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STRENGTHENING RURAL OHIO:

A REVIEW OF COMMUNITY DEVELOPMENT

BLOCK GRANT PROGRAMS

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON 

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 24, 2006

Printed for the use of the Committee on Financial Services

Serial No. 109–78

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York, Vice Chair 

RON PAUL, Texas 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

CAMPBELL, JOHN, California 

BARNEY FRANK, Massachusetts 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

DEBBIE WASSERMAN SCHULTZ, Florida 

GWEN MOORE, Wisconsin, 

BERNARD SANDERS, Vermont

Robert U. Foster, III, Staff Director 

(III)

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

ROBERT W. NEY, Ohio, Chairman

GARY G. MILLER, California, Vice Chairman 

RICHARD H. BAKER, Louisiana 

WALTER B. JONES, JR., North Carolina 

CHRISTOPHER SHAYS, Connecticut 

PATRICK J. TIBERI, Ohio 

GINNY BROWN-WAITE, Florida 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

STEVAN, PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

CAMPBELL, JOHN, California 

MICHAEL G. OXLEY, Ohio 

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

JULIA CARSON, Indiana 

BARBARA LEE, California 

MICHAEL E. CAPUANO, Massachusetts 

BERNARD SANDERS, Vermont 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

EMANUEL CLEAVER, Missouri 

AL GREEN, Texas 

BARNEY FRANK, Massachusetts 

(V)

C O N T E N T S 

Page 

Hearing held on: 

March 24, 2006—Morning Session .................................................................. 1

March 24, 2006—Afternoon Session ............................................................... 31

Appendix: 

March 24, 2006 ................................................................................................. 73

WITNESSES 

FRIDAY, MARCH 24, 2006—Morning Session—Mount Vernon, OH 

Calhoun, David, Director, Department of Community Development, City of 

Newark, Ohio ........................................................................................................ 13

Crow, Patrick L., Inspector, Community Housing Improvement Program, City 

of Mount Vernon and Knox County .................................................................... 15

Dupps, Hon. Daniel L., Mayor, City of Heath, Ohio ............................................. 3

Glass, Dave, Safety-Service Director, City of Mount Vernon, Ohio .................... 17

Graves, William J., Deputy Director of Development, City of Columbus, Ohio . 20

Hall, Hon. David, Holmes County Commissioner ................................................. 5

Schocken, Amy W., partner, CDC of Ohio, Inc. ..................................................... 18

Stockberger, Hon. Allen, President, Knox County Board of Commissioners ...... 6

FRIDAY, MARCH 24, 2006—Afternoon Session—Cambridge, OH 

Aaby, Aane, President, Ohio Conference of Community Development ............... 49

Downing, Philip H., Local Office Director, Columbus Enterprise Community 

Partners ................................................................................................................ 52

Gadd, Hon. Donald J., Mayor, Village of Byesville, Ohio ..................................... 33

Grefe, Hugh, Senior Program Director, Toledo, Local Initiative Support ........... 55

Henry, Oren J., Community Development Administrator, City of Cincinnati, 

Ohio ....................................................................................................................... 58

Laughman, Hon. Thomas J., President, Guernsey County Commissioners ....... 36

Metzger, Hon. Kerry, President, Tuscarawas County Commissioners ............... 37

Montgomery, Hon. Dorothy, President, Muskingum County Commissioners .... 38

Myers, Donald R., Executive Director, Ohio Mideastern Government Association ........................................................................................................................ 60

Ricer, Gary W., Executive Director, Guernsey, Morgan, Noble Tri-county Community action Committee .................................................................................... 61

Salupo, Hon. Samuel A., Mayor, City of Cambridge ............................................ 39

Wesel, Charmel, Acting Development Director, City of Marietta, Ohio ............. 63

Zwelling, Hon. Howard S., Mayor, City of Zanesville ........................................... 41

APPENDIX 

Prepared statements from the morning session: 

Ney, Hon. Robert .............................................................................................. 74

Calhoun, David ................................................................................................. 76

Crow, Patrick L. ............................................................................................... 80

Dupps, Hon. Daniel L. ...................................................................................... 85

Glass, Dave ....................................................................................................... 93

Graves, William J. ............................................................................................ 97

Hall, Hon. David ............................................................................................... 101

Schocken, Amy W. ............................................................................................ 117

Stockberger, Hon. Allen ................................................................................... 122

Page

VI

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD—MORNING SESSION

Hon. Robert Ney: 

Letter from Naomi Mattingly Compton .......................................................... 124

Letter from Evelyn Warr-Cummings .............................................................. 125

Letter from Dale Hartle ................................................................................... 127

Letter from Robert M. Wiles ............................................................................ 128

Position Statement from the Ross County Trustees ...................................... 129

Letter from Hon. Clifford L. Mason ................................................................ 130

Prepared statements from the afternoon session: 

Ney, Hon. Robert .............................................................................................. 133

Aaby, Aane ........................................................................................................ 135

Downing, Philip H. ........................................................................................... 164

Gadd, Hon. Donald J. ....................................................................................... 169

Grefe, Hugh ....................................................................................................... 172

Henry, Oren J. .................................................................................................. 177

Laughman, Hon. Thomas J. ............................................................................ 179

Metzger, Hon. Kerry ......................................................................................... 186

Montgomery, Hon. Dorothy ............................................................................. 189

Myers, Donald R. .............................................................................................. 195

Ricer, Gary W. .................................................................................................. 198

Salupo, Hon. Samuel A. ................................................................................... 199

Wesel, Charmel ................................................................................................. 207

Zwelling, Hon. Howard S. ................................................................................ 203

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD—AFTERNOON SESSION

Ney, Hon. Robert: 

Letter from the Coshocton County Commissioners ....................................... 205

Letter from Hon. Michael Mullen ................................................................... 206

Letter from Douglas R. Davis .......................................................................... 210

Letter from David Brightbill ........................................................................... 212

(1)

STRENGTHENING RURAL OHIO: 

A REVIEW OF COMMUNITY DEVELOPMENT 

BLOCK GRANT PROGRAMS 

Friday, March 24, 2006

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 8:00 a.m., in the 

Knox County Commission Hearing Room, 117 East High Street, 

Suite 161, Mount Vernon, Ohio, Hon. Bob Ney [chairman of the 

subcommittee] presiding. 

Present: Representative Ney. 

Chairman NEY. The hearing will come to order. This is a field 

hearing of the Subcommittee on Housing and Community Opportunity. 

And I did want to introduce the staff people here today. Clinton 

Jones is here, and Jeff Riley. Clinton is with the majority staff and 

Jeff is with the minority staff of the Financial Services Committee. 

But they obviously work together for the betterment of what we 

should do as a subcommittee. Our ranking member, Maxine Waters 

of California, sends her regrets. 

We have two panels today and in holding with—this is an official 

House hearing, there being no objection, this is an official House 

hearing, so the testimony that you will—that we will take back 

from here will be valuable. We are going to do three hearings within Ohio, and then we are going to do one in Los Angles in Representative Maxine Waters’ area. And I think that shows you no 

matter how large the city, or no matter how small the town, this 

issue is important. And we will take this back for the record and 

share it with our colleagues, so this will help—if you support Community Development Block Grants, then this will help to hopefully 

stave off the things that are happening right now with it. 

So, I would like to welcome you this morning to Mount Vernon. 

And I want to thank, first of all, the Knox County Board of Commissioners for allowing the subcommittee to use its public hearing 

room for today’s important discussions regarding the CDBG or 

Community Development Block Grant. So again, thanks to the 

Commissioners and a special thanks to Rochelle Shackle. I do not 

know if Rochelle is here but she does so many things for the county. 

2

The CDBG program, administered by the Department of Housing 

and Urban Development, is the Federal Government’s largest and 

most widely available source of financial assistance to support 

State and local government-directed neighborhood revitalization, 

housing rehab, and economic development activities. These formula-based grants are allocated to more than 1,100 entitlement 

communities (metropolitan cities with populations of 50,000 or 

more and urban areas), the 50 States, Puerto Rico, and the insular 

area of American Samoa, Guam, the Virgin Islands, and the Northern Mariana Islands. Grants are used to implement plans intended 

to address local housing, neighborhood revitalization, public services, and infrastructure needs, as determined by local officials, of 

course, with citizens’ input. 

The benefits of CDBG funding can be seen in local communities 

across the 18th District, which I represent. Here in Knox County, 

CDBG funding has allowed for the revitalization of several downtown streets such as in Mount Vernon. The rehabilitation of the 

Mount Vernon streetscape has brought a lot of new life, and residents and visitors alike can enjoy the renovated shops and the restaurants. And none of this would be possible without CDBG. 

CDBG funding is also vital to our small towns because it provides necessary resources to build sidewalks and pathways for residents to access local parks and recreation areas. 

Mayor Mason, by the way, sends his regrets that he could not be 

here with us today. 

President Bush’s fiscal year 2007 budget proposal raises some interesting and serious questions about what role community development should play in helping local and State government to provide safe and affordable housing to its constituents. In addition to 

recommending a new formula change for the Community Development Block Grant that focuses more on the neediest communities, 

the Administration recommended a funding level for fiscal year 

2007 that is 27 percent below last year’s enacted levels. And for 

those of you familiar with CDBG, it had a cut at the end of the 

day, last year. 

The proposal also last year, which was fought back in the House 

and the Senate, would have shifted CDBG into the Department of 

Commerce, which would have totally changed the rules, the regulations, there would probably have to be new rules and regs crafted. 

It would have changed—I think in the opinion of most Members of 

Congress, would have changed the total thrust of the CDBG program into something that would not be good and would not help 

with the quality of life. 

So our goal, or my goal, as chairman of the Housing Subcommittee is to make certain that the Department of Housing and 

Urban Development remains focused on housing and community 

development and that it has the tools necessary to continue to provide safe, decent, economically viable communities for our citizens. 

With such a significant decrease in CDBG funding levels, I question whether the Department will be able to continue these goals 

that have been set forth by the Congress. 

Last year, I was very vocal, again as I mentioned, in my opposition to the ill-fated proposal to move it to the Department of Commerce. And I think CDBG importantly is based on the concept that 

3

local communities and States can determine priority community 

development needs and then develop strategies and programs to 

address those needs. The program helps to create a web of programs designed to strengthen our communities and also to help 

with adequate funding. 

And with that, is there anything you would like to say? 

Mr. RILEY. No, thank you, sir, for having us today. Mr. Frank 

and Ms. Waters send their greetings. 

Chairman NEY. Thank you. And with that—usually the general 

rule of the House, because this is a hearing of the House, two 

things—in hearings in the House, no one in the House is commissioned to express yea or nays—not to use my name as a part of it—

not to express clapping or booing. It is just a rule of the House 

which would apply to the hearing today. And we have 5 minutes 

per panel, panel member and then 5 minutes of questions, and 

hopefully we will not take up all the time, so we would have a little 

bit more time, a little more relaxed about it. 

So, I want to thank you again, everyone, for being here today 

and we will begin with panel one. And we have the Honorable Daniel Dupps, Mayor, City of Heath, Ohio, who provides great service. 

I should put in a promotional plug here for Heath, Ohio; I live 

there, so that is why, it is a real good place, as all the communities 

are. And of course the Honorable Dave Hall, Holmes County Commissioner. And the Honorable Allen Stockberger, President of Knox 

County Board of Commissioners. And we will begin with you, 

Mayor Dupps. 

STATEMENT OF THE HONORABLE DANIEL L. DUPPS, MAYOR, 

CITY OF HEATH, OHIO 

Mr. DUPPS. Thank you, Chairman Ney. I appreciate the opportunity to testify today and share some information with you and 

the panel. You have my written statement. I would like to read 

portions of that, but also go to the past Community Development 

Block Grants in Licking County. And they represent small communities, villages, and townships, as well as the City of Newark, City 

of Heath, Pataskala whose mayor is here today. And then also in 

the last two pages, which gives you an idea of the fiscal year 

projects and where they are located in Licking County. And also 

the final page is a little highway map so you can also see the major 

thoroughfares. 

But in terms of the City of Heath, Heath is considered an acquired city under Licking County Small Cities Community Development Block Grant program. As an acquired city, we automatically receive roughly $47,000 per year in CDBG funds for infrastructure improvements. Since the City of Heath started receiving 

these funds in 1985, we have been very fortunate to receive 

$657,000; of that, $538,000 was expended. With the $538,000 we 

were able to leverage an additional $43,000 from other sources to 

upgrade our low-moderate neighborhoods with tornado sirens, fire 

hydrants, curbs, sidewalks, and street improvements. Without 

these funds we would not have been able to do many of these 

projects, much less leverage for bigger projects. 

It goes without saying, if there is a reduction in funds, every 

county, city, and village in the United States including the City of 

4

Heath will lose a valuable and much needed funding source. And 

I am glad, Congressman, you pointed out Los Angles and other cities; this is a nationwide issue. Also if the funds are reduced, then 

across the board, everyone’s funds will be reduced. Less funds 

equals fewer projects, and less projects means more deterioration, 

in our particular case. 

One final point: Heath has been able to attract numerous businesses to our community in the past 20 years, thereby providing 

thousands of jobs for our citizens, as well as bringing in other residents. I believe, when a business considers moving into an area, 

one of the questions posed would be, is this a progressive community or is this a community in decline? If the community is declining, the businesses will go elsewhere. 

Bottom line for us: I think I can speak for all in Licking County 

as well, the Community Development Block Grant program helps 

us grow. To reduce or eliminate it will only cause our communities 

to deteriorate further and that is not what our citizens want or 

need. It is not good for us, nor is it good for Ohio. 

If I could just go to the following pages, the communities are 

Buckeye Lake, a very struggling community and a new village in 

our county. You can see a township, Eaton Township. And you can 

see some of the projects that we have, if you turn to the third page, 

Heath is listed there. And you can see from 1985 up to 2004 or 

2005 some of the projects that we have done, plus all the other 

communities. Hebron is here as well today. But they range from 

curb cuts to handicapped playgrounds, to fire hydrants, to tornado 

sirens, to park furniture, to playground services. These are projects 

that have made Heath—Heath is a community of 8,500 people; it 

was incorporated in 1965—appealing to people. 

If I can note a couple of very important ones in terms of Licking 

County. And I do not speak for these communities, this is on page 

two, again the second page. But you will see the Hartford Wastewater Treatment Plant and Collection System. Hartford is where 

we have our county fair. Again, a small village, but without these 

funds, the small village of Hartford would not be able to have a 

wastewater treatment program. 

That is true of another small community in Licking County, Hanover. I think this particular list really emphasizes the broad range 

of projects in our communities. It is substantial and it is very, very 

important. 

Finally, the last two figures, the last two sheets show you the 

color coded years of the projects. The kinds of communities that we 

are using these block grants for, and then finally their locations. 

You can read the material, I cannot emphasize more on how important they are. They are more than the icing on the cake. They are 

the difference between a deteriorating community and a progressive community. 

I thank you very much for your time, sir. 

[The prepared statement of Mayor Dupps can be found on page 

85 of the appendix.] 

Chairman NEY. Thank you. 

Commissioner Hall. 

5

STATEMENT OF THE HONORABLE DAVID HALL, HOLMES 

COUNTY COMMISSIONER 

Mr. HALL. Thank you, Mr. Chairman. I appreciate the opportunity to testify in front of this group. I am the president of Holmes 

County Commissioners, and also president of Ohio Mid Eastern 

Government Association. But I will be speaking on behalf of the 

Holmes County Commissioners and my county. 

I would like to start my testimony by saying our Commissioners 

are in strong support of the CDBG program. These local programs 

have been vital for local project development in Holmes County. 

Through the past 24 years, Holmes County has had a partnership 

with our villages, township, fire departments, senior centers, and 

county transportation projects. 

Holmes County has a population of approximately 43,000. We 

are a very rural county. We have six villages with the largest village having a population of less than 5,000 people. We have 10 unincorporated villages. These villages are under local township rule. 

With a 24-year history of Holmes County CDBG projects, I have 

Exhibit A, which starts on my third page, and is the history of 

Holmes County CDBG project program from fiscal year 1982 to fiscal year 2005. 

Holmes County, over those years, has received over $3,670,781 in 

total formula funds, of which $3,266,900 was used for local projects. 

On page two, you will see the breakdown of the projects. Starting 

on page 4, and ending on page 10, you will see projects from 1982 

to 2005. In the left column is the total project cost. In the right column you will see the CDBG funds that were used in the project. 

So, you will see that there was local funds in some of these projects 

committed by local entities. 

As you see in many of these projects, there are local jurisdictions 

and different jurisdictions. We use these CDBG funds for sidewalk 

projects in our township villages, in our little villages. We have 

used it for sewer projects, water projects, and vans for seniors and 

low-income residents on our transportation side. Street improvements, EMS equipment, defibrillators, and other minor equipment 

that they could not find and could not fund. 

Early warning sirens have been vital in our county. We were 

able to do a project on that level, but we still are not finished. 

Park improvement projects, water studies, money to the senior 

centers for improvement, county home, sewer plan, storm drains, 

and projects for the village hall, local village hall, these funds are 

small in size but they are important to locals in Holmes County. 

Each year we receive over $1 million worth of requests in project 

funding. Unfortunately we had $200,000 last year to work with. 

CDBG funds are very important in my county in the State of 

Ohio and if asked, I would say level funding is not enough. We cannot afford to take any decreases. Just as added—the last two pages 

of my testimony here, I added, I just received a letter from the 

Ohio Department of Development; it states that Holmes County 

will receive a cut. I received that letter yesterday. Receiving a 10 

percent cut, so now we will be receiving $179,000. So we are going 

backwards. Actually, we need CDBG funding to be increased for 

the future of Ohio and our communities. 

6

We know our community, and this program has helped Commissioners to help locals to help themselves. We are starting our 

CDBG projects for 2006 and I have been out to villages with my 

fellow Commissioners, and townships, and I have to say we have 

already looked over $500,000 worth of requests just now and we 

have not even started our hearing process. 

On page 11, you will see my breakdown on the Community Housing Improvement Program. This program helps consumers to buy 

homes and it also helps in improvements and repairs. 

I would like to thank you for your time. 

Just to add a few things. We also, on the economic development 

level, our largest business in Holmes County is looking for the 

CDBG program to help to do some sewer and water projects. As 

you will see Wayne-Dalton, which is Wayne Door, a nationally 

known company, we were able to get them in the process of adding 

on and building on, with the editors on my back project list we 

have added Merillat Corp, the park projects and a few others to the 

CDBG funding. 

Finally, this program is vital, but not complete—its mission is 

not complete. 

I thank you. 

[The prepared statement of Mr. Hall can be found on page 101 

of the appendix.] 

Chairman NEY. Thank you, Commissioner. 

Commissioner Stockberger. 

STATEMENT OF THE HONORABLE ALLEN STOCKBERGER, 

PRESIDENT, KNOX COUNTY BOARD OF COMMISSIONERS 

Mr. STOCKBERGER. First of all, I would like to address the Formula Community Development Block Grants. I also received the 

notice yesterday of the cut. Knox County’s amount is a little bit 

less than Holmes County and I think as I understand the program, 

that’s because we have a city over 5,000, so they get additional 

monies that the county does not receive. But nevertheless, it does 

reflect a 10 percent cut. 

We in Knox County, Ohio, have appreciated the flexibility of the 

formula program. We have used these dollars to bring buildings 

into American Disabilities Act compliance. Without these funds 

being available some of the political subdivisions would not have 

been able to complete these much needed and mandated improvements. And we have looked on CDBG as a funding source to comply with the ADA mandates. And granted at this point in time we 

are approaching compliance with ADA, but we still have some improvements needed. 

We have also used these dollars to complete projects such as 

parks and improvements, sidewalks, stormwater drainage, our 

local domestic abuse shelter known as New Directions, and our 

local substance abuse facility known as the Freedom Center. All 

these community improvements are benefitting the low-moderate 

income members of our community. 

The next area of testimony I wish to speak to is the communities—the county’s Community Housing Improvement Project. My 

favorite component of the CHIP program is the same as the President’s. To expand home ownership and opportunity, although I 

7

might add even though that may be my favorite, it has been underutilized in Knox County. We have not been able to get the participation in the home ownership programs that we would like. I am 

not completely sure why that is. But we have had great participation in the rental assistance program component of the CHIP program and we are not quite as supportive of that, because philosophically we believe that it is like giving the people a fish every 

day to sustain them, rather than teaching them how to fish. And 

we believe the other home ownership program is more of a teaching 

how to fish example. 

Now, another area of that that has worked well for us, the home 

ownership concept, is that we have had several Habitat for Humanity projects. And we really embrace those here in Knox County and 

we believe it is an excellent opportunity for people to become homeowners. 

We have also utilized the CHIP monies to do some water and 

sewer projects in under-served—unserved low-income communities. 

In conclusion, Knox County has appreciated the CDBG programs. 

We recognize the need to be fiscally responsible. We would suggest 

that if budget cuts must be made, we request that you please save 

the flexibility of the programs and the brick and mortar components of the various CDBG programs. 

I appreciate this opportunity you have granted Knox County in 

testifying at this hearing. Thank you. 

[The prepared statement of Mr. Stockberger can be found on 

page 122 of the appendix.] 

Chairman NEY. Thank you. 

If anybody would like to answer this, all three or one of you. 

What about—I think you kind of made this statement at the end 

of your testimony. Any attempts to target these funds more stringently? In other words, into certain categories where you could 

fund only certain items. In other words, more stringent attachment 

to the funds. Do you have an opinion on that, if that were to happen? 

Mr. STOCKBERGER. Yes, I do have an opinion on that. In Knox 

County, our Board of Commissioners would support more flexibility 

rather than less—if I understood your question correctly. I think 

more stringent would mean less flexibility. Now, I understand that 

to use our local State Representative’s terminology, ‘‘the sheckles 

come with shackles.’’ And I understand the reason for that, obviously the Federal Government is not going to just spray money out 

here in the local communities, and we appreciate that. You have 

to be responsible for the tax dollars, as we do. But we certainly 

would appreciate whatever flexibility we can be afforded. Because 

there are times when certain components might fit one community 

very well, but they may not work as well in our community. So, if 

we had that flexibility, then it gives us the opportunity to match 

the needs of our communities better. 

Chairman NEY. Thank you. Anyone else? 

Mr. HALL. I agree with my fellow Commissioner to my left. I 

agree that flexibility as a county commissioner is vital. Each community is different. I look at my community where I have—on the 

eastern part of the county I have an Amish development, the 

8

Amish settlement. On the western, it is a lot more of the Appalachia areas. So flexibility in my county is vital. 

Mr. DUPPS. I would agree as well. That’s why I tried to list so 

many projects in our county. They are quite diverse and they are 

different in many ways, but yet they are the same. They tend to 

be basic infrastructure needs, if you really look at the list. And I 

would be surprised if you would see many grants throughout the 

country misused. Most of them tend to be the guts and meat of infrastructure needs in small towns and large communities as well. 

