United States 

Department of 

Agriculture 

Rural Development IDAHO 

Fiscal Year 2003 

Annual Report

“Making a Difference in Rural Idaho”

Rural Business-Cooperative Services 

Rural Utilities and Community Facilities 

Rural Housing Services 
Ann M. Veneman 

Secretary of Agriculture 

The Bush Administration has made great strides in supporting investments in America’s rural

communities. From the successful implementation to the 2002 Farm Bill to passage of the Healthy 

Forest Restoration Act, President Bush’s policy are helping strengthen the economic health of rural 

America. 

In 2003, we saw record net cash farm income, which is expected to total $65 million, up 33 percent over 

2002, and strong exports, which are expected to reach $56.2 billion for 2003. The demand for farm

products is being spurred by the President’s tax cuts, low interests rates and inflation and decline in the 

value of the dollar. Expanding payrolls and declining unemployment in the coming year are expected to

further accelerate food demand. 

Also fueling this growth are the programs being implemented by USDA’s Rural Development. Through USDA’s Rural 

Development programs, it is estimated that over 510,000 jobs have been created or saved since the beginning of the Bush

Administration. USDA has invested nearly $2.5 billion for rural business development in the form of loans, grants and

technical assistance. 

We are also working with local communities to build and strengthen economic development partnerships with state and local 

governments. Some $183 million has been invested in Empowerment Zones and Enterprise Communities (EZ/ECs). This 

investment is complemented by the leveraging of USDA funds to help attract $422 million in other federal investments and

$739 million in non-federal investments to EZ/ECs and other supported communities. 

To improve economic and community development opportunities in underserved rural areas, the Administration has entered

into agreements with 20 National Centers of Excellence and Historically Black Colleges and Universities to advance business 

development through improved information technologies and entrepreneurial skills training. 

Major investments have been made in developing value-added industries, with a focus on promoting renewable energy. Over

$35 million has been provided to support the development and marketing of renewable energy and the creation of energy

efficient systems in rural areas. 

Rural infrastructure, such as education, healthcare, telecommunications, water treatment and community facilities, has been

supported by more than $13 billion in grants and loans. More than $10.2 billion has been invested in rural housing, much of

which supports the President’s ambitious goal to increase minority homeownership by 5.5 million by 2010

Message from Acting Under Secretary for Rural Development 

Citizens and community leaders throughout rural America share a common desire to bring economic opportunity and an

improved quality of life to their community. There is a remarkable cohesiveness 

amongst rural citizens that allows the energy and enthusiasm of local citizens to

harness the resources needed to bring solutions to economic and social issues facing 

their community. 

As rural America’s venture capital bank, USDA Rural Development seeks to support 

local efforts by providing financing to create housing, business development,

technology and community infrastructure and essential community facilities. Over 

the last year, the Bush Administration through USDA Rural Development has 

provided over $13 billion in capital financing to assist rural citizens and communities 

invest in their future. 

USDA Rural Development capital investments in FY 2003 include; assisting over 

43,000 families realize their dream of homeownership; assisting over 100 rural 

agri-businesses with financing of energy efficiency and renewable energy systems

that support energy independence for America and that supports President Bush’s

national energy plan; assisting with the financing of over 12,000 business ventures to

create or save nearly 90,000 jobs; and assisting with the financing of community 

infrastructure and facilities that will benefit an estimated 7 million rural citizens. In

total, over 350,000 jobs are expected to created or saved as a result of the financing 

provided by USDA Rural Development.

Gilbert Gonzales 

Acting Under-Secretary 

USDA Rural Development 

USDA Rural Development has a dedicated team of professional with over 40 financial and technical assistance programs

available to assist rural communities improve their economic opportunities and an improved quality of life. I encourage you 

to contact our staff in (Name of State) to learn more about ways that USDA Rural Development can be of assistance to you 

and your community. 
Message from the State Director 

Fellow Idahoans: 

We are pleased to report on the 

activities of Idaho USDA 

Rural Development for Fiscal 

Year 2003. 

In this annual report, you’ll

find information about USDA 

Rural Development programs 

and how they help the people 

of our state. After reviewing 

it, we hope you’ll have a better idea of how USDA Rural 

Development is fulfilling its mission to create new opportunities for 

rural Idahoans. 

