U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

30–175 PDF 2006

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 25, 2006

Printed for the use of the Committee on Financial Services

Serial No. 109–79

(

(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 25, 2006 ................................................................................................. 1

Appendix: 

March 25, 2006 ................................................................................................. 33

WITNESSES 

SATURDAY, MARCH 25, 2006

Barnes, Patricia, Executive Director, Ohio CDC Association .............................. 7

Brightbill, David E., Executive Director, Washington-Morgan Community Action ........................................................................................................................ 9

Cain, Hon. Dean, Commissioner, Morgan County Board of Commissioners ...... 4

Hepburn, Dustin, Village Councilman of Bellaire, Ohio ...................................... 21

Justice, T.J., Director, Governor’s Office of Appalachia State Alternate, Appalachian Regional Commission ............................................................................. 12

Reed, Ken, Development Director, Vinton County Commissioners ..................... 14

Riordan, John, Development Specialist, Ohio Conference of Community Development .................................................................................................................. 14

Stroh, Jessica, Hocking-Athens-Perry Community Action ................................... 17

Thiessen, Cheryl, Executive Director, Jackson-Vinton Community Action, 

Inc. ......................................................................................................................... 19

Walker, Hon. John, Hocking County Commissioner ............................................. 6

APPENDIX 

Prepared statements: 

Ney, Hon. Robert .............................................................................................. 34

Barnes, Patricia ................................................................................................ 36

Brightbill, David E. .......................................................................................... 40

Cain, Hon. Dean ............................................................................................... 44

Justice, T.J. ....................................................................................................... 46

Reed, Ken .......................................................................................................... 50

Riordan, John .................................................................................................... 51

Stroh, Jessica .................................................................................................... 68

Thiessen, Cheryl ............................................................................................... 72

(1)

STRENGTHENING RURAL OHIO: 

A REVIEW OF COMMUNITY DEVELOPMENT 

BLOCK GRANT PROGRAMS 

Saturday, March 25, 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 10:00 a.m., in the 

Hocking County Emergency Management Agency Conference 

Room, 52 East Second Street, Logan, Ohio, Hon. Bob Ney [chairman of the subcommittee] presiding. 

Present: Representative Ney. 

Chairman NEY. The subcommittee will come to order. You are 

tougher to get to order than Congress. 

It is a pleasure to have time with you here today. Also, I wanted 

to thank Peggy Warren over here, she is a court reporter and she 

has been to probably six hearings. She was down in New Orleans 

with us, she has traveled to Ohio, so I just wanted to let you know 

she has been so good with our committee. 

This is the Subcommittee on Housing and Community Opportunity and today, without objection, it will serve as an official field 

hearing. I just want to explain to you why that is important, and 

why it is important to have you, and thank you for being here 

today. 

We have official hearings and that is why Peggy Warren is here, 

it will be transcribed, it will be entered into the record. We had one 

in Knox, one in Guernsey, one here in Logan, Hocking County, and 

the fourth one is going to be held in Los Angeles. So there are 

going to be four hearings, three in Ohio. I chair the subcommittee, 

so somebody asked me the other day, why are we having them 

here? Well, duh, I chair the subcommittee, it is a good place to 

have it. And it shows the rural side, it shows, you know, the differences of counties, and Los Angeles will show the large urban 

side. I predict to you, L.A. is going to agree with you here, with 

us. So, that is good. And this is all to help combat the 25 percent 

cut, so it is important. We will be able to go back with our colleagues and say for the record that we had the hearings, there is 

objection—unless somebody today supports the cut. But I doubt 

that will happen. But what I am trying to tell you is that this is 

very helpful on the whole issue. 

2

Clinton Jones is here, he is from the staff of the Financial Services Committee in Washington, D.C., which is chaired by Mike 

Oxley. And he is on the majority side. If you do not follow Congress, Republicans are in the majority, so—at least for this time. 

Might change, you never know. But anyway he is on the majority 

side. Cindy Chetti is also on the majority side. Jeff Riley is on the 

minority side, on the Democrat side. They are all good people, we 

have a lot of other staffers, they work together to help a lot of people, you might see on C-Span where people are thrashing each 

other up right and left, but I think our Housing Subcommittee—

the ranking member is Maxine Waters of California and also the 

ranking member for the Full Committee is Barney Frank of Massachusetts. I think they have all done a good job to try to help people 

with Community Development Block Grants. Both parties have 

worked together, so I am very proud of all the members of the committee. 

Jeff, do you want to say something? 

Mr. RILEY. No, just thanks for having us today, and greetings 

from Mr. Frank and Ms. Waters. 

Chairman NEY. Clinton, you want to say anything? 

Mr. JONES. Glad to be here, I enjoy Ohio a lot, so it is good to 

be back. 

Chairman NEY. And so, again, I want to welcome you here and 

I want to thank auditor Ken Wilson and the Hocking County 

Emergency Management Agency for allowing this subcommittee to 

use the conference room here for today’s important discussions regarding HUD’s Community Development Block Grant. 

The CDBG program, is administered, of course, by HUD, and it 

is a widely available source of financial assistance to support our 

neighborhoods and local governments; redirect neighborhoods; revitalization; housing rehabilitation; economic development activities; 

and helping the fire services. There are a lot of good ways it helps, 

I think; communities and formula base grants allocated more than 

1,100 entitlement communities, metropolitan cities with populations of 50,000 or more, urban counties, rural areas, the 50 

States, Puerto Rico, and the insular areas of American Samoa, 

Guam, the Virgin Islands, and the Northern Mariana Islands. 

Grants are used to implement plans intended to address, again, 

local housing issues, neighborhood revitalization, public services, 

infrastructure needs. And it is determined by local officials and citizens, which I think is the greatest thing about CDBG. You can see 

a lot of the benefits of CDBG in Morgan County; Commissioner 

Cain is here, of course and it has played a vital role in that county. 

You know, there are a lot of different projects; it was used for 

water and sewer, the Chesterhill Theater, and a lot of different 

things that have been done there. 

I also wanted to note Dave Brightbill, who is here with Washington/Morgan Counties Community Action. He will discuss today 

cuts in CDBG funding. Morgan County received 80,000 formula 

dollars in 2006, which is down from $94,000 in 2004. The proposed 

cuts from the President’s budget would cut funding to $60,000, it 

would be a 36 percent decrease I think, as Dave has provided us 

statistics. These types of reductions will be disastrous to communities’ abilities to continue to rebuild and renovate their areas. 

3

The budget proposal raises some interesting and serious questions as the process runs. This is the Administration’s budget proposal, it has now come into the House. Our subcommittee has jurisdiction over what is called the authorizing, the language of the 

CDBG. There are appropriators in the U.S. House who actually put 

the money into it. We, of course, will take our findings and go to 

the appropriators to say we would support restoring funding. Then 

it goes over to the Senate. So, this cut is not in the House-introduced version, this cut is within the Administration’s budget, which 

would be the President’s. And again, it raises some serious questions about what role Community Development Block Grants 

should play in helping local and State governments provide safe 

and affordable housing to its constituents. 

In addition to recommending a new formula change for CDBG 

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. I would also note to you the struggle last year was whether Community Development Block Grants 

remained within HUD or moved to Commerce. And we won that 

battle, because moving to Commerce would have created all new 

rules, changed the whole structure across the United States, so we 

were against that. So we won that battle. 

However, at the end of the year a budget reconciliation—which 

I did not support—passed and there were percentage cuts. So, 

CDBG actually, if you look at it, took a 10 percent cut last year. 

If you take this 25 percent proposed, that would be 35 percent over 

2 years. So, I just wanted to note a little bit of the history of that. 

So, our goal is to continue to focus on housing and community 

development and make sure the communities have the tools to provide for the communities. I just want to also, you know, say that 

as this process continues, we will continue to communicate with 

the local officials and citizens on this important CDBG issue. 

Before we start if you want to, especially because we have officials who are here, elected officials, citizens, if you would like to 

start—and if you do not want to, that is fine, but, start and stand 

up and go ahead and just say who you are and we will start over 

here and go across. You want to say who you are? 

Ms. STROH. Okay, hi, I am Jessica Stroh and I work with Hocking-Athens-Perry Community Action. 

Mr. STROH. I am Dan Stroh and I am Jessica’s husband. 

[Laughter] 

Ms. JOHNSON. I am Sandra Johnson and I also work with Hocking-Athens-Perry Community Action. 

Ms. WALKER. Karen Walker and I am the wife of John Walker, 

county commissioner. 

Mr. GREEN. Greg Green, Hocking County commissioner. 

Mr. SPENCER. David Spencer, reporting for Logan Daily News. 

Ms. ROBERTS. Mary Roberts, Athens resident. 

Mr. BRIGHTBILL. David Brightbill, Washington/Morgan County 

Community Action. 

Ms. BARNES. Patricia Barnes, the Ohio Community Development 

Corporation. 

4

Ms. SMITH. I am Mary Jo Smith. I am the City of Lancaster, 

Ohio’s, Community Development Department director and this is 

my husband, Patrick. 

Mr. RIGGINS. Terry Riggins, Perry Township trustee here in 

Hocking County. 

Ms. THIESSEN. My name is Cheryl Thiessen and I work for Jackson-Vinton Community Action, and this my husband Don. 

Chairman NEY. I like seeing all these women running the show. 

Mr. BEARDEN. I am Jack Bearden and I am with the Ohio Conference of Community Development. 

Mr. REED. My name is Ken Reed. I am the director of Development for the Vinton County Board of Commissioners. 

Mr. WILDS. I am Robert Wilds, president of the Ross County 

Township Association. 

Ms. SEXTON. I am Sarah Sexton and I am an intern in the Governor’s Office of Appalachia. 

Mr. JUSTICE. T.J. Justice, director, Governor’s Office of Appalachia, here in Ohio. 

Mr. MAHAFFEY. Danny Mahaffey, a resident of Hocking County. 

Mr. DUNKEL. I am Hubert Dunkel, a resident of Hocking County. 

Mr. MOORHEAD. Charlie Moorhead, a resident of Hocking County. 

Mr. HEPBURN. I am Dustin Hepburn, Village Council, Bellaire, in 

Belmont County. 

Chairman NEY. Guess who had the furthest travel. I was raised 

in that city. I knew his father, he is a brand new council member. 

Ms. SAUNDERS. I am Barbie L. Saunders from Chesterhill. I am 

on the Village Council. 