Chairman NEY. I should also mention Representative Collier. I 

do not know if he is here—in the hall—Representative Collier, the 

local representative is here and has been so helpful to us and helpful with also arranging this, so I wanted to give him credit, with 

the shackles or without the shackles. 

I raised this question—I wanted to let you know—why about 

stringent, and I hear this from Washington. I will have people that 

will come up to me and they will say well, they are using this 

money for fire trucks. Yes, okay, and what’s the next question? But 

some people would say it is supposed to be more of complete housing or it is supposed to be this or that. But I do try to explain a 

lot and that’s why I think this is good for the record, to a lot of 

people, that it is a quality of life issue here too in the communities. 

But also you have a lot of community and if they do not have a 

certain piece of safety equipment and that volunteer fire organization goes away, people will not be in that area, because they would 

not have necessarily a paid service that will come into it. So, I 

think the quality of life does tie into jobs, in my opinion. So, I have 

tried to stress that, because people say well, maybe we should not 

allow it to use for fire equipment. Or maybe we should not allow 

it to be used for certain things that maybe does not make sense to 

them but might make sense to a community. I think your testimony has provided that. 

Would anyone like to comment on—I know Commissioner Hall 

mentioned about the cut. What explanation has been given to you 

regarding the cut? You said you got a letter from the State, but 

have you had any explanation on it? 

Mr. HALL. We were told in the letter addressed to the Board of 

County Commissioners, March 23, 2006, that, ‘‘Dear Commissioner 

Hall, In fiscal year 2006, the Office of Housing and Community 

Partnership expects to distribute approximately $21.9 million of 

Ohio Small Cities Community Development Block Grant Program 

funds to eligible communities through the Community Development Program, which includes the formula allocation...’’, basically 

in the level that there was a—‘‘Due to a 10.2 percent reduction in 

the Community Block Grant Program at the Federal level, the fiscal year 2006 Community Development Program allocations were 

reduced by 10 percent.’’ So we are saying that the level of cuts have 

now bled down and been passed on to the locals. 

Chairman NEY. I wanted to clarify, because that is the 10 percent I talked about last year. These people are saying well, CDBG 

in the President’s proposal is going to be cut 25 percent and then 

the goal might be, well, let us get it down to a 15 percent cut. Now, 

if you take 15 percent and 10 percent last year, it is still 25 percent. If the current cut is in existence, it is 35 over a 2-year period, 

9

so we always like to tell people, the goal is—in my opinion and 

some people will disagree, some people will support the cut, but the 

goal is to get it back to 25 percent, because we are already at 10 

percent from the previous time. And I think that directly reflects 

how the dollars change down to an area. 

Would anybody like to comment on how CDBG funds have leveraged private sector funds for a community? 

Mr. DUPPS. On my list here, you will notice that there are a 

number of categories. There is the grant request. There is the actual expenditures, there is other and there is the total, and the 

total entity. And the other is the numbers of dollars that have been 

leveraged by various communities. So, you can take a look at each 

bottom line in terms of Licking County or Utica or other small 

areas in our county, what has been leveraged. In our particular 

case, we have an opportunity, if we do a bike path or if we do a 

park or something like that, we can go to a foundation. If we—we 

do have a grant writer and we try to match as many of our other 

grants with private sector grants. And that is across the board, 

whether it is a Licking County foundation or State foundation, actually the State capital—Capital Improvements Fund is another 

area that we go to. 

One of the things that we did was we saved our oldest home in 

our community, an 1860 home designed by Andrew Jackson Downing, one of the gentleman who laid out some of the areas of Washington, D.C.; it was important to us. But we were able to leverage 

some money from this particular fund and then with the State 

Community Capital Improvement Fund. 

So it is important and that is why the list is there. It shows you 

the amount of money that is leveraged elsewhere. And without that 

I do not know how we would do that. Because we have to have, you 

know, a certain amount of funding anyway in terms of going out 

for grants. We have to show that we are contributing. We contribute our own financial monies from the cities. We get this particular grant and then we go out and leverage it elsewhere. We 

have been very, very fortunate in Heath to do that. And you can 

see other communities in Licking County have done the same 

thing. 

Mr. HALL. On our last 2 years, just looking at 2004 and 2005, 

we have leveraged dollars from other State programs. If you look 

at our transportation, we were able to receive $93,600 through the 

State ODOT program. And in 2005, we were able to, in our program, the Ohio Public Works Program, on a road—I mean, on a 

water and sewer project, we were able to use the old Issue Two 

program, which will now be the Issue One program. So we have not 

received anything from the private, but we have from the other 

public entities, we have received matching dollars. 

Mr. STOCKBERGER. I believe that we have also, however, I do not 

have the data with me. 

Chairman NEY. The final question that I have is on the 15 percent public service cap, the limitation is 15 percent. Does anybody 

think that should be raised? Or has that been an issue? Where you 

could use it for health care sector, there is a cap of 15 percent. 

Maybe you have not dealt with that, okay. 

Mr. STOCKBERGER. No, we have not done that. 

10

Chairman NEY. I wanted to make a comment because you said 

some interesting things about local flexibility and about the funds 

and the process. And I imagine the State process is pretty old hat 

for you. It has been around awhile, I assume. You know people talk 

these days, you hear it across the county about earmarks and we 

have to do away with earmarks. In a way, the monies come down 

and then you make decisions and, you know, different levels of government and people from communities work with their local officials. You are taking the money down and it is more of a local flavor to that decision. It can be a controversial decision or not, but 

it is more local flavor. This whole type of earmarks in Washington 

and let us do away with earmarks, I have no problem putting our 

name on the earmarks. We earmarked a cancer hospital addition 

here in Knox County, a road project, $52 million worth, so I have 

no problem putting the names on them. You can electronically surf 

any of these bills and see whose names are in there. But this whole 

phase to not to do earmarks to return taxpayers dollars means, at 

the end of the day, the reverse of CDBG in a sense. It will be a 

decision made in Washington. So you are going to have the bureaucracy of Washington, D.C., saying hmm, I think maybe Holmes 

County needs this. Or I think Knox County or Heath, Ohio, needs 

these improvements, I do not think it is going to happen. So, in my 

opinion, the earmark is a way where you hear local opinions from 

local mayors and township trustees, commissioners, State reps, and 

citizens, you know, everywhere. And then that money comes back 

down through. So I just wanted to say as you read this earmark 

fever, let us do away with them, in a way, it is taking away the 

local people’s desires to have certain things in their communities. 

Which I think block grants, I know you solicit opinions, I know you 

have tough decisions too, on how do you chose. 

Mr. DUPPS. I would like to comment on it, because we talk about 

that often in our deliberation with the council and, as you know, 

we have been the recipients of money because of your efforts on 

State Route 79. And people have asked me about that. And without—when you have a State route through your community whether it be a State route like 79 through my community or a State 

route like 16 or 161 through Pataskala, once you have that, that 

road is our responsibility to maintain, that’s everyday, you plow it, 

you patch it, you widen it, you do it all. Unless you have the urban 

repaving, and urban repaving comes along every 10, 20 years or so. 

So you are maintaining that. The widening is almost impossible for 

a small municipality in some of these. So you do need this help. 

When we widened State route 79, we were dealing with literally 

the Erie Canal, if you are familiar with our community. So we had 

some real structural issues to deal with. We couldn’t have done 

that without that help. So, again, one of the things that I would 

say is if people in the United States complain about earmarking, 

then they have a right to vote. And they—the system is that way. 

They change or, you know, support, whatever they do. But the facts 

are, most communities cannot deal with all the new infrastructure 

problems and maintenance issues without the help of ODOT, without the help of the State government, without the help of the Federal Government. 

11

When you talk about the wastewater treatment plants—you 

know, I am talking about very small communities, Hanover and 

Hartford, dealing with millions of dollars of wastewater improvement needs. And it is very, very difficult without higher and higher 

rates to put into savings for 10 or 15 years for replacement funds 

when those facilities wear out, or when they need to be upgraded 

for a new environmental protection agency regulation, you must do 

that. 

So, again, in terms of earmarks, I kiddingly say—I heard this, 

but I kiddingly say to reporters, pork barrel backwards spells infrastructure in my community. The reason I say that is we cannot 

handle all of the needs and the necessities of running these major 

water treatment plants, these major wastewater plants and also 

maintain these highways. 

Most communities are struggling without—our neighbor Newark 

is struggling mightily with surface stormwater. They have a combined plant that has been—it is a real problem for them. They are 

going to have a real problem. 

So that is my response. You know, we have a system here in the 

United States and while I am satisfied with it, it is up to the citizens to vote for a particular candidate or not for a particular candidate. But without some earmarked funds, I think we would have 

a real struggle. And I also trust local officials and I trust other officials to do the right thing. Most of the time they do the right thing 

for our citizens. So, I thank you that, Congressman. 

Chairman NEY. I just wanted to raise that issue. I think again, 

you should have to put your name on the appropriation, no problem, make it public. Here is your name, here is who asked for the 

money, all through the bills versus being silent on it. I think that 

is the way to handle it and then, you know, this is the person that 

did that appropriation and then they have to justify, you know, 

what they did and who they appropriated on behalf of. So, I think 

that’s probably the solution versus the generic let us do away with 

them. So, I just thought I would raise that. 

I want to thank you for your testimony today. And we are going 

to move on to panel two. But I want to thank you so much, because 

this does allow us and like I said we have staff on both sides of 

the aisle here. It allows us to go back and take this testimony for 

the record. And I think it will have an impact and I hope it does 

and the letters coming from across the country on important issues. 

So, I want to thank panel one and move on to panel two. 

And then as we begin to move on to panel two, we move on now. 

If you want to start around the room, if you are an elected official 

and you would like to introduce yourself and if you have statements for the record and you are not on a panel, we will take the 

statements for the record. If you are a citizen and you want to introduce yourself. I just thought we would start, how about we start 

here. 

Mr. BOOTH. John Booth, president of the city council. I want to 

go on record in support of CDBG, and the council recently passed 

a resolution and it has been sent to your office and to other Representatives in support of all that. The Mayor’s report, and Amy 

Schocken is here today in support of their reports today. 

12

Chairman NEY. Anybody else? Go ahead down the row. If you do 

not want to, that is fine. Now, the panel can come forward, if you 

want to do that. 

Mr. Calhoun, Mr. Crow, Mr. Glass, Mr. Graves, and Ms. 

Schocken. 

Anybody else in the room would like—yes, sir. 

Audience PARTICIPANT. Mayor of the City of Pataskala. We 

looked at the numbers in the last 24 hours and saw that 10 percent 

cut as well. And I would like to make this a public record statement that we are particularly a city that would be taken out of the 

local share under that formula with a 25 percent cut. That is a 

great example of residents in our community that would receive no 

services with local decision making in order to solve a problem. 

And we are right in the midst of an example, a water project in 

a low-income housing area. The last 3- or 4-year plan was through 

CDBG funds, so I would ask for any support we can get in order 

to keep the funding where it is at. 

Chairman NEY. The Mayor of Delaware, I know, has a statement. 

Audience PARTICIPANT. I’m not the mayor, I am the city manager. 

Chairman NEY. I am sorry. 

Audience PARTICIPANT. We support the CDBG program as well. 

We have a written statement that we would like to submit. 

Chairman NEY. For the record. Anyone who has written statements you would like to submit for the record, we will be glad to 

take those. Any other officials would like—please identify yourself, 

if you are an elected official. 

Mr. WISE. Bob Wise, Knox County Commissioner, I just want to 

go on record that we wholeheartedly support everything that Allen 

presented here today. He did a fine job. Thank you. 

Mr. PFEIFER. Gary Pfeifer, Holmes County Commissioner. I just 

wanted to go on the record to say that, again, I support my fellow 

Commissioner Dave Hall and his statement and the local governments know what local government needs and we need to have to 

that access available to assess that a whole lot better than what 

Washington does. 

Chairman NEY. And if there is no one else. Anybody else who has 

a statement for the record, we will be glad to take it. 

We will have panel two and we have Mr. David Calhoun, the director of the Department of Community Development, City of Newark. And Mr. Patrick Crow, Community Housing Improvement Program CHIP inspector, Knox County in Mount Vernon. Mr. David 

Glass, safety service director, City of Mount Vernon. Mr. Graves, 

William Graves, housing administrator, City of Columbus. And Ms. 

Amy Schocken, partner, CDC of Ohio, Inc. Thank you. And we will 

begin with Mr. Graves. 

Actually, we will begin with Mr. Calhoun. I need to introduce 

Cindy Chetti. Cindy is also one of the fine staff people at Financial 

Services and as you can see runs the three of us in Washington, 

D.C. Cindy has done a great service all this time out there. Mr. 

Calhoun. 

13

STATEMENT OF DAVID CALHOUN, DIRECTOR, DEPARTMENT 

OF COMMUNITY DEVELOPMENT, CITY OF NEWARK, OHIO 

Mr. CALHOUN. Good morning, Mr. Chairman and the members of 

the committee. I’m the director of the Newark Community Development Department. On behalf of Mayor Bruce Bain, I appreciate the 

opportunity to address the importance of CDBG and the potential 

impact that cuts will have on Newark, Ohio. 

Our community is a community of 46,000 people. It is the county 

seat of Licking County. 

Newark is a community comprised of 51 percent low and moderate income people. HUD categorizes us as an entitlement community. Our Five-Year Consolidated Plan guides our use of CDBG 

funds and reflects the high priority needs of our community. And 

those needs were the result of an intensive comprehensive assessment involving many facets of the community. 

Clearly, the cornerstone of the CDBG program is that it is based 

on the needs assessments conducted at the local level. This is vital 

in developing and implementing a strategic plan. We, at the local 

level, can best assess the challenges facing our citizens and service 

providers. Too many Federal and State programs have homogenized mandates that force square pegs into round holes to access 

funding. That has never been the case with CDBG and that characteristic is key to its effectiveness and value. Washington does not 

know the specific needs of Newark, Ohio. The flexibility inherent 

in the makeup of CDBG allows us to make the most effective use 

of Federal dollars. 

In Newark, over half our housing stock was built prior to World 

War II. For many years, the focus has been on preserving existing 

housing stock, assisting development of affordable housing, and 

preventing homelessness. Over 70 percent of our housing was built 

prior to 1978, therefore we are implementing lead hazard removal 

programs so that we can save our older housing and prevent disabilities in children who are unknowingly at risk due to lead based 

paint. 

Perhaps one of the most understated aspects of CDBG is the collaboration that it encourages. We work with numerous social service agencies and non-profits in order to maximize resources that 

help people with a variety of needs. Without it, many people will 

suffer and so will our community’s overall ability to address major 

issues in housing, economic development, and the prevention of 

slum and blight. 

Local governments, private non-profit entities, and social service 

agencies cannot absorb these cuts. The City of Newark has just 

gone through a layoff of city employees, that has included basic 

services such as police and fire. There is just no chance that our 

local budget will be able to absorb cuts in the CDBG program. 

Removing setasides, such as Brownfields Economic Redevelopment Initiative, Rural Housing, and Section 108 loans, and pushing 

them into the CDBG program will have the same effect. A forced 

combination as recommended by the President’s plan essentially 

forces the elimination of these programs. 

In addition, the Administration’s push for home ownership does 

not necessarily meet the need of every community. Home ownership is not the best option for everyone. Frequently, low-income inVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
14

dividuals and the elderly do not have adequate resources to maintain their homes. Blindly leading them down a path of home ownership can set them up for failure and exacerbate our property 

maintenance problems. 

An even larger problem is the increased rate of mortgage foreclosures and predatory lending practices. Ohio has a terrible rate 

of defaults. In Licking County, the number of foreclosure filings increased by 549 percent between 1994 and 2004. That problem 

needs to be addressed instead of using CDBG bonus funding to increase home ownership opportunities. Sustainability of home ownership is far more important in Newark than inflating the numbers 

of new home buyers. 

Again, Newark, not Washington or Columbus, develops our comprehensive multi-year plan. The strategy to identify local needs, 

prioritize them, and implement programs to achieve measured objectives and results is an important part of the CDBG system. 

I would like to just mention a few of the important programs 

that Newark will—that will suffer in Newark if we incur the cuts. 

There is nothing to fill the gap for home rehabilitation for low and 

moderate income people if these funds are reduced. We help persons stay in their homes through our deferred loan—low interest 

loan program. Newark CDBG has helped the elderly and persons 

with disabilities to live in sanitary and safe housing. We just completed an emergency home repair for a blind couple, including roofing and electrical repairs. As a result of those repairs, they can 

maintain their independence and live in a safe environment. Without our intervention, this home would have deteriorated and eventually become uninhabitable. 

Last year the city established a partnership with Mound Builders Guidance Center to develop a job tryout program for persons 

with disabilities. This alliance resulted in 18 people with disabilities gaining permanent employment. Without CDBG, the community would not have had the resources to implement such a creative endeavor. 

Public services also play a key role in our CDBG program. For 

example, we have leveraged funding of CDBG with Issue Two dollars from the State of Ohio for several sanitary sewer projects. Approximately 450 homes now have sanitary sewer services that 

could not have been accomplished without this funding. 

The ability to leverage funding cannot be overstated. Every dollar invested in CDBG has a multiple rate of return. Our local 

homeless prevention agency has obtained multi-million dollar 

grants because the City of Newark has provided CDBG dollars as 

local match. 

CDBG has already incurred significant cuts over the past 3 

years. The impact of those cuts have had—inflicts long term damage to communities nationwide. An additional cut as mentioned of 

about 27 percent would be devastating for Newark. 

CDBG has a 30-year history of reaching out and delivering services to millions. CDBG has helped Newark assist members of the 

community who would have fallen through the cracks. CDBG is not 

a handout, it is a helping hand and I hope Congress and the Administration will not slap that hand, but continue to extend it to 

the people of Newark. 

15

Thank you for the opportunity. 

[The prepared statement of Mr. Calhoun can be found on page 

76 of the appendix.] 

Chairman NEY. Thank you. Thank you, Mr. Calhoun. Mr. Crow. 

STATEMENT OF PATRICK L. CROW, INSPECTOR, COMMUNITY 

HOUSING IMPROVEMENT PROGRAM, CITY OF MOUNT 

VERNON AND KNOX COUNTY 

Mr. CROW. Good morning, Mr. Chairman, and members of the 

committee. I thank you for the opportunity to testify this morning. 

My name is Pat Crow. I reside in Danville, Ohio, a small community of approximately 1,000 people, where I served as mayor for 12 

years. I have been working in Knox County area community service 

and development positions for 20 years. My wife Sandy and I operate a family business. We are self-employed. The name of the company is Downtown Options and we provide management services 

on projects such as the Woodward Opera House, the Downtown Revitalization of Mount Vernon, and many local CHIP funded 

projects. 

I am currently the housing inspector for the local Community 

Housing Improvement Program, also known as CHIP. And this is 

a Community Development Block Grant funded program. 

In my spare time, I am the executive director of the Convention 

and Visitors Bureau for Knox County, a part-time job. 

I would like to quickly summarize the areas for which I have had 

personal experience and the resulting impact of the history of the 

CDBG dollars spent in Knox County. 

In downtown Mount Vernon, three major CDBG revitalization 

projects were implemented and completed including parking improvements, streetscape improvements, and over 60 downtown 

building rehab projects. In addition, many other projects were stimulated not using funds from CDBG, but I believe the result of, including our conference center and hotel that we currently have in 

our downtown. 

The overall work utilized approximately $1 million in CDBG 

funds. This investment stimulated directly over $4 million in other 

public and private development dollars being spent. These efforts 

have also resulted in recent heavy investments by local developers 

committed to the long haul type efforts needed to assure the continued economic growth of the downtown well into the 21st Century. 

The initiative that started the Woodward Opera House restoration had its beginnings within a community development block 

grant. Once the Woodward restoration is complete, it is projected 

that the programming and retail expansion will stimulate over an 

additional $1 million annually in increased economic benefit to the 

community. 

As I served as the Mayor of Danville, I recognized that there are 

literally millions of dollars that have been invested over the years 

in the aging and decaying infrastructure throughout Knox County. 

More specifically, I have recently been the inspector and construction coordinator on over 60 individual CHIP projects in Knox County and in Mount Vernon. These programs are designed to assist 

needy property owners. Perhaps this defines the essence of the 

16

CDBG program. This has been a most humbling experience for me. 

I often see folks in circumstances that cry out for relief. Some examples, I found a hole in one roof so large you could stand by the 

client’s bed and see blue sky through the fallen down plaster ceiling and the gaping hole in the slate roof shingles. In several cases, 

we have found ourselves contracting to clean up lead-based paint 

contamination in homes where little children were potentially 

being poisoned by this harmful substance so plentiful in many old 

houses. We have, for just a few dollars, moved appliances to the 

upstairs of houses so that the elderly can continue to live at home 

and not be a burden to their family or to the government. We have 

replaced dangerous furnaces, leaking hot water heaters, and collapsing basement walls in homes with single mothers working full 

time to support their children. We have replaced and repaired 

countless roof leaks, fallen gutters, and installed toppers so the elderly would not have to climb ladders to remove the fallen leaves 

that plug the downspouts resulting in future severe home deterioration. 

We have helped young couples buy their first home and made 

certain that the current building standards are met to assure the 

longevity of their stay. We have helped the handicapped build 

ramps, constructed fire exits to assure the safety of children living 

in upstairs apartments, and repaired plumbing and replaced floors 

to eliminate the health hazards from dangerous sewage soup holes 

in deteriorated basements. 

We have replaced frayed electrical wiring and electrical boxes hot 

from overloads, to bring clients’ homes up to safe living conditions. 

We have covered, contained, and re-sided a home recently that was 

shedding lead based paint particles all over a neighborhood full of 

children playing nearby. We installed a new furnace to assure winter heat for a couple where the young wife was going through the 

excruciating experience of chemotherapy treatments for her cancer. 

I could go on, but if you want to know how important this CDBG 

program is, I would like for you to have a chance to go talk to these 

folks. Almost without exception, they are the most grateful group 

of Americans that I have ever known, thankful for these seemingly 

small and insignificant grants. I believe that we all have a responsibility to make a difference in these people’s lives, in these kids’ 

lives, in these grandmothers’ lives, in the lives of the sick, the ailing, and the frail. 

This important CDBG program has had a huge impact on those 

that are being served and it must continue. Mr. Chairman, members of this committee, please campaign for the continued support 

of the Community Development Block Grant Program at least at 

its currently funded levels. But more money is needed. 

In addition, please do not allow the dilution of this program 

through the inclusion of unrelated programs that have previously 

have been funded otherwise. 

I thank you for the opportunity to address you this day. Thank 

you. 

[The prepared statement of Mr. Crow can be found on page 80 

of the appendix.] 

Chairman NEY. Mr. Glass. 

17

STATEMENT OF DAVE GLASS, SAFETY-SERVICE DIRECTOR, 

CITY OF MOUNT VERNON, OHIO 

Mr. GLASS. Good morning. I am Dave Glass, Safety Service Director for the City of Mount Vernon. And I am going to read a prepared statement from the Mayor who could not be here this morning. 

