WASHINGTON, Oct. 28, 2015 - Separate congressional panels last week took a hard look at outstanding budget problems in rental assistance and water infrastructure programs that have kept federal dollars from reaching rural America.

The chairman of the Senate agriculture appropriations subcommittee, Jerry Moran, R-Kan., opened a hearing on funding for USDA’s Rural Development’s (RD) assistance programs by listing the many benefits RD affords rural Americans, including home loans for low income families, small business loans for entrepreneurs, and community financing for critical infrastructure improvements.

“One of the primary interests in my running for public office was (my) belief in rural America and my desire to see that it prospers,” Moran said. And Rural Development is the agency “tasked with maintaining and improving that quality of life so that our children and grandchildren have the chance to raise their families in the places that we in rural America call home.”

But according to the hearing witnesses, some RD programs – rental assistance, for example – need changes, pronto, if they are to help rural Americans.

The RD Rental Assistance Program provides rental payments to USDA-financed affordable-housing developments on behalf of low-income and farm labor families. But since August, many of those businesses haven’t received payments, putting rural families at risk of displacement, or worse, homelessness.

Tony Chrisman, a 26-year-veteran developer and manager of affordable housing complexes in Oregon and Washington state, blames the problem on a USDA accounting error.

Tony Hernandez, the administrator of the Rural Housing Service, confirmed the allegation. He told lawmakers the program is experiencing a budget shortfall of $101.5 million in 2015 because it changed the way it estimated expenses by using statewide averages for housing property costs, which this year came in below actual expenses.

Because some of Chrisman’s properties have costs above the state average, he says the agency owes him $365,000 in back payments – an IOU that if unpaid “could bring an end to our business,” he said. Hernandez said the issue remains unresolved, even though Moran said Congress gave the program authority to backfill overdue payments in the omnibus spending bill.

The subcommittee’s top Democrat, Sen. Jeff Merkley of Oregon, who had only just heard of the rental payments issue that morning, called the agency’s mistake “unacceptable” and said the subcommittee would “push very, very hard” to get the “crisis” resolved by the end of the year.

Merkley said the budget estimates for fiscal 2016 “show an even larger deficit” of $120 million, on top of 2015’s shortfall. Hernandez testified that his agency “was trying to figure out how” to backfill the 2015 payments, and will work with the committee to “improve accuracy” of the cost forecasts in the 2016 budget.

Another issue that surfaced on Capitol Hill recently affects rural public water utilities and their ability to keep clean water flowing to their customers.

Earlier this year, a Government Accountability Office report found rural communities will need $140 billion in drinking water and wastewater system upgrades in the coming decades. Since then, lawmakers on both sides of the aisle have been looking for ways to get rural utilities the funding they need.

But instead of upping allocations to EPA’s State Revolving Funds – the main source of funding for small water utility infrastructure improvements that collectively amount to billions of dollars annually – lawmakers have elected to increase funding for technical assistance, by $2 million or $3 million dollars a year at most.

Every year since 2003, Congress authorized a budget for EPA’s technical assistance program, which helps small utilities procure expertise related to regulatory compliance standards and audits.

The Senate recently passed a bill (S 611) by unanimous consent that would lock in an annual appropriation for the EPA’s technical assistance program until 2020, and would expand the types of activities that qualify for grants to include organizations that manage circuit riders. These roving water system experts are contracted to help small utilities complete special jobs, like grant writing and financial planning, for a fraction of the cost utilities would incur if they kept that expertise on staff.

The House Subcommittee on Environment and the Economy, chaired by Rep. John Shimkus, R-Ill., has scheduled a markup for S 611 at noon today, after discussing the House’s companion bill (HR 2853) last Thursday. In the House’s version, the annual appropriation to the program is set at $15 million for the next five years.

While both bills have broad bipartisan support, Democrats say they focus on a minor piece of the budget puzzle – and not the infrastructure part. Shimkus’ Democratic counterpart, Rep. Frank Pallone of New Jersey, said the bills help secure a “small pot of money” already set aside to help rural utilities.

“It is not the whole solution for small systems,” he argued during the Thursday hearing. “It is imperative that this subcommittee take on the important task of reauthorizing the (EPA’s) Drinking Water State Revolving Fund.” The fund, established when the Safe Drinking Water Act was amended in 1996, makes funds available to finance actual improvements in infrastructure.


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