Mr. WILSON. Good morning, I am Ken Wilson, Hocking County 

auditor. I am pleased to welcome everyone here and, Congressman, 

we appreciate having you here in our community. 

Mr. DENTON. Larry Denton, Washington Township trustee in 

Hocking County. 

Mr. GARBO. Bob Garbo, director of Hocking County Community 

Action. 

Chairman NEY. I will introduce two more people. Carrie 

Mittinger does a wonderful job as a field rep. She really cares a lot 

about the area and she is local, from Chillicothe. Dave Pappas is 

in from Washington, D.C. 

With that I want to thank you all. If you have statements, by the 

way, without objection, for the record your statements can be part 

of the record. We were limited on how many people we could pick 

to testify, but if you have statements, we have 30 days open, so if 

you can get the statements to us, it would become part of the official record in Washington for the hearing. 

And with that we will begin with Commissioner Cain, welcome. 

STATEMENT OF THE HONORABLE DEAN CAIN, COMMISSIONER, MORGAN COUNTY BOARD OF COMMISSIONERS 

Mr. CAIN. Good morning. Congressman Ney, Subcommittee on 

Housing and Community Opportunity representatives, elected officials, and concerned citizens: 

It is with great pleasure that I, Dean Cain, vice president of the 

Morgan County Board of Commissioners, am able to sit in on the 

5

field hearing with you today and represent Morgan County. The 

Community Development Block Grant Program has been an important funding source for Morgan County and played a key role in 

the community development over the last several decades. 

Morgan County, Ohio, is one of the 29 counties designated Appalachia and is titled a transitional county by the Appalachia Regional Commission. Our county, although called transitional, has 

one of the highest unemployment rates in the State, low income, 

and a declining tax base. 

With a population of nearly 15,000, over 52 percent of our entire 

population is considered to be low to moderate income, according 

to the 2000 census. With programs benefitting the low to moderate 

income population, CDBG is critical to the future success of Morgan County in continuing the community development projects. 

Over the last 4 years, the Community Development Block Grant 

has aided our community in a wide array of projects. 

Since 2000, Morgan County has received over $500,000 of funding through the formula program, receiving one of the lowest yearly allocations in the State. Formula funding has allowed us to improve our fire department facilities and equipment which they have 

to operate with when emergencies arise. It is very difficult for rural 

fire departments to receive the adequate funding they need to survive and CDBG plays a critical role for our rural fire departments. 

Over the last 4 years, 29 percent of Morgan County’s CDBG formula dollars has assisted our six rural fire departments. 

Other areas of interest that formula fund has enabled Morgan 

Country to fund include 21 percent to the water and sewer projects. 

Several of our rural water districts rely quite heavily on formula 

funds to assist in water line extensions and acquisitions, and many 

planning projects. Morgan County’s four villages have been working hard to improve the water and sewer facility via formula funds 

that serve many low to moderate income populations. 

Over 25 percent of the formula funds have provided for our 

neighborhood facilities for public rehabilitation projects. For example, those include renovation of a county senior center, township 

buildings, recreation facilities, community centers, and the historic 

theater. The historic Union Hall Theater just recently reopened in 

the village of Chesterhill as a direct result of CDBG funding. According to the chairperson of the Union Hall Committee, ‘‘We are 

trying to breathe life back into our town through this theater.’’ The 

Mayor of Chesterhill feels the theater is going to be a very important part of the economic development of the village, which has a 

low to moderate income percentage of over 41 percent. 

As you look back at the various programs that assist our community, and that fall under the umbrella of Community Development 

Block Grants, it is hard to imagine where we could afford to lose 

or sacrifice any of the funds that we have previously received. 

Every program is working to benefit low to moderate income populations in different ways. We just learned about our formula allocation for 2006 and we are incurring a 10.2 percent reduction in the 

coming year; our allocation was reduced from $89,000 in 2005, to 

$80,000 in 2006. If next year’s budget reflects another 25 percent 

reduction in this program, activities for the future will be receiving 

6

such a minimal amount, by the time that we divide it into the various programs, it will not amount to much. 

It has been a pleasure to get to be here today and represent Morgan County. It is my hope that the Administration’s proposal for 

the President’s fiscal 2007 budget takes this information presented 

in these field hearings from the rural communities such as ours 

and reconsiders the reform. 

Thank you. 

[The prepared statement of Mr. Cain can be found on page 44 of 

the appendix.] 

Chairman NEY. Thank you. 

Commissioner Walker. 

STATEMENT OF THE HONORABLE JOHN WALKER, HOCKING 

COUNTY COMMISSIONER 

Mr. WALKER. Thank you. I became aware of the CDBG funding 

in 2003 when, as a Falls Township trustee, we applied for a grant. 

As a trustee and now as a commissioner, I have seen firsthand the 

need to continue these grants due to the limited source of funds 

that townships, cities, and villages have to assist with the many 

projects that are in dire need for the people of Hocking County. 

I believe in 2002, Hocking County received approximately 

$160,000, compared to $138,000 in 2005. As our State and Federal 

funds are cut, the cost of services and materials continue to escalate. 

During the past years, the money received by Hocking County 

has funded numerous projects for townships and the City of Logan. 

Some of these projects have included guardrails, fire stations, fire 

equipment, curbs, sidewalks, storm sewer improvements, vehicles, 

water lines, and resurfacing of roads, along with rehab of buildings. 

If this funding is cut, the township would suffer greatly—townships, I should say. 

So on behalf of the citizens of Hocking County, I strongly urge 

you to continue this much needed program. 

Thank you. 

Chairman NEY. Thank you, Commissioner. 

I just have a couple of questions. Have either of the counties 

dealt with any of the brownfields? We passed a bill for brownfield 

economic development in December of 2005, which would have 

been the old buildings. I know down here, there weren’t the steel 

mills like in the eastern part of the State, but have you ever had 

any experience with brownfields? 

Mr. WALKER. Yes, we are kind of in the process right now of 

working with that. The county has purchased the old General Clay 

Brick Yard. And we are in the process of working with that. So, 

that is something that we definitely need to see. 

Chairman NEY. Let us say that if we are able to restore the cuts 

that are put into this budget, is there anything else that you think 

should be revamped or changed, or maybe not, with the way CDBG 

works. I am talking about the process. We, of course, send the 

money down to the State, you work with the Small Cities, is there 

anything or maybe not? 

Mr. WALKER. I think the main thing with 11 townships and two 

villages and a city, you know, the amount of money we receive, it 

7

is very difficult to try to give it to each one on an equal basis, to 

decide which projects will receive it. 

Chairman NEY. The one thing that I like about CDBG is it goes 

all the way down to the local level, but I can imagine if you have 

$200,000 worth of requests, and $100,000 worth of money, it has 

to cause some problems. 

I do not have any other questions. But I sure appreciate your 

time and I know that the committee does, and I appreciate the help 

that you are giving. People like yourselves across the country and 

your associations will be networking, I know, to try to stop these 

cuts. 

Thanks a lot. 

We will move to the second panel and we have Patricia Barnes—

just take a few minutes, if somebody wants to get coffee. Patricia 

Barnes, David Brightbill, T.J. Justice, Ken Reed, John Riordan, 

Jessica Stroh, and Cheryl Thiessen. 

[Brief recess] 

Chairman NEY. We are going to add for the record, Dustin Hepburn, councilman from Bellaire on the record. And we will begin 

with Patricia Barnes, executive director of the Ohio CDC Association. 

Let me just give the titles of all the panel, we said the names: 

David Brightbill, executive director, Washington-Morgan Community Action; T.J. Justice, director, Governor’s Office of Appalachia, 

State Alternate, Appalachian Regional Commission; Ken Reed, development director, Vinton County Commissioners; Mr. John Riordan, development specialist, Ohio Conference of Community Development. Also, we have Ms. Jessica Stroh, Hocking-Athens-Perry 

Community Action; Cheryl Thiessen, executive director, JacksonVinton Community Action, Inc.; and Dustin Hepburn, councilman 

from Bellaire, Ohio. And we will start with Ms. Barnes. 

STATEMENT OF PATRICIA BARNES, EXECUTIVE DIRECTOR, 

OHIO CDC ASSOCIATION 

Ms. BARNES. Thank you. Good morning. My name is Patricia 

Barnes and I am the executive director of the Ohio CDC Association located in Columbus, Ohio. The Association is a statewide 

trade association of non-profit community development corporations that includes neighborhood organizations, rural and urban 

community action agencies, and other non-profit development organizations. Approximately 175 community development corporations 

and their partners form the membership of the Association. 

The Ohio CDC Association has been in operation since 1984 and 

provides training, technical assistance, public policy development 

and advocacy, and special projects that benefit community development corporations. For example, the Association provides both 

entry level and intermediate level training in affordable housing 

development, workshops in community economic development and 

micro-enterprise, and onsite technical assistance in all of these 

areas. The Association is also active in the area of Individual Development Accounts and works with 18 organizations, including 10 

rural organizations. It also sponsors an annual conference on technology and community development, planned for July 13th of this 

8

year, and an annual membership conference on a variety of topics 

planned for September 21st through 22nd. 

Many Association members receive Community Development 

Block Grant funds for their affordable housing, economic development, and community development activities. In this testimony, I 

would like to highlight the CDBG activities of three rural members 

in the areas of micro-enterprise, affordable housing development, 

home repair, and essential services. 

The Community Action Agency of Columbiana County is administering a CDBG funded micro-enterprise program for the 

Columbiana County Board of Commissioners for 2006. Funding 

was received from the Small Cities CDBG program administered 

by the Ohio Department of Development. This program provided 

entrepreneurship training and loan resources for Columbiana 

County residents interested in starting or expanding a small business. Participants must complete the small business training and 

a business plan, and meet all eligibility requirements. A five member Micro-enterprise Loan Review Board reviews all loan requests 

and determines the terms and conditions. The maximum loan 

amount is $15,000 to be used for purposes such as inventory, advertising, insurance cost, equipment purchases, and working capital. Participants also receive personal development counseling to 

address budgeting and credit repair. 

In 2005, the CAC provided financing to 17 individuals for new 

business start-up and expansion in Columbiana County for a total 

of $149,000 in loan funds. I believe that is actually their to-date activities; that is a lot for one year. A total of 269 individuals have 

received small business and personal development training through 

the Micro-enterprise program. The CAC has a low 5 percent default 

rate on its micro loan fund, an outstanding achievement given the 

fact that most loans are made to individuals who have suffered 

credit or financial hardships prior to participating in the program. 