Prior to that though, I would like to tell that I worked for the 

city for 27 years and been involved in these grants for that entire 

time, and they are extremely beneficial to all the residents of the 

community. 

We are pleased to give testimony to the Subcommittee on Housing and Community Opportunity at the field hearing held here in 

Mount Vernon, Ohio. 

We understand that the public hearing is entitled, ‘‘Strengthening Rural Ohio: A Review of the Community Block Grant Program.’’ The City of Mount Vernon has received many grants since 

the CDBG program was created in 1974. The city has identified 

specific target areas in the city that have low to moderate income 

neighborhoods. We have offered home rehabilitation projects, home 

repair projects, home buyer assistance programs, and rental rehab 

programs. Along with these private sector programs we have used 

CDBG funds combined with city funds for the improvement of sidewalks, curbs and gutters, storm drainage, and public handicapped 

restrooms all located in these target areas. The CDBG program is 

a prime example of how private-public partnership can improve low 

and moderate income segments of the community. Citizens of all 

ages who are in compliance with the income guidelines can fix up 

their homes and have input on the general improvement of their 

neighborhood. 

The City of Mount Vernon also participated in what Pat said before, the three downtown revitalization programs. Like most cities, 

both large and small, our central business district has been impacted by the strip malls being located on the perimeter of the cities. Mom and Pop businesses that we knew as we grew up disappeared because of their inability to compete with the large merchandisers. However, many of these small businesses were able to 

make the transition to meet the needs and demands of today’s consumers. The downtown revitalization program allowed both the 

landowner and the tenant to fix up their store fronts, the interior, 

and, in some cases, the roofs of the downtown buildings. This enabled the entire central business district to take on a new look. It 

has energized the downtown area. 

The private-public partnership was received with a great deal of 

enthusiasm in the central business district. In the last funded 

project, the City of Mount Vernon did a complete rehab of the 

streetscape, and new sidewalks, flowerbeds, street lighting, and 

storm drainage were all added to improve the downtown area. This 

would not have been possible without the Community Development 

Block Grant Program. 

We have also been the recipient of the CDBG Competitive 

Grants. In the north end of our city, we were able to go in and improve storm drainage, and put in sidewalks that allowed residents 

from several apartment complexes catering to low and moderate income residents to walk more safely from their apartments to the 

18

community swimming pool and playground and to the shopping 

areas. Prior to this construction project, the road they were located 

on was narrow and had a deep ditch making it necessary to jump 

into the ditch to avoid cars. The construction of the drainage and 

the new sidewalks and the crosswalks made it a much safer area 

for the children and adults to walk. 

We have recently been awarded another competitive grant that 

will be used in the west side of our city to improve streets and gutters, storm water drainage, and improve handicapped access to 

Riverside Park. All of these projects have had a positive impact on 

our city for over 30 years. As you can see, a 27 percent decrease 

in funding, which we believe is only the beginning of a plan, will 

have a negative impact on our ability to rehabilitate these low to 

moderate income neighborhoods. 

Over the years, I have talked with senior citizens living primarily on Social Security who were able to procure a new roof with 

the CDBG helping hand enabling them to live additional years in 

a safe, dry home. I have also talked to people who lived in substandard housing with faulty septic tanks, who were able to connect to the central sewage systems as part of the rehab program. 

I have talked to young and old people alike who lived in areas of 

the city that were built before storm sewers were the responsibility 

of the developers. After every rainstorm, the areas of their house, 

and driveways, and sidewalks if they had them, were all submerged for hours or even days until the water would evaporate. 

The storm sewers that we have been able to build with this program have dried out numerous areas of the community. 

In conclusion, I believe the continuation of a fully funded Community Development Block Grant Program is necessary to maintain small businesses, assist seniors to stay in their homes longer, 

assist young people who have limited income to rehab older homes, 

to improve property values, and make roadways and sidewalks 

safer in target neighborhoods. Also, the improvement of handicap 

accessibility in the public parks and restrooms have all been a very 

positive impact on the City of Mount Vernon and the surrounding 

area. 

[The prepared statement of Mr. Glass can be found on page 93 

of the appendix.] 

Chairman NEY. Thank you. 

Ms. Schocken. 

STATEMENT OF AMY W. SCHOCKEN, PARTNER, CDC OF OHIO, 

INC. 

Ms. SCHOCKEN. I am Amy Schocken, and I want to thank you 

very much for the opportunity to speak today. I am a partner in 

a community development consulting firm that assists rural communities throughout Ohio with their CDBG programs. And in the 

22 years that I have been in this business, I have seen an invaluable resource with the CDBG funds. 

And I have been very fortunate to work with Knox County and 

Mount Vernon for several years. And to expand a bit on the programs that we have done in Mount Vernon and Knox County, Dave 

was just talking about the Taylor, Wooster, McGibney Road project. 

And that was a wonderful collaboration between Knox County, 

19

Mount Vernon, and Clinton Township in identifying a great need 

of a neighborhood of over 730 people, of whom 93 percent were low 

to moderate income. There is a municipal swimming pool on one 

side of the neighborhood, an elementary school and ball parks on 

the other side. There were no sidewalks for the kids to get from 

one to the other, they had to walk either in the middle of the road 

with no room or on the berm of a State highway. And with the use 

of city, township, county, and CDBG funds as well as State Issue 

Two Funds, we were able to use $452,460 in CDBG funds which 

leveraged $357,920 in other funds to complete this project and now 

everyone has a safe place to walk. 

Another project was the rehabilitation of the New Directions Domestic Abuse Shelter. They house over 75 people a year and they 

benefit approximately 500 people annually with their services. This 

building was in great need of rehabilitation and the county used 

$31,000 of their CDBG funds to leverage over $41,000 in county 

general funds, local mental health funds, and also local United 

Way funds to rehabilitate this place so that there is a safe place 

for these people to go in Knox County. 

The City of Mount Vernon is currently undergoing major reha- bilitation in their west end neighborhood. A total of $670,000 in 

CDBG funds are leveraging $746,000 in other funds to make vast 

improvements to this neighborhood. The neighborhood contains 

2,747 people, of whom 63 percent are low to moderate income. Improvements underway include storm sewers, curb cuts, street paving, improvements to the neighborhood park, rehabilitation of an 

old train station into a community center, and home repairs for 14 

low to moderate income homeowners. Also, Habitat is building one 

new home. 

In addition, the village of Danville is undergoing a substantial 

improvement. This is a small rural village of about 1,100 people, 

of whom 58 percent are low to moderate income. In this village the 

county is utilizing over—almost $631,000 of CDBG funds to leverage $310,000 other funds to undertake 31 low to moderate income 

homeowner home repairs, Habitat is building two houses, storm 

sewers, fire protection and water line improvements. 

And this is just a very short list of what has happened in the 

last few years in Knox County and Mount Vernon. And much of 

what they accomplished is due to competitive programs that the 

State offers. Unfortunately, they only can fund about ten community distress grants a year, which are $300,000 grants to do Statecommunity revitalization projects. They also have a housing program that funds about 60 communities a year. And in order to undertake any of these programs, communities are required to do two 

planning studies. One is a community housing assessment, community housing improvement strategy which focuses on the housing 

needs of a community. And the other is a community assessment 

strategy that focuses on the infrastructure, public service, public 

facility needs. And those studies have to look at the community as 

a whole and target what areas of low income population have the 

most needs and put their money toward the most distressed areas. 

And the other way that—with the housing programs in Ohio, 

they also, the State of Ohio has small communities access housing 

funds, through what they call the CHIP Program, which you have 

20

heard. And that is a combination of CDBG Home Investment Partnership funds and Ohio Housing Trust funds. It enables communities to utilize the flexibility, and what all three of those programs 

have to offer in a comprehensive manner to address the individual 

needs of that community and it really builds on the flexibility that 

is needed. Each community, as you have heard, has completely different needs. Some may need a park improvement. Some may need 

economic development. Some have housing, almost all have housing needs. You can get sanitary sewer lines, where there is raw 

sewage running down the street. You can help a ball field. So, 

these are all greatly needed quality of life issues. 

In addition to the competitive programs, the State of Ohio funds 

the CDBG program through the Small Cities Program. And since 

2004, these funds have been cut over 14 percent. The proposed cuts 

will reduce it another 27 percent. The proposed formula changes 

would reduce the amount Ohio receives significantly more. In 2004, 

Ohio had 116 small cities that received a direct allocation of CDBG 

funds. In 2006, that number is down to 84. The proposed cuts 

would take that number down to 58; that is a 50 percent reduction 

in the number of small cities that would get direct allocation since 

2004. 

In Knox County and Mount Vernon, in 2004, they received direct allocations of $148,000, and $85,000, respectively. The proposed 

cuts would reduce these allocations to $95,000 and $54,000 which 

is a 36 percent decrease since 2004. These cuts would just be devastating to rural Ohio. These small communities have the smallest 

budgets, and the least opportunities to find other resources to fund 

the low income neighborhood community revitalization activities. 

And I seriously believe that any further cuts in this program would 

just basically eliminate any kind of targeted low income housing 

and low income revitalization in Ohio. 

And I think if you really want to see the benefits of the program, 

you just need to take a walk in downtown Mount Vernon and see 

the revitalization needs or walk on McGibney Road and see where 

these kids used to have to walk, or talk to any of the social service 

providers and—or any of the individual homeowners that we have 

assisted. It is just a remarkable program and a vital role in the 

community development. Thank you. 

[The prepared statement of Ms. Schocken can be found on page 

117 of the appendix.] 

Chairman NEY. Thank you. 

Mr. Graves. 

STATEMENT OF WILLIAM J. GRAVES, DEPUTY DIRECTOR OF 

DEVELOPMENT, CITY OF COLUMBUS 

Mr. GRAVES. Thank you, Mr. Chairman for the opportunity to 

testify today; it is most appreciated. I am here on behalf of Michael 

Coleman, Mayor of the City of Columbus. Unfortunately he could 

not attend today and he sends his regrets. 

My name is William Graves and I serve as the housing administrator for the City of Columbus. The City of Columbus is an entitlement community receiving Community Development Block Grant 

funds from HUD. I have worked with CDBG and other HUD funded programs since 1981. 

21

CDBG has a proven track record for helping local government to 

address specific needs and focus on community issues as identified 

in the communities consolidated plan process. Of critical importance is that the CDBG program enables communities to identify 

and target these Federal resources to needs that are most critical 

to the community. The broad range of eligible activities within the 

CDBG program and the flexible approach of HUD in allowing communities to target these dollars enables recipients to use this program to maximize assistance to low income families. As such, 

CDBG continues to be an essential asset to help communities fight 

blight, improve neighborhoods, and focus on activities that benefit 

low income individuals and pockets of poverty. 

The Administration’s current budget proposal will drastically reduce CDBG, and to give bonuses to communities that succeeded, 

would leave thousands of communities unable to address the basic 

needs of low and moderate income people. Essentially the Administration is proposing to strip $1 billion out of the program by proposing the lowest level of funding for CDBG since 1990. The proposed reduction in CDBG is further evidence of the Administration’s reverse Robin Hood approach to budget making. The CDBG 

program was already reduced by 15 percent over the past 3 years 

and the President’s budget proposal would further cut the program 

by another 25 percent. Again, further evidence of the President’s 

mission to reduce all funding for low income Americans. This reverse Robin Hood approach comes at a time when the needs of 

urban America is at a critical juncture requires increased funding 

not funding reductions. As such, I urge anyone interested in community development as a means to assist low income households 

and preserve neighborhoods to advocate for at least $4.5 billion in 

formula funding for CDBG in fiscal year 2007. The President’s 

budget calls for $2.7 billion for formula grants for cities and States. 

This is reduced from $3.7 billion in Federal fiscal year 2006. Certainly the City of Columbus, as does a broad coalition of community 

development advocates—and I attached that coalition to the written testimony—sees these cuts as evidence that the Administration 

is abandoning its commitment to America’s communities in the 

guise of reform. The coalition members also expressed concerns, as 

mentioned above, that the 25 percent reduction would pose serious 

threats to communities’ abilities to provide important services and 

economic recovery for low income citizens. 

For the City of Columbus, this continual erosion is extremely 

critical and is evidenced by the sharp reductions during the past 

several years. In 2003, the City received $8.7 million. In 2006, the 

allocation was only $6.6 million, a reduction of 24 percent during 

this period. Another interesting point is that the administrative 

oversight requirements for the CDBG and other HUD funded programs continues to go up while funding goes down. Such a situation not only creates frustration for grantees but also erodes the 

ability of recipients to undertake projects as more and more time 

is spent handling administrative and reporting requirements while 

funding for projects to benefit low income housing is reduced. 

The City of Columbus targets its block grant resources in order 

to focus investment and create impact. Certainly, given the small 

amount of CDBG dollars received this is the best method for an enVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
22

titlement recipient such as Columbus. Typically, the city selects six 

neighborhood pride areas each year and these locations serve as 

the target zones for housing rehab and other activities that benefit 

low income households. The city also selected 11 neighborhood commercial revitalization districts to focus block grant economic development activities. In addition, the city creates or uses a CDBG 

service area to determine, based on demographics and housing 

standards, which is then used to focus code enforcement and other 

initiatives to improve the quality of life for the residents. 

Outcomes for a portion of the housing related activities benefitting low income households, are as follows: 

In 2003, the city was able to assist 131 low income households 

through housing rehabilitation activities to provide decent, safe, 

and sanitary housing; 143 low income elderly households received 

minor home repair, preserving the housing quality and enabling 

those homeowners to remain in their homes; 28 disabled individuals were provided with accessibility modifications; 583 low income 

households received emergency repair assistance to correct substandard conditions protecting their health and safety, and again, 

allowing these low income citizens to remain in their houses. 

In 2004, 78 low income households received housing rehabilitation assistance; 172 low income elderly households received home 

repair; 12 disabled individuals were provided with accessibility 

modifications; and 553 low income homeowners received emergency 

repair assistance. Again, to correct unsafe, substandard conditions 

and protecting the health and safety of those individuals. 

In 2005, 55 low income households received housing rehabilitation; 247 low income elderly households received minor home repair assistance; we had 22 disabled individuals receiving home accessibility modifications and 53 deaf individuals received assistance 

to enable them to live independently; and 583 households received 

emergency repair assistance. 

As demonstrated above, these reductions in funding are impacting the city’s ability to provide housing rehab assistance. There are 

continually more and more households denied assistance due to a 

lack of CDBG dollars. Such a situation is extremely frustrating, 

creating a tenuous situation. As housing stock deteriorates, low income households must make dire choices on where to spend limited 

resources—fix the house, pay the medical bills, pay utility bills, or 

eat. 

The City of Columbus urges Congress to not reduce this much 

needed program and strongly requests that funding for Federal fiscal year 2007 for CDBG should be $4.5 billion. 

Thank you for the opportunity to testify, Mr. Chairman. 

[The prepared statement of Mr. Graves can be found on page 97 

of the appendix.] 

Chairman NEY. Thank you very much. 

Starting with Mr. Calhoun, I think you raised some interesting 

issues, today we have talked about CDBG in a lot of different ways, 

which is the way the program is supposed to work. You focused a 

lot on housing and, you know, there is an attempt to, of course, get 

as many people into housing as possible in the country. It used to 

be about 68 percent of Americans had a house, now it is about 72 

percent. The minority rate is still low. It is about 50 percent or 

23

less, which is unacceptable. So there is a lot of effort to help anyone with housing, but also to focus on helping minorities to be able 

to acquire housing. You raise a different picture too about the predatory lending, which is interesting. Senator Padgett has passed a 

bill and we have a bill—I have a bill with Paul Kanjorski and also 

we are proud to have a lot of significant and important members 

of the Black Caucus Democrats on that bill. So, I think it is a good 

beginning point. There is going to be another hearing or a markup 

coming up this week with Spencer Bachus on predatory lending. 

So, the goal is to have some standards across the country where 

they do not exist in a lot of States, but North Carolina seems to 

be something that everybody is looking at. So you bring in another 

aspect to it too of trying to stop flipping, to have counseling and 

the government can put money in programs, but you have got to 

have counseling and education on the issues so the people know to 

the best of their ability what they are signing. I just thought you 

brought an interesting component that, you know, people would 

think, well, here is CDBG and here is the funding. But there is 

other aspects the community has to watch. I just thought that 

was— 

Mr. CALHOUN. Well, we are in the process of putting together 

with our local housing coalition group a counseling program that 

ties the people that we serve into resources for mentoring and a financial literacy program. And I think it is important that we are 

able to use what we are doing in the housing rehab and tie that 

to some counseling services and CDBG allows the flexibility to 

bring those resources together. They received an AmeriCorp Grant 

to provide the financial literacy program, we can tie into that with 

the CDBG program. And we have families all the time in foreclosure and it is a major concern I think, statewide, to address the 

foreclosure rate and predatory lending practices. 

Chairman NEY. Are communities also active with brownfields 

elimination and do you have any thoughts on brownfields in the 

smaller community when we look at it? 

Mr. CALHOUN. We were very close to obtaining a brownfield 

grant. The project basically got stalled, but it is an important program and providing the redevelopment of that kind of area and 

bringing in jobs makes the rest of the efforts that we do worthwhile. It helps solve the problem. Jobs in the community are a 

basic function. If we cannot do that, then the housing problems, the 

other problems just multiply. So I think it is an important program 

to preserve. Putting it into CDBG just dissolves and dilutes the 

program. It does not provide the same benefit. 

Chairman NEY. There is an effort to change the CDBG formula, 

which now recognizes older housing stock. Do you have any views 

about the need to change that? 

Mr. CALHOUN. I think changing the formula needs to be done 

carefully and within the context of the current CDBG program. We 

should identify the most important needs and recognize differences 

in communities to do some targeting. But I would be very concerned about that formula penalizing smaller communities and putting all the money into the major metropolitan areas. If that formula—and we have seen that in some other cases where the number of problems outweighs the percentage of concentration of probVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
24

lems and we lose funding as a result of that. But I think equalization and a review of the funding formula may need to be done, 

but it needs to be done carefully. 

Chairman NEY. The other aspect you raise, again, you know, it 

is important to get people into homes, we have the American 

Dream down payment that we passed, overwhelming vote on that 

to help with up to $5,000. Something else the House has done and 

we worked with Congressman Barney Frank, Congresswoman 

Maxine Waters, Chairman Oxley who chairs the committee, and 

myself and others, passed—I am trying to remember what—we 

passed the Affordable Housing Fund and GSC reform, Fannie Mae 

and Freddie Mac had to have a reform and we put into their fund. 

And we took, I think it was up to 5 percent of Fannie Mae and 

Freddie Mac’s profit and put it into a fund that would help the 

poorest of the poor and some of that, there was also some amendments about some, you know, Katrina-related issues or if you had 

a catastrophic event. But the bottom line is we put that in there. 

And one of the reasons we did that is not everybody will have the 

availability to own a house. And so therefore, I think the housing 

fund that we created, which I hope the Senate will act on, we 

passed it in the House, is a wonderful thing to help, again, the 

poorest of the poor. Section 8 is something that we look at all the 

time, because our subcommittee is the authorizer for HUD so we 

oversee HUD and the language part of it. We always look at Section 8 and the housing authorities. 

I just think that you raised a good point, you know, with CDBG 

and what you can utilize. Then the other types of housing you utilized. And Habitat for Humanity was mentioned here earlier. It is 

not a one-size-fits-all for the community and the more we can recognize that you have to help people who have different needs is 

good. So folks—home ownership is an absolute must. But there are 

other ways that you help people with their living conditions that 

may not be able to own a home. This is, I think, an important 

thing for CDBG. 

Mr. CALHOUN. We have both programs in existence in our program, assisting our program. Assisting in home ownership and a 

down payment assistance program. But it needs to fit within the 

strategy that we are trying to implement. If you change the funding formula to provide bonus funding for that kind of thing, you 

may disrupt the balance of that strategy and overemphasize a need 

that may not fit in the community as well. 

Chairman NEY. Thank you. Mr. Crow, you mentioned when you 

were the Mayor of Danville, you witnessed firsthand the neediest 

residents, is there any other message that we should give Washington on their desire to change CDBG. Things that maybe they 

want to do, that you may not be happy with? Or are there other 

things maybe that should be done within the program? 

Mr. CROW. Well, I believe, and I cannot speak for the village, I 

am no longer the Mayor, but I am still a resident and familiar with 

what is going on. I would echo what we have heard from several 

here; the distress that is in the smaller communities is because of 

loss of business, because of the socio-economic changes that happen 

in America where business flees the little towns and moves to the 

larger communities. And the need to improve the sewer and water 

25

and keep them up to date with the changing EPA regulations that 

are Federal mandates is impossible without the CDBG funding. It 

is just—well, what we will see is communities like the village going 

into violations with the EPA because they do not have the money 

and funding. The answer sometimes we get from—no disrespect—

but from bureaucrats and the EPA is just raise your rates. Well, 

when water rates and sewer rates in the village of Danville climb 

to $100 to $200 a month for a family of three, we are reaching beyond the ability of these people to pay the bills. So, the termination 

of CDBG funding for those kinds of activities would be devastating 

to the communities like the village of Danville, both water, sewer, 

and infrastructure improvement projects. 

We need to be focusing not only on just infrastructure, we have 

heard a lot about that today, but you mentioned earmarks earlier, 

and I have a great concern about only focusing on helping people—

I think Commissioner Stockberger mentioned giving them fish 

versus teaching them how to fish. We need to focus on asset creation kind of investments and you have helped us with the Woodward Opera House project, a prime example of a community development project, which is not just a quality of life issue with respect 

to performing arts, but also an investment in the downtown district 

where there is a commercial element to it that would create jobs, 

it will keep jobs downtown, and spawn other development in the 

central business district. So, there are many aspects to CDBG that 

are really subtle and hidden that are benefits to the community. 

Chairman NEY. Thank you. You never offend me if you complain 

about overzealous bureaucrats. 

[Laughter] 

Chairman NEY. Mr. Glass, do you want to elaborate on the 

CDBG money, because you have mentioned a lot of different 

projects where it was utilized when you had a public-private partnership development as a result of the project. 

Mr. GLASS. Well, I mean I can just echo what we have done in 

Mount Vernon, for the last, like I said, I have worked here for 27 

years in the engineering department before I took this position. 

And I have been involved in these block grants the entire time. 

And we have just done tremendous amounts of beneficial things for 

the neighborhood, the storm sewers especially, when we put the 

storm sewers into different neighborhoods to resolve these water 

problems. I do not get involved in the day-to-day housing rehab, 

those kind of things. 

I would like to change my hat a little bit. I am on the village 

council in Fredericktown and I would echo the past sentiment. We 

have a $6 million sewer improvement coming up, a sewer plan improvement coming up there that there is just no way that we will 

ever be able to afford it. 

Chairman NEY. We have communities all over this district— 

Mr. GLASS. Oh, I understand. 

