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Valley economic program CEO urges Congress to continue federal investment

POSTED July 29, 2011 8:40 p.m.

With unemployment levels remaining well above 15 percent locally, U.S. Rep. Jeff Denham (R-Atwater) led a hearing Wednesday in search of ways the Economic Development Administration can maximize job creation.

“With high unemployment rates, large deficits, and an out of control debt, we must ensure federal economic development programs are targeted and effective,” said Denham, who chairs the House Subcommittee on Economic Development, Public Buildings, and Emergency Management.  “With many federal programs focusing on economic development, Congress must look at each and find ways to streamline, reform and, where necessary, consolidate.”

A March Government Accountability Office report found the EDA was not operating as effectively as possible, advocating the agency streamline policies and procedures. But David Spaur, president and CEO of the Merced County Economic Development Corporation, testified in Washington that EDA programs are having an impact locally, despite any inefficiencies.

“People, companies, and communities are suffering,” Spaur said. “We need to focus our attention on job creation, investment into infrastructure, sustainability and innovation.”

The programs can help troubled communities become competitive, he said, by paying to build sewer and water system improvements or running fiber optic cable to new tech-focused business parks.

“Without EDA investments, many of the infrastructure projects that could catalyze a whole region are out of reach for resource-poor rural communities or distressed communities,” Spaur said.

The EDA is the only federal agency focused solely on private sector job growth and economic sustainability. Its sole mission is to generate jobs, retain jobs, and stimulate economic growth.

EDA projects should be viewed as investments, not incentives or earmarks, Spaur said, due to the strict rules they are governed by. For example, local municipalities must not only provide matching dollars on projects, but must also show jobs have been created and retained. If they do not, they’re forced to return the funding to the federal government, leading to a big return on investment.

In 2010, the EDA awarded $285 million in investments, expected to create about 48,500 jobs ranging from machinists to high-tech researchers. Each dollar attracted about $6.90 in public/private capital investment.

In Merced County specifically, Spaur detailed how EDA funding allowed a telecommunications upgrade to the former Castle Air Force Base, attracting a partnership with the University of California, Merced. The university has since established a Solar Institute on the site, and Merced County attracted an AT&T call center to the former base as well.

The program could bring provide even more benefit to the Central Valley in the coming years. An eight-county Comprehensive Economic Development Strategy, drafted over the past three years, will allow the region to better focus and concentrate economic development efforts in the region.

The Central Valley Economic Development District will seat its first board of directors in the next few months, Spaur said. The district’s goal is to help rural communities access EDA funds, driving innovation – and employment – across the Valley.

“On behalf of communities around the country working hard to stay competitive in this challenging global economy, I urge you to continue to provide strong support for the Economic Development Administration so that it can provide aid to multiple projects across the U.S.,”  Spaur said. “These are lean times, but EDA has a record of providing a meaningful return on investment in terms of private dollars and jobs.”

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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