More than half of the businesses are owned by women, and 6 percent are minority owned. All of the individuals are low to moderate 

income as defined by the HUD Section 8 limits, all of the businesses were in Columbiana County, and all of the loan recipients 

were Columbiana County residents. A few examples of the types of 

businesses that the CAC has assisted include a home health care 

provider, a printer, home repair and lawn services, excavating services, home daycare, construction, solid waste collection, and crafts. 

The Ohio Department of Development provided similar micro-enterprise grants from the CDBG program to five other rural microenterprise programs in 2004–2005. Total funding for the six grantees was $289,300 for a total of 271 beneficiaries located in 

Columbiana, Logan, Noble, Portage, Van Wert, and Vinton Counties. 

In the area of housing and community development, HHWP 

Community Action Commission, serving Hancock, Hardin, Wyandot, and Putnam Counties, recently received a $356,070 Community Housing Improvement Program (CHIP) grant awarded to Hancock County from the Small Cities’s CDBG program of the Ohio 

Department of Development. Under the grant, HHWP will construct four homes for low to moderate income people in Findlay, 

9

Ohio and provide home buyer training. In addition, they will provide 15 very low income homeowners with emergency home repairs. 

Other examples of their CDBG activities include emergency rent 

and utility payment for low income households in Putnam County, 

repairs to the parking lot, ceiling, and furnace of their child development center that houses six Head Start classrooms and two child 

daycare classrooms, serving a total of 145 children, and to their 

WIC program offices. These services and repairs would not have 

taken place without the support of the CDBG program. 

Logan-Belle H.A.N.D. and that is Housing and Neighborhood Development, an affordable housing organization located in Bellefontaine, Logan County, and a subsidiary of Logan Metropolitan 

Housing Authority, has received $45,000 in affordable housing subsidy for three low income families to purchase homes through two 

different CHIP grants received through Logan County. Each family 

will be able to receive up to $15,000 towards their home purchase. 

In Bellefontaine, the CHIP program has provided $30,000 in affordable housing subsidy for two low income families to purchase 

homes. The CHIP program in both Logan County and Bellefontaine 

have also provided funding for financial literacy and home buyer 

education classes for prospective home buyers in Logan County and 

Bellefontaine. 

In each of the above cases, CDBG funds provide critical support 

for the creation of jobs, home ownership, and important services 

such home repair, emergency rent and utility payments to prevent 

homelessness, home buyer counseling, and repair facilities for essential services such as child care. 

In fiscal year 2006, Ohio’s Small Cities CDBG program received 

a 10 percent reduction in funding, and, as we have all discussed, 

in fiscal year 2007, the President’s budget proposes an additional 

25 percent reduction. In addition, proposed formula changes in 

CDBG would reduce Ohio’s allocation by a range of 9 percent to 21 

percent. When combined with the proposed reduction in funding, 

the formula change could result in Ohio losing as much as 46 percent of its current allocations. This change would harm thousands 

of low income Ohio residents in need of jobs and housing and hurt 

the Ohio economy at a time when Ohio is not experiencing the economic growth witnessed in the rest of the country. Given the importance of the CDBG program to Ohio, we urge you to find ways 

to sustain the CDBG program at its current level. We ask you to 

give the ongoing reform efforts adequate time to see results and to 

reject any changes to the formula that would disadvantage Ohio. 

Thank you for the opportunity to testify today. I would be happy 

to answer any questions. 

[The prepared statement of Ms. Barnes can be found on page 36 

of the appendix.] 

Chairman NEY. Thank you very much. 

Mr. Brightbill. 

STATEMENT OF DAVID E. BRIGHTBILL, EXECUTIVE DIRECTOR, 

WASHINGTON-MORGAN COMMUNITY ACTION 

Mr. BRIGHTBILL. Chairman Ney, thank you very much for holding these hearings. We certainly appreciate it, and before I start 

on these remarks, I should mention that I am also on the council 

10

of the village of Lower Salem, which is a massive 110 people with 

a budget of about $40,000 a year. 

Chairman NEY. You are telling your election size. Then you are 

going to have the town— 

Mr. BRIGHTBILL. No, we have more trouble finding people to run. 

But no, that has never been an issue in Lower Salem. And we have 

received CDBG funds over the years from the county. In fact, in 

just the past year, we replaced our sidewalks using CDBG formula 

money. 

Washington-Morgan County Community Action has been in business since 1967, and operates a variety of programs designed to 

help low and moderate income families. In 1990, Washington-Morgan received its first housing rehabilitation program funded with 

Community Development Block Grant funds through the Washington County Commissioners. In addition to that partnership, we 

now work with the Morgan County Commissioners and the City of 

Marietta to rehabilitate homes in all three communities. CDBG 

funds are used in conjunction with HOME dollars to provide comprehensive housing rehabilitation services to low and moderate income families. Each local community develops a Comprehensive 

Housing Improvement—Investment Strategy, a CHIS, which serves 

as a basis for allocation of funds, assuring that housing funds including CDBG are used according to well-thought-out goals and objectives. CDBG funds have contributed significantly to lengthening 

the useful life of housing stock in our two counties and improved 

the lives of dozens of families. 

The CDBG has been, and continues to be, a very valuable tool 

for governmental subdivisions and non-profit organizations in our 

area of Appalachian Ohio. CDBG funds an array of important economic and community development projects. Ohio and its Appalachian region are not feeling the effects of the economic recovery 

that is being reported in the rest of the country. Our area continues to lose good paying manufacturing jobs. We struggle to replace those jobs and in most cases replacements are lower wage 

service jobs or require traveling great distances, and Morgan County is a great example of people who have had to find jobs in communities outside of Morgan County, as far away as Columbus actually. CDBG provides local government flexible money to help provide needed infrastructure such as water and sewer, access roads, 

revolving loan funds, and matching funds for non-profits and rural 

emergency services. As you know, infrastructure improvements are 

a necessary factor in job creation, especially in rural areas such as 

ours. 

As I mentioned above, Washington-Morgan Counties Community 

Action works with commissioners in both Washington and Morgan 

Counties. Their CDBG funds come through the State of Ohio, both 

through formula allocations and its competitive grants for water 

and sewer projects, housing programs, and economic development. 

Our agency also works with the City of Marietta, which as an entitlement community, receives its CDBG allocation directly from 

HUD. 

The Morgan County Commissioners, because of the relatively 

small amount, as Commissioner Cain just mentioned, of formula 

CDBG funds available to the county, have not been able to provide 

11

matching funds for the Comprehensive Housing Improvement Program, the CHIP. They have, however, been the grantee and an active partner in several CHIP grants. Their partnership with our 

agency has generated $215,000 in CDBG in the Office of Housing 

and Community Partnerships over the past 4 years. Those CDBG 

dollars, along with HOME funds, resulted in four home ownership 

opportunities, 24 owner occupied rehabs, 9 rental rehabs, and 15 

minor home repairs in the last 4 years alone. For a county that 

often ranks at the top of Ohio’s unemployment statistics, and finds 

local resources stretched even further than most Appalachian counties, these outside resources not only prolong the life of existing 

housing stock, they also provide opportunities for local contractors 

and jobs for the local workforce. 

In Washington County, the Commissioners have utilized some of 

their CDBG funds to provide matching funds for the CHIP. Again, 

the assistance provided by this program provides owner-occupied 

housing rehabilitation, down payment assistance along with rehabilitation, rental rehabilitation with landlords contributing 40 percent of the cost. The flexibility—and this is certainly a key—the 

flexibility of CDBG also allows for minor repairs such as ramps, 

septic systems, electrical systems, and heating units. HOME dollars cannot be used on—can be, but because of the requirements 

that are tied to that, it is almost impossible to really use it in reality. Thirty-eight families in Washington County have been assisted with CDBG and HOME funds. The Office of Housing and 

Community Partnership has provided $209,000 in CDBG dollars 

and the county has added about $40,000 in formula dollars. Again, 

this is over the last 4 years. 

Marietta, as an entitlement community, receives its CDBG funds 

directly from HUD. They also use their funds for community and 

economic development activities. Our partnership with Marietta 

has resulted in $40,000 worth of CDBG entitlement funds being 

committed to the CHIP program. These funds have helped generate 

over $400,000, my written testimony says $4 million—I should 

wish, but that is not right. Just an extra zero, zero here zero there. 

This has allowed for one home ownership opportunity with rehab, 

two rental rehabs, and 12 owner occupied homes being rehabilitated in the last year-and-a-half. 

The over $5.5 million in CDBG cuts Ohio received this year obviously will have a negative impact on activities such as those listed 

above. Local dollars are already stretched to the breaking point. It 

is not possible for Appalachian counties or cities to make up these 

dollars. Projects which would have provided housing and other infrastructure needs will not be done and the jobs which would have 

been created by these projects would not be filled. If the President’s 

proposed 25–27 percent cut is maintained in the fiscal year 2007 

budget, the impact will be staggering. Ohio could lose an additional 

thirteen and a quarter million dollars in CDBG funds. And that is 

just in the non-entitlement areas, that is not factoring in the cities, 

making the overall 2-year cut almost 40 percent. 

As an example, Morgan County, as Chairman Ney mentioned, received $80,000 in formula dollars in 2006, which is down from 

$94,000 in 2004, and if the President’s budget numbers are adopted, they would fall to $60,000, a 36 percent cut. And again, in a 

12

county that is certainly struggling in terms of finances and unemployment. Another example is the water and sewer fund the State 

sets aside for non-entitlement communities, currently $9.8 million 

has been allocated for these types of projects and these funds are 

normally utilized long before the end of the fiscal year. A 27 percent cut to CDBG would of necessity lead to cuts in this set-aside, 

further reducing important infrastructure investments. These dollars will not be made up. State and local governments certainly do 

not have the funds to replace them. An economy which is barely 

making any progress toward recovery will be set back even further. 

Given the nature and benefits of CDBG, I would advocate for additional funds, not less. The flexibility and local spending of the 

dollars not only enhances housing and infrastructure, it generates 

direct jobs and indirect jobs through the projects completed. 

I urge you to look for ways to increase, not decrease, the funds 

for this program and to maintain its targeting to low and moderate 

income individuals and families. Our counties, cities, and non-profits need help in turning local economies around, not more obstacles 

and less funding. 