Chairman NEY. —been working with them for years and we will 

try to comply and EPA will come in and, you know, basically 

maybe sometimes obviously say drinking water would not meet a 

certain standard so then they are going to put the people to the 

point where they do not have water. So, there has to be a sound 

science and a balance there. Or in a community that is so impoverVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
26

ished where it simply is not going to be able to get the money, 

there has to be a way, you know, and we try to do that, work with 

communities to help out to alleviate the— 

Mr. GLASS. It is a very difficult situation, for the real small communities. 

Chairman NEY. Ms. Schocken, you mentioned about the low income, well, low and moderate income benefits of CDBG. Is there 

anything that you would like to elaborate on—on the low income? 

Ms. SCHOCKEN. Well, one of things that I know President Bush 

is pushing for is targeting of funds and maybe targeting to the lowest of income. And these programs, you know, most neighborhoods, 

if you target a neighborhood in Knox County, you are not going to 

find the whole neighborhood is 35 percent or less of county median 

income. There is going to be a mix there and as we talked about 

the McGibney Road project, that area is 93 percent low to moderate 

income. And there are a lot of apartment complexes that are Section 8 subsidized that are very low. But there are also homeowners 

in that area, too. And they are also more moderate but still in the 

low to moderate income range. And I think that if you get rid of 

the moderate income element of the CDBG beneficiaries, you are 

going to get away from the home ownership activities. Those are 

the people who can afford to purchase a home. 

You are going to get away from benefitting a village that overall 

is low income, yet it is not very, very low income. And so the vast 

majority of the needs in our State are in, you know, there are 

things that help the very low income like tenant rental assistance 

program, Habitat for Humanity, which tend to be within the CDBG 

umbrella but not directly CDBG funds, they’re part of, as I spoke 

earlier with the housing programs that we can fund with, Ohio 

Housing Trust Fund dollars and Home Investment Partnership 

Funds as well as CDBG. 

So I think that, you know it’s very important, with the flexibility 

and with actually meeting targeted needs to be able to keep the 

low to moderate income and not just focus on the very low income. 

Chairman NEY. That is a point—Clint had made some notes, we 

make notes to each other, there was a question that he wanted to 

ask, which I think is very pertinent, as the President wants to 

change this saying that CDBG funds or the White House is insinuating or saying that basically they are used for higher level or 

maybe not the lowest of the low and they want to change that. But 

in order to change that and I hear that you are already doing 

projects for the neediest. So that change may revert that money 

from 200 different cities as I understand it, when you are already 

trying to target the neediest. What you are saying is that is not 

necessarily a good move? 

Ms. SCHOCKEN. Right. 

Chairman NEY. It sounds good, when they take the money and 

move it to the neediest, but when there is already service being 

done to the neediest and that move will affect the general program. 

Ms. SCHOCKEN. Right, and what we talked—I mentioned that in 

Ohio, which I think is a little different than maybe some communities, they are really stressing that communities do planning. And 

they have to put together five-year comprehensive housing and infrastructure plans that do result in targeting the most distressed 

27

areas and the populations with the most needs. Be it housing for 

MRDD people or work with Habitat or doing a major sanitary 

sewer project in a village. So, you have to—they are requiring communities to really examine and target their funds to the most distressed areas. So, I think that is being done in Ohio already. 

Chairman NEY. Before we move on with the other question, I 

have, just for the record. Naomi Mattingly Compton, Alexandria 

Village Council has a statement for the record. Clifford Mason, 

Mayor of the Village of Hebron, who sends his regrets—he could 

not be here— has a statement for the record. Evelyn Moore 

Cummings, Marion County Regional Planning Commission, has a 

statement for the record. And Dale Harris, Director of the Ohio Regional Development Corporation has a statement for the record. So, 

without objection, the statements will be entered into the record. 

And also, I wanted to note that the written statements of all of 

the second panel and the first panel, will be made part of the 

record. And also that the record will be left open, without objection, 

for people to ask additional questions of you, or additional material 

be entered by Members of Congress who are not here today. Without objection, we will leave the record open. Just a piece of business. 

Mr. Graves, in your previous position you were involved and director of the State CDBG program and now that you are out of that 

position, do you have any reflections about the Small Cities Program? 

Mr. GRAVES. Mr. Chairman, regarding that program, the one 

thing the State does is use the money extremely wisely and I think 

Ms. Schocken talked about that, the reduction in the direct assistance provided. The formula program and also CHIP, there are a 

number of other programs, community distress, and water and 

sewer that is used out of the State’s CDBG program that I believe 

if, it is just my opinion looking back it drives a lot of development 

in those small rural communities to link with public works money, 

USDA money, other resources for infrastructure, water and sewer 

that but for the State’s CDBG money would not happen. It would 

be a continual standoff between EPA and these small communities 

to meet the water requirements, it is critical. And then coupled 

with the CHIP, it continues to erode the ability of small communities to survive, quite frankly. That is not my hat now, but, that 

is looking back as you said, Mr. Chairman. That is kind of what 

I am seeing. 

Chairman NEY. Do you want to elaborate any of—I have dealt 

with a lot of issues and worked with Mayor Coleman as we do our 

district and mayors from across the State, any reflections on some 

of the housing, the importance of the housing aspects of the CDBG? 

Mr. GRAVES. Simply that, Mr. Chairman, that the CDBG—the 

prime issue is the flexibility and the ability of communities to target those resources. Whether in small areas where there is infrastructure needs or a city like Columbus where we have adequate 

infrastructure dollars but we really need to target resources to preserve housing stock and help low income. The HOME money does 

a lot of the housing development activities and the home buyer assistance activities to buy a home. Without CDBG we could not preserve the existing housing stock, which is critical in neighborhood 

28

development. It lets the current units, when folks are, especially 

the elderly, they cannot maintain their properties. We can go in 

with small amount of money from block grants and stabilize that 

structure and enable them to stay in their home. And we do that 

in a targeted way. And I think that is extremely critical for a block 

grant. I will, as a side note, indicate that we do also with our block 

grant money pay three agencies to do home buyer education. We 

train them to educate the individual in foreclosure prevention and 

then we use the HOME money, the America Dream down payment 

initiative to actually assist them in buying that house. 

Last year, the ADDI program was cut like 50 percent. So, I am 

not certain why that happened, but I am more sure what is happening in 2007. But certainly home ownership and that whole initiative and I appreciate what Mr. Calhoun said, because we do a 

lot of other activities besides homeowner. But certainly that is an 

extremely important component. 

Chairman NEY. Just a question for curiosity, we also had the 

first, this subcommittee with Congresswoman Maxine Waters and 

the staff and the members went down to New Orleans, and Gulfport, Mississippi. We actually had the first hearing of the U.S. 

House, official hearing, down there and it was a pretty intense 2 

days—11 hours total between the 2 days. We had about 9 or 10 

members who were down there. And so we looked at the whole 

issue with Hurricane Katrina. How has it been about Section 8, 

maybe you don’t know about this situation, but I assume maybe 

you would. Section 8 and people who have come from the Gulf, 

from New Orleans, up into Columbus, have you dealt with that? 

Mr. GRAVES. Mr. Chairman, yes, we have an agency called 

Southside Settlement that does a lot of the work with the Katrina 

victims and also the housing finance—the housing finance agency 

set up a strategy statewide, targeting resources, keeping database 

referrals. The situation with Section 8, as you said, Columbus Metropolitan Housing Authority is doing what we can to help them 

move through the system. I am not sure of the numbers that have 

come in. It certainly gets dicey as far as the waiting list and what 

have you. I mean, right now there are 9,000 individuals on the 

waiting list for Section 8 vouchers in the City of Columbus. So, 

while we are moving and assisting in that and actually landlords 

and apartment owners are helping too, the ability to get vouchers 

is not as strong as one would like. But it is moving through and 

they are doing the best that they can. 

Chairman NEY. Has there been—were you able to get the emergency vouchers to follow the residents from the Gulf? 

Mr. GRAVES. Mr. Chairman, I do not know that. I would have to 

ask Dennis Guest from CMHA, but I do not know off the top of my 

head. 

Chairman NEY. I am just curious, we met with the housing authorities from here in Ohio, last week in Washington and we just 

continue to look at that issue, because it affects the community 

here. We passed emergency vouchers and supported them. I do 

have a concern and then there was FEMA money, which we did 

take some of that money and we put it in to what, Hope VI, several 

different programs, because we felt it needed to be directed versus 

FEMA having a free hand to just spend it at certain places. But 

29

I think that the Section 8, we need to watch that because, that 

should be paid out of emergency monies and that is to locate people. Personally, I think people ought have an option. I do not think 

you give an option when you say, why do not you know go to a different city across the United States and then that is your option. 

Because for example, in Mississippi there are 30,000 trailers with 

electric and people were able to stay home. It would be like something catastrophic happened in Knox County, and they said, your 

option is to go to Seattle, Washington, or New York City, but options to go to Holmes County is not one. You know, obviously you 

know what you would try to choose. 

But I mention the Section 8 and for the communities, because I 

do think that as these emergency vouchers are created, which they 

have to be to help these people that are scattered across the United 

States to have their housing until they hopefully can back home, 

we have to watch that at the end of the day FEMA—or I mean 

HUD—is not instructed to then take it out of the hide of the existing Section 8, which would mean, well, we do not have enough 

money to continue these emergency vouchers so guess what, we are 

going to take it out of Section 8, which would impact, you know, 

communities on housing. And that is something that I want you to 

know we are cognizant of and trying to deal with. 

Ms. SCHOCKEN. Just for the record, Knox County has used some 

of their CHIP tenant based rental systems Section 8 voucher programs for one displaced family from Katrina. 

Chairman NEY. Oh, they have. 

Ms. SCHOCKEN. Yes. 

Chairman NEY. Let me just say that I really appreciate—do you 

have any questions? 

Mr. RILEY. No, thank you for having us today. I have enjoyed it 

and the ranking members, of course, look forward to working with 

Mr. Ney and keeping the CDBG funding at least at last year’s levels or higher. 

Chairman NEY. You know you may hear that the—that the 

Democrats and Republicans are ripping each other apart every single hour. And there are disputes, and disputes within parties, but 

we have, I think, with Chairman Oxley, the Republican from Ohio 

who chairs the committee, Barney Frank from Massachusetts, the 

ranking member of the Full Committee, myself, and Maxine Waters, our subcommittee ranking member, actually been able to work 

together to come to a lot of agreements. So, I think we all sang the 

same tune to try to protect the communities. 

And that is the other thing, we have to balance, I understand 

that we have a deficit. But if you look into the budget presented 

to us now by the Administration and then the House has to do 

something and the Senate. But if you look at that particular budget, you will see increases in some areas of $100 million or $1 billion, but yet you will see decreases in the CDBG of 25 percent so 

that does not seem to be a fair way to balance, to take it out and 

to one aspect. 

I want to thank you again for all of your time and your testimony is helpful. The committee is adjourned, thank you. 

[Whereupon at 9:50 a.m., the subcommittee was adjourned.]

30

31

STRENGTHENING RURAL OHIO: 

A REVIEW OF COMMUNITY DEVELOPMENT 

BLOCK GRANT PROGRAMS 

Friday, March 24, 2006

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HOUSING AND

COMMUNITY OPPORTUNITY, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 2:00 p.m., in the 

Guernsey County Commission Conference Room, 627 Wheeling Avenue, Cambridge, Ohio, Hon. Bob Ney [chairman of the subcommittee] presiding. 

Present: Representative Ney. 

Chairman NEY. Okay, the subcommittee will come to order. I 

want to thank—we have a wonderful turn out. I see a lot of faces 

in the crowd from different areas. 

We have two panels and I want to welcome everybody to Cambridge. We just left Knox County this morning with a hearing. I 

want to thank Commissioner Tom Laughman and the Guernsey 

County Commissioners, all of them, for allowing this subcommittee 

to use this public hearing room here for today’s, I think, very important discussions. Probably more important than in past years 

about the Community Development Block Grant Program. 

The Community Development Block Grant Program—most of you 

would know what it is—but there are some people I am sure, here 

in the room, and in the public, who may not be completely familiar 

with it. But it is administered by the Department of Housing and 

Urban Development, HUD. It is the Federal Government’s largest 

and most widely available source of financial assistance to support 

State and local government directed neighborhood revitalization, 

housing programs, rehab, economic development activities, and the 

formula-based grants which are allocated to more than 1,100 entitlement communities (metropolitan cities with populations of 

50,000 or more, and urban counties). The 50 States, Puerto Rico, 

and the insular areas of American Samoa, Guam, the Virgin Islands, and the Northern Mariana Islands are also included. Grants 

are used to implement plans intended to address local housing, 

neighborhood revitalization, public services, and infrastructure 

needs as determined by local officials with citizen input. I think 

that is an important point too. These monies come from Washington, but they are arriving at the local level, and you have a lot 

of input. It is a better way than the one-size-fits-all of Washington 

telling you what to do. 

The results and benefits of the CDBG funding can be seen 

throughout this district. Right here in Guernsey County, the City 

of Byesville has used CDBG. Mayor Gadd of Byesville uses it to 

create new jobs, create economic growth, and maintain the safety 

of the community. Mayor Gadd of Byesville will discuss, I am sure, 

in his testimony, how CDBG purchased fire trucks and emergency 

32

vehicles, an expense that small towns and villages cannot afford on 

their own. Mayor Salupo, of course, is here and discusses in his testimony how Cambridge used a $400,000 grant to revitalize and renovate their downtown. Today, this downtown area is the center of 

bustling economic activity and a great place for residents. 

We have the County Commissioner from Muskingum County and 

the mayor. Tuscarawas County, of course everybody has worked 

with these funds to better ways of life in their counties. 

Now, in the President’s budget for 2007, it raises some interesting and serious questions about what role community development should play in helping local and State governments to provide 

safe and affordable housing to its constituents. In addition to recommending a new formula change for CDBG, which the President’s 

budget does, that change focuses on more of the neediest communities. The Administration recommended a funding level in fiscal 

year 2007 that is 27 percent below last year’s enacted levels. The 

struggle last year was this program going to the United States Department of Commerce, and the House and Senate stopped that, 

but there was still a 10 percent cut. So this year, the issue is not 

as much the program going to Commerce, but it is trying to save 

the money. So, the 10 percent cuts there, if you add the 25 percent, 

that is a 35 percent cut over a 2-year period of time, if this cut was 

successful. 

HUD’s Community Development and Housing Program has built 

home ownership, supported neighborhood revitalization, and also 

increases access to affordable housing. These activities not only 

help individual communities, but they also strengthen our Nation’s 

economy as a whole. Last year, over a billion dollars of Community 

Development Block Grant funds were used for housing, resulting in 

homeowners receiving assistance to rehabilitate their homes, families becoming first time home buyers, and rental housing units 

being rehabilitated. In addition to housing, CDBG serves as a valuable tool for infrastructure enhancement, job creation, economic development, and public service projects. Without adequate funding 

from CDBG, critical improvements such as new storm sewers, road 

widening, and job development programs simply would not have 

taken place. 

So our goal, and I am chairman of the Housing Subcommittee, 

is to make certain that the Department of Housing and Urban Development, known as HUD of course, remains focused on housing 

and community development and that it has the tools necessary to 

provide safe, decent, economically viable communities. But with 

such a significant decrease in these funding levels, I question 

whether the Department will be able to meet the goal that the 

Congress has actually laid out for it. 

Let me just say that this is an official hearing of the House. It 

will be recorded and transcribed, and taken back to Washington, as 

the Knox County hearing was. So everything will be on the record, 

and of course, distributed to members. We have another hearing; 

the fourth hearing that we are going to have is in Los Angeles. The 

ranking member of our subcommittee is Maxine Waters, and she 

has asked for a hearing in Los Angeles. We are going to go there. 

I would venture to say that Los Angeles is going to equal, no matVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
33

ter that it is a size larger than us, exactly what you say. So we 

are going to drum up support that way. 

So, the hearing is important, it allows us to go back to D.C., and 

say; this is what people think. 

With us today, we have Clinton Jones, our counsel; he is on the 

majority side, so he is a Republican. We did not sit him to the right 

because of that. And we did not sit our good friend, Jeff Riley, who 

is with the minority, Democrat side, and he works for Congressman 

Barney Frank of Massachusetts, who is our ranking member. And 

Congressman Mike Oxley of Ohio is our chairman. And I do assure 

you, as I said earlier, you might see how we all battle each other, 

but actually we do work together. This committee might have some 

differences, but Barney Frank, Maxine Waters, Mike Oxley, and 

myself, as well as the Members on both sides of the aisle have done 

some productive things for housing. And so, you know, you might 

see disagreements, but once in awhile, we do work together, believe 

it or not. 

So I am happy to have the staff. They are an important element. 

Cindy Chetti is also here, from Washington, D.C. So I took them 

and got them a good local meal and they are very happy. And with 

that, Jeff, do you want to make any comments? 

Mr. RILEY. No. Thank you for having us today. Greetings from 

Mr. Frank and Ms. Waters. 

Chairman NEY. Also, for the record we have a joint petition from 

the Coshocton County Commission, by the county commissioners. 

And Dana Schrock, Kathy Thompson, Rick Dougherty, and Douglas 

Davis, the county engineer from Muskingum County, also have 

statements. Without objection, we will enter them as a part of the 

record. 

And if there are any other statements for the record that you 

have, also from people in the audience, we will be glad to accept 

those. 

Panel one, we have the Honorable Don Gadd, Mayor, Village of 

Byesville; and on the panel too, the Honorable Tom Laughman, 

president, Guernsey County Commissioners; the Honorable Kerry 

Metzger, president, Tuscarawas County Commissioners; the Honorable Dorothy Montgomery, president, Muskingum County Commissioners; the Honorable Samuel A. Salupo, Mayor, City of Cambridge; and the Honorable Howard Zwelling, Mayor, City of Zanesville. 

And welcome to all of you and we will start—and the way the 

House rules run, basically you have 5 minutes, everybody gets 5 

minutes, then we have questions and other comments that you 

might have. And then for the audience, the way the House rules 

operate, we do not show signs of clapping or booing, even though 

you might want to. Just a protocol that we use in the House. It 

does not offend me too much if you do a little bit, but, you know, 

not too much. With that we will start with Mayor Gadd. 

STATEMENT OF THE HONORABLE DONALD GADD, MAYOR, 

VILLAGE OF BYESVILLE, OHIO 

Mr. GADD. Mr. Chairman, gentlemen. Thank you for the opportunity to address this hearing today. As I know your schedule is 

34

busy and we all have pressing issues, I will keep my comments as 

succinct as possible. 

As with the proposed budget cuts in the Local Government Fund 

by the State a couple of years ago, no issue will probably impact 

local governments more than the CDBG cuts in the Administration’s current budget proposal. 

At that time, local officials from all over Ohio convened at the 

statehouse to impress upon our legislators the absolute importance 

of Local Government Funds and informed them that the lack of 

same would have a significant impact on our grassroots government here in Ohio. Because, here in the heartland, at the local 

level, we work hard to get a dollar’s worth of progress for a dollar’s 

worth of grant money. With community support, we get much more 

than that dollar. 

Additionally, I lobbied hard for the passage and approval by the 

voters of the State of Issue I, formerly called Issue II, as it is at 

the core of Ohio’s ability to rebuild roads and bridges needed to 

compete with today’s modal industry. Ohioans recognized its importance and passed this issue overwhelmingly. 

As you know, I have been the mayor of a small village here in 

southeastern Ohio for several years. During those years, we have 

seen a significant renewal of job opportunities and replacement of 

a blighted downtown due, in part, to the securing of CDBG grants. 

Currently, we are working on tier grants for an additional $400,000; that, along with the engineering and architectural design 

will redevelop our downtown into a stop along the Nation’s tourism 

highway. A local initiative creating a 501C3 corp will provide a 

tourist train with historic renditions of our coal mining heritage 

and eventually end up at the Wilds, the largest game preserve of 

its type in North America. These grants will be the catalyst to get 

the owner operators to buy into our economic future. Job creation 

at the local level is grassroots America and this buy in is not possible, in most cases, without a grant incentive. 

Over the next 18 months, the village will be involved in securing 

grants for a new wastewater plant, working with the Ohio Department of Development and others to secure grants, including CDBG, 

for approximately $27- to $30 million worth of industrial and commercial expansion in my town of 3,000 people. The job opportunities and expanded local economy alone will more than pay for the 

initial monies put forward by these projects. 

As I have traveled much of rural Ohio, being in the energy business, let me assure you that each and every small town, township, 

and county has something to point to that was initiated, supplemented, or completed because of the Community Development 

Block Grants. From fire trucks, to infrastructure, to enhancement 

projects these competitive funds have been a source of creating a 

better America that would not have otherwise been possible. To 

take this away would end rural Ohioans’ dreams of making a better place to live and work. 

On another note, being one, much like yourself, with deep roots 

in this area, I am involved in other activities that are sometimes 

off the scope of my being mayor, and sometimes within my jurisdiction, so I can help out. I am speaking of the local Habitat for Humanity, of which I have been the president these last 3 years, and 

35

the Community Housing Improvement Program, both of which 

have created dramatic improvements in the community and for the 

individuals benefitting therefrom. 

I am well aware of the chairman’s help in securing funding from 

the House for the one new house Habitat built in Byesville, as I 

was the one who got the land donated for it. The recipient of that 

home now sits on our local Habitat Board and is involved in getting 

others the home that they could only dream about a few short 

years ago. 

Since then, the local chapter has solved most of its funding 

issues over the last several years. We have received CDBG grants 

for $50,000 each year that go to build not one, but two homes each 

year, each home bringing pride of ownership and the American 

dream to those who did not even envision it for themselves or their 

family. One such case is a local man whom I have asked to share 

a story. 

This man is the ‘‘American Dream’’ and his story is the essence 

of all we do and what we believe in as public servants and people 

responsible and caring about those around us. For you see, when 

he first applied to Habitat, he lived in a very small and old, two 

bedroom home on a relative’s acreage. He was a divorced father of 

five, including one with physical handicaps, with some learning disabilities of his own. He had held down the same job for 20-plus 

years, but couldn’t afford to believe his life would change. 

On the initial visit to this home, we found the wringer washer 

on the back porch, the windows all caulked shut as best as possible, the vents missing in the floor because the trailer was too old 

to find replacements, and the floor moved up and down as we 

walked through it. 

However, on that initial visit, and subsequent visits, the home 

was always neat and clean down to the kid’s mementos and play 

things pinned or shelved on the walls. As the place was too small 

to store their individual things, each child had space on the wall 

for his or her things. 

Today, that man and his children live in a split level, six bedroom home that they put more than their required sweat equity 

into. Their home cost was $39,000. $25,000 by CDBG grant, and 

the rest through local contributions and help. 

They participate in our other projects, and he was extremely 

proud to tell me that he has found a new job that pays more and 

provides better for his family. His outlook on life is much brighter 

now, and he, like the others, has hope for himself and his children’s 

future. 

Mr. Chairman, this would not have happened without CDBG 

grants. Nor would have home ownership happened for others without the CHIP program, nor would have local enhancement projects 

solely or partially funded by CDBG. As with the Local Government 

Funds, grassroot local government gets much more done with a 

buck than just spending it. We create jobs, households, social 

wellbeing, and improvements in the communities in which we live. 