Helping to create quality jobs, housing, safe drinking water, and 

reliable and modern infrastructure for rural communities remains a 

top priority. Rural Development employees in Idaho are working in 

partnership with federal, state, tribal and local government officials as 

well as the private sector to make certain our financial resources are 

invested wisely and have the greatest impact on improving the quality

of life in rural areas of our state. 

We want to thank our partners: the private, nonprofit, and government 

entities that have participated with us in many of these projects. With 

their assistance, we have helped rural residents statewide. 

We recognize that the best solutions to rural problems are developed 

by those on the ground. We stand ready to assist Idaho’s rural 

communities by being an active participant in their growth. 

Sincerely, 

Michael A. Field 

State Director 

 Rural Business- 

 Cooperative Service 4 

 

Rural Utilities and 

 Community Facilities 7 

 

Rural Housing Service 9 

 

 Historical Trends 11 

 

 Office Locations 12 

Contents
Rural Business-Cooperative Service 

Accomplishments 

Program Name

Dollars 

Obligated

Participation

Amount

Total

Investment

# 

Jobs

Business and 

Industry Loan 

Guarantee

 4,518,500 747,232 5,265,732 152 

Business and 

Industry Loan 

Guarantee (CAIP*)

4,560,000 400,000 4,960,000 118 

Rural Business

Enterprise Grant 

(RBEG) 

381,000 3,945,448 4,326,448 664

Intermediary

Relending Program

300,000 45,000 345,000 19 

Rural Business

Opportunity Grant 

(RBOG) 

47,000 3,000 50,000 38

Energy 1,010,000 3,043,000 4,053,000 N/A 

Value Added 

Producer Grant 1,353,635 1,353,635 2,707,270 N/A

TOTAL $12,170,135 $9,537,315 $21,707,450 991 

*Community Adjustment and Investment Program

Rural Development provided financing to

promote the start-up or expansion of rural 

business or cooperatives, creating or

preserving 991 jobs in the rural areas 

served. $10,816,500 in Rural 

Development, Rural Business Cooperative 

Services (RBS) program assistance was 

provided to rural projects as guaranteed 

loans, grants made to third parties, or

loans made to intermediaries to facilitate 

the development of rural businesses and 

cooperatives, or grants made to eligible 

agricultural producers/ producer groups. 

RBS program assistance was leveraged 

with $8,183,680 from our Partners, for a 

total investment in rural projects and

communities of $19,000,180. Idaho RBS 

provided technical assistance services to 

cooperatives and cooperative steering 

committees to facilitate Empowerment

Zone/Enterprise Community Initiative. 

Business & Industry Guaranteed Loans: Fiscal Years 2002 & 2003 

Lender Location

Number

of Loans 

FY 2002

Amount of 

Loans FY

2002

Number

of Loans 

FY 2003

Amount of 

Loans FY

2003

American West Bank Pullman, WA 1 $ 699,600

American West Bank Orofino 1 $ 572,000 1 $ 600,000

Bank of Whitman Colfax, WA 1 $ 575,000

DL Evans Twin Falls 1 $ 1,716,000

Farmers & Merchants Meridian 1 $ 2,602,713

Intermountain Community Bank Nampa 1 $ 396,000

Mountain West Bank Meridian 1 $ 1,118,000

Panhandle State Bank Sandpoint 2 $ 4,560,000

US Bank, NA Preston 1 $ 188,500

Washington Trust Bank Boise 1 $ 3,000,000 

Wells Fargo Bank, N.A. Lewiston 1 $ 400,000

Wells Fargo Bank, N.A. Coeur d'Alene 2 $ 755,000 

Zions Bank Blackfoot 1 $ 525,000

Zions Bank Moscow 1 $ 500,000

Totals 9 $ 9,129,313 8 $ 9,078,500

4 
Rural Business-Cooperative Service 

Success Stories 

RK Tek, LLC began operations during the spring of 2000 with the start-up of a light manufacturing business located in

northern Utah. The business designs and constructs custom performance parts for snowmobiles, ATVs and motorcycles. In

addition they produce highly specialized wax injection moldings used for investment castings. They initially leased a 1,200 

sq. ft. building and after a few months of operation it became evident that they had outgrown the space. The business is such

that nearly all raw materials and finished products are sold and purchased via the internet or by telephone. Accordingly, the 

location of the business is not critical to its success. They began to seek out potential locations and visited Preston, Idaho and 

were impressed with the community and decided to relocate. They obtained a long-term lease for property located within the 

City of Preston’s Industrial Park and developed plans for a facility that would meet current needs as well as provide for 

additional growth. The project included the construction of a 3,500 sq. foot building, moving expense, debt refinance and 

purchase of additional equipment. US Bank utilized the Business and Industry (B&I) loan Guarantee Program for the 

project’s term financing. The project created 3 jobs and saved 2 jobs. 