Again, thank you for allowing me to testify and I will be happy 

to answer any questions. 

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

40 of the appendix.] 

Chairman NEY. Thank you very much. 

Also, for the record, without objection, I wanted to enter Robert 

Wilds, president of the Jefferson Township Board of Trustees—and 

he has signatures of other township trustees who oppose the 25 

percent cut. I will enter that into the record. 

Mr. Justice. 

STATEMENT OF T.J. JUSTICE, DIRECTOR, GOVERNOR’S OFFICE OF APPALACHIA STATE ALTERNATE, APPALACHIAN 

REGIONAL COMMISSION 

Mr. JUSTICE. Thank you, Mr. Chairman. Good morning. I, too, 

would like to thank you for holding this hearing here in Logan, 

Ohio, as well some of the other hearings you have held throughout 

our wonderful State. 

In my position as director of the Governor’s Office of Appalachia, 

I know firsthand the benefits that Community Development Block 

Grant funds bring to the communities of Appalachian Ohio. I also 

know the crushing impact that the proposed cuts of this funding 

could have on our part of the State. 

I think it is important to point out that CDBG funding is oftentimes a partner with many other State or Federal programs in 

order to make projects happen. The fact that it is a partner oftentimes allows communities to borrow less, assume less debt, and 

allow projects to move forward. 

To capture this somewhat, in the past 3 years, as the result of 

CDBG funding, 2,568 jobs have been created, 1,290 more jobs retained, that is the direct result of 71 Economic Development Program grants and 16 Micro-enterprise Business Development Program grants being provided through the CDBG program. In my 

opinion, this is a calculated, measurable return on investments 

being made by the Federal Government that is replicated not just 

13

here in Ohio, but across this great country. However, with the proposed 10 percent reduction of CDBG for fiscal year 2006, the State 

of Ohio anticipates that, at a minimum, 86 less jobs will be created, 

43 less jobs retained, and $13.3 million not leveraged. Looking forward to fiscal year 2007 with a proposed 25 percent reduction, we 

believe another 192 jobs will not be created, 97 jobs not retained, 

and $29.3 million will not be leveraged. Now the job creation numbers may not sound staggering, but I think it is important to keep 

in mind that one job in rural Appalachian Ohio may well be the 

equivalent of 100 jobs in Columbus, Cincinnati, Indianapolis, or 

elsewhere. 

And I would like the record indicate a typographical error in my 

testimony. It does state 500 jobs; it should be 100. 

Chairman NEY. Well, that is the goal. 

Mr. JUSTICE. Aside from the economic development components, 

CDBG provides very critical funding for public infrastructure in 

smaller communities, for example—more numbers—1.2 million linear feet of street improvements have been installed over the past 

3 years, that is significant. When we look at the proposed reductions in CDBG funds, the figures are alarming. Over the next year, 

a 10 percent reduction would cause the following to not happen 

here in Ohio: 

40,000 linear feet of street improvement will not be improved or 

installed; 

12,986 linear feet of curbs and sidewalks will not be improved or 

installed; and 

103,333 linear feet of water and sewer lines will not be installed 

or improved. 

In 2007, with a 25 percent reduction, we will see the following 

not be improved or installed: 

90,000 linear feet of street improvement; 

29,000 linear feet of curbs and sidewalks; and 

232,500 linear feet of water and sewer lines. 

Those are staggering numbers. 

Per the committee’s request, I would like to provide one specific 

example of a project here in the region that had a tremendous impact, and would not have happened had it not been for CDBG. 

Back in 2002, the Le-Ax water line extension project received 

$600,000 in CDBG funds. That leveraged additional dollars to 

allow a multi-million dollar water line extension project to occur. 

The end result of that investment was 353 households in four counties receiving reliable water service. Those counties include Vinton, 

Athens, Meigs, and here in Hocking counties. That is a large number of homes receiving water service that otherwise would not 

have. I personally can think of no other Federal program that is 

as powerful and effective than CDBG. I do represent the Appalachian Regional Commission as well. But I am here today to urge 

the United States Congress to restore funding, which would allow 

our communities to continue to grow and be competitive. 

In closing, I do want to applaud President Bush for his proposed 

level of $66 million in funding for the Appalachian Regional Commission, which also provides monumental economic impacts here in 

Ohio. And I am hopeful that the Bush Administration and Congress will equally recognize the importance of the Community DeVerDate 0ct 09 2002 16:33 Nov 03, 2006 Jkt 030175 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\HBA084.000 HFIN PsN: TERRIE
14

velopment Block Program, while maintaining its successful protection of our great country, which it has accomplished since arguably 

our worst day of tragedy on September 11, 2001. 

[The prepared statement of Mr. Justice can be found on page 46 

of the appendix.] 

Chairman NEY. Thank you. 

Mr. Reed. 

STATEMENT OF KEN REED, DEVELOPMENT DIRECTOR, 

VINTON COUNTY COMMISSIONERS 

Mr. REED. Good morning. Again, thank you for holding this hearing. My name is Ken Reed and I am the director of the Vinton 

County Board of Commissioners Development Department. My 17 

years of experience in this position has given me a ground level 

perspective on the efficacy of individual Federal programs. 

The Community Development Block Grant program is, I believe, 

an effective program, that has made a demonstrable difference in 

the quality of life in Vinton County. Without CDBG funds, many 

persons in my community would not have access to reliable affordable source of potable water, our elderly would not have transportation to doctor appointments, our volunteer fire fighters would not 

have adequate protection gear, our local entrepreneurs would not 

have access to affordable capital, and our community would not 

have 911 service. If time would permit, I could list other essential 

needs that are being addressed in Vinton Count through the CDBG 

program. 

Being the most rural, most economically distressed county in 

Ohio, Vinton County faces some unique challenges. The CDBG program, with its emphasis on local planning, its flexibility, and its 

targeting the low to moderate income households is a vital resource 

that helps us to make up for a lack of local resources. 

The bottom line is that the CDBG program, as it is currently 

structured, works. Reduction in CDBG funding and changes in the 

allocation formula concerns me. As the old adage says, ‘‘if it ain’t 

broke don’t fix it.’’ 

Thank you. 

[The prepared statement of Mr. Reed can be found on page 50 

of the appendix.] 

Chairman NEY. Thank you very much. 

Mr. Riordan. 

STATEMENT OF JOHN RIORDAN, DEVELOPMENT SPECIALIST, 

OHIO CONFERENCE OF COMMUNITY DEVELOPMENT 

Mr. RIORDAN. Thank you very much. My name is Jack, and currently, I am the development specialist for the Ohio Conference of 

Community Development. But before I begin, I would like to formally thank Congressman Ney for his support and endorsement of 

the CDBG program last year. I think we were heading for a disaster and your help really paid off last year. I think that these 

hearings are a great way to get a clear picture of the value of this 

program in Ohio. 

As I indicated I am currently a development specialist for the 

Ohio Conference of Community Development (OCCD). It is an organization of 166 local governments and related entities that adminVerDate 0ct 09 2002 16:33 Nov 03, 2006 Jkt 030175 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\HBA084.000 HFIN PsN: TERRIE
15

ister State and Federal community development programs to the 

people of Ohio. OCCD was founded in 1964 and has provided training and assistance to local governments in their community and 

economic development efforts to improve the quality of life of their 

citizens. Attached to my testimony is a brief history of the organization, an explanation of our objectives and purposes, as well as a 

list of our members. 

Formerly, I was the Director of Community and Economic Development for the Department of Housing and Urban Development, 

and it was my pleasure to be associated with the Community Development Block Grant Program from its conception in the Nixon 

Administration and saw its development in the 1970’s, 1980’s, and 

1990’s. Following my retirement from the Department, I was appointed by then-Governor George Voinovitch to be deputy director 

for community and economic development for the Department of 

Development in the State of Ohio. Attached is my resume of 40 

years of public service. 

CDBG has a proven track record of helping local governments 

address and focus on community needs that result from the concentrations of low and moderate income people who do not have 

sufficient income to pay local taxes to cover the cost of providing 

themselves with local services. Limited local public revenues cause 

communities to focus only on the most critical needs to maintain 

their communities as decent, safe, and sanitary places to live. The 

lack of resources deteriorates public infrastructure and fosters a 

decline in the housing stock and commercial facilities which typifies the areas where low and moderate income people are forced to 

live. 

CDBG has been an essential asset to communities in their fight 

against blight that flows from this deterioration. The changes in 

CDBG that the Administration proposes for 2007 cannot be separated from the 27.5 percent reduction in funding. The changes reflected the Administration’s effort in 2005 to consolidate all local 

community assistance programs into an economic development program to be administered by the Department of Commerce. 

Now, we all know that good paying jobs with health benefits 

would be the long term solution for many low and moderate income 

families. The problem is that the vast majority of jobs being generated are not good paying jobs and do not match the number of 

good jobs lost in Ohio. Communities are thus faced with trying to 

deliver basic services without sufficient local tax revenues from the 

employers and citizens. 

Without CDBG funds in sufficient amounts, Ohio communities 

will continue to deteriorate, blight will go unchecked, and the quality of life will erode for more and more Ohioans. 

CDBG focuses on basic needs of low and moderate income people. 

Attached are reports by the State of Ohio on the effects of these 

cuts. 

First is a list of reductions to the 197 counties and communities 

in Ohio which were helped by the CDBG program through the 

State’s Office of Housing and Community Partnership of the Ohio 

Department of Development. 

Second is a narrative report, ‘‘Community Development Block 

Grant Program Funding Reductions Effects on Ohio’’. 

16

And third, is an earlier memo from the chief of that office, 

‘‘Funding Reduction Effects on Ohio’’. 

These reports tell what jobs, facilities, and improvements will be 

lost. For example, just down Highway 93 in Jackson County, there 

is a lady who can enjoy a cool, cold drink of water from her kitchen 

sink. No big deal you might say, but there are 150 other people in 

Jackson and Washington Township who also now have safe water 

because of CDBG. In the unincorporated villages of Ray and Byer, 

19 wells were determined to be contaminated with arsenic. CDBG 

was the source of $535,000 to help provide 62,000 linear feet of 

water lines to connect 55 low income households. 

