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Small Communities: More Bang for Econ Development Buck

August 01, 2012 By Taryn Trujillo, Undergraduate Research Fellow

Beltrami County needs money for a veterans' geriatric nursing facility, Cottonwood needs a new fire hall/ambulance garage, Deer River needs a wastewater treatment pond, Hoyt Lakes needs to renovate its police, fire, & ambulance services building, Lake City would like to expand its public library, and the list goes on and on. Over 90 applicants, requesting a total of $288 million, have submitted their applications to get a piece of the state bonding bill pie.

The Minnesota Department of Employment and Economic Development (DEED) is providing a chance for communities to apply for bonding money they didn't receive this spring. DEED is giving out $47.5 million dollars (less than a sixth of what is being requested), and will announce funding awards next month. The requests will be weighed on a list of criteria, such as job creation, regional significance and economic development, which will hopefully prove to be very good for rural Minnesota. 

While the dollar amounts these communities are requesting are much smaller—many just around or less than $1 million—compared to bigger cities' multimillion dollar asks, funding could have a much more profound impact within these communities in terms of proportional job growth and economic development. Unlike a ball park of convention center renovation, all local citizens will feel the impact of enlarging a local plant.

Summarizing the merits of all 90 applicants is tough in an 800 word article, but here are some highlights from a few smaller communities.

Cosmos, MN (Population: 580)

Requesting $600,000 to replace its public library and city facilities.

In February, 2011, the small town of Cosmos lost its public library to a fire. Arson and foul play were ruled out; the fire marshal suspects it was an electrical fire, according to an area news outlet. While the library did have insurance, the settlement was not enough to build a new facility.

The library was located at the center of town and was a "devastating" loss for the small Meeker County community. The library had a summer reading program for children as well as story hour. "A lot of people in town used the library both for reading and for internet access,” Dianne McClain, a Cosmos bank teller told WCCO-TV at the time. Internet access is something that is not always readily available in rural Minnesota so the library’s loss is more than an inconvenience for many.

Park Rapids, MN (Population: 3,600)
Requesting $1,284,500 for drinking water improvements.

The Residents of Park Rapids rely on groundwater for their drinking water supply. The sandy soils in this area and the shallow depth to the groundwater table make this resource particularly vulnerable to contamination from human activities on the land surface, according to a city published brochure, which further states:

"One contaminant that has shown up in the city water supply at increasing levels is nitrate nitrogen. Through a process called “blending,” where water with low nitrate levels is mixed with water containing higher nitrate levels, the city has been able to provide its residents with drinking water at nitrate levels that are safe to drink. However, the current trends in nitrate levels measured in the city wells indicate that this will become increasingly difficult in the future."

The nitrates are thought to be coming from the agriculture operations just west of the city which are directly over the recharge zone for the city’s wells. The agriculture operators have altered their methods to help the situation, but the city wants to implement a stronger long-term solution.

Rushford-Peterson School District (Combined population: <3,000)

Requesting $7,500,000 for a new grade school.
The Rushford-Peterson school dates back to 1906 and it shows. Earlier this spring the Rushford-Peterson school district’s superintendent, Chuck Ehlers, made an interesting move by putting in a bid for the original state bonding bill but the application was turned down. Now, he is making another move for a piece of the economic development fund pie.

This is unusual because state bonding bills traditionally do not fund local school projects. Districts usually put forth a referendum where the citizens can decide whether to increase taxes for construction and other capital funding. In this particular case, the school district’s citizens do not have the tax capacity to raise the financial capital that is necessary, as Mr. Ehlers told MPR, “We can’t say to our citizens that we are raising your taxes by 48%.”

Back in May, legislators and the governor’s office attributed their hesitancy to fund the district's request because they felt they would be setting a precedence. fearing other schools would make similar capital requests.

But I would say these are extreme circumstances and few other districts would fall into.

Perhaps the most important thing that we need to consider is who needs the money more? In small communities, often a little bit of money can go a long way, thus creating a much larger impact. These communities have real needs, but not necessarily the financial ability to address them because of their smaller populations.

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