Future uncertain regarding Rural Center funds

Jul. 23, 2013 @ 05:16 AM

Rutherford County has over $1 million in grants through the North Carolina Rural Center.

With the latest budget passed Sunday by the North Carolina General Assembly, those funds are now in question.

The budget, to be voted on this week by the House and Senate, defunds the embattled Rural Center and shifts those funds to a newly-created division within the Department of Commerce.

"The Rural Center funding, historically, allowed counties like Rutherford close the gap on other counties like Mecklenburg, Wake and Orange," said Matt Blackwell, Rutherford County Economic Development Commission (EDC) director. "Losing the Rural Center and putting those funds under the Department Commerce, until we have a better view on how it will be disbursed, will determine what it means."

Blackwell said the county has three grants outstanding through the Rural Center including a $500,000 grant to help build a rail spur at Horsehead Corporation's facility off U.S. 221. There is another $480,000 building reuse grant for Valley Fine Foods in Forest City and a $75,000 building reuse grant for Project COZY — a new project not yet announced.

"Our immediate concern is that we have projects that are pending in the Rural Center and we don't know what impact this will have on those projects," said Carl Classen, Rutherford County manager.

According to House and Senate leaders the new budget shifts funds from the Rural Center to a new Rural Economic Development Division in the Department of Commerce.

"It could have a negative impact on how we can compete but we just don't know how the money will be handled," Blackwell said. "All of those grants were used to help attract those businesses to Rutherford County."

Recently, the county received building reuse grants for Isothermal Textiles and Ameridial.

Additionally, the new budget invests funds into a new Rural Infrastructure Authority. Leadership called the new authority "a streamlined and efficient program where rural communities can get the support and resources they need without regard to political connection."

The primary concern for Blackwell and Classen is whether or not the funds originally intended for the Rural Center will be earmarked for rural counties or thrown into one pot for all counties to use.

"Until I know how the state intends to handle those funds, it's hard to say," Blackwell said. "Yeah, I'm nervous but if they use it in a way that positively impacts rural communities, it will be fine but if it is just a pot that all the counties share, it could make us less competitive."

The Rural Center was rocked last week by the State Auditor's office with a report that questioned grant accountability and the salary of its president, Billy Ray Hall. A day after the audit report was released Hall submitted his resignation.

Thursday, Gov. Pat McCrory requested the Office of State Budget and Management suspend dispersement of state grant money to the Rural Center.

But, for now, county officials remain in a wait-and-see stance with regards to current and pending grant funding as well as what the future has in store for rural grant funding.

"As for the future of the Rural Center, we are just waiting to see what the rules are for rural counties and those projects that favor rural areas," Classen said.