I want to take a moment to reinforce this letter that was given 

to you yesterday by Mayor Clifford L. Mason. He talks about little 

things, but that is the important problem that local governments 

are facing. Sidewalks do not seem too important, but if you have 

a kid walking down next to the highway, a sidewalk can save that 

kid’s life. 

CDBG is often a GAP financing that makes basic needs possible. 

For example, 3 years of CDBG money made possible over three million feet of water and sewer lines. That is three million—that is not 

an error. 

[Laughter] 

Mr. RIORDAN. The 10 percent cut in funding for this year will reduce that by at least 100,000 feet. The Administration’s proposed 

27.5 percent cut would cut that by 230,000 feet. If these cuts persist, each year hundreds of poor families will be left with contaminated wells, and costly trucked or bottled water. 

CDBG also constructs, rehabs, and helps finance thousands of 

homes for poor people. Last year—this is statewide—8,293 families 

became homeowners because of CDBG. 12,698 rental units were 

built or rehabbed with CDBG GAP financing. 22,397 single family 

homes were rehabbed. In total a little over $68.8 million of these 

CDBG funds went into housing. In addition to the housing that 

these funds provided, these expenditures generated over 200,000 

good jobs. That is often forgotten, that housing creates jobs. 

CDBG has not in the past, and does not now, provide sufficient 

funds to address the comprehensive total needs of low and moderate income people, but it has made a bad condition a little better. 

CDBG provides local communities the flexibility, within parameters, to focus on aspects of total comprehensive need that it determines are the most critical through a local planning process with 

its citizens. 

CDBG could and should be more efficient and effective in addressing these needs. Some CDBG recipients used their funds for 

things that they should not. Some CDBG recipients get more funds 

than they should. CDBG needs to be changed. 

Changing the formula that determines who gets how much 

money without a comprehensive analysis of the totality of CDBG’s 

role with local government in their fight against deterioration and 

blight will lead to massive unanticipated outcomes and unequal 

consequences. The Needs Index created to revamp the CDBG program is a good approach, but it needs further input and analysis. 

HUD’s funds for research and technology are being cut at the time 

17

when meaningful data is most needed to determine what communities should get how much money, for what purposes. 

A few years ago OMB declared that CDBG was ineffective. OMB 

independently developed a score-keeping method by which the success would be determined. It was like deciding in the middle of the 

football season that teams were going to win by the number of total 

yards gained, rather than the number of points scored. The comprehensive method that ultimately was worked out with HUD, 

OMB, and the organizations representing State and local government entities that produced the Outcomes Measurement System is 

a good way to address the needed change. However, even this process needs more input from local government administrators and 

even the HUD field staff should be involved in the process. 

Our small towns and cities and the poor people who live in them 

are not going away because of the budget deficit. It is wrong to 

make them pay to balance the budget. 

The Administration’s proposal to drastically reduce CDBG and 

all the other local government assistance programs and to give bonuses to communities that it determines succeeded, gain more 

yards, while thousands of communities cannot address the basic 

needs of low and moderate income people is wrong. 

Congressional setasides of CDBG funds for pet projects which 

further reduce the efforts of local governments to address these 

needs are also wrong. 

I wish to thank you for this opportunity to express my frustration and hope that it will lead to wisdom and justice in the halls 

of Congress. 

[The prepared statement of Mr. Riordan can be found on page 51 

of the appendix.] 

Chairman NEY. Thank you, Mr. Riordan. 

Ms. Stroh. 

STATEMENT OF JESSICA STROH, HOCKING-ATHENS-PERRY 

COMMUNITY ACTION 

Ms. STROH. Hi. Again, my name is Jessica Stroh and I am the 

community development coordinator at Hocking-Athens-Perry Community Action, also known as HAPCAP, based in Athens, Ohio. 

And before I get started, I just want to thank Congressman Ney, 

and the entire Subcommittee on Housing and Community Opportunity, for allowing a small rural community to have a voice in the 

proposed changes to the Community Development Block Grant program. 

CDBG funding is unique and vital to our rural region. It is the 

only source of flexibile funding that communities can access to address critical needs for low to moderate income neighborhoods and 

residents. CDBG leverages other funding for projects that could not 

otherwise be completed and the citizen participation component allows for projects to be selected and prioritized at a local level. 

CDBG funds provide the basic necessities of human life and are the 

building blocks needed for attracting businesses to our area. Safe, 

clean, and sanitary water and sewer systems, affordable housing, 

and basic infrastructure are the driving force behind economic development in our region. 

18

Unfortunately, since 2002, each county we serve has faced a 

steadily decreasing formula allocation resulting in a 25 percent 

total reduction. An additional 25 percent cut, as proposed in the 

President’s 2007 budget, would further devastate low income communities and residents. Rural areas are already at a disadvantage 

because they receive one-third less Federal funding for community 

resources as do urban areas. Continued reduction in CDBG would 

further limit opportunities for poverty-stricken rural communities 

to create economic development opportunities. 

In order to illustrate the impact of this cut, I would first like to 

offer some insight into each of our counties’ programs. From 2000 to 2004, Athens County received more than $3.2 mil- lion in total CDBG funding leveraging an additional $14.7 million 

that would not otherwise have been available to the county. However, the countless needs in the county far outweigh the money 

available. 

Athens County averages over $1 million in requests from township trustees, village officials, and community organizations for 

their yearly formula allocation. And with the proposed cuts, Athens 

County would receive only $155,000 in 2007, which would be down 

from $276,000 in 2002. Already there is a major gap between the 

need and the money available to meet that need. Basic infrastructure should not be a luxury. Safe and sanitary water and sewer 

systems are a basic human right that each county strives to provide residents by utilizing CDBG funding. As one resident in the 

Sunday Creek Valley Water District in Athens County wrote to her 

representative last year, ‘‘We desperately need water. Until you 

have to live this way, you do not realize what a gift water is. My 

family can be poverty level and get by. We, however, cannot keep 

going without water.’’ 

Perry County was able to undertake 29 community development projects leveraging an additional $8.5 million between 2000 and 

2004. And I would like to share one story with you today. After 

being awarded funds to create a park, a resident of the community 

of Congo, population 47, wrote, ‘‘CDBG is a wonderful program created by the government, because it does such a great deal of good 

for the smaller, forgotten communities that have suffered from coal 

mining, logging, strip mining, and in later years were left to die. 

Slowly, we hope to rebuild our community to make a better place 

for our children to raise their children. I am glad that you are helping to make our families and community struggle a little easier to 

maintain our heritage and the love for our community.’’ 

As you can hear in her own words, CDBG helps residents gain 

a sense of pride in their communities. 

Hocking County was able to complete 28 projects with the almost 

$800,000 in formula funding they received between 2000 and 2004. 

If the cuts take effect, Hocking County would receive a mere 

$94,000 in fiscal year 2007. Southeastern Ohio counties already 

face larger challenges and higher costs when installing and maintaining critical infrastructure because of the unique topography of 

the area and the rural nature of the communities. And once administration costs are paid and higher construction material expenses 

are taken into consideration, there will be little left. Hocking County would be devastated by the proposed cuts. 

19

If these cuts are allowed to stand, housing stock and infrastructure like water and sewer systems will continue to deteriorate, 

communities will not be able to attract needed businesses, construction companies throughout the region and administrative 

agencies like HAPCAP will have to lay off staff and finally, communities like the little town of Congo that I mentioned, will lose hope 

and may fade away. 

I know that the outcome of this funding and its impact are not 

easily measured on paper. However, I witness the outcomes firsthand everyday. I get to see the impact a shelter house has on a 

community, the way a contractor goes the extra mile so that funding can be stretched, and the faces of a family when they are finally able to purchase a home or access clean water. 

Just last year, we struggled to protect this money from cuts. On 

behalf of the County Commissioners and other local officials, contractors, and residents of Hocking, Athens and Perry Counties, I 

urge you to make CDBG a priority in the 2007 budget by not only 

maintaining the funding, but by restoring it to its highest funding 

levels so that we do not have to fight year after year to save this 

critical program. 

Thank you very much for your time and I would be happy to answer any questions. 

[The prepared statement of Ms. Stroh can be found on page 68 

of the appendix.] 

Chairman NEY. Thank you. 

And we have Ms. Thiessen, who is a recipient of one of the water 

projects. 

STATEMENT OF CHERYL THIESSEN, EXECUTIVE DIRECTOR, 

JACKSON-VINTON COMMUNITY ACTION, INC. 

Ms. THIESSEN. Yes, I am. I am a resident of Washington—or 

Washington Township in Jackson County. And about 8 years ago, 

the Washington Township trustees were successful in getting water 

to us. I had always had to haul water in the summer time and 

through the rest of the year, I had to deal with iron. When you 

filled up your washer you had to make sure not to put your white 

clothes in there until the washer was filled up. So I can testify personally to that. Anyway, I did not know that was going to happen. 

Chairman Ney and members of the committee, I do appreciate 

this opportunity to testify today. I am Cheryl Thiessen, executive 

director, Jackson-Vinton Community Action. And our agency serves 

the counties of Jackson and Vinton, which are two small rural 

counties in the southeastern part of Ohio. Although we do not administer the CDBG funding, we have utilized the funding through 

our local resources. 

Our agency is a private non-profit organization and we have provided services for over 40 years and we strive to address the needs 

of low income families and individuals in our community. With 

shrinking resources and growing need due to the tough economic 

hardships including high unemployment in our counties, low 

skilled labor and higher cost of living, many of our families struggle daily to meet their basic needs. 

Our agency provides a wide range of services to the poorest of 

the poor in our community. We have several programs and I have 

20

them listed in my testimony. Since 1998, our agency has been involved in construction of single family housing as defined by HUD’s 

definition of low income households. In 2001, we were successful in 

securing a 3-year Rural Housing and Economic Development Grant 

for $150,000, and in 2004, we secured a second round of the grant 

funding for an additional $150,000. And this was utilized for increasing staff capacity in our housing department, that is funded 

in part with the RHED funding. The role of the staff is to work 

with local entities to improve the housing quality within Jackson 

and Vinton counties and promote home ownership opportunities to 

low income families by providing education and information on the 

various programs so that they can achieve the American Dream. 

We provide emergency home repairs to low income homeowners, 

the majority of these being elderly households, because a lot of the 

younger people cannot afford to own their own homes. We work 

closely with local entities such as CHIP, UDSA-Rural Development, 

Habitat for Humanity, and the Ohio Department of Development. 