I urge you and your fellow Congressmen to keep the CDBG intact, 

as it adds to our great country at its very roots and simply put, 

from a small town mayor, that’s where America starts and that’s 

what government is all about. 

36

Thank you for the pleasure of addressing you. 

[The prepared statement of Mayor Gadd can be found on page 

169 of the appendix.] 

Chairman NEY. Thank you, Mayor. 

Commissioner. 

STATEMENT OF THE HONORABLE THOMAS J. LAUGHMAN, 

PRESIDENT, GUERNSEY COUNTY COMMISSIONERS 

Mr. LAUGHMAN. Thank you, Congressman Ney. Before I begin, I 

just want to welcome, on behalf of Guernsey County, you and your 

staff, and the other guests that we have here today. I would also 

like to say that we, as a county, are very, very appreciative for everything that you are doing for us here in Guernsey County, especially in the area of the water line improvements that you have 

given us. That certainly is not forgotten. 

Community Development Block Grants are, and have been, very 

crucial for Guernsey County in the 19 townships and 10 villages of 

which we are comprised. Since the year 2000, block grants have 

provided $354,000 in street paving projects for local governments 

within Guernsey County. Since the year 2000, block grants have 

provided over $132,000 in much needed fire protection for the volunteer fire departments located within our county. Since the year 

2000, block grants have provided $42,000 for recreational facilities 

in the various parks within our county. I have attached an 

itemized breakdown of this as part of my testimony. 

Since 1999, block grant funds have provided over $375,000 in 

emergency home repairs in Guernsey County, excluding the City of 

Cambridge, which would not have been possible without these very 

vital dollars. 

Under the cuts proposed for Community Development Block 

Grants in the year 2007, Guernsey County will receive $110,000. 

Were that to happen, using the figures from the 2005 projects, the 

village of Quaker City would not receive the needed funds for a 

new fire engine used in the protection of life and property. Again, 

using these same figures, the villages of Old Washington and Valley Township would not see much needed street paving for the benefit of the residents residing there as well as for the traveling public. 

All local government funds are dwindling. Expenses are on a constant rise while at the same time revenues are at a standstill, if 

not decreasing. 

Several years ago revenue sharing was the answer for local governments. That was eliminated and replaced with Community Development Block Grants. Now is not the time to remove or replace 

this most important program. 

This is rather the time, under the current budgetary climate, to 

not only increase block grant funding, but also to change the rules 

in order that townships may use these funds for much needed 

CHIP and SEAL projects for their township roads. This action 

would not only continue to improve our proud quality of life here 

in Guernsey County, but at the same time provide for a base for 

future paving projects within our townships. As you know the current block grant program must have a life of at least 7 years, CHIP 

37

and SEAL simply does not do that. It just does not go that long, 

but it would be a real savings to our township. 

We ask that this program not be altered to a lesser degree, but 

rather to a much higher and much better standard. 

Thank you. 

[The prepared statement of Mr. Laughman can be found on page 

179 of the appendix.] 

Chairman NEY. Thank you, Commissioner. 

Commissioner Metzger. 

STATEMENT OF THE HONORABLE KERRY METZGER, 

PRESIDENT, TUSCARAWAS COUNTY COMMISSIONERS 

Mr. METZGER. Thank you, Congressman Ney, for the opportunity 

to speak before the committee today. You know, while we realize 

that Congress and the President have a shared responsibility as 

stewards of the Nation’s financial resources, it is difficult to imagine any other Federal program that touches as many lives as the 

Community Development Block Grant Program. It must be understood that in today’s budgeting environment, there is no local revenue source to replace the proposed 27 percent cut in the CDBG 

appropriation. The fiscal year 2007 budget plan would require 

tightening of low income targeting to communities with little resources, which would necessarily channel those reduced CDBG 

funds to the lowest of the low income communities, even though 

those projects may not dramatically affect as many people. It is not 

difficult to imagine a scenario where funds best used to develop the 

infrastructure to support housing and/or an economic project in one 

community, would need to be diverted to a community with less development potential just to meet a CDBG program guideline. We 

feel that our county and the other CDBG recipients across the Nation are best qualified to determine the proper use of these funds 

under current guidelines and we would like to share with you our 

experience in Tuscarawas County with the CDBG program. 

The program has been an integral part of all phases of community development within Tuscarawas County for close to 3 decades. 

The program is unique in that it allows, and in fact, requires county government to assist in the planning and development of 

projects that have been identified by local political subdivision officials as important to the growth, stability, and wellbeing of their 

communities. The opportunity for communities to share in the benefits of the program is guaranteed by a mandatory and closely 

monitored citizens’ participation plan and a series of public hearings. It is perhaps the best example of direct citizen involvement 

in the expenditure of tax dollars. 

The program can be used for many things. In our county the 

most pressing need is for improvements to existing, or the construction of new, infrastructure. This could be something as basic 

as a street and sidewalk improvement or could involve more important health issues such as safe drinking water or the proper treatment and disposal of sanitary sewage. The CDBG program makes 

these improvements possible by leveraging very limited local funds 

with Federal dollars. We can also achieve maximum effect from 

both Federal and local dollars by combining similar projects, such 

38

as paving, into one large project, thereby ensuring more cost effective bids on these projects. 

The end result of these efforts goes beyond the mere infrastructure improvements. They bring about a sense of community pride 

and with reliable infrastructure in place often lead to more housing 

and economic opportunities. 

Perhaps the key to success in the program is in the word community. Over the years we have completed a number of projects that 

have become the focal point of a community. One of the best examples in our county started with the drilling of a water well for one 

of our rural townships. In times of drought that well became the 

only public source of potable water available to the residents of the 

township. A few years later, right next to that well, we built a senior center and a community center and it quickly became a source 

of pride for the people of the community and a place where residents of all ages come together. Today, in addition to its original 

purposes, that center is used for food distribution, medical 

screenings, educational instruction, voting, and it is a distribution 

center for the Tuscarawas County Public Library and bookmobile. 

The facility is now being supported by a special tax levy. The seed 

that was planted here by the Community Development Block Grant 

program has germinated and the fruit that has developed helps 

feed a community. 

This is only one of the many success stories in our CDBG experience. Unfortunately, we believe that such dramatic results will become an exception rather than the norm under the proposed budget 

cuts and tightened guidelines. 

Thank you for the opportunity to testify. 

[The prepared statement of Mr. Metzger can be found on page 

186 of the appendix.] 

Chairman NEY. We thank you, Commissioner Metzger. 

Commissioner Montgomery, welcome. 

STATEMENT OF THE HONORABLE DOROTHY MONTGOMERY, 

PRESIDENT, MUSKINGUM COUNTY COMMISSIONERS 

Ms. MONTGOMERY. Thank you, Congressman Ney, for the opportunity to testify before your today. It is a pleasure to speak to you 

about the use of the CDBG funds in Muskingum County. My fellow 

county commissioners and I are concerned about the proposed cuts 

to the program and I would like to share some of those concerns 

today. 

In Muskingum County, we have been fortunate to have completed many worthwhile projects with CDBG funds. Just since 

2000, we have installed water lines, completed storm sewer improvements and sanitary sewer improvements, paved roads, installed and repaired sidewalks, renovated parks, and repaired and 

installed culverts. 

With the approximately $200,000 that Muskingum County receives each year, we are able to reach out to various townships and 

villages in the county to address some of their most urgent needs. 

These areas, which are struggling economically, would not be able 

to complete the majority of these very necessary projects without 

the assistance of CDBG funds. This year, we are planning to complete six projects in six different parts of the county. And these inVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
39

frastructure improvements will have an effect on hundreds of 

Muskingum County residents. 

Infrastructure is not the only area where CDBG funding has an 

impact. CDBG programs also stimulate the domestic economy by 

creating jobs and expanding home ownership, which empowers 

struggling neighborhoods. This is important, since there is a direct 

correlation between the condition of housing and the performance 

of our youth in school which has a long-lasting impact upon society 

as a whole. 

The reduction in the amount of allocated funds granted to 

Muskingum County will certainly affect the nature, scope, and 

number of projects that we will be able to undertake in the future. 

From expanding water lines to repairing roads and sidewalks, 

CDBG funds have been used to improve neighborhoods and change 

lives. Our community will most certainly feel the ill effects as a result of these proposed cuts. 

My fellow County Commissioners and I, along with our CDBG 

coordinator, would greatly encourage you to support the CDBG program in its current state and reject any proposed funding cuts. 

Thank you for the opportunity. 

[The prepared statement of Ms. Montgomery can be found on 

page 189 of the appendix.] 

Chairman NEY. Thank you. 

Mayor Salupo. 

STATEMENT OF THE HONORABLE SAMUEL A. SALUPO, MAYOR, 

CITY OF CAMBRIDGE 

Mr. SALUPO. Excuse me. Thank you, Congressman, for giving us 

the opportunity to testify here today. I would also like to echo Commissioner Laughman in saying that we are grateful to you; you 

have been a loyal friend to all of us here in southeastern Ohio and 

serve as an outstanding representative for all of us, both Republican and Democrat, so thank you very much. 

Having said that, the Community Development Block Grant Program was developed by a Republican President and a Democratic 

Congress over 30 years ago. It replaced a hodgepodge of specific 

grant programs which were designed and approved according to the 

dictates of bureaucrats in Washington. CDBG put funds and decision making at the State and local level. It permitted communities 

to try and deal with their needs locally through locally developed 

programs and activities. This program has served the country well 

in most places. CDBG, and attendant programs such as ARC, EDA, 

HOME, etc., have improved housing, local economies, and infrastructure primarily for lower income households and communities. 

They have done this with local rather than Federal decision making. 

CDBG funding over the past 10 years has been stagnant. It has 

not even kept up with inflation, and last year it was cut in real 

terms by 10 percent. Given the good this program has done in 

Cambridge and hundreds of other communities, this simply is not 

acceptable. It is not acceptable to balance the budget on the backs 

of lower income households. To believe this program can survive 

another 25 percent cut and continue to serve hundreds of thousands nationwide is simply folly. What is needed, and what we 

40

would like to see, is full funding for the CDBG program at no less 

than $4.5 billion. Even this does not begin to make up for the 

year’s budget amounts not covering inflation. 

CDBG remains crucial for rural areas such as Cambridge. For 

decades, the Federal Government has been a strong partner for our 

community to ensure that our city can provide housing, community 

and economic development opportunities, and other things for our 

residents. This partnership has resulted in lasting and positive 

changes for our community by producing affordable housing and 

creating jobs through business and commercial development. These 

programs have greatly benefitted our city, and to a greater more 

specific extent, our elderly, our children, and our low to moderate 

income population. 

It is critical for our Federal Government to remain a strong partner, to keep CDBG as a Housing and Urban Development administered program, and to retain the current funding levels. The Federal, State, and local governments have a duty to ensure that all 

residents have safe and sanitary housing, adequate public infrastructure, and access to employment opportunities. Our community 

deserves a better quality of life, a quality of life made possible 

through the assistance of CDBG funds. 

To many who do not understand the program, CDBG represents 

a Federal Government slush fund. I submit to you today, that it 

is a comparatively small amount of public dollars to leverage a 

huge amount of private sector funding. As has been said many 

times by others, CDBG is truly a leg up, and not a handout. 

Let me try to illustrate some of the important projects that the 

CDBG has made possible in our community for the past few years, 

and is demonstrative of the programs made possible through CDBG 

throughout its 30-year history. 

We now enjoy a beautiful, vibrant downtown area, made possible by the Downtown Revitalization Grant totaling $400,000, with an 

additional $150,000 of discretionary funds through the Ohio Department of Development Office of Community Partnerships grant 

programs. These funds made it possible to save a dying downtown, 

which has, in turn, encouraged the private sector to invest heavily 

in our efforts to preserve a historic piece of small town U.S.A. 

Our community, as many throughout the Nation, has directly 

benefitted from CDBG formula funding, in the amount of $498,000 

over the past 5 years. We have been able to fund projects such as 

street improvements, renovation of our fire department facilities, 

curb and sidewalk replacement, and street surfacing, just to mention a few. 

The water and sewer CDBG funded program through the Department of Development has provided $450,000 of critical funding to 

replace two lift stations and 4,600 linear feet of sewer lines, which 

benefitted 1,273 households. 

CDBG, HOME, and the Ohio Housing Trust Funds make up the 

funding for the Ohio Department of Development Comprehensive 

Housing Improvement Program, the CHIP program. The CHIP 

funding from the last three 2-year grants totaled $1,655,000, and 

has greatly assisted the City of Cambridge with its neighborhoods—in preserving our neighborhoods. CDBG has provided home 

ownership opportunities for low to moderate income population 

41

with new construction programs, it has assisted our elderly, single 

mothers, and large families with emergency repairs that otherwise 

would not have been possible, and allowed for the rehabilitation of 

current housing stock for homeowners who cannot obtain conventional financing. CDBG has helped create partnerships with rental 

property owners to renovate rental units, providing safe rental 

housing, while allowing rent amounts to remain at an affordable 

level. Additionally, the funds provided a strong partnership between our local Habitat for Humanity and the city for creation of 

new housing. 

The Appalachian Regional Commission further provided CDBG 

funding in the amount of $460,000 for sewer and water projects, for 

rail improvements, paving projects, and funding to support our 

Community Improvement Corporation, or CIC, efforts to strengthen and attract economic development and job creation for our area. 

So, in conclusion, CDBG is a program that serves communities 

and lower income households well. It has made a significant difference in the City of Cambridge, and has improved living conditions for numerous lower income households. We ask that Congress 

fund this program at a level of no less than the $4.5 billion in the 

coming fiscal year 2007 Federal budget. 

[The prepared statement of Mayor Salupo can be found on page 

199 of the appendix.] 

Chairman NEY. Thank you very much, Mayor. 

Mayor Zwelling. 

STATEMENT OF THE HONORABLE HOWARD S. ZWELLING, 

MAYOR, CITY OF ZANESVILLE 

Mr. ZWELLING. We welcome you also, and we appreciate what 

you have done for Zanesville in the past years. You are a Congressman who sincerely takes his constituents to heart and we appreciate you for it. 

Being last is not unusual to me, and I said to Mayor Salupo, did 

they save the best for last? He said, no, it was alphabetical order. 

[Laughter] 

Mr. ZWELLING. In this climate of deficits and budget cuts, the 

Community Development Block Grant Program has been criticized 

for lack of measurable impact. I strongly disagree. I am prepared 

to give you many examples about the positive impact these funds 

have had on our citizens and community, but I also want to note 

the devastating impact that the reduction or the elimination of 

these funds would have on us as well. To make cuts in this program is to ask the most from those who have the least to give. 

Nearly 57 percent of the population of Zanesville is low to moderate income. CDBG funds have helped us address the needs of our 

citizens who do not have the sufficient income to pay local taxes 

to cover the cost of providing themselves with the basic services. 

Each year, we have the Citizens Advisory Committee review applications from city departments and local non-profits. After reviewing 

this information and the city’s community and housing assessment 

plans, they make recommendations to me as to which projects to 

fund. This is an example of home rule functioning at its best. Local 

citizens are prioritizing projects in their own community. Since 

42

2000, we have been able to make the following improvements with 

these funds: 

1,439 linear feet of sewer lines and repairs; 5,300 linear feet of 

water lines and repairs; 

7,680 linear feet of curbs and sidewalks in the City of Zanesville; 

5,291 linear feet of street repairs; home repairs for 48 low-moderate income owner-occupied households; 

And we purchased over 2,300 pieces of electronic equipment and 

supplies for local non-profit organizations dedicated to community 

outreach. 

Often, we have utilized matching funds from other sources like 

HOME and the Ohio Housing Trust Fund to get the maximum benefit from this investment. 

It is important to note that CDBG has not, and does not, provide 

sufficient funds to address the comprehensive total needs of low 

and moderate income people. Each year, we have to deny applications for very worthy projects because there is no money. These include new water lines, sewer separation projects, equipment purchase, and capital improvement projects for non-profits. 

Over the past 6 years, the City of Zanesville has spent, on average, approximately $184,000 on projects dedicated to assisting individuals living in low or moderate income homes and communities. 

However, with the projected reductions in CDBG funding, many 

more projects may be limited or eliminated entirely. Looking at 

these reductions in 2004, the City of Zanesville received full CDBG 

funding of $175,000. Since then, CDBG funding has been reduced 

by 5 percent in 2005 to $165,000, 10 percent in 2006 to $149,000, 

and a projected 25 percent reduction in 2007 to $112,000. 

With this proposed reduction in place, our ability to assist those 

living in these targeted areas is drastically reduced and instead of 

performing four or five projects every fiscal year, we would only be 

able to execute one, possibly two projects per year while crippling 

our ability to aid those in the greatest need of assistance. 

In conclusion, looking at both President Bush’s comments for reducing the funding for CDBG’s as well as the stated purpose of 

those block grants, what the City of Zanesville, as well as many 

other communities around the Nation, is doing is implementing 

policies mirroring these stated goals by the Administration. CDBG 

funding is going directly to community outreach programs as well 

as infrastructure and home repairs in many low or moderate income communities. By restructuring and reducing this funding, the 

Administration is only perpetuating this dire situation already in 

place in many communities as well as limiting the accessibility of 

these funds to individuals who need the assistance the most. 

Thank you. 

[The prepared statement of Mayor Zwelling can be found on page 

203 of the appendix.] 

Chairman NEY. Thank you, Mayor. I appreciate your time. I have 

a question, if somebody would want to answer it. Just, if somebody 

could just elaborate on your experience that you had with the administration of CDBG and the State’s Small Cities program. Are 

they good? Are there any things that needs to be refined in regard 

to the Small Cities program, anybody? 

43

Mr. ZWELLING. The money crunch that has gone from Washington down to the small communities has had its impact on all of 

us. And the projects still remain lined up and ready to go, but the 

cutting in the funding seems to be cutting to the core some of the 

projects that are most direly needed by areas that cannot otherwise 

afford it. 

Chairman NEY. Does the process still work? I mean the money 

has been cut like 10 percent, but is the process still a good process? 

Mr. ZWELLING. Yes, it is. 

Chairman NEY. Not the money side, but the process seems to 

work? 

Mr. ZWELLING. The process works. 

Chairman NEY. Mayor Gadd, in your testimony you mentioned 

the largest game area, of course the Wilds. And I think it is interesting if you have an example or anybody else had an example of 

something where you used Community Development Block Grant 

monies to leverage private sector money? 

Mr. GADD. That is what we have done. We did a block grant that 

was in 1997–1998 for the exterior in the downtown. If you are familiar with Byesville, it was pretty run down at that time. And we 

have been trying to get ourselves around an idea to redevelop and 

have a buy in of downtown. And a couple years ago we went 

around town, believe it or not, in 9 days with a hat and raised 

$11,000 and brought a little railroad to town, which still sits there 

and around that railroad we have had a lot of enthusiasm. We 

have about 35 to 40 busloads of people now coming to ride our railroad every year. And what we are trying to do is enhance it and 

make it, instead of a weekend operation, a 6-day-a-week operation. 

By having the Tier Two Grant and enhancing the downtown—

this area was one of the largest areas for coal mining around the 

turn of the century. They said the coal taken out between Guernsey 

County—there were 13 mines between us and the town just south 

of us—the pull cars will stretch from Washington, D.C., to San 

Francisco, and back to Chicago, so we were big in coal mining. And 

we have explored that heritage on our train, by redeveloping downtown into the small quaint shops and the chocolate shops and the 

soda things. People are willing to reinvest into downtown. 

The future is bright doing that because tourism is a good dollar, 

for every dollar you bring into your area, it revolves around your 

economy 7 times. So, we are hoping that all the dollars that we attract to this area creates additional jobs. 

Mr. SALUPO. I am sorry, Congressman, I just want to add onto 

that. I could probably go on for about 45 minutes about the impact 

that CDBG has made to our community. Just take the downtown 

for example, about 4 or 5 years ago, like most small rural cities, 

downtown was dying, and all around us some of them are having 

a difficult time. With the help of the downtown revitalization grant 

of $450,000, and I am not exaggerating, literally millions of dollars 

of private investments over the last several years. We have virtually no empty stores downtown. We have competed with the—terrifically with the Wal-mart expansion and the retail expansion 

down on 209. We have added over a dozen new businesses in our 

downtown area. It is growing and flourishing right now, as a direct 

result of CDBG. 

44

Also, just recently a county program, the FedEx expansion down 

on 209, not to mention the millions of dollars of the expansion with 

Detroit Diesel and the Ridge Tool area down there. So, this has 

made a tremendous impact on our local community. And I can even 

go back 7 years to the cooperation between Byesville and the City 

of Cambridge and Jackson Township, CDBG was also instrumental 

in the expansion of the newly annexed area down by the Wal-mart 

complex, which has generated dozens of new retail businesses and 

I might add that, probably the largest employer in our community 

in one specific area is in the retail area, $37 million of payroll directly related to the retail industry. So, it has made a terrific impact on our local community. A small amount that is generated, 

that, millions literally, millions of dollars of private investments, 

which has increased our employment. We reduced our unemployment rate and we have about 2,000 more people working today 

than we did 6 years ago. So, this can all be attributed to this partnership. 

Chairman NEY. I had another question, it came up in Knox 

County and the second panel also might want to comment on this, 

but, the Administration’s proposal has a change in it to take some 

of the money and redirect the formula to the neediest of the needy. 

That takes away from 200 other recipients of this and then switches it down. The question that I had though and the kind of answer 

I want to take back to Washington of your feelings, do you also—

I mean, you try to service everybody, I understand, but do you also 

have things you can point to where you are trying to take care of 

the needy and the neediest and that way we maybe do not have 

to adjust this formula. Because at the end of the day, if you adjust 

the formula everybody will lose some. I just wondered if anybody 

had any comments on trying to take care, you know, the poorest 

of the poor? 

Mr. LAUGHMAN. For us, it is the emergency vehicle program that 

we are doing, I see that as really taking care of the needy because 

a lot of these volunteer fire departments just simply cannot afford 

to replace equipment and we are not only going with fire trucks, 

we are going with ambulances also. I mean, you have been around, 

you see some of the conditions of some of those vehicles that they 

are forced to use. I am afraid if cuts are made that is going to cut 

right into those kinds of things. And we do, we try and hit every 

village and township that we can, but it is like everything else, you 

know, $350,000 worth of requests for $170,000 is there. 

Mr. GADD. We do that in my certification in every 4 or 5 years, 

my guys go around and do it; a lot of the towns, especially the older 

the town is there is a lot that are covered under the low to moderate income. And the focus is not so much the neediest of the 

needy because by working for everybody you actually enhance the 

needy also. And what Mayor Salupo and the Commissioners talked 

about, we tried to provide an avenue that will enhance everybody’s 

life and bring up everybody’s standard of life, but if you just focus 

on one group and leave other projects go, it is not enhancing everybody that way. 

Ms. MONTGOMERY. Well, I think is covered by the roads that are 

provided so that the fire trucks and the EMS vehicles can get to, 

and I can testify that sometimes the rides in those ambulances are 

45

not very comfortable. And we will not go there, as far as bumps are 

concerned. 

