In what has become a battle over local control versus state control of economic development funds, the City of Ogallala has opted to wait the issue out a while longer before making a decision on the state's ultimatum.
In a move, that has a growing number of communities in Nebraska and the Nebraska League of Municipalities questioning it's decision, the Nebraska Department of Economic Development (DED) has told communities that it intends to begin overseeing a revolving loan program that has been available since the mid 1990's. The Community Development Block Grant (CDBG) Program, made available through the federal government's Housing and Urban Development, is a revolving loan program that a community earns when a qualifying business obtains, and pays back, a loan designed to bolster economic development and/or business growth.
It was the understanding of Ogallala, and other communities, that all guidelines of the program were being met in administering funds to businesses.
The Nebraska DED last month sent letters to communities across the state, stating the department, under pressure from the federal government, will either need to take over administration of local CDBG funds and acquire any existing pools of money, or impose more stringent oversight of such funds, including an audit of all previous accounts.
Locally, under the first stipulation passed down from the state, the Keith County Regional Economic Development Investment (REDI) program, which currently holds more than $100,000, would need to be turned over, and more than $600,000 in outstanding debts to the program would then be paid to the state, rather than the Keith County REDI program to be used for future projects. It's unclear at this point how the state would then redistribute those funds, but some speculate it would be through regional offices - possibly through organizations like the West Central Nebraska Development District in Ogallala.
Under the second stipulation, Ogallala City Manager Bruce Smith said it may be difficult to provide proper documentation of all projects administered through the CDBG program according to the department's strict, and what some believe to be, difficult to understand guidelines. In that case, the city and county would be required to pay back funds used for previous projects at the Nebraska DED's discretion based on the audit.
Communities have been given a 60-day extension on making a decision, from early July. Smith wants to use that time to learn more about the state's plan and allow a growing number of inquiries and complaints to be addressed by the state.
In the meantime, the Ogallala City Council Tuesday night voted to amend the Interlocal Cooperation Agreement between the communities within Keith County and the county itself. The amended agreement will possibly allow the community, in conjunction with the county, to administer the remaining REDI funds for use in infrastructure improvement and a broader range of projects than was previously allowed.
More on this topic will be addressed in coming weeks and months as the Nebraska DED and communities across the state find a way to see eye-to-eye or come to grips with the guidelines set forth.
Also at Tuesday night's Ogallala City Council meeting, the council approved, following the planning commission's recommendation, to include some new parcels of land in the city's blighted and substandard map. One parcel includes the Plaza Motel east to the Front Street Plaza, not including the police department. The other parcel is located near 21st Century Equipment south of the interstate.
The city's blighted and substandard map includes property all over the city that needs developed or redeveloped. The designation allows the city to free up resources for development and redevelopment projects, like tax increment financing - a program that assists businesses with initial development and/or redevelopment costs to encourage existing businesses to expand and new businesses to build.
Lastly, the council recognized a city employee for 20 years of service. Ogallala Public Transit Director Carol Maxson started when it was only a so-called handi-bus. Since then, she has overseen growth and expansion, and even been recognized on a federal level for her commitment to, and improvement of, the public transit.
The next Ogallala City Council meeting will be held at 7:30pm on Tuesday, July 24, at the city administration building.
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