Utilizing HUD resources, we provide counseling for credit issues, 

including budgeting and resolving outstanding debt. We provide 

counseling on predatory lending, and the selection of a lender. We 

also instruct the families on the importance of home maintenance 

and other housing related issues. Since 1998, our agency has constructed 18 single family households and currently has 5 units in 

progress. We provide economic development opportunities by utilizing local vendors and contractors for the emergency home repairs 

and construction of our housing units. 

Since being certified a CHDO in 1993 by the State of Ohio, we 

have access to funding targeted to rural areas. However, many of 

the grants do not provide administrative or operational funding to 

support the staff while completing the project. Without funding 

such as the Rural Housing and Economic Development program, 

our agency would not be able to sustain our housing staff or complete the projects as we have in the past. In 2004, we submitted an application for $55,000 to the Jackson 

County Commissioners for funding through the Community Development Block Grant Program for a water line that would supply 

six low income families along Dan T. Davis Road outside the Village of Oak Hill, and the houses that were in our projected project 

funded by the Ohio Department of Development. Our project was 

a ten unit single family, stick built subdivision marketed to families at 52 to 73 percent of area median income. Without the water 

supply from an approved source by the Ohio EPA, our subdivision 

would be stalled. 

We contacted several resources to assist with the funding needed 

for the water line project on Dan T. Davis Road. And one of the 

things I will mention is that our budget had increased because we 

had dealt with Hurricane Andrew and the housing costs at that 

time had increased significantly, so it had increased our project 

cost because our houses, to construct them had raised from when 

we submitted the project until we actually started construction 

process. Many of the resources that we contacted such as USDA 

Rural Development, the Ohio Valley Regional Development Commission, and the Economic Development Revolving Loan Program, 

offered funds for water lines and sewer, but most of those had regVerDate 0ct 09 2002 16:33 Nov 03, 2006 Jkt 030175 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\DOCS\HBA084.000 HFIN PsN: TERRIE
21

ulations connected to economic development which had to either increase jobs or retain jobs. And since this was a home ownership 

project, we could not meet that criteria. Some of the other resources such as the local Community Housing Improvement Program, they were already earmarked for other areas in the county, 

because of the great need. 

With the current flexibility of the Community Development Block 

Grant, the Jackson County Commissioners were able to fund a 

total of four projects for various activities. This included nearly 

$50,000 for the water line for our subdivision, with our agency covering the balance of the cost. The Jackson County Commissioners 

also assisted the Village of Oak Hill with funds for the extension 

of a sewer system, the Jackson County Rural Water for a pumping 

station which served low income families in the rural area, and another small project within the county. 

In a rural community with no public transit system, substandard 

housing stock, high unemployment, lack of health care coverage, 

and a shortage of living wage jobs, many of our families have limited choices as to where they are able to live. If they have credit 

issues—many of the public housing authorities are now doing credit checks and families with any credit issues are denied affordable 

housing in that housing authority. Many of these changes would 

make the local resources have to compete against each other for 

the funding, instead of working together as an alliance. 

The needs of our low income families are growing every day. 

Many of our programs have long waiting list such as our Emergency Home Repair and our Weatherization Programs, because the 

funding level is inadequate. We need to increase funding resources 

to increase affordable housing opportunities for low income families, not reduce it. Many of the local resources are already 

stretched too thin. Our staff would be willing to set up a tour of 

our poorest communities so you can see firsthand the conditions 

that many of our families are forced to live in. 

I thank Congressman Ney and the members of the Housing and 

Community Opportunity Subcommittee for their hard work and 

commitment. And I would be glad to answer questions. 

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

72 of the appendix.] 

Chairman NEY. Thank you. 

Mr. Hepburn. 

STATEMENT OF DUSTIN HEPBURN, VILLAGE COUNCILMAN OF 

BELLAIRE, OHIO 

Mr. HEPBURN. My name is Dustin Hepburn and I am on the Village Council for Bellaire, Ohio. 

First off, I would like to thank Mr. Ney and the subcommittee 

for the invitation to speak here today. I am going to start off by 

saying something that I am sure you are all aware of. But, all 

towns and cities throughout some part of their history have gone 

through, for a lack of a better word, a downfall—decrease in population, loss of community growth and all around deterioration of 

community infrastructure. 

Now with that said, most of these towns and cities are able to 

make some sort of a comeback. One of the major reasons for these 

22

comebacks is because of government funding such as the HUD program and CDBG. These programs are necessary to rebuilding the 

community infrastructure. The community that I am representing, 

Bellaire, unfortunately is one of these communities that is currently in a major downfall. Sadly, we are not alone. So many communities in the Ohio Valley and the Appalachian region are in dire 

need of government funding, more likely more—now so than ever. 

A cut now in our immediate future would have a devastating effect on all of our communities. And I believe that all we are asking 

for today is the opportunities that past communities were given. I 

know if given that chance, we would be able to turn a downfall 

around. 

With that said I would like to thank everybody for coming out 

today and showing their support. I thank you again, Mr. Ney and 

the subcommittee, for letting me speak. 

Chairman NEY. Thank you. I have a few questions and a couple 

of generics if we could do that. I am very fascinated about—I appreciate all of your testimonies—the micro, I ran into a foundation, 

there was a—the name escapes me, a lady from New York who 

called me up and offered—she has a foundation, you might know, 

it is pretty famous I guess—she offered to come into our area and 

we brought her down here and had a few meetings a few years ago. 

Linked her up with people and they, as an act of charity, fund 

these micro loans. And you know—the name escapes me. 

Ms. BARNES. The Minx Foundation does and Axeon is also in 

New York. Axeon is in South America, Central America also. 

Chairman NEY. Okay, but I am very interested in those micro 

loans. A micro loan may not create a whole lot of jobs, we aim to, 

you know, create lots of jobs. We brought in prisons or factories, 

Colgate Palmolive, I can go back years back when I was a State 

senator, and you can see where we created 300, 400, but the micro 

loans may not create multiple jobs at one time, but you want to 

just further comment a little bit more, maybe about why it is a success or not? 

Ms. BARNES. Well, the State of Ohio has used both CDBG funds 

and also funds from the Housing Trust Fund to help create Micro 

Enterprise Programs, and actually one of the foremost practitioners 

for Micro Enterprises is right here, Ken Reed, in Vinton County, 

they have probably one of the best track records in the State of creating jobs, and in one of the most distressed communities. I wondered if I might just ask Ken if you would say a few words about 

what you have been doing. 

Mr. REED. Yes, the Micro Enterprise Program has made a big 

difference in our community. Because we are in a community with 

only two financial institutions, very conservative banks, that are 

not very aggressive when it comes to commercial lending. We get 

these entrepreneurs that want to start a small business and they 

do not have that access to affordable capital. They might be able 

to run up their credit limit on a credit card for the $15,000 they 

need, but that is usually not affordable. We can provide them 

through the Micro Enterprise Program access to that $15,000 at an 

affordable interest rate. 

We also have a technical assistance component, to sit down and 

help them develop business plans, figure out cash flow projections, 

23

and even after the loan to do some follow up assistance to help 

them succeed. It has made a big difference in our community. We 

have quite a few success stories. And I would put our success rate 

up or default rate up against the banks any day. 

Chairman NEY. That is where I think, using some of these monies—and a lot of people do not know about micro loans. I helped 

to create the Ohio Housing Trust fund when I was a State senator. 

Senator Ray came to me, Representative Barry at the time, they 

are both gone from the legislature as I am. But when I was a State 

senator, he came to me, there is a lot of disputes on that trust 

fund, I can tell you that. You know that, you had people that said 

that it is terrible. You should not do it. But it was a private-public 

partnership, we had to beg to get $5 million if I remember correctly. 

Ms. BARNES. At the beginning. 

Chairman NEY. To begin it and I knew that would come out to 

be a good thing, and we followed the lead and helped Senator Ray, 

it went through my committee at the time. And those things may 

not be looked at right in front, and realize how good they are, and 

it is like the micro/mini loans, the same way. 

I also want to note, when I visited troops in Afghanistan, I went 

to Kabul twice, and Bahrain twice, met with the Afghani government. We pushed the micro loans, because woman were not allowed to read for 35 years, if they read they would cut their fingers 

off publicly to show everybody else not to read. And everybody was 

talking about how do you help Afghanistan, with the Taliban and 

how poor it was and we talked to U.S. Commerce, and when they 

were talking to the Afghani’s, focus on micro loans, it is a way to 

help within the individual and a community, that has even been 

used, that theory over there, with success. 

Ms. BARNES. That is great. 

Chairman NEY. I wanted to mention I think it is a great thing. 

David, what I would like to ask you is to focus kind of on the neediest of the needy, because I know you—I have known you for years 

and Bob Garbo and you have worked with, to quote my colleague 

Congressman Green sometimes, the least, the lost, and the last, the 

poorest of the poor people that need help, and I know you work 

with all levels to improve communities, but you and Bob Garbo 

have done that for years. 

And the White House has a proposal, the Administration does, 

to take and rechange some of this formula to help the neediest of 

the needy at the expense of 200 different people who have been trying to achieve or entities to achieve success, and cities. I just wanted to know if you wanted to comment on that. 

Mr. BRIGHTBILL. Well, you know, I guess I view getting communities and getting people out of poverty on a continuum. And communities have to be totally healthy if those jobs are going to be created. I have been in this business for almost 40 years, and I have 

believed since day one, and I believe today, nobody will not be poor 

until they have a job that pays enough for them to live on. I mean, 

we are never going to—I am not necessarily talking about individuals with severe disabilities and that sort of thing, but the average 

person, is going to have to work, and if they are going to work, they 

are going to need jobs. And that means that the community as a 

24

whole—now, I am not suggesting that Beverly Hills is entitled to 

the same share as or should be treated the same as Appalachian 

Ohio. But I think that overall targeting, in my opinion at least, 

with CDBG toward low and moderate is a pretty fair method of 

doing it. You know, as Jack said, I guess you could always look at 

ways that you might tweak it to target those activities a little bit 

more. Because I know that local governments, county commissioners and mayors sometimes—always—have a very difficult task 

as the requests come in. I mean, they are trying to deal with a lot 

of constituencies. So, you might want to target that a little bit. 

But I think that all communities need, you know—well the majorities of the communities need to have that continuum there, so 

that you are helping the poorest of the poor and yet you also have 

to help, as they move forward, they need to have resources available to them also, housing is a good example. 