But I think Mayor Salupo mentioned about the coal mining that 

has taken place in this area, and the horrible water conditions that 

some people have, they either have none or perhaps what they 

have is really not drinkable, and we have been allowed to lay a lot 

of water lines and the sewer situation is certainly no better. So, I 

really think we are not only reaching the poorest of the poor, but 

in doing so, inspiring and helping those along the way who are in 

those same neighborhoods. 

Mr. METZGER. Well, one of the things we do in Tuscarawas County is, we routinely, with our CDBG funding, always set aside some 

money for what we call SEA, which is Society for Equal Access. My 

concern would be, if the rules were changed, that they would not 

be able to utilize those CDBG funds and maybe they might be able 

to fund some of those folks who just need access to transportation 

needs. And you would limit the number of people who actually 

need that particular help. That would be a large concern there. So, 

by changing the rules, I mean, we may be—if the rules end up 

being changed you may end up in a situation, as I said in the testimony, where you may focus on helping, maybe one or two individuals, when there are still people who are needy who may rise a little bit above the lowest of the low income, but they would not be 

able to access those dollars, the CDBG dollars to help them. Because that is what we look at in Tuscarawas County, is not only 

just the income, but the number of people who are helped by that 

CDBG funding. So, you know, we take both of those things into 

consideration when we decide where those funds are distributed. 

Mr. SALUPO. Just to expand on what everybody has already said. 

My fear would be that if we change the way we are doing the formula right now that it would take away local discretion and what 

we have been able to work through our community assessment 

strategies of a comprehensive plan that ultimately benefits everybody. You are allowing a local community to determine what the 

needs are and how to affect the quality of life for everybody totally, 

in the whole community. And so I think it would be critical to continue to leave it the way it is so that we can make the decisions 

locally. 

Chairman NEY. Mayor Zwelling. 

Mr. ZWELLING. I think it is hard, perhaps difficult for the President to realize that there are still a lot of areas in this country 

where people do not have adequate water and sewage. Zanesville 

is such a place and CDBG funds are sorely needed to get these 

bare necessities to the people who need them the most. 

Chairman NEY. I have one final question, and then if you have 

anything else you want to add. But I have one final question. It 

was geared towards housing. This subcommittee that I chair is 

Housing and Community Opportunity, and so we look a lot at the 

housing issues. In the housing spectrum, about 72 percent of Americans own a house; I believe that is a pretty accurate figure. The 

minority rate is way lower, it is about 50 percent, which is unacceptable, it needs to be raised up. And you look at different, you 

know, aspects of housing, when you say housing, the ownership of 

the house, we have some great building statistics. But also, not evVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
46

erybody can own a house, this was pointed out too up in Knox 

County today, not everybody can own a house, or maybe not everybody will ever qualify. Maybe there are situations where it is not 

the way to go for them. So, you have other types, of course your 

apartments, Habitat for Humanity, as Mayor Gadd mentioned, Section 8 Housing under HUD, and a lot of Community Development 

Block Grant monies have been utilized, obviously CDBG, for housing. 

And if anybody had any brief comments you want to make on the 

housing aspect of this, how the programs are working or not working. 

Mr. ZWELLING. We partner with Habitat also, as somebody else 

mentioned, and the very type of housing that you just mentioned, 

we use CDBG funds for that; it is very crucial to us. 

Ms. MONTGOMERY. Several have mentioned the CHIP program 

and, you know, the roofs or maybe a heating system, just a multitude of things that—and it does not have to be a senior citizen 

who is in need. But there are just a lot of poor situations out there. 

Chairman NEY. Yes. 

Mr. LAUGHMAN. Our CHIP and housing programs are administered through the City of Cambridge, through Steve Gerhard, and 

Evelyn and their assistants and they do an excellent job. That has 

really made a difference here in Cambridge. 

Mr. SALUPO. It has, and it has provided an opportunity for people 

who might not have been able to own their own home. That is 

without question, but in addition to that, it has improved the aesthetics and the quality of our neighborhoods. The partnership with 

Habitat has all combined to provide other assets to the community. 

So that has also been, the CHIP program is an outstanding program. 

Chairman NEY. Yes. 

Mr. GADD. We are doing three CHIP homes in Byesville this 

year. The ones that they built previously were sold quickly, because 

of the write down, the way that they could do it. We found, what 

we were talking about earlier, there are some people qualified for 

those homes, because they, well, I think one of my police officers 

applied for a home this year. But they qualified, because they have 

an income and stuff. Through our Habitat for Humanity, which we 

still get money through the CHIP program, we are finding people 

who never even dreamed of having a house or that opportunity. 

When you take $39,000 across 20 years, you are talking maybe 

$225 or $275 a month that family is paying for that house. But it 

is their house, their dream, their future. And they have been wonderful with it. It makes such a difference to see a family who now 

has a place that is their home. There is nothing more important 

in this world than having a family home that you can go to, even 

as you grow up. You go back and see Mom and Dad, that is their 

home, it is not a rental, it is not someplace that they keep moving 

around to. That is their family home and that is important, especially here in rural America. 

Chairman NEY. Yes. On the housing aspect, we passed the American Dream down payment bill, which I think was a good bill, carried by Katherine Harris; Congressmen Oxley and Frank, and Congresswoman Maxine Waters were instrumental. We worked with 

47

them and passed that out of our subcommittee and that is a bill 

that will help down the road. Also, we did just—I think it is really 

important to a lot of people—we also did a housing fund that we 

created, we took 5 percent, I think it was, it was Fannie and 

Freddie, Fannie May, Freddie Mac, put it into a fund so that they 

will carry out their charter mission of Congress, and I do not know 

how much that fund was. 

Mr. RILEY. $500 million the first year. 

Mr. JONES. $500 or $600 million the first year. 

Chairman NEY. $500 to $600 million the first year and it will 

grow into the billions from there, 5 percent of their profits basically. That is a good fund. And it is to be used to help the poorest 

of the poor and for different housing initiatives throughout the 

country. You know, we have to look to the other body, in Washington you cannot say the word Senate, believe it or not, on the 

Floor of the House, here you can, we do not have metal detectors 

or C-Span so we can say all manner of things. But we are hoping 

the Senate will come along and will help us on this. I think it is 

a really important thing that communities will be able to utilize. 

With that, I do not have any other things except, do you have 

any questions? 

Mr. RILEY. No. 

Mr. JONES. No. 

Chairman NEY. I do want to say one thing because we are going 

to go to the second panel. If there are elected officials in the room 

who just want to give your name and your title, we can do that as 

we are shifting panels here. 

But I want to thank all the elected officials. And I also wanted 

to address something about earmarks. You are hearing about earmarks all the time now in Washington, D.C., we have to stop the 

earmarks. You know, if they want to put our names to the earmarks, and our name is attached, then that is fine. They can print 

it all day long, our name will be attached to earmarks, I have no 

problem with that. And it will be in the bill, they can put our 

names in parenthesis so that they know who did an earmark. You 

know, this has all started with Congressman Cunningham and the 

earmarks. But if they want to put our names to them, I think that 

is just fine I think with most members. 

But the thing here I think people have to remember, they are 

saying do away with earmarks. CDBG, what we are talking about 

today, you cannot—that money comes down from Washington goes 

to the State and you all sit and have your hearings where you are 

getting requests of $700,000, you only have $100,000 to spend. You 

have your hearings and you have your input, citizens are available 

to have their say here. If we would do away with earmarks I can 

tell you that a lot of projects, I look around the room of projects 

that we have done, I see people and faces and I see dollars too of 

projects we have done. 

I promise you that the United States Government would not 

have returned taxpayers dollars by saying let us build a cancer 

center over in Knox County. They would not have said, let us put 

$100,000 in a Tuscarawas County study to see about raising those 

roads. I mean, I can go on and on and on, water and sewer systems. And I just think that the earmarks are still local because we 

48

do not sit there and make those things up. Local officials tell us, 

we need that, we need this, citizens, local development districts tell 

us. So in this great fever of earmarks, if we want to make it fully 

open and shut, the sun is shining, transparent, I have no problem. 

But to just say let us stop and let the unelected people in Washington, who are Cabinet Members of any President, whether it is 

the previous, the current, or the next, who make those decisions, 

I do not think we want to do that. And so, I just want to assure 

you, I still think earmarks are a real honestly local way. It comes 

from here out to us to bring it back. 

Thanks for your time and all that you do for your communities. 

And we will go on to panel two, which will be Mr. Aane Aaby, 

president, Ohio Conference of Community Development. Mr. Philip 

Downing, local office director, Columbus Enterprise Community 

Partners. Mr. Hugh Grefe, senior program director, Toledo, Local 

Initiative Support. Mr. Oren Henry, community development administrator, City of Cincinnati. Mr. Don Myers, executive director 

of OMEGA, and Mr. Gary Ricer, executive director, Guernsey, Morgan, Noble Tri-county Community Action. 

Some of the people in the audience if you want to or if you are 

just a citizen and you want to say hello and give your title, I mean, 

go ahead. Why do we not start in the audience. 

Mr. HEARD. John Heard, Noble County commissioner. 

Ms. CARTER. I am Linda Carter and I administer the CDBG program for the Noble County Commission. 

Chairman NEY. Okay, can we start over back here. 

Mr. LACE. Ken Lace, Washington County. 

Mr. STEIN. Henry Stein, director of development, City of Matins 

Ferry. 

Mr. WARNER. Russ Warner, I am the office chief for the Ohio Department of Development’s Housing and Community Partnerships. 

We administer the CDBG, HOME, and ESG. 

Mr. MOORE. John Moore, township trustee, Harrison County. 

Mr. NORTON. Gene Norton, township trustee in Muskingum 

County. I have received CDBG funds regularly. 

Chairman NEY. Anybody else? 

VOICE. Township trustee. 

VOICE. I am her husband. 

[Laughter] 

Chairman NEY. Why do not we start over here. 

Mr. GROMONT. Tom Gromont, director of Neighborhoods Department for the City of Toledo. 

Mr. DAVIS. Doug Davis, the county engineer for Muskingum 

County. 

Ms. MONTGOMERY. Dorothy Montgomery. 

VOICE. We receive CDBG. 

VOICE. Jefferson Newspaper here in Cambridge. 

VOICE. Township president, Muskingum County. 

Chairman NEY. And J.P. Dutton, raise your hand. J.P. is with 

our office He is working out of Zanesville; he covers most of your 

counties, and he does appropriations and general office work. and 

also David Popton from Washington works for us. He used to work 

for John Kerry, Senator John Kerry. The Ohio Senator John Kerry. 

Got you. 

49

We will start, Mr. Aaby, go ahead. 

STATEMENT OF AANE AABY, PRESIDENT, OHIO CONFERENCE 

OF COMMUNITY DEVELOPMENT 

Mr. AABY. Thank you, Congressman Ney. My name is Aane Aaby 

and I am the community development director for the City of 

Massillon, Ohio. I have been employed by the City of Massillon 

since 1973, when I was hired as a project coordinator for the City’s 

Neighborhood Development Program, or NDP. An NDP was a type 

of categorical grant program administered by the U.S. Department 

of HUD and was a type of limited purpose urban renewal program. 

It is with a sense of some irony that I report that on the very day 

that I was hired by the City of Massillon in 1973, then-President 

Nixon had imposed a moratorium suspending all HUD categorical 

grant programs. So I had been hired to administer a program 

whose future funding was in limbo. 

However, President Nixon, and later President Ford, had a plan 

for local communities to return to them some of their tax dollars 

in the form of block grants, giving local communities the flexibility 

and discretion to use these dollars as we saw fit, provided these 

dollars were used wisely to achieve certain federally mandated objectives, namely the provision of decent affordable housing, the creation of a suitable living environment, and the expansion of economic opportunity, all objectives primarily for the benefit of low 

and moderate income persons. Initially called the Better Communities Act, the program eventually passed Congress as the Housing 

and Community Development Act of 1974. 

In 1975, I was appointed assistant planning director for 

Massillon and given the responsibility for administering the City’s 

Hold Harmless CDBG Entitlement. Massillon was designated a 

Hold Harmless community because although we were not large 

enough at the time to qualify as an entitlement grantee, we had 

previously received categorical grants from HUD and were allocated CDBG funds to maintain the continuity of our efforts. 

In 1985, Massillon was officially designated by HUD as an entitlement community, and in 1988 I was named community development director for the City, a position that I still hold. 

However, I am also appearing before this subcommittee as a representative of another organization. I am currently the president of 

the Ohio Conference of Community Development, OCCD, a 165-

member organization of local government community development 

officials. OCCD has a broad membership representing the spectrum 

of communities in Ohio from large urban areas such as Cleveland, 

Columbus, and Cincinnati to some of our most rural villages and 

counties. Four times a year, our membership gathers for a day and 

a half to meet with HUD, Ohio Department of Development representatives and others to learn about the newest initiatives at the 

Federal and State level, to hear presentations on topics of interest 

in the field including best practices and award winning projects, 

and to receive training and instruction on important programmatic 

elements involving housing and community development issues. We 

are now in the process of instituting a statewide training and certification program for community development officials. OCCD is 

50

an important organization for Ohio communities and I am pleased 

to be able to serve the members as their current president. 

So, I am here before the subcommittee wearing two hats, representing both the City of Massillon and the Ohio Conference of 

Community Development. But I am here with one purpose, to advocate for the restoration of full funding for the Community Development Block Grant Program. 

The last 5 years have seen dramatic decreases in CDBG funding 

for Ohio communities. In 2001, Massillon’s entitlement grant was 

$956,000. In 2006, our CDBG grant will be $749,597 a decrease of 

over $200,000, or a 21 percent loss of funding over a 5-year period. 

This year will be especially difficult as our entitlement amount for 

this year alone was reduced by almost 11 percent. 

For all 43 Ohio entitlement communities, the total loss of CDBG 

funding over the 5-year period from 2001, is more than $26 million, 

$12 million in the last year alone. The State of Ohio is responsible 

for administering and allocating CDBG funding to Ohio’s small cities and non-urban counties. During the last 5-year period the 

State’s CDBG program has lost over $8 million in CDBG funding 

with a $5.5 million reduction in the last year. 

And now we read that President Bush has proposed further cuts 

for 2007, effectively reducing funding for community development 

by another 27 percent. I have estimated that Ohio communities 

will lose an additional $30 million and the State of Ohio would lose 

another $13 million. If the budget is enacted as proposed, 

Massillon’s CDBG program would have suffered a total loss of 42 

percent of its block grant funding from 2001 levels. 

But how do these funding reductions affect my community? How 

are Massillon’s programs being impacted? In Massillon, we use 

CDBG block grants to operate such programs as housing rehabilitation, code enforcement, neighborhood street improvement, demolition and clearance, and youth recreation. We also provide funding 

to a variety of local organizations, including: Massillon Main Street 

which provides exterior renovation and facade restoration grants to 

downtown commercial buildings; the Walnut Hills Residents Association, a neighborhood based organization designed to promote the 

revitalization of their neighborhood; the Massillon Urban League, 

which provides housing counseling services and teen pregnancy 

prevention classes; Stark County Community Services, which operates the Family Living Homeless Shelter in Massillon; the Domestic Violence Project, which operates a domestic violence shelter in 

Massillon; West Stark Medical Clinic, which provides free health 

services for low income uninsured households; West Stark Family 

Services, which provide homemaker services to elderly and handicapped households; the YWCA of Massillon, which helps pay for 

child care services for families in crisis; the Massillon Commission 

to Advance Literacy, which provides adult literacy training; Faith 

in Action of Western Stark County, a faith-based organization 

which provides caregiver services to the frail elderly; and Lighthouse Visions, which provides life skills education classes for foster 

children. 

Reductions in funding inevitably lead to loss of services. Every 

$5,000 reduction for housing rehabilitation programs in Massillon 

means one less home repair project that will assist a single parent 

51

household or elderly homeowner. Every $5,000 reduction for demolition and clearance activities means one less vacant dilapidated 

structure can be torn down resulting in the continuation of blight 

in low income neighborhoods. 

Reductions in funding also mean loss of funding to local organizations for their programs, meaning less funding for homeless shelters, domestic violence shelters, free medical clinics, housing counseling, child care, and elderly services. 

The city does not put together its CDBG program in any sort of 

arbitrary fashion. We put a lot of time and effort in the preparation 

of a 5-year plan called a Consolidated Plan for Community Improvement. The Consolidated Plan provides an in-depth analysis of 

the city’s housing, homeless and community development needs 

and establishes objectives to be achieved. A strategic plan is prepared to achieve our objectives and after that an annual plan is 

prepared each year to allocate our CDBG dollars to specific projects 

and activities designed to reach these objectives. 

All of this planning is done through a citizen participation process designed to provide input from local groups and organizations. 

These steep funding reductions, both real and proposed, which we 

are facing are causing a number of problems locally. Loss of funding means fewer activities, less funding or no funding for local organizations. We identify all of these housing, homeless, and community development needs in our Consolidated Plan, and then with 

Federal cuts we are denied the monies needed to make meaningful 

progress in addressing these problems. We ask for community 

input from local organizations on one hand, and then are forced to 

offer only limited, or maybe even no funding, for their programs. 

The proposed 27 percent funding reduction for 2007, will in all likelihood, if enacted, mean the end of funding to any local organizations in Massillon. Loss of such funding will definitely impact the 

quality of services available to serve the neediest of Massillon residents. Those elderly and single parent households living in substandard housing, those families in crisis facing homelessness, in 

need of child care, or in need of medical services, and those elderly 

in need of homemaker and caregiver services. 

Cities like Massillon need these community development dollars. 

The activities provided with these funds cannot be carried out with 

general fund dollars. The city has no local funding for housing rehabilitation, home repair assistance, or for local public services. 

Economic downturns have strapped our city budget, making it extremely difficult to provide for such services as police and fire protection, pothole repair, snow removal, and the like. CDBG is part 

of the implied pact between local and Federal Governments returning a portion of Federal tax dollars back to local communities, giving local governments the flexibility to use these dollars as needed 

to meet real identified community needs, while still adhering to a 

federally mandated framework of regulation and oversight. The institution of performance measurements is an important step in the 

ongoing process of monitoring and evaluation needed to better document the results and the benefits from the expenditure of CDBG 

dollars. 

Massive funding reductions will not destroy CDBG, it will only—

will not reform CDBG, it will only destroy the program, signaling 

52

the Federal Government’s abandonment of local communities and 

the neediest populations within our communities, leaving local government lacking the very resources needed to help solve some of 

the Nation’s most difficult problems. And ultimately that is what 

it is really all about. These are not just Massillon’s problems. They 

are Cleveland’s, Dayton’s, Cambridge’s, Guernsey County’s. Collectively, these are the Nation’s problems and that is why we need a 

national program to address them. That is why we need a fully 

funded Community Development Block Grant Program. 

Thank you for your attention. 

[The prepared statement of Mr. Aaby can be found on page 135 

of the appendix.] 

Chairman NEY. Thank you so much. 

Mr. Downing. 

STATEMENT OF PHILIP H. DOWNING, LOCAL OFFICE 

DIRECTOR, COLUMBUS ENTERPRISE COMMUNITY PARTNERS 

Mr. DOWNING. Good afternoon, thank you, Chairman Ney. Before 

I proceed, I just wanted to let everyone know, although it does 

state that I am a local office director of Enterprise Columbus, I actually hail from Wapakoneta, Ohio. So I have a rural connection 

and I spent probably half of my professional life working in rural 

communities. So, I have kind of an odd mix of urban and rural. 

Chairman NEY. One of Neal Armstrong’s— 

Mr. DOWNING. Yes, as matter of fact, I lived on Neal Armstrong 

Drive. That is a very small town. Well, thank you, I appreciate 

that. 

Thank you for the opportunity to discuss the Community Development Block Grant Program, and other key Department of Housing and Urban Development programs that facilitate the production of affordable housing and community improvements nationwide. 

Enterprise is a leading provider of the development capital and 

expertise required to create decent, affordable homes and rebuild 

communities. For more than 2 decades, Enterprise has pioneered 

neighborhood solutions through public-private partnerships with financial institutions, local governments, community organizations 

and others that share our vision. Enterprise has raised and invested $7 billion in equity grants and loans, and is currently investing in communities at the rate of $1 billion a year. Enterprise’s 

two Ohio offices located in Cleveland and Columbus, work statewide with a host of urban, suburban and rural community development partners. 

Enterprise plays an important role in the housing and community development finance system. To our grassroots partners, we 

provide resources, expertise, and access to additional capital. To 

our philanthropic and corporate partners, we offer assurances that 

funds are invested with the maximum impact. To the Federal Government, we ensure taxpayer dollars are appropriately targeted, efficiently used, and leveraged to the greatest extent possible. 

In fiscal year 2006, Congress recognized the value of the Community Development Block Grant, and nearly unanimously rejecting 

the proposals in the budget to eliminate the program entirely and 

transfer authority to the Department of Commerce. This year, 

53

while the proposal would leave the program authority at HUD, the 

proposed budget significantly reduces funding for the program. For 

the second year running, the Administration has proposed to cut 

funding for CDBG and several other programs under the auspices 

of the Strengthening America’s Communities Initiative. 

The fiscal year 2007 budget proposes just $2.7 billion in formula 

funding for CDBG. This is a reduction of $936 million compared to 

the appropriated level for fiscal year 2006. To make matters worse, 

the fiscal year 2006 funding level represents a 10 percent reduction 

in the funding from the appropriated level in the fiscal year 2005 

budget. Since fiscal year 2001, CDBG formula funding has declined 

by nearly 16 percent. We have grave concerns about these funding 

levels and the trend that they represent. These reductions have 

real and harmful consequences for communities across the country. 

The CDBG program represents the glue in the community development tool box. Without these flexible dollars that CDBG brings 

to affordable housing and community development facilities 

projects in both urban and rural areas, these developments often 

would not be able to come to fruition. 

The CDBG statute is very clear, the program’s three national objectives are the elimination of slum and blight, addressing urgent 

needs that pose imminent threat to health and welfare of a community, and addressing the needs of low income—low and moderate 

income families. We have made great strides in the past 30 years 

towards these objectives, but we by no means have achieved them. 

CDBG is an essential tool in rebuilding of communities. Without it 

much of the progress we have made is in jeopardy. 

Even as the CDBG program was slashed in the budget request, 

both Congress and the Administration have recognized its flexibility and strong past performance and have channeled $11.5 billion in Gulf Coast rebuilding funds through this program via supplemental appropriation bills. After the trio of hurricanes devastated the Gulf region, America’s housing crisis was unveiled for 

the world to see, and for our own citizens to recognize. The budget 

proposal looks the other way as families across our country, seeking stability, struggle to find fit, affordable housing. 

This committee and many of your colleagues in the House and 

Senate deserve the thanks of the community development industry 

and the low and moderate income families we serve for preserving 

CDBG last year. We hope that you will again join with us to ensure 

that this program can continue a strong track record of success. Accordingly, we urge Congress to fully fund the Community Development Block Grant program in the fiscal year 2007 budget at $4.5 

billion. 

