Statement of Floyd G. "Buddy" Villines, Judge/Executive,
Pulaski County, Arkansas
before The Subcommittee on Transportation and Infrastructure
Senate Environment and Public Works Committee
July 14, 1998

Mr. Chairman, distinguished members of the Panel

Thank you for holding this important hearing and for inviting us here today to discuss the long overdue reauthorization of an agency that is very important to revitalization efforts in our economically distressed rural and urban areas.

My name is Floyd Villines. I'm Judge/Executive of Pulaski County, Arkansas and a former Mayor of Little Rock. I'm here today on behalf of the Coalition for Economic Development, a group of fifteen (15) national organizations committed to supporting the Economic Development Administration.

Our coalition represents national organizations representing rural and urban economic development practitioners, professionals and academics, and local elected officials. These organizations include the American Economic Development Council, the Association of University Centers, the Council for Urban Economic Development, the National Association of Counties, the National Association of Business Incubators, the National Association of Development Organizations, the National Association of Installation Developers, the National Association of Management and Technology Assistance Centers, the National Association of Regional Councils, the National Association of State Development Agencies, the National Association of Towns and Townships, the National Congress for Community Economic Development, the National League of Cities, the Public Works and Economic Development Association and the U.S. Conference of Mayors.

Members of the coalition applaud your efforts and the efforts of Committee Chairman John Chafee to produce a reauthorization bill that continues the reforms that have been underway at the Economic Development Administration for several years. We also pledge our support to work with you to reauthorize EDA.

Members of the coalition believe that reauthorization of the Economic Development Administration is critical because:

The agency is moving into the 21st Century with authorizing legislation that goes back to the early 1980s. The agency needs reinforcement with new language that allows it to help our rural and urban communities meet the continuing and ever-changing challenges of economic revitalization. Among those challenges will be access to and expertise in information age technology. Our businesses in small cities and rural areas will be unable to compete in the global economic without access to these information and marketing tools.

Reauthorization will allow the agency to focus on its core mission and to develop multi-year plans for its programs, rather than draining off its energy in an annual battle for survival.

The coalition's support for EDA is based on a very simple concept: EDA works. It is a federal agency that does what it was designed to do. It serves the federal role of leveling the playing field for those communities that need to become productive parts of the national economy, rather than a drain on it. It is a lean, streamlined agency with a clearly defined mission. It supports and helps revitalize our economically distressed communities. As a local government official, it is important to me that EDA is there to provide the seed money necessary for the infrastructure improvements we need to attract new business and help existing businesses expand and grow.

I emphasize "seed money" because that is what EDA support is. It's a boost, a leg up. It requires local governments to provide as much as 50 percent in matching funds, although for extremely distressed communities, this match can be reduced. Often, however, EDA funds are the linchpin that allows us to leverage other financial resources and to buy down loans, making those loans affordable for particularly distressed areas. For example, in my own county, two census tracts In the vicinity of North Little Rock were facing a 33.4 percent and a 36.7 percent unemployment rate. There was no industrial park in the area and no attractive place to locate industry that could provide jobs to these unemployed residents.

Through the efforts of the North Little Rock Industrial Development Corporation and the Central Arkansas Planning and Development District, an appropriate site was found. With a $462,000 grant from EDA and a $300,000 plus match from North Little Rock, water, sewer and an access road were constructed to reach the industrial park site.

Soon after completion, three companies moved in, providing 323 new jobs, a payroll in excess of $3.1 million, with private investments of approximately $4.4 million. We now have 13 tenants, employing 365 people, with an annual payroll of $4.1 million and private investments totaling $9.5 million.

We believe economic development efforts in this area contributed significantly to a $10,000 average household income increase in Pulaski County between 1990 and 1995.

This project could not have been completed without the assistance of EDA.

Following are but a few examples, selected from across the country, of what EDA investments have meant to our distressed communities.

A project in cooperation with the State of Maine to build a Fish Pier at Stonington, on Deer Isle in East Penobscot Bay. As a result of the new pier, 100 new jobs were created and 262 jobs retained in the fishing community. Since its completion, a seafood company with three trailers has opened, along with smaller businesses for fish sorting. The city has benefited as owner of the Pier through user fee charges. The pier, called "the Cadillac of piers", is expected to last for 300 years.

Increase in sewage treatment capacity for the Borough of Berwick, Pa., enabled the town to retain 506 jobs, part of a plant operation that was a heavy user of the sewage facility. The company has expanded its workforce, creating about 450 new jobs. Cost to EDA was $1 million; cost to the community was $4.5 million. Private sector investment was $14.250 million.

The Rochester Science Park in Rochester, N.Y., helped boost a sagging economy that had few jobs for entry level workers. The Science Park, funded at $1 million by EDA and $2.12 million from other sources, has created 534 jobs and retained another 55 jobs and resulted in a private sector investment of $13.175 million.

The Martin Luther King Industrial Park in St. Louis is completely filled and has generated a total of 600 new jobs while retaining 600 more. The park has attracted $50 million in private sector investments.