Rural Business Enterprise Grant 

The economic base of North Central Idaho and the City of Lewiston has been dependent

on basic natural resource-based industries for the last century. Accordingly, over the 

past decade the economy has been strained as the timber industry, and those industries 

that rely heavily on that sector, has been stressed for a variety of reasons. 

Diversification is the key to economic development in this region. 

Lewis-Clark State College, 

(LCSC) Milling Machine 

As the region's designated professional and technical school, the Lewis-Clark State 

College (LCSC) has participated in the development of the North Idaho Manufacturer's

Association, an association of small and medium-sized manufacturing businesses. N

Idaho Manufacturer's Association provides a means by which partners in the associat

can find each other and develop appropriate strategies to strengthen the manufacturin

sector. One of the association's goals is to partner with industrial technology educ

to provide students with training opportunities to prepare them for the manufacturing 

workforce.

orth

ion 

g 

ators

LCSC identified a significant mismatch of employer needs and employee skills in the 

manufacturing sector. Members of North Idaho Manufacturer's Association have stated 

that one of the greatest barriers to their growth is an untrained workforce. Specifically, 

members of the association identified a critical shortage of skilled CNC Milling

Machine technicians. The RBEG Project emerged from a collaborative effort among 

manufacturers, business and economic development agencies, and LCSC to upgrade

and expand technician training. 

Rhonda Merritt, Business Loan 

Assistant, and Dene Kay Thomas, 

President LCSC

RBS provided LCSC with a Rural Business Enterprise Grant (RBEG) of $28,000 to purchase a Computer Numerical Control 

(CNC) Milling Machine to add to the training facilities at LCSC. The new machine, which mills metal, features the latest 

technology and will enhance the training of those students in LCSC’s technical and industrial programs. The machine will 

give students an edge to potential employers because it gives them experience working with the latest transition codes. 

Students trained on the new equipment will help employers increase productivity and sales, and will give them the skills 

needed to seek jobs with better salaries. This project will be of benefit to local businesses because they are able to attract and 

keep a locally trained labor force to enhance their small and emerging businesses in the rural communities 

LCSC estimates that technical training provided on this equipment will have the effect of creating/retaining 5% of existing

jobs in this sector, or 13 jobs. This RBEG project is expected to have a significant impact on the small and emerging private 

businesses in the area. 

5 
Rural Business-Cooperative Service 

Success Stories (continued)

Value-Added Producer Grant

nsistent

Salmon Creek Farms Marketing Association (SCFMA) represents over 189 family producers 

located in Idaho, Utah and Montana. They requested Value-Added Producer Grant (VAPG) funds 

to be used for working capital to assist them in implementing a business plan to add value to their 

hogs through a branded line of Natural Pork. They worked in conjunction with the Independent

Meat Company (IMC), Twin Falls, Idaho and after completing test marketing and a feasibility 

study it was determined that a line of high quality natural pork would bring a premium in the 

market place. SCFMA developed standards for production including all aspects from herd genetics 

to feeds and herd health practices. Ultimately, the goal is that the producer will provide a co

supply of quality hogs to be marketed under the Salmon Creek Farms Natural Pork label and by doing so they will receive an 

above market premium. SCFMA’s mission statement, taken from their homepage on the internet, is as follows: 

Our mission is to provide each and every consumer of Salmon Creek Farms Natural Pork, the most complete and 

satisfying pork eating experience of their lives. 

“Our family farmers are producing the ultimate natural pork in the world using environmentally friendly,

sustainable production and management techniques. Our program provides consistent premiums, incorporated 

into our pricing matrix, which are shared by everyone involved, from our genetic team through the production,

processing and marketing of our products. Working together we have created a program that sets the industry

standard for pork quality and wholesomeness. Our Association creates long-term sustainability and

competitiveness for our producing families, ensuring a bright future for all of our families in this generation and

generations to come. And we can provide the ultimate pork eating experience for you!” 

