Gary Gentry, executive director of the Knox County Development Corp. in rural Indiana, had a problem.

Farbest Foods Inc. had just signed a contract to become the second occupant of the county’s new industrial park. It was December 2011. Scheduled to open in January 2014, the company’s turkey-processing plant would consume 800,000 gallons of water and discharge 700,000 gallons of wastewater daily, which would require installing new water and sewer lines to the treatment plants. Approximate cost: $3.2 million.

Founded in 1790, the 524-square-mile county is a relatively poor agricultural area with about 39,000 residents. Getting a loan from a local bank or issuing a bond is very tricky. So in February 2012, the county applied for a U.S. Commerce Department Economic Development Administration (EDA) assistance grant. Seven months later it received $1.6 million.

“This grant,” says Gentry, pausing and reaching for an appropriate word, “I’d like to think of another word besides godsend.”

The money’s going to the Vincennes Utility Services Board, which oversees the water department, sewer collection system, wastewater treatment facility, and storm sewer utility on an annual operating budget of $6.5 million.

It came out of the $111,640,000 fiscal 2012 budget for EDA’s Public Works Investment Program. That’s 23% less than five years ago. The 2013 appropriation is yet to be determined with Congress pondering spending cuts in the face of the fiscal cliff.

“We remain concerned that the programs cities utilize to support infrastructure are still in consideration to be cut,” says Marie Lopez Rogers, president of the National League of Cities and mayor of Avondale, Ariz.

Grants support water and sewer improvements, industrial parks, brownfield development, and telecommunications infrastructure that will promote job growth in distressed urban and rural areas. To meet the “distressed” definition, a region generally must have:

  • An unemployment rate at least one percentage point greater than the national average
  • 80% or less of national average per capita income, or
  • A “special need” like the loss of a major employer or military base closing.

Stephen Barlas is a Washington, D.C.-based freelance writer who covers regulatory issues, with a special emphasis on EPA.