up. Because both companies subcontract to someone else 

to actually do the construction and those costs are pretty constant. 

So by this group offering to build our network at the very low price 

that they did, it wasn’t free, but we will never see prices like that 

again on fiber construction. 

Ms. NORTON OF THE DISTRICT COLUMBIA. Just a point you make. 

As we sit in this committee tracking the stimulus funds, the first 

thing we say is for goodness sake, build it now, when everybody is 

looking to make a buck and hard to make a buck, so you get prices 

you will never get again. And your notion about opportunities, Mr. 

Winchester, you know, they don’t come knocking at the door anyway, you got to have a lookout. Opportunities present themselves. 

They can pass you on by while you are stuck in some notion about 

what the opportunity has to be. That is how the private sector operates, and it looks like that is how the Commission operates as 

well, given your testimony, the testimony we have heard from all 

three of you. 

Mr. Groves—Dr. Groves. 

Mr. GROVES. Madam Chair, one of the things that sometimes penalizes rural areas is the inability to collaborate our work in unison, our work together. That is where the Appalachia Regional 

Commission comes in. Oftentimes in a rural area it is hard to have 

one party come forward to bring a common picture. And when you 

look at areas one county by itself may look very poor, but combined 

with six, seven, eight, nine or 10 counties together in collaboration 

you get some wonderful things done. Oftentimes it takes a thirdparty outside in formation who can create that energy, can create 

that conversation, can bring the folks together and can focus very 

narrowly on what are the core issues. 

Balsam West results from a core problem; that is, we knew the 

future was going to be based on access to very high speed technologies available for business, industry, schools, hospitals. And we 

said that is the core infrastructure problem for western North 

Carolina for at least the first part of the 21st century. Once that 

is settled in everybody said this has got to happen, then the issue 

is how do you make it happen, and you get a unified approach to 

it. That is one of the hard things to do. And again, the ARC was 

very, very helpful in helping us paint the picture, put the details 

together and then understand the business. Otherwise we would 

not have had a chance to understand how the business worked. 

Once we understood how it worked and what happened we felt we 

could do this, and we sure did. 

Ms. NORTON OF THE DISTRICT COLUMBIA. Well, the ARC was 

helpful in that. There is a lot to be shared in all of this. And certainly your experience, certainly you, Dr. Groves and Dr. Winchester, does show we can’t keep ourselves mired in the 20th century. You understood that broadband might be more important 

than, you know, a new road through those mountains, because the 

36 

new road is broadband and it opens up instantly roads that were 

unheard of. 

I have one more question for you. I am so impressed by what I 

have learned as chair of this subcommittee from the commissions 

that I would like to understand what the regional commissions 

could do to benefit nonrural communities. For instance, I mentioned that you have in this Nation’s capital, it is only a mediumsize city, but you have got some of the same things you will find 

in, let us say, a State like New York State. In one end of the State, 

you have some of the richest people in the United States and the 

world. In other parts of the State you have a huge thriving middle 

class. And then you have parts of New York State that look exactly 

like Appalachia. Well, in a real sense, unable to pass up analogies, 

as I am, I look at my own city with some of the highest income people, and by the way, the city has one of the highest education levels 

in the United States, and you can understand that with the Federal Government located here, it has a large black middle class, a 

large white middle class, and then it has got on the other side of 

the river, if this were divided into counties the, two wards, as we 

call them, on the other side of the river that look a whole lot like 

what we find in the Southeast Crescent, further into rural Virginia 

and going on down, 28 percent unemployment, 30 percent poverty 

rate, right alongside or on the other side of the river from more 

prosperous communities. 

How might a regional community benefit even a portion of a 

more urbanized community that has had systemic poverty? Are 

there lessons to be learned from rural communities by these impoverished communities often alongside rural communities, suffer the 

same fate, but because they are seen as some other model, city 

model for example, they don’t have the same enterprising approaches that we see in the commissions. Do you think they could 

be adapted to urban areas, parts of urban areas it would be, that 

suffer from the self-same statistics and poverty levels? 

Mr. NORTON. Well, as a local development district or regional development district—— 

Ms. NORTON OF THE DISTRICT COLUMBIA. I can’t hear you, Mr. 

Norton. 

Mr. NORTON. Sorry. I will try to get this a little closer a little 

bit. 