In additions to cuts in the CDBG program, we are also concerned 

about the eliminations to the brownfields program, Section 108 

loan guarantees, and rural housing and economic development programs. Each of these programs meets a specific need that communities face when tackling their affordable housing and community 

development problems. We encourage Congress to reject proposals 

to eliminate these essential programs, as well as to reject proposals 

to cut funding for the Section 202 elderly housing program and the 

Section 811 disabled housing program. 

54

Another key program slated for elimination in the fiscal year 

2007 budget request is the Section 4 affordable housing and capacity building program. The Section 4 program is another critical instrument for revitalizing communities. It equips community development corporations and other neighborhood based non-profit organizations with the tools and resources that they need to address 

local issues. 

The Section 4 program provides seed capital that community and 

faith-based groups use to attract private investment for housing, 

economic development, and other revitalization activities. It helps 

local communities use programs like block grants much more effectively. In 2005, each Federal Section 4 dollar generated $67 in community activities. I think that speaks to the leverage issue you 

were talking about earlier, Mr. Chairman. It is a very effective program, leveraging private sector dollars. As you are aware, HUD administers Section 4 primarily through Enterprise and the local initiative support corporations, Mr. Grefe, representing them to my 

side here. The Nation’s two largest non-profit community intermediaries. In 2005, Enterprise and LISC used $30 million in Section 4 investments to help grassroots groups generate $2 billion to 

produce more than 12,000 affordable homes with a wide range of 

other economic development activities. 

To provide one example, in Fayette and Fairfield Counties, the 

Section 4 program supported training that enabled Community Action to expand its service area and self-help housing program from 

Fayette and Fairfield Counties into Ross County and to complete 

the second phase of Arbor Village in Washington Court House. 

Arbor Village is a community of 30 new affordable for-sale homes 

made possible in part by the buyer’s sweat equity. Additionally, 

Section 4 funding assisted Fairfield Affordable housing in developing 50 apartments, as well as providing case management and 

supportive services for low-income seniors. 

Additionally, in Columbus, Section 4 has provided capital to our 

local funding intermediary, the Community Development Collaborative of Greater Columbus, leveraging significant resources from 

financial institutions and philanthropies. This effective privatepublic partnership from financial institutions has proven effective 

in building capacities in over 15 local community development organizations, catalyzing construction of thousands of affordable 

homes and 120,000 square feet of commercial and retail space in 

Columbus. Recent evaluations by OMB and GAO point to the effectiveness of the program. 

The bottom line is that community based organizations across 

the country are building affordable homes, starting small businesses, developing commercial and community facilities. They are 

connecting people to jobs, providing child care and other services, 

and making streets safer. They are building that better world, 

quite literally, by providing the economic tools people need to pull 

themselves out of poverty. But they cannot do it alone, they need 

our help. 

We at Enterprise strongly believe that Congress should demand 

performance and accountability of Federal programs. We are committed to working with Congress and the Administration to improve the performance of these policies and programs. We encourVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
55

age Congress to continue to support and fund innovative models, 

test new approaches, and preserve successful programs. 

We are pleased that the subcommittee has brought this panel together today and I hope this dialogue will continue. We look forward to working with you to ensure that the best possible outcomes 

occur for not only the expenditures of public dollars, but also for 

the low and moderate income families struggling to find affordable 

housing in safe neighborhoods across our country. 

[The prepared statement of Mr. Downing can be found on page 

164 of the appendix.] 

Chairman NEY. Thank you, sir. 

Mr. Grefe. 

STATEMENT OF HUGH GREFE, SENIOR PROGRAM DIRECTOR, 

TOLEDO, LOCAL INITIATIVE SUPPORT 

Mr. GREFE. Thank you, very much, Chairman Ney, and thank 

you for assuring that Ohio is the home for these hearings this year; 

we deeply appreciate it. 

My name is Hugh Grefe and I am the senior program director 

for the Toledo office of the Local Initiatives Support Corporation. 

LISC is a national non-profit community development support organization working through our 34 local offices in over 100 cities 

and 80 rural communities across the United States. Each year we 

invest close to $900 million in low income neighborhoods and rural 

areas. Since 1980, LISC has raised over $6 billion in grants, loans, 

and equity from supporters and has invested it to generate over 

$14 billion in community development. These funds have created 

over 160,000 homes, 25 million square feet of business and service 

facilities, and helped to employ 60,000 people. LISC works through 

local non-profit community development corporations and other 

non-profit community based development organizations along with 

local government and local private sector partners. Our financing 

includes investments, loans, loan guarantees, and grants. Organizational assistance includes advice, training, management analysis, 

and operational support. 

In Toledo, I have been responsible for leading LISC work in community development for 12 years, and previously served as a senior 

executive at a local hospital serving Toledo’s oldest and poorest 

neighborhoods. In Ohio, LISC has local offices in three cities; Toledo, Cleveland, and Cincinnati. We also work through our rural 

LISC office working with program partners and two rural non-profit developers, the Adams/Brown Counties Economic Opportunities, 

Inc. and with WSOS Community Action Agency in northwest Ohio. 

LISC’s work with our non-profit community development partners is structured around efficient and strategic use of public 

funds. One of the critical building blocks of community development is the Community Development Block Grant Program. 

In Toledo, a weak market city with a struggling economy and a 

continuing loss of population and loss of jobs, CDBG is a key resource. With few local private foundations, CDBG is the main 

source of operating and public investment funds for community development and human services organizations. Significant goals to 

build new neighborhoods around new schools and a major job-producing riverfront development must have CDBG investment to sucVerDate 0ct 09 2002 15:46 Nov 02, 2006 Jkt 030176 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 F:\DOCS\30176.TXT HFIN PsN: TERRIE
56

ceed in the coming years. As an example, the Pontiac and Ontario 

Place development provides a wonderful study of a broad-based 

neighborhood revitalization aided by the CDBG. Forty new and rehabilitated homes for low income families have been built within 

sight of the location of the new Chase Elementary School. The use 

of CDBG in this first project in Pontiac/Ontario has now attracted 

$3.5 million in new, private investment to the neighborhood and 

created the basis for the next steps in the new schools, new neighborhood program. 

In Cincinnati, Ohio, CDBG supports the infrastructure of community development corporations which are the backbone of neighborhood-based development in that city. Working with our partner, 

Cincinnati Housing Partners, 18 blighted properties in the 

Carthage neighborhood have either been rehabilitated or have seen 

new constructed homes and sold—who have built them and sold to 

working families creating equity for first time home buyers and 

hope for a whole neighborhood. The CDBG program was key to this 

neighborhood turnaround through its flexible uses in acquisition 

and infrastructure improvements. 

In Cleveland, CDBG funds have been extremely important tools 

in strengthening community economic development. Funds are 

used to repair homes, provide operating support to CDCs, provide 

shelter and care for the homeless, repair neighborhood storefronts, 

and provide supportive care for those living with AIDS. In Cleveland, along with the LISC grant, CDBG funds were used to support 

the Spanish American Committee, Ohio’s oldest Hispanic non-profit 

organization, to develop the only HUD certified bilingual housing 

counseling program in the City of Cleveland, to increase home ownership in the fast growing Hispanic community. This relatively new 

program has been amazingly successful in helping to increase home 

ownership among Cleveland’s growing Hispanic community. 

In rural Ohio, through our partner organizations, Adams/Brown 

Counties Economic Opportunities, serving Adams and Brown County and WSOS Community Action serving Ottawa, Sandusky, Seneca, and Wood counties, affordable rental housing and home ownership is being built for low and moderate income families, senior 

housing is in the planning stages, businesses are being assisted 

using critical job-producing strategies through micro enterprise development and IDA initiatives, child care centers are being built, 

homeless are being assisted and more, all with the assistance of 

CDBG funds. 

Along with other specialized Federal programs including the 

HOME program, the Section 8 tenant assistance program, the 

Community Service Block Grant programs, Section 4 and others, 

CDBG plays an extremely important role as one of the most flexible of all programs in the tool box created to support community 

revitalization and support. Among its strengths are the following: 

CDBG is the venture capital of change, leveraging significant private capital into communities that have had difficulty attracting 

new investment. For example, in Toledo, over the last 10 years, 

CDBG commitments from the City of Toledo entitlement have resulted in $5.00 for every single dollar of CDBG, just from LISC 

alone. And when the project financing commitments that the CDC’s 

57

have been able to attract is added, it brings it to nearly $9 in total 

leveraging impact from the City of Toledo’s commitment. 

CDBG encourages local elected leaders to work with community 

based and run organizations to set priorities for investments that 

produce results in difficult-to-develop areas. 

CDBG allows communities to take the long view and develop 

strategies to address the corrosive effects of decades of negative 

economic and social trends. 

Because it is flexible, CDBG can be carefully targeted in ways 

that enhance the effectiveness of more focused investments of 

HOME funds, Section 8, Section 202, and other Federal funds. 

Overall, CDBG allows local communities to develop and carry out 

neighborhood and community transformation plans that make the 

project or transactional work supported by HOME, Section 8, Section 202, and other funds have more long term and lasting impact. 

CDBG is a 30-year old program and it works. From LISC’s national perspective we have seen the benefit of the flexibility of the 

program in cities as diverse as Los Angeles, California and Duluth, 

Minnesota. In rural America we have seen the usefulness of small 

cities grants funded by CDBG which helped to jump start the revitalization of a faltering main street as we just heard about here in 

Cambridge or the acquisition of land in order to start a self-help 

home ownership program in a community that had not seen new 

construction in decades. 

We thank Congress for your past support, particularly last year, 

and applaud your vision and partnership with local communities in 

supporting CDBG. 

If reform is to happen to the CDBG program, we urge Congress 

to include community-based stakeholders, both rural and urban, in 

this decision making process. We understand that times are tough 

in Washington. Tough decisions must be made over competing priorities. CDBG works, it helps communities work. Deep cuts will 

strike at the very heart of communities reinventing themselves. 

Discussions concerning changes to the CDBG program or how the 

allocation program or formula is determined must not be kept within the Beltway but to be brought here, as you have done today, 

where we are, to be discussed. 

I appreciate the opportunity to testify before this committee. I 

am happy to answer questions. And I wanted to comment on your 

question about direct support for low income persons, as a result 

of that. In Toledo, Ohio, every year the City of Toledo’s allocation 

of CDBG to family resource centers and other non-profits including 

homeless shelters, soup kitchens and other feeding programs, etc., 

amounts to about $1 million a year and it is direct service to the 

very lowest of low in our community. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Grefe can be found on page 172 

of the appendix.] 

Chairman NEY. Thank you. 

Before we go on I wanted to, the Mayor of Vincennes is in the 

room. We introduced everybody, so the Mayor of Vincennes is here. 

I just wanted to say that. 

He was my mayor for 13 years, so I wanted to introduce him. 

58

VOICE. He used to be my resident and I could tell him that he 

may have his power in Washington, but on weekends he belonged 

to me. 

[Laughter] 

Chairman NEY. We got redistricted and we had to move, I might 

get redistricted and have to move back. 

VOICE. That is important. 

Chairman NEY. He was good when I lived there. 

Mr. Henry. 

STATEMENT OF OREN J. HENRY, COMMUNITY DEVELOPMENT 

ADMINISTRATOR, CITY OF CINCINNATI, OHIO 

Mr. HENRY. Thank you, Mr. Chairman, thank you. Before I begin 

my comments, I want to thank you for having this hearing and it 

is nice to be back in this part of the State. I live in Cincinnati now, 

but I was born and raised in Newark, Ohio. 

Chairman NEY. Okay. 

Mr. HENRY. I was their community development director for 16 

years and had many successes there with the block grant program, 

and then moved on to the Ohio Department of Development, and 

was the deputy director of the community development division 

there. I currently sit on the board of the Ohio Housing and Finance 

Agency, but I am wearing a different hat today. So I will begin my 

comments. 

Okay, thank you, Chairman Ney and the members of the subcommittee, for allowing me to testify today on the importance of 

the HUD Community Development Block Grant Program to our 

communities, and the need for continued stable funding for the program. 

I am the Community Development Administrator for the City of 

Cincinnati and I have held that position for approximately 5 years. 

In that time I have seen Cincinnati’s annual CDBG allocation decrease 21 percent from $17,343,000 in 2002 to less than 

$13,742,000 in 2006. The substantial annual cuts in funding are increasingly making it difficult to administer effective programs to 

add new and sustain existing jobs, provide decent affordable housing in safe neighborhoods, and to offer needed public services for 

our citizens. In order to maintain effective programs, please fund 

the Community Development Block Grant formula program at a 

minimum of $4.3 billion for 2007 and beyond. 

We are very concerned about the President’s proposed cuts in the 

fiscal year 2007 budget proposal that would reduce overall CDBG 

program funding by 27 percent and would provide for dramatic 

changes in the funding formula. I understand HUD will be pursuing a new formula that would cut the CDBG allocation for Cincinnati by an additional 25 percent. If all these so-called reforms 

are enacted as proposed, the city could see its CDBG allocation 

shrink from a high of $17,343,000 in 2002 to only $7,523,000 or 43 

percent of what was received just 5 years ago. Add in the effects 

of inflation and Cincinnati will be operating with only about a third 

of the resources the city recently received. 

Like all cities, Cincinnati has a unique history. In 1880, Cincinnati was the sixth largest city in the United States and had a 

solid industrial base. As the city matures, it finds itself landlocked 

59

and with one of the lowest home ownership rates in the Nation at 

just 39 percent. And it is only 29 percent for minority populations. 

As manufacturing is still a large part of the economy, many of the 

old factories and sites need serious brownfield remediation to be 

marketed and reused for new industry and jobs. Obsolete, old 

neighborhoods need new approaches and well designed infill redevelopment to meet the needs of existing citizens, to halt the exodus 

to sprawling suburbs, and to offer exciting and innovative alternatives to attract new residents into a mixed income and diverse 

environment. 

While pursuing a number of redevelopment initiatives, our leadership currently is taking bold action to address the ongoing problem of vacated buildings. There are documented complaints on over 

1,700 vacated buildings that contribute to the blight, harbor illegal 

activities, and provide an incentive for disinvestment. The city is 

dramatically increasing fees and fines on negligent property owners. Our goal is to cut the number of vacated structures and to motivate owners to immediately address safety issues and to rehabilitate and reuse their vacated building. The owner may also sell 

their building or donate it to the city and neighborhood-based redevelopment groups. CDBG funding is a key part to this effort by enabling us to have ample resources to pursue all of these buildings 

in a reasonable time frame. When the transition of these blighted, 

vacated structures begins, CDBG will continue to be a strong element. CDBG funding will be utilized to demolish, clean up, and rebuild some sites or will leverage funding in the renovation of others. Our strong actions in dealing with vacated buildings will be a 

tremendous start to the revitalization of some of our most challenged areas. 

But the proposed funding cuts and formula reallocations threaten 

new initiatives as well as our existing community redevelopment 

efforts. The 21 percent cut in funding we have experienced over the 

past 5 years has meant cuts in neighborhood programs and public 

services in all areas. Of significance, CDBG regulations generally 

limit expenditures of CDBG funding for public service activities to 

15 percent of the grant including program income. As the CDBG 

program has been cut 21 percent, a corresponding cut has been 

made in public service activities, such as youth development programs or drug elimination activities. At the same time, CDBG 

funded programs are under increased scrutiny, and more reporting 

information is requested, increasing staff time. We have no issue 

with being held accountable for the expenditure of public funding, 

but we cannot continue to offer high quality programs that truly 

address the needs of our neighborhoods with significant annual 

cuts. 

In order to maintain effective programs, please fund the CDBG 

formula program at a minimum of $4.3 billion for 2007 and beyond. 

We understand the periodic need to examine formulas to ensure 

they are fair, but for a city with a declining population base, large 

numbers of vacated building of which many are historically significant, numerous brownfield industrial sites, and extremely low 

home ownership rates, it does not seem plausible that a cut of 25 

percent is a reasonable adjustment. Ideally, formula funding could 

be increased to maintain funding to existing cities while boosting 

60

those that seem to have unmet needs. In today’s budget environment that may seem unrealistic, but to not reinvest in our neighborhoods and communities seems totally unrealistic. 

Thank you for your consideration and thanks so much for your 

support of the programs over the years. 

[The prepared statement of Mr. Henry can be found on page 177 

of the appendix.] 

Chairman NEY. Thank you. 

Mr. Myers. 

STATEMENT OF DONALD R. MYERS, EXECUTIVE DIRECTOR, 

OHIO MIDEASTERN GOVERNMENT ASSOCIATION 

Mr. MYERS. Thank you, Congressman Ney. Before I start, I just 

would like to note, as you are well aware, four of the board members on the original panel were OMEGA members which I represent and we are honored for that privilege and that invitation. 

It is also good to have the Honorable Congressman Frank, the 

ranking member of this important subcommittee, here today. And 

for this privilege of testifying before this committee today, and to 

you we thank you. 

I testify to express my comments and those of the Ohio MidEastern Governments Association Board in its entirety, to seek 

your consideration and support to fully restore funding to the HUD 

Community Development Block Grant Program in the amount of 

fiscal year 2004 levels of $4.3 billion. In addition and most importantly, we ask that you and the committee support retraining—retaining the original mission of the program as a flexible local-driven program that provides valuable assistance to county commissioners, mayors and development directors working to improve 

local communities and the economic development initiatives needed 

in our region. 

As executive director of OMEGA, I represent a Council of Governments, a local development district, and an economic development district serving 593,221 people. 

At our most recent annual board meeting, 92 officials were in attendance, from a variety of walks of life, and all of them spoke of 

the critical importance of the CDBG program. At our most recent 

meeting held 2 days ago, March 22, 2006, we spoke of this subcommittee hearing, its importance. And the board in its entirety 

asked that we express no in uncertain terms the importance of the 

Community Development Block Grant Program to rural Ohio and 

to our region. 

As a former development director in Belmont County, I have had 

the privilege, Congressman, of working with you on three very important projects to me and to you. You were both a state senator 

and a United States Congressman. We worked on $80 million Electrolytic Tin Plating Plant, called Ohio Coatings. We worked on the 

Shadyside Stamping Plant in Shadyside, Ohio, together at a cost 

of $32 million. The Electrolytic Tin Plating Plant was at $80 million and we worked on the Belmont Correctional Institution together at a cost of $38 million. 

When I left Belmont County as its development director in 2001, 

these three projects alone had created 900 jobs, and they had a 

payroll and fringe benefit package in excess of $35 million. Belmont 

61

County and its people today benefit because of these developments. 

These projects could not have happened, and would not have happened, without the Community Development Block Grant Program, 

which you are very familiar with. 

Records in our office, the OMEGA office, and we do not have all 

records for the HUD program, but what we have found is, just in 

the year 2004 we had $3,015,000 for 15 county and city formula 

grants, $885,000 for two water and sewer grants, and $5,839,000 

for 12 CHIP grants. These CDBG grants are so important to our 

region and to the individual counties and cities that they benefit 

and serve. 

Our infrastructure needs today are many, not only here in rural 

Ohio, but throughout the country. Last year, the American Society 

of Civil Engineers prepared a report that addressed the 12 primary 

categories of infrastructure in America. The grade given by this 

quality group of people was a D. Both drinking water and wastewater received a grade of D. The report further states that the Nation’s 54,000 drinking water systems are aging rapidly and some 

sewer systems are in excess of 100 years of age. And Congressman, 

you personally know one in our region that is 100 years of age, 

your former hometown. We need quality programs like Community 

Development Block Grant that address these issues of concern and 

importance. 

You have done much for the people of Ohio and for the economic 

disadvantaged citizens throughout the United States. We ask that 

you continue to look out for those in need and in the shadows of 

life. With a very sluggish economy and three major floods that have 

hit our area recently, our 10-member counties need your help and 

that of Congress more than ever. We ask that you support these 

quality programs and restore funding of the CDBG program to the 

fiscal year 2004 level of $4.3 billion. 

Again, for this privilege and this honor to speak of this important 

program, and on behalf of OMEGA, we thank you for this consideration. 

[The prepared statement of Mr. Myers can be found on page 195 

of the appendix.] 

Chairman NEY. Thank you very much. 

Mr. Ricer. 

STATEMENT OF GARY W. RICER, EXECUTIVE DIRECTOR, 

GUERNSEY, MORGAN, NOBLE TRI-COUNTY COMMUNITY ACTION 

Mr. RICER. Thank you very much. My name is Gary Ricer and 

I am the CEO of Guernsey, Monroe, and Noble Tri-County Community Action, Inc. On behalf of the residents of Guernsey, Monroe, 

and Noble counties, I would like to submit this testimony of the 

need for the continuation of funding for the Community Development Block Grant Program. GMN Tri-County CAC has administered the CDBG program for the Noble County Commissioners for 

the past 12 years. This program is discretionary funding, which 

permits the local elected officials to complete much needed projects 

within a local jurisdiction, which they could not do without the 

critically needed CDBG funds. 

62

During the past years, we have been able to complete the following projects in Noble County: 

Help purchase fire trucks for volunteer fire departments; 

Purchase needed supplies for the fire departments; 

Install sidewalks; 

Install water lines; 

Dry fire hydrants; 

Demolish buildings; 

Renovate buildings; 

Help purchase senior citizen vans; 

Purchase park equipment for small villages; and 

Pay engineering fees for proposed sewer lines, just to name a 

few. 

We have received a significant reduction in grant funds over the past 3 years, and for this rural area it went, in 2004 from $67,000, 

2005 $63,000, 2006 $57,000. So you see the pattern. I am urging 

your support of the continued funding for the Community Development Block Grant Program. 

And in summary, I would just like to say as a former county 

commissioner, as well, that I think it is really critical when you 

look at—this is the last of the discretionary monies, that I feel for 

the rural communities. And with all due respect, many times when 

State and Federal Government has allocations of funds available 

for disbursement they pretty much direct or tell you where those 

monies are going to go. But I think in this case with the CDBG 

and with the public’s input, it really does give the voter, the taxpayer, the resident, and the communities a strong voice on exactly 

where that discretionary money is going. Of course we all know 

that it is generally ten to one the request of the monies that is 

available for what is to be actually disbursed, but it is really important, I know to a lot of these public and—public organization service and civic youth groups and such. 

I know in the past, historically from e-squad defibrillators, to 

sidewalks in slum and blight areas, and from a new roof for community centers to replacing a pumper on a fire engine; that is really critically important for the locals. And what you said earlier, 

Congressman, to the first panel about if the guidelines are changed 

to look more at the poorest of the poor so to speak, the hardest to 

serve, the under-served and under-privileged, I feel that it would 

have a detrimental effect, because what that actually is going to do 

is, let us say hypothetically, you take 200 that were funded and 

you cut that back to 20 of the hardest to serve, then before you 

know it, the moderate income is going to be the low income. Because they are going to be affected as well. So I think it is critical 

if you would, with all due respect, be mindful of that fact as well. 