Section 9006 Energy Program 

On September 3, 2003, Idaho's U.S. Senators Larry Craig and Mike Crapo announced three U.S. Department of Agriculture 

grants totaling more than $1million for renewable energy systems in Idaho. "These three projects will be greatly enhanced by

the grants announced today, and I am very proud of the forward-thinking efforts these gentlemen have undertaken to expand

the role of renewable energy in our state," Senator Craig said. 

Through the Fiscal Year 2003 Renewable Energy Systems and Energy Efficiency Improvements (Energy) Program, Rural 

Business-Cooperative Service (RBS) provided grants to agricultural producers and rural small businesses to purchase 

renewable energy systems and make energy efficiency improvements. The Energy Program is designed to help agricultural

producers and rural small businesses reduce energy costs and consumption and help meet the nation's critical energy needs. 

One of the projects announced by Idaho's U.S. Senators Larry Craig and Mike Crapo was an Energy Grant of $500,000 made

to Val E. Schwendiman. Mr. Schwendiman has been farming for over 50 years in eastern Idaho. He has been studying the

wind resources on his farm since 2001 through multiple anemometer sites. Mr. Schwendiman also utilized data collected by

the Idaho National Engineering and Environmental Laboratories (INEEL) renewable energy program. The project funded by

the RBS Energy Grant includes the purchase and installation of a single 1.5 MW wind turbine. Power produced by the wind

turbine will be sold under contract to PacifiCorp (Utah Power) 

As noted by Tyler Schwendiman: "The grant has really helped speed things up. We'll call this a test project. If this can pay

for itself, we might put in more." 

6 
Rural Utilities and Community Facilities 

Accomplishments 

Program Name

Dollars 

Obligated 

Participation 

Amount Total 

Water & Waste Disposal 

 Loans $5,531,000 

 Grants $4,690,212 $3,399,800 $13,856,012

 Native American $235,000 

 Pre-Development Planning

 Grants $30,000 $30,000 

ECWAG 256,000 $256,000

Solid Waste Management Grants $79,000 $22,000 $101,000

Community Facilities 

 Direct Loans $3,397,000 

 Grants $75,000 $500,000 $5,392,464

 Guaranteed Loans $1,212,000

 Economic Impact Grants $208,464 

Totals $15,713,676 $3,921,800 $19,635,476

Success Stories: 

Sandpoint Charter School, Inc. 

In 1998 the Idaho Legislature created a new chapter in Idaho code that authorized charter schools. The Sandpoint Charter 

School, Inc. was opened in 2000 and was the 10th Charter School formed in Idaho. In Idaho, charter schools are non-profit,

publicly funded and non-sectarian. They are operated independently within existing school districts. 

The Sandpoint Charter School was formed and has operated with broad based community support including the strong

support of the Lake Pend Oreille School Board. They were chartered for 7th, 8th, and 9th grades. Due to strong community 

support and word of mouth, they quickly outgrew their existing facilities and were in need of a larger building. The project 

has involved the purchase and remodel of a vacant 28,800 square 

foot commercial building in Sandpoint. 

The project was made possible with a $900,000 loan from

Panhandle State Bank guaranteed by a USDA Rural 

Development Community Facilities Loan Guarantee, and a 

$650,000 Community Facilities Direct Loan from USDA Rural 

Development. The Sandpoint Charter School has provided

$300,000 cash contribution, and has donated some labor for the 

project. Construction began in August 2003. The building should

be complete in December 2003.

7 
Rural Utilities and Community Facilities

Bruneau Water & Sewer Project 

The Bruneau Water & Sewer District water system 

was condemned by DEQ in 1998 due to fluoride 

levels in excess of the maximum contaminant level 

(MCL). Bruneau applied to USDA-RD in early 

2001 to build a small reverse osmosis (RO) water 

treatment facility, new water storage tank and new 

water meters to bring the system back into 

compliance for fluoride levels, and more recently 

arsenic levels in excess of the MCL. 