As a regional development organization in the local DD, as they 

are called among the regional development like DRA, in the Appalachian region they use the local development districts to implement. My district is a good example. I have nine counties in northwest Arkansas. At one end of my district is the corporate headquarters of Wal-Mart, Incorporated, Tyson’s Food, J.B. Hunt, and 

other Fortune 500 companies. The other end of my district is 

Searcy County, the example that I gave you, which is one of the 

most rural and impoverished counties in our State, that falls in the 

Dealt Regional Authority. 

But working through this, it is important to keep it all in perspective among the business communities and working together, as 

Dr. Groves said. Transportation is important because those people 

living in those impoverished counties commute to and work in 

micropolitan areas and other regions. But they have to be part of 

37 

the plan, that has to be a part of the overall planning. And the districts can serve as a liaison between the State and local governments, nonprofit organizations and the private sector working together to accomplish much of this. 

Other things we do are conducting outreach activities among 

those local governments, making them aware of what these regional development commissions provide, and then working with 

them to develop the projects. 

So yes, working as a region I think you can work through these 

things as the examples that both of my colleagues here today mentioned. People can work out of their house if they have broadband. 

What they could sell among their neighbors as a seamstress, for an 

example, they can now sell around the world to Hong Kong, Japan, 

and be an international market. So all of that is very important 

that we plan and look at our regions. 

Mr. WINCHESTER. Madam Chairman, I am sorry but I have zero 

experience in urban situations and would not dare offer suggestions 

or criticisms in that area. 

Mr. GROVES. Madam Chair, I have worked in some urban settings. Oftentimes I think the difficulty is you have multiple variables, more than you have in rural areas, to cope with. And your 

question was about organizations like ARC and others and how 

they would work with that. I think one of the factors that is important is somehow be a convening group of information and a 

verification of information. Often what occurs in settings like that, 

my experience, is that information is not trusted. And it is hard to 

build coalitions on data or information where there is no trust. 

That is where some communities, urban I have seen, have had oftentimes set up almost research groups outside the university sector on its own to verify certain things the community wants to do; 

studies that have some validity to it, or at least believed to have 

validity sufficient to organize and bring people together. 

I think commissions like ARC can help facilitate that, to bring 

that sort of veracity, knowledge, information into what is considered a neutral way to build coalitions of people and cause conversations to take place that otherwise might not happen. I think that 

is probably one of the best things. And out of that you would hope 

then some models could emerge which they could be shared against 

such commissions as to how you might approach some of these 

problems, some workable problems, and best case solutions. 

Ms. NORTON OF THE DISTRICT COLUMBIA. Thank you. Indeed, the 

notion of the studies, going from the studies that you have done in 

rural areas that have been so credible that they have impressed 

the private sector, using universities and others outside of the normal governmental apparatus, is very intriguing. Because obviously 

the city or State wants it and now trusted by the investor, I am 

not so sure they are always trusted by the population to be benefited. But the notion of having a study that you can rely upon, that 

you can verify might in itself, if nothing else, be of some value in 

urban areas. And I don’t think that any such thing occurs in urban 

areas. 

Indeed, one of the most important things that these commissions 

have done is to harness the university sector. Extraordinarily useVerDate Aug 31 2005 16:03 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 P:\DOCS\56289.0 KAYLA
38 

ful. We want to spread that throughout anything we do, especially 

with the new commissions. 

Finally, let me say we are very concerned that given what these 

commissions can mean that we have not been able to secure funding for them yet, there is some funding for the Southwest Crescent, 

some initial funding there, we are going to work very hard using 

an appeal for funding from everybody who wants some money, 

which is always the case. And the Federal Government is the 

granddaddy of funds and so you know people’s eyes glaze over. 

What you have done in offering your testimony is to give us documentation for the benefit to the Federal Government and the Federal dollar, the many times leverage of the Federal dollar, even for 

something as inexpensive as a study, we simply cannot be beat by 

anything we do. 

All we do is hand out money. We are glad to do it where the necessity is there, but without anything like the rigor, the accountability and the bottom-up involvement of communities that has 

produced the success you are able to report. 

So you enjoy the greatest respect from our subcommittee and the 

committee. 

The full chairman of the committee was an originator of the idea 

even before he came as a member of the staff. I think this is his 

very favorite part of his many jurisdictions which involve some of 

the most colossal ones like roads and trains and the rest. 

So you do have great respect and great advocacy from this committee and this subcommittee. And may I say how very much I 

have appreciated your very informative testimony and that, like 

the testimony of those who preceded you, they will help us in the 

next reauthorized bill. 

Thank you very much for coming to Washington. This committee 

is adjourned. 

[Whereupon, at 4:20 p.m., the subcommittee was adjourned.] 

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