Chairman NEY. The point was made yesterday, is why I wanted 

to ask you the question we asked up in Knox County, and asked 

it in Guernsey County, is it sounds good to help the poorest of the 

poor, and changing that formula, but what we are finding and I am 

sure that you can give us 100 examples, you all are trying to help 

the poorest of the poor. Changing that formula is not necessarily 

going to have an effect but may be actually a detriment is what we 

are up against. 

Mr. BRIGHTBILL. As they move up a little bit, they still, I mean, 

theirs is a continuum to, they get a little bit more income, but they 

still do not—so yeah, I think we need to maintain that continuum. 

Chairman NEY. Also, T.J. Justice, first of all I want to thank you 

and the Governor for your fight for Appalachia, fighting for the 

funds, Joey Padgett is now a State senator, before, he was a big 

champion of that. Ann Pope has helped us from ARC, you have 

done a great job, also, Mr. Justice and the Governor promoting 

that. We kind of won that battle in a sense that it is coming in at 

decent funding this time at the ARC. 

From your perspective at the State’s end of it, is there anything 

or does it run fine, the process, the money comes to the State, is 

there anything there, you want to comment on the process? 

Mr. JUSTICE. Well, we are very comfortable with the process. We 

think it works very well. I agree with, I believe it was Mr. Reed’s 

statement, you know, if it is not broke, do not fix it. It’s grassroots, 

local-based with systems in place, checks and balances are there. 

So, from the State of Ohio’s perspective, we are very pleased with 

the current process and evaluation mechanisms. 

Chairman NEY. Thank you. 

Mr. Reed, how about any of the CDBG, I was just trying to take 

the housing end of it in Vinton County, any of the CDBG has been 

applied to housing? 

Mr. REED. Yes, we use a lot of CDBG through the CHIP program. We have been fortunate to have continuous CHIP funding 

for a number of years. We have local administrative capacity. In 

other words, through our office, we have the staff to implement the 

program. We have all local contractors and we are still putting in 

flush toilets for people out here. We have widow women living on 

$400 to $500 a month, and we are putting them in bathrooms and 

eliminating the privies. So there are some basic housing needs. 

25

And one thing about CDBG that has not been mentioned is the administrative dollars that go through CDBG. 

I live in a community where the county commissioners cannot afford to even have a clerk for the commissioners, let alone to have 

a staff person. And the administrative dollars in the CDBG program helps to pay my salary and keep the lights on and pay our 

staff. It makes a difference in a small rural community. Because 

those administrative dollars then, we are on board to be able to access other funding using this CDBG, as T.J. said, to leverage other 

funds. And without the CDBG program, we would not have the 

local administrative capacity to go out after the EDA and the 

USDA and the ARC funding. 

Chairman NEY. It has a cap. I think it is valuable because it is 

not like Franklin County, where you have Columbus, which is this 

huge, you know, powerhouse, has development entities. Even littler 

towns outside Columbus should have the development entities. 

Mr. REED. Yes. 

Chairman NEY. If we did not have development entities in a 

county the size of Morgan or Vinton, your end result is nobody is 

going to be able to sit there and say, I think you ought to do this. 

That would be Washington telling you what to do and nobody is 

going to write the grant and that will be the end of it. 

Mr. REED. Right. That is why the administrative dollars on the 

CDBG are very invaluable in getting that done. 

Chairman NEY. Mr. Riordan, you are a powerhouse on development. 

Mr. RIORDAN. Thank you. 

Chairman NEY. You are. I want to thank you for what you did 

before, with the trying to shift that to Commerce and stopping 

that. And I think you have a real good perspective how, you know, 

you are able to look at all these groups that, you know, you represent and how they are working in different parts of the State. 

The one thing I wanted to—the OMB, you raised that issue. We 

were talking about that, we have talked about that before. OMB—

some of the ways—and this maybe reflects on this. 

Mr. RIORDAN. Sure. 

Chairman NEY. Some of the ways you look at what you do, how 

it helps the community can be an abstract too. Somebody mentioned the park. I think you mentioned the park. If we had to go 

back and say the park created this amount of jobs, it did not, but 

it brought a quality of life into the community and, you have to 

have some quality of life too. That is why people live in communities also. 

But the OMB does not, it cannot get it hands on the abstract, 

it just says that this is the amount it created, CDBG is not that 

good. But I happen to know from cases where you do a CDBG 

project, jobs are created we will never know about. You will never 

know about. 

Mr. RIORDAN. That is right. 

Chairman NEY. Locals would not know about. I just want—if you 

just want to reflect a little bit more on that OMB study? 

Mr. RIORDAN. Well, I think what OMB is trying to be able to do 

is to make value judgments on the expenditure of all government 

funds. So in doing that, you kind of begin to set aside, well, these 

26

are the things that we are going to do. Now, they can deal with 

feet of sewer and water line, that kind of stuff, but when you get 

into the kinds of activities that do not have a definitive brick and 

mortar kind of result, they cannot make that valuation. One of the 

things that came out at that time, they were saying, okay, well now 

the community has spent all that money in a neighborhood. Well, 

what happened to the school enrollment? What happened to the police reports? Well, yeah, you can do that, but I mean, do you set 

up a national system for gathering that data in order to be able 

to answer that question or do you go back in and say if that is a 

question, you do not make every community in the country go 

through and fill out those reports, you go back and you do some 

sampling to get your information. And I think part of the issue was 

that they were trying to get at this information, which is good information. If I were them, I would want to do that. But the thing 

about this kind of thing is that, good ideas are cheap, implementation is very dear. And the question is, sometimes you get people 

coming through there and they are able to drive their own particular idea on what the end result ought to be and they forget the 

basic premise of this program was to take the money and let the 

local community determine what it wanted to do. 

Now, the problem that happened for awhile was that HUD was 

not given the administrative wherewithal to be able to oversee the 

grantees. So when you had somebody that was really screwing off 

with the money, you know, you could not deal with that. I mean, 

it was just not possible. 

The other problem that we have is, you have a program that has 

grown over time. The conditions that existed at the time of its creation do not exist today. So you have a lot of communities that 

have grown in population to be able to get entitled under the program. And that is really, you know, every community has some 

pocket of low income people, but not the—there are some suburban 

communities now that are entitled because of their population, but 

they do not really have anywhere near the problem that Vinton 

County has. So it is that kind of a problem. 

But OMB needs to be kind of reined in and say you can not have 

one game plan for the whole thing. And you cannot come down and 

say, after you got the program started we are going to change the 

rules. 

Chairman NEY. You also said something interesting about set 

asides, you can call them earmarks. You know, everybody talks 

about earmarks today. And a couple of things on that. I did not realize and we want to work—I did not realize that there were set 

asides and earmarks in the CDBG. I knew Appalachia, and I promise to not go after them myself. Highway Bill, sure, as many as I 

can get. 

I want to comment, Appalachian Regional Commission, we have 

always kind of had a gentlemen and gentleladies agreement in 

Washington, this is ARC money. It comes down through, and I 

know how, because for Governor Rhodes, I was the Education and 

Health Care Program Manager. So, I was Governor Rhodes’ person 

up in Appalachia, in the Governor’s office. They came down to me, 

we worked with the LDD’s, the three LDD’s at the time, of course 

they are there, Buckeye Hills, Hocking Valley and OERDC, also 

27

OMEGA of course. And so those all come down through, and we always had the deal that you did not earmark those. So they just 

flow right down through. This time they were earmarked and I will 

be candid with you, I was offered some earmarks and I did not take 

them. Because these are funds that kind of always have been sanctity at the top and they come down through and the locals decide. 

And the earmarking erodes that. 

Now in a highway bill, where that is not the case, sure, everybody should be a free-for-all to go get those monies. And I can say 

that publicly. That can be printed. Nothing you can print can hurt 

me these days. So I do not worry about it. But these funds I did 

not know there were some set asides. And that is not a good thing. 

Mr. RIORDAN. No. 

Chairman NEY. I do not even know who did them, I am sure both 

sides do it. Well, that is not a good thing. So I appreciate you pointing that out. 

I want to say one other things about earmarks if I could while 

I am on that rant. You know, everybody talks about the earmarks, 

because they put these contractor things in and one Congressman 

got Persian rugs in toilets and $2.7 million or whatever. Changing 

the earmark system does not change that, if somebody is going to 

get somehow cash in their pocket. But the—but this fever of earmarks, I think our names ought to be put on them. I think it ought 

to be publicly known, who is doing the earmarks. They can put it 

in the bill and put my name and others in there. Ought to have 

transparency, media can see it, people can see it. Then you can say 

well, this is who did that. And then if there was anything to be 

tracked back, they know, because sometimes we do not know who 

did them. 

But this business of trying to sell to the public these earmarks 

are so bad—I did an earmark for a cancer hospital. I called down 

to Vinton County, we wanted an earmark for the dental clinic. 

Highway monies, that frankly the Federal and State would never 

have done these highways we have done, And if you take this no 

earmark attitude, now I believe in it with CDBG. If you take that 

attitude, you are going to say to the United States Government, 

whoever is President, this time it is Bush, next time it might be 

a D or an R, and their executive cabinet members are going to say, 

I think I just ought to give Vinton County or Morgan County or 

Hocking County this little item—that is not going to happen. Ninety nine percent of what the Democrats or Republicans in Congress 

hear comes from that community out to us. 

So, in my opinion, if you ban all the earmarks—make them 

transparent, I do not care—you ban all the earmarks, you are going 

to reverse CDBG. It is all going to be Washington, D.C., deciding 

and I will be frank with you, with delegations it will go to New 

York, Los Angele,s and it will be pretty well centered to one place. 

Mr. RIORDAN. With big populations. 

Chairman NEY. So I just wanted to—but I do think you are right, 

earmarks within the CDBG are not good for the system. 

Mr. RIORDAN. You asked a question of the earlier panel about the 

brownfields, and T.J. and I have been working on those for years 

and years and years, and one of the things that people do not realize in brownfields is, in trying to use an old facility, you have got 

28

a number of disadvantages first, in trying to get someone to locate 

in that area. If you get somebody who is interested in locating in 

that area, you have increased costs associated with preparing that 

site for development that make it very diseconomical to locate 

there. And you have not only the economic cost of demolishing 

what is there, but many times these old facilities had industrial 

processes that contaminated the soil upon which they stand. So 

that you cannot just go in there and start to mess up that soil and 

try to get something there or you end up hurting the environment. 