Bruneau passed a revenue bond in May 2001 in the 

amount of $145,000 to cover a portion of the project 

costs, and the USDA-RD funding was approved in July 2001 which consisted of a $145,000 loan and 

$435,000 grant. During subsequent project planning, DEQ expressed concern that Bruneau had only 

one well, with no backup. Although the existing single source is grand-fathered in, it does not meet 

current standards. 

Given the limited size and income of the community, this was likely the only opportunity to bring the 

water system fully up to current standards. In addition, the RO pilot testing revealed that the existing 

source would be insufficient to meet the community’s needs, as a certain portion of the treated water 

would go to waste. The existing funding package contained the maximum possible USDA-RD grant for 

the existing project budget, and was insufficient to complete the original project plus the second water 

source. 

In November 2002, Bruneau requested a CDBG for $265,600 to construct a second well, with additional 

piping to be added to the water improvement project. In April, 2003, the CDBG was approved, and the 

project moved forward. In August, 2003, an additional USDA-Rural Development grant for $133,812 

was approved to cover a cost overrun on the new tank and enable aeration and small booster pumps to 

be added to the water treatment plant. Phase I construction of the new water storage tank has started, 

and soon the community’s water system will no longer be condemned. 

8 
Rural Housing Service 

Accomplishments

Program Name

Dollars 

Obligated 

Participation 

Amount

Percent of 

Participation 

Single Family Housing 

Loans (Section 502)

 Very Low Income $10,113,352 $1,557,379 16% 

 Low Income $10,301,817 $1,610,400 16% 

Repair & Rehabilitation 

Grants (Section 504) $287,730 $2,000 .01% 

Repair & Rehabilitation Loans 

(Section 504) $372,790 $2,000 .01% 

Mutual and Self-Help Housing 

Grants (Section 523) $547,660 $-0- N/A% 

Single Family Housing 

Guaranteed Loans $34,290,946 N/A N/A 

Farm Labor Housing (Section 

514) $497,700 $-0- 0% 

Multi-Family Housing

Loans (Section 515) $5,259,177 $-0- 10.4% 

Rental Assistance(RA) 

(Section 521) $13,319,582 N/A N/A 

Technical Assistance Grants $60,000 

Labor Housing Grants $360,000

MFH program Credit Sale $585,000

Totals $75,935,754 $3,171,779

In 2003, Rural Housing Service 

provided approximately 

$20,415,169 in direct funds and 

$34,291,288 in guaranteed funds 

to help 608 rural families buy 

single family homes. Also 

$659,492 in grant and loan funds 

assisted 122 very-low-income 

homeowners with removal of 

health and safety hazards or 

rehabilitation of their existing 

dwellings. 

In total, Idaho’s Rural Housing 

Service invested more than 

$75,875,028 either as direct 

loans and grants, rental 

assistance, or guaranteed loans in 

rural housing.

Success Stories: 

Two Year Search Pays Off Through 502 Program 

Adrienne Mendoza and her three daughters lived in a noisy, run-down apartment complex for nine 

years. She felt very unsafe there after several of her neighbor's homes were burglarized. She was 

concerned about the environment she was raising her daughters in 

and wanted to find a home that would provide privacy, safety and 

an overall good environment for a family. 

She tried to save for a home, but as a single mother with a limited 

income, her money never seemed to stretch far enough. She had 

looked for a home for two years before Magic Valley Bank told h

about USDA Rural Development's leveraged loan program. She

quickly applied with the bank, which then forwarded her 

application to Rural Development. 

er

She was able to find an older home that a local contractor had 

gutted and completely refurbished to look like new. 

Through the partnership efforts of Magic Valley Bank and USDA Rural Development who provided 

financing for the home, and Idaho Housing & Finance Association who provided a grant for closing 

costs, Ms. Mendoza is now a homeowner. Ms. Mendoza said, "I'm so happy. My girls and I are so 

proud of our home. My whole life has turned around lately. At Christmas, I invited my co-workers 

over to show off our beautiful home, and show them that dreams really do come true.”

9 
Rural Housing Service

Success Stories (continued)

Partners Help Elderly Homeowner 

Norma, a 62 year old grandmother, raising her 2 grandchildren and also 

caring for her terminally ill 30 year old son, was in need of a new home. 

They were living in Norma’s first home which was built in 1948. It was 

falling down around them. The roof was buckling and the foundation was 

failing. The interior of the home was in poor repair as well. The 

bathroom did not have a sink or medicine cabinet, vice grips 

were required on the bathtub faucet to turn on the water. 