Again, I thank you on behalf of the citizens of Guernsey, Monroe, 

Noble Tri-County. And I appreciate your efforts; I know the work 

for all of you, you have kind of got your work cut out for you as 

well. We are always asked to do more with less funding. So good 

luck and I appreciate the opportunity to testify. 

[The prepared statement of Mr. Ricer can be found on page 198 

of the appendix.] 

Chairman NEY. Thank you. 

Ms. Wesel. 

63

STATEMENT OF CHARMEL WESEL, ACTING DEVELOPMENT 

DIRECTOR, CITY OF MARIETTA, OHIO 

Ms. WESEL. Thank you for allowing me to speak. My name is 

Charmel Wesel and I am the acting development director for the 

City of Marietta. We currently are an entitlement community for 

CDBG funding. Last year, we received $505,971. This year we will 

receive $450,554. 

To echo the sentiments that you have already heard, CDBG 

funds are an incredibly valuable tool in assisting our low income 

families. Here is just a brief rundown of a few of the programs, a 

few of the ways we have used our CDBG dollars. Last year we assisted 15 families with emergency home repairs. We have given 17 

families the paint and supplies to paint the exterior of their homes. 

We helped 13 local businesses make improvements to their store 

fronts and provided more than 100 children with summer playground program activities, while providing five local teens summer 

jobs. We awarded more than 300 scholarships to families admitting 

them to our new Aquatic Center. We supplemented our local public 

transportation system with $40,000, and placed new playground 

equipment in two of our neighborhood playgrounds. We installed 

historic street lighting in a slum and blight area to provide residential safety and we assisted our local food pantry with the purchase 

of new refrigeration equipment. We hosted a building doctor clinic 

for our many residents living in older or historic homes. As you 

know, Marietta is the oldest city in the State of Ohio, so we have 

a lot of older homes. We also hosted a DART visit with Downtown 

Ohio Incorporated last summer that began an ongoing drive to the 

Main Street program in our downtown for revitalization efforts. We 

provided lead paint education for several families. We worked with 

our Washington County Career Center to create some new wrought 

iron trash receptacles that were placed throughout our downtown 

and our new bike path and planted more than 40 trees throughout 

a slum and blighted area. We completely reworked a city street and 

resurfaced a public basketball court. And in addition to that, thinking about leveraged funds, we worked with our community action 

program in Washington County, and supplemented their CHIP program with $40,000 of funds which go to help fund $400,000 to provide home rehabilitation efforts. 

This is not a complete listing of the projects we did last year, but 

it is very indicative of just how valuable the dollars are that we receive from CDBG every year. Please do keep in mind that all of 

these projects are done in areas that have been identified as low 

income or slum blighted areas, using census tract data. 

We are very fortunate to receive these funds. Their flexibility is 

crucial in allowing us to create the programs that will directly impact those low income residents who really do need our assistance. 

A brief example of the wonderful flexibility of the CDBG program 

came to light following the two devastating floods we suffered in 

September of 2004 and January of 2005. These floods ravaged our 

town affecting some 300 plus businesses and thousands of residents. Most of the residents affected were low income. It affected 

our trailer parks and some low income housing areas that were directly in the flood plain. A lot of trailers were destroyed; homes 

were completely flooded out. FEMA came to assist us but they 

64

could not really provide the adequate funding that we needed. We 

were, as a city, able to move funds in our CDBG program directly 

into our emergency repair program to assist those homeowners 

with new furnaces, new hot water tanks, new electrical, whatever 

they needed. We also created a new project in our CDBG funds to 

help flood-affected businesses. We provided $1,000 apiece to over 35 

local businesses to help them get back open as quickly as possible. 

I do not know of any other Federal program, and I am new to 

government, but I do not know of any other Federal program that 

would allow that flexibility with the same funding in such a short 

time frame. We were immediately able to react and respond to the 

needs of our citizens. 

One other issue to address is a little bit more specific to our region. Appalachian Ohio continues to lag behind the rest of the 

country in terms of economic growth. I hear every night on the 

nightly news that our country’s economy is growing; our local economy, however, remains stagnant. 

We continue to have homeless issues resulting from the floods. 

Many of our homeless are going unreported; they are sleeping on 

their friends’ sofas or sleeping in their cars. Gas prices continue to 

stick at $2.50 a gallon. Our population in Marietta is shrinking and 

our employer base is declining as well. Our manufacturing base 

has shrunk dramatically leaving what few job openings are available only in the service industry, which means lower wages and 

fewer benefits. 

These items affect our city government’s pockets pretty deeply 

and that means we can provide fewer infrastructure improvements 

and services. CDBG is our strongest hope to provide much needed 

assistance to those in dire need. While I realize that our Federal 

Government has to be fiscally responsible, CDBG is not the area 

in which to make such drastic cuts. Unfortunately the reality of life 

for our low income citizens across the country is this, a one time 

assistance from a CDBG fund will not move them out of their low 

income lives. CDBG is, and must remain, an ongoing flexible funding program to allow communities to help those in need. Whether 

that is creating jobs, providing funding for home repairs, or maintaining an adequate infrastructure. CDBG answers all of those 

needs and more. I urge you to look for other alternatives to find 

the funding to balance the Federal budget. Do not take away from 

those who already have nothing to give. 

Thank you very much for your time, I appreciate it, thank you. 

[The prepared statement of Ms. Wesel can be found on page 207 

of the appendix.] 

Chairman NEY. Thank you. A very good panel and I appreciate 

all your time. 

I wanted to mention on the floods, we have, we meaning the staff 

in Washington, in fact had a hearing way ahead of the curve prior 

to Hurricane Katrina on flood insurance, was it in Tuscarawas 

County, I think? 

Mr. RILEY. Last August. 

Chairman NEY. Last August, so we were ahead of the curve. We 

all know more than we want to know maybe about flood insurance 

laws now. And the House placed flood insurance with some reforms, I only mention this because in our area it is flooding too. 

65

You have not only got it in Cincinnati, you know, in other river 

areas, in Tuscarawas County, all over the place. But we put some 

reforms in that and the Senate did not move. Now, we did another 

round of flood insurance. 

But FEMA too, we are trying to find out, you know, what FEMA 

does and does not do to help and they do some things to help and 

some they do not. So, I wanted to mention one in particular, on 

Powhatan Point, Ohio, we—FEMA, the trailers would be moved, be 

pulled, trailers and not modular, would be pulled away and then 

the water would come up. And then when they went to bring them 

back, FEMA said, well, you can bring them back, but you are going 

to put them on 30 foot blocks and then you have to run the plumbing up, you have to spend thousands of dollars for the trailer. 

Well, the point was no, when we know it is going to flood, the 

river does not really flash flood, and—but we can just pull them 

out. And it just so happens, I just want to tell you, Clinton Jones, 

and Cindy, and anyone else who worked with Mr. Beerider at the 

time, they put the amendment in to force FEMA to let you pull 

those trailers out of Powhatan, across the United States. 

I just thought I would mention that. So, they did do that, so we 

try to look at some of the situations, the block grants are good too, 

for the flexibility of the flood. That is what we have done with the 

Gulf States now. They have an appropriation for block grants, they 

can use it in various ways. Some of them are using it maybe retroactively on flood insurance, and some are using it for direct payments for the houses. So, I think the flexibility aspect of the block 

grant, during Katrina, of the horrible thing—our subcommittee, by 

the way, went there. We were the first subcommittee of the House, 

period. Well, the first committee of any type to go down there and 

view it, you know, and to have the hearings down there. So, I think 

the flexibility of block grants and applied right into Katrina was 

the better, quicker way probably to do a lot of things to help. 

I was going to ask about Cincinnati and that is 39 percent, do 

the vacant buildings have something to do with the home ownership rates? 

Mr. HENRY. While the city, as I mentioned, was the sixth largest 

in the country many years ago, but, you know, it is kind of down. 

It is not in a flood plain, but there is the flat area between the hills 

there, so the population is very dense and—and it led to the development of a lot of rental units, or older housing that is kind of obsolete and they have been turned into rentals. And as people earn 

more money and could afford a home, they moved out to the suburbs. So now, we have an inner city that only has a 39 percent 

home ownership rate and, you know, that is far below national average. I am forced to try to sustain a community, we have to do 

something about that. And that is why— 

Chairman NEY. That is why the District of Columbia, Washington, D.C., which is a very high cost area, obviously to buy and 

I think it is 50 percent—50 percent would be home owners, so I 

was just— 

Mr. HENRY. Yes, and we are not that high of cost. I do want to 

mention the flexibility of block grants. We have a number of 

Katrina families who were relocated to Cincinnati that—and we 

are using block grants to help them through the transition and 

66

with their FEMA assistance, and we do have people now, in fact 

just yesterday I received a report of five families who have bought 

houses, so they are now going to be residents in Cincinnati from 

the Gulf. 

Chairman NEY. I saw something on television about that, too. 

The first families who came up, I saw something on TV, they came 

to Cincinnati, this was 6 months ago. 

Mr. HENRY. It is helping reverse our population decline. We put 

them in homes. 

Chairman NEY. One thing we noted earlier too, for Section 8 purposes that, you know, FEMA, we had stipulated that some of the 

funds would have to go to HOPE VI and some different ways they 

were going to spend their money. And Congress on a bipartisan 

basis had agreed that they would spend, I do not remember exactly 

what we appropriated, we had HOPE VI, what else was there, do 

you know? 

Mr. RILEY. A variety of HUD programs. 

Chairman NEY. And we said, here is the FEMA money that is 

going to be spent down at the Gulf and here is how you are going 

to spend some of it. So we had directed it. And I think too, if you 

are dealing with Section 8, the Congress has to be careful because 

as emergency vouchers were provided for people to, you know, go 

across the United States and take that emergency voucher, go to 

Cincinnati, Columbus, or Seattle, wherever people went, although, 

I personally think people need options to remain there, if you want 

my opinion. I think that, you know, in Mississippi there are 30,000 

trailers so people could remain there and rebuild and, in New Orleans, there are 2,000 trailers. And there are a lot of reasons I can 

cast the third sin fed, third sin state, third sin local city. And if 

you wanted to do that, but I just think that if people, you know, 

did have to disperse across the country and did not have the option 

unfortunately to stay at home, they need that Section 8 and those 

vouchers to follow or as we create emergency vouchers, we have to 

be careful later on in future Congresses that somebody does not 

come back and say look it is a tight budget and those emergency 

vouchers came out originally out of this pot of money. Now we are 

going to make HUD assume that cost, and therefore, you short 

communities on your standard vouchers that were out there. I 

think in my opinion that is something that we have to watch. 

Anybody want to just mention anything else about the 

brownfields, do you work with the brownfields? 

Mr. GREFE. In Toledo, which is a classic midwestern industrial 

city, brownfields are dominant—they play the role as an immovable 

storm cloud that hangs over neighborhoods, and they can either be 

vacant land itself or simply abandoned buildings. So brownfield redevelopment is a profoundly important part of our rebirth. It represents an opportunity for very efficient and high impact use of the 

existing infrastructure, rather than—you know, I do not want to 

get into a big long discussion about sprawl versus—but when you 

can reinvest in those old parts of the community where you have 

already have an infrastructure that the public through its taxes 

and its local jurisdiction has to support anyway and you cannot not 

support it any more. It is very good government to promote the reinvestment in those areas where possible. 

67

One additional thing to consider about brownfields that we learn 

the hard way a lot of the time is, most of them seem to be 19th 

and early 20th century configurations. The 21st century economy 

has a different set of needs, and so when we think about rebuilding 

brownfields, we are actually talking about reinventing our industrial base. The kinds of industry that today would use something 

that was configured to be a factory in 1895 and its location and so 

forth, is going to be a very different kind of industry, but it represents opportunity for creativity. So it is very important not to 

lose that resource. 

Chairman NEY. Mr. Henry. 

Mr. HENRY. Well, you know, going back to Cincinnati’s history as 

an industrial community, we have lots of inner city brownfield sites 

and all that need to be redeveloped and, you know, all the good 

reasons about trying to eliminate sprawl and all that. Also, we 

have the infrastructures set up for it, you know, the Ohio River 

still transports a lot of commerce. We have two interstates, we 

have a very active airport, so it’s important to continue to have the 

reinvestment there in the city. 

But one of the things you were asking earlier about private dollars being leveraged, we do not find a lot of difficulty in getting 

companies to come in and, whether they are doing manufacturing 

or, you know, whatever their business is, if we can come in and 

hand them a clean site. But it is getting those properties, getting 

them cleaned up, pulling in the resources and it takes a city to be 

able to do that. A private business just cannot take that risk of 

going in and acquiring a site and not knowing if they are going to 

run into PCB’s or asbestos and get it tied up, that could be devastating. And so we have a very active brownfield program, we 

modeled it after one that has been very successful in Chicago and 

we are turning properties over regularly, large pieces so that we 

can attract people back in and put them right on route 50 or I–

75 or whatever. 

And I find too, I mean, you know, it is not just Cincinnati, I had 

the same kind of problems in Newark, they were certainly on a 

smaller scale, but every community has some old mill or some old 

plant that dumped something and that land would be perfect to do 

something with. But a private business cannot go in and do it. It 

has to come in, you know, we have to be the ones that do the clean 

up. 

Chairman NEY. We found that out now in refineries. The bill 

that I supported in the past, the Federal Government will actually 

build the refinery, go through the permitting process etc., with 

itself. And then it will be sold to the private sector. We have not 

built a refinery since 1976, there is a reason, either government 

then mandates you, the company will build the refinery, which you 

cannot do or we build the refinery or we fast track it so that they 

will have an incentive to build a refinery. So, you run into these 

problems everywhere. 

New Orleans, the Army Corps was telling people that you need 

to, or here is what we want you to do with the levees. The companies came in, the companies got sued immediately by groups, and 

the companies said fine we do not have to be here. So, you know, 

you are running into this, and I think that the governments or the 

68

development groups give, you know, a bit of a push in there with 

a better feeling to be doing developing. 

Has anybody ran into problems of—I am just curious, about permitting, getting the studies done, the environmentals, or does that 

run pretty smooth? 

Mr. MYERS. Congressman, they are difficult but in many cases 

they need to be difficult. 

Chairman NEY. Because of the past history? 

Mr. MYERS. Exactly. It is a quality program and, you know, as 

it is right now it could be slightly better, but we also need the 

guidelines. And we will follow the guidelines believe me, just to 

have the worthiness of the programs. 

Mr. GREFE. We do not want to lose the resource. 

Chairman NEY. I want to ask about capacity building, you had 

mentioned that, is that the 1994 program? 

Mr. DOWNING. Correct. 

Chairman NEY. Senator Bond? 

Mr. DOWNING. Correct. 

Chairman NEY. Okay, so that is back in my youth, 1994. 

Mr. DOWNING. Yes. 

Chairman NEY. Yes, and it has certain provisions of, you know, 

who can be involved in it? 

Mr. GREFE. That is correct. 

Chairman NEY. Now you want to just expand on that a little bit? 

Mr. DOWNING. Sure. Basically the Section 4 program, as you 

mentioned, originated back in 1994. The program right now in the 

past year has contemplated $26.5 million, which is really divided 

between Enterprise and LISC to support specifically on-the-ground 

capacity building activities. And what we do in Columbus is invest 

a great deal of the money in the capacity, the ongoing day-to-day 

activities of community development organizations. Those folks are 

the best, most in tune with the needs of their neighborhood, their 

communities. We in turn work with them to effect housing, to effect 

change, be it commercial revitalization or whatever they need. So 

that money really serves significantly and the leverage amount 

that I gave you was specifically for Section 4, and I think it is really prudent of—it is a highly effective program. Because we will use 

it with the private sector. We go to the banks and we show the investment that is being made by the government and then we leverage that at a minimum, three times. And then in our local programs we are seeing numbers that Hugh was talking about, the $7 

to $8 being leveraged by a single dollar of Section 4 funding. 

Mr. GREFE. As I think you are aware, the Section 4 program is 

the one that is scoring, the park scoring is rated as the highest performing HUD program, that may be a result of being a fairly modest one. So, without hoping to be argumentative at all, we would 

hope that this little $30 million, now $26 million program would 

not get lost in the rounding somewhere. It is a highly effective program and it is the best rated program in the department. It is also 

powerful, because we are able to be value added with it. 

What Phil is saying is that, at least what we do with it in Toledo, 

is we are able to take the baseline, which the City of Toledo is willing to invest in CDC’s, you do not have as much money as the cities block grant allocation makes available. But we are able to add 

69

an extra layer that we can be careful about targeting. So it can be 

all about whatever the necessary competitive edge is or moment of 

excellence, whether it is training, computer capacity, there is a 

whole lot of things we can do to help those get really first class impact. 

Chairman NEY. Don Myers mentioned about, and I was asking a question about wireless. I know that you had a project $300,000, 

I think it was, for that high speed wireless? 

Mr. RICER. High speed wireless, $383,000. 

Chairman NEY. Two years ago. I just wondered for the more 

rural areas, or parts of the urban areas too that may not be up—

up to speed. A lot of people and it is my opinion too, if you can wire 

and provide the high speed, you are ahead of the ball game there. 

There is a company in Wheeling, West Virginia, and a law firm has 

come from San Francisco and hired, I believe, 20-some people, paying an average of $46,000, which down here is a lot. And it may 

not be a lot to you all with the fortunes you pay for your houses 

and, I feel bad for you in D.C., but a lot of money. And they do 

all of their billing out of there right now. And they do payroll and 

the law firm in San Francisco is saving $4 million a year by doing 

it down here, because they would have had to pay a fortune on rent 

out there. A house that cost $100,000 here is $1 million out there. 

The cost of the salaries would go up because of the cost of the 

house. That is all because they got the wiring down there. And I 

just wondered if anybody use—yours was a direct grant? 

Mr. RICER. USDA through Rural Utilities. 

Chairman NEY. Does anybody use CDBG in any way to—for wiring, I call it wiring. I am a teacher by degree, a history teacher, 

so I call it wiring. Getting it up to speed. 

Ms. WESEL. We did a weekend—we have a festival every fall, 

and we did just a trial run, we brought in a company and we used 

CDBG funds to actually purchase or loan a camera that we put 

right downtown at the levee, right where the festival is and also 

used CDBG funds to buy, I believe, some of the—I cannot recall exactly, that was right before I came on board. We bought some 

pieces of the puzzle to use for that weekend. And so that we could 

have that in place hopefully to expand and make this a permanent 

fit for us. Because we do not have, we are severely lacking in 

broadband and wireless. 

Chairman NEY. I just think with kind of the high tech industrial 

parks, and I want to close here. I do not want to hold you, but just 

a couple of things I think, I know you talked about with the LDD’s, 

some of you. When we got—when 9/11 occurred it made us start 

to think about our systems. When the U.S. House got anthrax and 

the three office buildings had to close and 10,000 people had to 

move around D.C., our computers were over in the Ford Building, 

and nobody could get in there because they were searching for 

whether it was anthrax or not. They developed leaks inside. And 

so they had to send the—the EPA detector people in to act as 

plumbers. And the leaks were coming down through the computer 

systems. We had no redundancy. There was no second grid. All the 

information at the U.S. House would have just evaporated or vanished if something happened within there. In fact we had to encase—where the daycare center was had to be encased in concrete, 

70

because that was where the anthrax came through. So, it taught 

us a lesson about redundant systems. Then it taught—maybe I putting in much more information than you want to know. 

Mr. MYERS. My son was going to daycare. 

Chairman NEY. His son went to daycare. It is gone, it has been 

encased and removed. I am sorry, Don, you are fine. And that is 

not classified information. No, it is fine down there. But anyway—

I never talk about that, it would scare people. But we learned too, 

maybe things ought to not be all in D.C., or New York. You know, 

the trade center, or L.A. I think areas have opportunities in other 

cities, whether you are a large city or whether you are a small 

area. If you are wiring equipment there might be something in the 

future that the government might continue to have their systems 

outside of one central center. 

Mr. RICER. In remote areas. 

Chairman NEY. I just thought I would throw that out there. 

And one other thing, Don Myers too, I will tell you, he said about 

the prison it is true. He was viciously attacked as were the commissioners for building onto that piece of land that sat there and 

nothing was on it. And all of a sudden somebody says, let us put 

900 jobs on there. Well, the same thing happens today, if you go 

to a community sometimes and you build the system, well, what 

are you building it for. It is building it for a reason. So, you know 

it is a good thing to do, it is preventive. 

Mr. MYERS. Could I bring up one item, we did not want to speak 

individually about line items, but after the last meeting, three 

mayors and two development directors came up to me and asked 

if I would report it today. A line item for demolition, you know, 

that is a tough issue, but we ask that and—and the mayors and 

the development directors wish that that line item, major importance on the riverfront, that that line item if possible stay in the 

CHIP program. There are tough guidelines on it. We are willing to 

follow the tough guidelines, but we need the right to tear down 

houses that are beyond repair using CHIP dollars if at all possible. 

Congressman, the final thing, your friend and mine, Ann Pope, 

donated $500,000 from Washington in discretionary for the three 

floods. And the floods we had in 2004, we are just starting to use 

those dollars right now. FEMA came in and did an environmental 

on each and every one of those damaged properties. And because 

it was ARC dollars coming to the State of Ohio we had to go out 

and do all new environmentals on activities that are just replacements. And, you know, those people needed that money. This act 

of kindness and it was, in getting the approval and everything else, 

and to help the Powhatans and Columbiana County, and Jefferson, 

and Belmont County, and the world of Mariettas, we are just starting to use those dollars now because we had to go out and do all 

new environmentals. We did not accept FEMA’s environmentals. 

And, you know, I know that those are difficult times, but you know, 

sometimes we just shake our heads when action like that, we understand the importance of environmentals. But there are times 

when, if one government organization does it, why can we not accept it? 

Chairman NEY. Sure, I understand. 

71

I want to thank you all for your time. You have come long distances, and from a wide variety of backgrounds, which is the purpose of this hearing. And we have from larger cities, development 

corporations and everything, rural areas, that helps us. And I believe it helps us and I believe it helps us as a State, to go back, 

Mayor Coleman sent someone today to Knox County. So, I think it 

is a wonderful—we have the larger cities and I think it is a wonderful partnership with the rural areas. Our next hearing again 

will be in Los Angeles, we think Los Angeles will mimic here, although a larger place, and will help us and try to stop the cuts. 

I will also tell you in closing that it is not going to be easy. I looked 

through the budget, there are things that are funded with increases this year, so I do not understand why it all comes out of 

the CDBG. We have to push, because if it is a 25 percent cut and 

then they say well, we will only cut it 10 percent. Well, that is 10 

and 10 from the previous year, so that is 20. 

And the other thing adverse to this, if we are building our economy these are truly monies that go to build the economy. This is—

not the place, you know, to cut back on. 

Ms. WESEL. Exactly. 

Chairman NEY. Maybe another mission to Mars in the next 2 

years we will not do that or something. I really believe a lot in 

these funds. You helped us a lot by making this official testimony, 

we can take it back. I want to thank all of the staff for your time 

and diligence, thank you. 

[Whereupon the hearing was adjourned at 4:25 p.m.] 

(73)

A P P E N D I X

March 24, 2006

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