So there has got to be a greenfield program that kind of counters 

that extra cost on these lands or we are going to sit in Ohio with 

all kinds of old industrial sites that we are just not going to be able 

to deal with. And those are blighting influences on that community. 

Chairman NEY. Thank you. 

Ms. Stroh if you could just comment on—and I know you work 

with a lot of people to help them through job creation and different 

things you do to help their quality of life too. I just wondered if you 

want to talk a little bit about CDBG used as a quality of life 

project. 

Ms. STROH. Sure, one of the programs that the State has developed is a community distress program and counties can apply for 

them on behalf of villages, neighborhoods, cities, parts of townships. For a setaside from the formula program for $300,000 to target one neighborhood, and instead of being 51 percent low to moderate income, these communities have to be 60 percent low to moderate income. And we have been able to work with about five different communities in our three counties, targeting this $300,000 

just to one community, they have to leverage some additional funding and it is really unbelievable to see what this can do to a community, especially with the citizen participation component. We 

have to have a series of meetings and have residents come and do 

surveys and they start to feel ownership over what is going on in 

their community and these improvements. And then when they are 

awarded it, it is just, you know, one of the most exciting phone 

calls for me to make to call them to tell them that they got this 

funding. And then to go and start it up. And normally, in Hocking 

County here we did one in the village of Murray City and they 

were able to build a new fire department, their old fire department 

was in the flood plain; and do water line improvements. In the village of Corrine in Perry Counties, we were able to undertake like 

seven or eight different projects, sidewalks, parks, fire equipment, 

window replacement, and furniture replacement on their main civic 

community center. And a lot of times, I mean the residents, it is 

really moving to see them rally around it. And I really believe that 

that helps inspire them and give them hope and improve their 

quality of life in, you know, many different ways, not only just benefitting from all the different activities, but to take part in that citizen participation process. 

So, I definitely think that the community distress program here 

in the State of Ohio has a huge impact in benefitting the quality 

of life. 

Chairman NEY. Thank you. I wanted to ask a follow up question 

with Ms. Thiessen about, you said costs increased because of Hurricane Andrew? 

29

Ms. THIESSEN. Yes. 

Chairman NEY. Would you like to explain that further? 

Ms. THIESSEN. Well, whenever we submitted our project in 2003, 

we had an estimate, we had to get the cost certified by a local contractor of what our housing cost was going to be. And then whenever we submitted the application, it took almost a year to get the 

approval and the funding. During that time period, we had Hurricane Andrew and of course, just like it did with the hurricanes this 

time, Katrina, it raises your housing costs. And we were in the 

middle of another subdivision and our housing costs for like plumbing— 

Chairman NEY. So the materials that are used down in— 

Ms. THIESSEN. And the gasoline cost. Where the gasoline was affected also, any of your products that is made with petroleum, like 

your plumbing and things like that. So we have experienced that 

not once, but twice with our subdivisions with the hurricane costs. 

So, I mean, it makes an impact. And then of course the local gas 

cost and the heating cost and stuff, all that gets added on as a surtax. 

Chairman NEY. The gas and heating of course we knew about. 

Our subcommittee, by the way, was the first committee of the U.S. 

House to go to New Orleans, no other committee went. The subcommittee went down there with Maxine Waters and the staff and 

also down to Gulfport, Mississippi. And I knew about the petroleum cost because it was coming down to where the milk cartons 

were going to be cut off and the dairy called us in the district to 

say that they could not get these cartons, they could not get milk 

out to people. So, I knew Louisiana was affecting us, but I did not, 

you know, really realize about the piping and you know, maybe it 

had not been preordered, so getting it now, it has a cost increase 

in it. 

Ms. THIESSEN. Just the heating cost or doing the walls and the 

roofing cost. Any of this cost was increased. And I mean, whenever 

you submit your proposal, you know, you cannot go back and ask 

them for more money. So we have run into that, not once but twice 

on this small job. 

Chairman NEY. Well thanks. I just want to thank you for your 

sincerity and integrity and how you care, you and all the people on 

this panel. And I know a lot of you, some of you better than others. 

And whether you are elected or down doing this development, I 

think there is things that have been done, nobody is going to know 

your name in 30 years, or anybody else’s, but there is going to be 

some quality or somebody is going to have a home due to you and 

other people that have worked on it. So, I appreciate that. 

Ms. THIESSEN. At my age, I will probably still be here working. 

[Laughter] 

Chairman NEY. Add 30 on to 25 years old. 

Ms. THIESSEN. Yeah, I will still be here. 

Chairman NEY. I just wanted to comment, because Councilman 

Hepburn has come up from Bellaire. Bellaire was a town that had, 

and maybe I could just give this perspective, I think you gave some 

of it. I was raised in Bellaire and we had about 11,000 people when 

I was there, now it is 4,900. There was a glass house there and I 

was a full-time glass worker, AFL/CIO, glass workers union, by the 

30

way. And I was full-time glass worker and it allowed me to go to 

Ohio University Eastern. That is gone because of Czechoslovakian 

imports that came in and Rutherford Glass and all the things that 

we had down there. And some of the water lines are 100 years old. 

They are wood still. I mean, they still have water but they are 

dealing with wooden water lines. And so Bellaire is a community 

that has had, like a lot of places in Appalachia, has had a real—

it is a city that had a horrific time and I am just wondering if—

if the CDBG’s cut, if that cut encourages you trying to rebuild Bellaire? This would be, add the 10 to 25, that is 35 percent, a third. 

Where Bellaire seek its ability to repair itself? 

Mr. HEPBURN. Right now, as far as water lines go, we are looking 

for a lot of help. The EPA does a lot of matching funds for emergency work. Right now, the town is supposed to be running on—

I will give an example, four water treatment plants, one is actually 

completely down and two more are just about ready to go. Right 

now, we are on the EPA water lines. So if another one of those 

storage goes out, let us say in the next so many months or so, we 

are going to be in a world of hurt not only in the quality of drinking water, but there is also the scenario where since the filter is 

completely out, the tank cannot be filled. And if there is a major 

fire, things are going to be dry. 

We are also looking to the Appalachian Regional Committee for 

some help. I think our district office is out of Cambridge. 

Chairman NEY. He is right there. 

Mr. HEPBURN. All the matching funds. 

Chairman NEY. Grab him before you get out of here. 

Mr. JUSTICE. Thanks, Congressman. 

Mr. HEPBURN. Our entire sanitation system is taking a major hit, 

mostly from what you said, from the old water lines. I mean, I go 

personally back to the west Bellaire where you were raised, there 

is three water breaks probably a week out there. I mean it is bad. 

Chairman NEY. My parents live out there. I know I hear it, I tell 

them to call their councilman. 

[Laughter] 

Chairman NEY. Well, thank you, and this is very valuable for us, 

it really is. It will allow us to go back to Washington. We have a 

nice bipartisan effort to try to stop this. Here is the other thing, 

this is a very difficult year and I want to say something about the 

budget, look, I know we have to balance the Nation’s budget. I 

know we were in pretty decent condition doing that. After 9/11 

whether we liked it, to bail out the airlines, because the domestic 

airline industry was going to go out. Money to the intelligence 

forces to try to stop these monsters and find out about them before 

they attacked us. Two wars, whether you agree with the war or 

not, we have got to help, the troops are there we have to fund them 

and, you know, you name it, it has happened in the country. And 

so there is a balance; but, what I think is unfair is, first there are 

two things. 

One, these funds, you do not go in in a bad time and a bad economy, especially our area, and take out the force that creates the 

jobs so the mom and dad can get on their feet, help the kids, support school levies, etc. That is the reverse way to go. It is times like 

this you go into other programs. By the way, the beginning budget, 

31

I looked through and it has three or four, I looked just in the State 

Department alone, it has three or four programs that have a $100 

million increase, a billion dollar increase. So you look around there. 

I like research, but we do not need to be sending anybody to Mars 

or the Moon right now. This is a time so let us hold that and save 

$32 billion. There is a fair way to do this. 

The problem, I think, that we have with this, it is not just to 

save your favorite program, although we all try to do that. But 

there are other entities in this budget that have not taken a hit 

at all. You know, the administrative ends of things, the EPA, the 

highway department, you name it, the Federal transportation, 

Commerce, they can scale a little bit back at their levels within the 

bureaucracy of the government. There is a better way to do this. 

But, here is what I fear on this, to be right up front with you, 

oh well, we were going to get a 25 percent cut, gee, we got it down 

to a 10 percent cut. Well, 10 percent and the previous 10 percent 

is 20 percent. We are going to keep sliding. To me this is a big do 

or die with the Congress, of its attitude where it weighs in on this. 

So, I do appreciate an awful lot your participation, believe me it 

will help. I also like to come to a place where we have a hearing 

that you do not have to go through a metal detector to come see 

us. 

[Laughter] 

Chairman NEY. With that, I will leave the record open without 

objections for 30 days. Is there anything you want to say before we 

close? 

Mr. RILEY. No, thank you, for having us. 

Chairman NEY. Again, thank you, I want to thank Chairman 

Oxley, who chairs the committee, again from Ohio. Barney Frank 

is the ranking member for the Full Committee from Massachusetts. 

I chair the Subcommittee on Housing, and Maxine Waters is our 

ranking member from California. 

And without objection the record will be left open for 30 days. 

People may have additional questions they want to ask you or additional things to be entered to the record, and again thank you for 

your time. And thank you again to all the locals that have helped 

us set this up. 

[Whereupon at 11:42 a.m., the subcommittee was adjourned.] 

(33)

A P P E N D I X

March 25, 2006

34


30175.001
35


30175.002
36


30175.003
37


30175.004
38


30175.005
39


30175.006
40


30175.007
41


30175.008
42


30175.009
43


30175.010
44


30175.011
45


30175.012
46


30175.013
47


30175.014
48


30175.015
49


30175.016
50


30175.017
51


30175.018
52


30175.019
53


30175.020
54


30175.021
55


30175.022
56


30175.023
57


30175.024
58


30175.025
59


30175.026
60


30175.027
61


30175.028
62


30175.029
63


30175.030
64


30175.031
65


30175.032
66


30175.033
67


30175.034
68


30175.035
69


30175.036
70


30175.037
71


30175.038
72


30175.039
73


30175.040
74


30175.041