There were also major plumbing problems in the kitchen area. 

The lawn was watered by flood irrigation which left a huge 

mud hole in the middle of the yard where the water pipe 

protruded. These were just a few of the issues. 

After working through the details with all of the partners 

involved – the existing home was demolished and a new home was constructed for Norma’s family. It 

included a new sprinkler system. 

The following partners 

contributed to make this 

project a success: 

 Idaho Development & 

Housing Organization 

 Caldwell Urban Renewal 

 Intermountain 

Community Bank 

 USDA, Rural 

Development 

 Neighborhood Housing 

Services, Inc (CDFI 

Funds) 

In addition, there were many local vendors, contractors, & sub-contractors who assisted by discounting 

or donating their materials and labor. 

Norma’s payment before - $401.00 / month 

Current house payment with taxes & insurance - $347.02 / month 

10 
Historical Trends

$-

$10

$20

$30

Millions

1999 2000 2001 2002 2003

Rural Business-Cooperative

Service

$-

$10

$20

$30

Millions

1999 2000 2001 2002 2003

Rural Utilities and Community

Facilities

$-

$20

$40

$60

$80

Millions

1999 2000 2001 2002 2003

Rural Housing Service

Loans and Grants

11 
Office Locations for Rural Development IDAHO 

 Coeur d’Alene Area Office

Morris E. (Mac) Cavasar, Rural 

Development Manager 

7830 Meadowlark Way, Suite C3

Coeur d'Alene, Idaho 83815 

phone: 208-762-4939, 

fax: 208-762-9799 

email: mac.cavasar@id.usda.gov

Grangeville Outreach Office

Patricia Patoray (Patty) 

Rural Development Specialist

Route 1, Box 2

Grangeville, Idaho 83530

phone: 208-983-1050

fax: 208-983-0519 

email: patty.patoray@id.usda.gov

Lewiston Outreach Office 

Zeeta Augello, Rural Developme

Specialist 

1630 23rd Ave., Ste. 6 

Lewiston, Idaho 83501

phone: 208-746-9621

fax: 208-798-3164

Email: zeeta.augello@id.usda.gov

Blackfoot Area Office

Gary Gamble Rural Development Manager

727 Jensen Grove Drive, Suite 1 

Blackfoot, Idaho 83221

Phone: 208-785-5840, fax: 785-6561 

Email: gary.gamble@id.usda.gov

Rexburg Outreach Office

Christie Robertson 

Rural Development Specialist 

265 E 4th N, Rexburg, Idaho 8440

Phone 208-356-7248, fax: 356-7240

Email: Christie.robertson@id.usda.gov

Weiser Outreach Office 

Nicholes Partin 

Rural Development Specialist 

845 East 9th 

Weiser, Idaho 83672

phone: 208-549-4280 

fax: 208-549-4229 

Email: nicholes.partin@id.usda.gov Twin Falls Area Office 

Larry Stachler

Rural Development Manager

1441 Fillmore, Suite C 

Twin Falls, Idaho 83301

Phone: 208-733-=5380 

Fax: 208-734=0428

Email: larry.stachler@id.usda.gov

Caldwell Area Office

M. Stewart Brent 

Rural Development Manager

2208 E. Chicago, Ste C 

Caldwell, ID 83605

Phone: 208-454-8691

Fax: 208—459-9762 

Email: stewart.brent@id.usda.gov Soda Springs Outreach Office

David Birch Rural

Development Specialist 

309 E. Hooper, #3

Soda Springs, Idaho 83276

Phone: 208-547-4926

Fax: 208-547-4801

Email: david.birch@id.usda.gov

Mountain Home Outreach Office 

Louise McBride 

Rural Development Specialist 

795 South Haskett

Mountain Home, Idaho 83647 

Phone: 208-5878-9791

Fax: 549-4229 

Email: louise.mcbride@d.usda.gov

Rupert Outreach Office

Manuel A. (Tony) Ballestero

Rural Development Specialist 

98-B South 200 West

Rupert, Idaho 83350 

Phone: 208-436-0116

Fax: 208-436-3098

Email: manuel.ballestero@idlusda.gov 

Visit us on the Web 

www.rurdev.usda.gov/id