_ A regional business development system created by the Association of South Central Oklahoma Governments, Duncan, in cooperation with the City of Lawton. This is an example of a rural area taking a model developed by a metropolitan area. The program integrated a "going into business and business plan preparation" courses and seminars in conjunction with a Vocational Technical School. The development district worked with its member communities to pull together twelve revolving loan funds. The program provided course work for Fort Sill employees when the defense facility was going through a reduction in force; has helped hundreds of individuals in their business creation and expansion efforts and has helped course graduates that have gone into business.

A project in a deteriorating area in inner Philadelphia that has brought back to life the old American Bandstand Building and turned it into a center for business incubation. The center is the brain child of the Wharton Small Business Development Center at the University of Pennsylvania. The center's 10 year goal is to create 200 new businesses, 3,500 new jobs and leverage $660 million in private investment.

Esperanza Unida (New Hope) business incubator center that serves a predominantly Hispanic area in southside Milwaukee has been in existence since 1971, but its efforts were redoubled in the early 1980s when all of the factories in which people worked in the neighborhood closed down. In response, the center started an auto repair training business, but over the years, it has expanded into 11 different training centers, all starting around market niches where there were jobs and wages adequate to support a family.

These are but a few of the successful economic revitalization projects in which the Economic Development Administration has played a major role. Numerous other successful efforts can also be documented.

As I mentioned earlier, EDA is an agency that works. We believe there are several reasons why:

The EDA network EDA's regional offices and state economic development representatives assist local governments and other recipients of funding. These regional office people and EDRs are available to assist with any problems that arise. They watch over the projects, make sure there are no problems and help us get projects completed on time.

The EDA planning process. EDA requires an overall economic development strategy that engages the community, various organizations and local governments in a process to assess needs and to determine goals. That plan is a realistic road map that keeps us focused. That plan is developed on a regional basis, with specific input from local governments in the economic development district, citizens and others. The process allows us to identify our strengths and weaknesses and work to build on those strengths and eliminate or reduce our weaknesses. It allows us an opportunity to look at where we, as local governments, can be working together, rather than competing, for economic growth.

The academic connection. EDA has a network of university centers that can provide economic development practitioners with academic research to assist them in planning and project management. In our state, the center at the University of Arkansas-Little Rock is currently collecting and acting as the repository for a consistent set of data that can be used by all economic development districts in developing their overall plans. These university centers can also operate over a broader base than one economic development district.

The revolving loan fund program. EDA's revolving loan fund has assisted thousands of entrepreneurs in establishing their businesses and has kept thousands of other small businesses in operation. These loan funds serve those that do not meet the criteria for loans from traditional lending institutions. We all know that small businesses are providing the majority of new jobs in America. The EDA loan fund allows us at the local and regional level to invest in our communities by assisting businesses that are home grown and are more likely to stay at home.

EDA's Trade Adjustment Program. EDA's network of 12 Trade Adjustment Assistance Centers provide vital help to businesses impacted by our changing trade policy and the growing global competition. The program is designed to help those businesses that receive certification as truly impacted businesses to develop an adjustment proposal that includes the firms recovery strategy and technical assistance needs.

EDA's eligibility criteria. The agency's emphasis is on the most economically distressed areas in rural and urban America and on the most viable projects. The criticism that too much of America is eligible to receive EDA finding in not valid. While many areas that were designated as economic development districts over the years remain as "designated" districts, they receive no finding because they no longer meet the eligibility criteria.

EDA's job creation focus. The emphasis in EDA programming is on job creation. EDA grants are tied to job retention and the creation of new jobs, either through new companies or expansion of existing companies.

EDA's willingness to listen. EDA has demonstrated a willingness to change. EDA has listened to its grantees about the time frame for processing grant applications and for simplifying the process and has corrected many of the problems of the past by moving decision making to the regional level. EDA has demonstrated a willingness to reform. EDA, in actuality, has been reforming itself. The agency has listened and responded to criticism and suggestions from Congress and from its grantees.

All of you are aware, I'm sure, that many communities that are struggling to comply with welfare reform. That means we must find ways to increase the number of jobs available, and in many parts of the country, communities are faced with an ongoing struggle to attract enough job opportunities. EDA is the one federal agency that places all its program emphasis on job creation and job retention, and it is the agency already positioned to help those rural and urban communities struggling to respond to welfare reform requirements. In my own county, EDA assistance has meant that we have been able to add living wage jobs for many of our citizens. EDA has been there through the years to assist us with our struggle for economic revitalization.

In conclusion, Mr. Chairman and members of the Panel, the Economic Development Administration has earned the respect of all of us who have worked with it. It is time the agency was recognized through reauthorization for the lasting benefits it has contributed -- and will continue to contribute -- to our communities.

Again, thank you for the opportunity to appear before you today. The longer coalition testimony submitted for the record includes numerous examples of the investments EDA has made in America's economically distressed rural and urban areas. We have also included a tabulation of the investments EDA has made in every state since the agency started in 1965.

In addition, we have included a list of coalition member contacts. Please feel free to call any of them with any questions you may have specific to their areas of expertise.

I'll be happy to answer any questions. And again, I want to assure you, Mr. Chairman, and other members of the panel that you may rely on members of the coalition to assist you in any way we can.