By Lindsay Lucas
According to ICMA's 2014 Economic Development Survey of Local Government,1 more than two-thirds of local governments in the United States have the primary responsibility for economic development. In 2018, I suspect this amount has not changed.
While such other groups as chambers of commerce, regional organizations, citizen advisory boards, and public/private consortia support economic development and contribute to development strategies, it is often a local government that has the primary responsibility of implementation.
According to the ICMA survey, nearly 90 percent of a community's local economic development activities were funded by local revenues and the local government's general fund. With many federal agencies offering programs to support economic growth, it is a little surprising that less than one in three responding communities reported federal aid as a primary source of funding.
With local governments playing a crucial role in economic development, it is important for local government managers to understand how to leverage various programs and where to find federal financial and technical assistance.
Recognizing this need, ICMA joined a consortium with New York University's Wagner Graduate School of Public Policy (wagner.nyu.edu) and Jobs for the Future (www.jff.org) to work with the U.S. Department of Commerce's Economic Development Administration (EDA; www.eda.gov).
The consortium supported EDA's economic development integration function, which provides insight and guidance on ways to align and integrate federal economic development programs and criteria.
With each new administration and budget cycles, communities have learned that they cannot solely depend on one federal agency to meet all the financial and technical assistance needed for development.
It doesn't help that priorities are continually shifting and impacting funding allocations to federal agencies. This, however, shouldn't discourage local governments from seeking federal support; it just requires practitioners to reach out to a variety of agencies and to leverage resources from multiple sources.
ICMA has learned from past experiences working with numerous federal agencies, including EDA, and supporting communities with their implementation of regional economic development plans. This article examines key traits of successfully implemented projects that have leveraged funding and resources from multiple federal agencies to meet local priorities.
Where Are Your Resources?
One of the most important aspects and at times the most undervalued, when looking at leveraging federal resources for economic development projects, is the role stakeholder groups with a vested interest can play in garnering financial support from federal agencies.
While stakeholders can have a key role in establishing relationships with agencies and helping with the implementation of projects, it is not always easy getting them to the table. It is important that managers reach out to partner organizations to better understand regional opportunities and challenges. This also helps clarify overlapping and competing priorities among stakeholders and identify opportunities to build new or strengthen existing regional partnerships.
Convening a diverse group of stakeholders ensures that the development of a comprehensive regional strategy is reflective of the needs of the region.
When multiple stakeholders are brought to the table to discuss their needs and goals, whether they are businesses, nonprofits, schools, or community groups, managers will be able to fully understand and assess a region's existing capacity before applying for federal funds.
A local college or business, for example, could already have an existing relationship with a federal agency and could be the conduit needed to receive funding. Working with anchor institutions also may help alleviate some of the burden on local governments with implementing projects and meeting the reporting requirements.
Some grants even require the inclusion of colleges or other anchor institutions, and with an established relationship with these institutions, the lift to apply for grants is not so heavy.
One of the best ways to make sure the appropriate stakeholders are included—and no one is accidently omitted—is by conducting a needs assessment to better understand the mission and goals of community institutions. Through this assessment, you can gain a better understanding of the limitations, the strengths, and the relationships the industries have that can be leveraged.
The difficult part of such an effort is in the nuances: identifying the right partners, succeeding in engaging them and keeping them engaged, coalescing partners around agreed-upon community goals, getting their commitment to a plan of action, and assessing and tweaking the plan if necessary.
While working with stakeholders is extremely beneficial, managers also need to make sure they are not overextending or underusing any one group. More stakeholders will request a seat at the table and provide feedback when monthly meetings are held and a two-way communication stream is established.
When integrating multiple federal funding streams to support a single economic development strategy, conflicts can arise in regard to the reporting and monitoring requirements that each award requires.
Each agency has its own set of monitoring and reporting requirements that are usually laid out in the contract. Perhaps not all agencies' requirements will be aligned with each other, causing the awards recipients to submit several different reports on a monthly or quarterly basis.
A way to navigate this potential challenge is to identify the various requirements during the planning process and discuss a plan with the agencies. Local governments will be able to report the information agencies need without submitting different forms to each one. Most agencies have partnered on other projects and if asked, can provide an easy solution to this predicament.
It is important that the capacities and priorities of partner organizations are clearly articulated during the planning process. Smaller community-based organizations and small businesses do not have the time nor the financial or human resources necessary to both implement programing and tackle administrative tasks.
One way to avoid this conflict is by making sure everyone understands their roles and responsibilities for implementing the project. Issues are bound to occur, as Murphy's law states, so it is better to be prepared.
Hold weekly or monthly meetings depending on the phase of the project, and make sure there is a contingency plan for delays. Having a plan in place may not prevent delays or additional costs, but it most likely will help prevent misunderstandings and delays on submitting reports.
During the planning process, it is a good strategy to map out a crosswalk of each federal agency's criteria to identify overlap and disparities. Understanding the requirements that are attached to each funding source and where there are duplications can help streamline the application, monitoring, and reporting processes in the future, which will, no doubt, accelerate the process.
It almost seems like a no-brainer that local governments would want to establish a relationship with federal program officers if they were seeking federal funding. Sometimes, however, the value of establishing these relationships can be understated.
Federal program officers serve as a project's single liaison between the region and the federal agency funding programing. As such, establishing contact with program officers early and often can offer immense benefits to the region.
Program officers can serve as an information and referral source for upcoming federal funding opportunities and a sounding board for grant applications, as well as a resource for clarifying program requirements.
It can be difficult to identify federal funding announcements that are applicable to a region's economic development strategy, and it can be even more challenging putting together a proposal that meets the requirements.
This is a significant challenge for smaller communities that have limited resources and do not have a dedicated staff member focused on economic development. This is where federal program officers have a lot to offer in the way of meeting this challenge.
Federal program officers are familiar with the strategic goals and activities of specific regions and can make recommendations on which new funding opportunities a region may want to pursue. In Snohomish, Washington, a strong relationship between the local economic development districts and Seattle's regional EDA office was pivotal to identifying additional federal funding sources to support the state's Oso mudslide disaster recovery efforts.
The Seattle regional office served as a trusted adviser for identifying which federal programs would be available to assist in economic planning and growth after the rescue and recovery phase of the project.
For small and rural communities, it can be difficult to attract employers and sustain economic growth. If relationships are established with federal agencies, they can provide additional support, help identify assets that become economic development opportunities, and make funding more accessible.
Communities might not have the resources to fund a staff person dedicated to research and who can make connections with federal agencies. A manager will be the one to reach out to places directly, gauge what the need is, and provide guidance on where resources can be located.
The support EDA and other agencies offer is not limited to money as they can also provide guidance on establishing or redefining an economic development strategy.2
Federal Support Is Available
The process of developing a regional strategy must be, at all points, intentional and strategic; especially at the outset. Integrating all of the components necessary to implement a regional economic development strategy, however, can be a challenge for most.
If managers apply for a grant but are not successful, they should not walk away. To strengthen the next proposal, request additional information from the funder on why it was denied. The feedback received can be instrumental in gaining financial support from other federal agencies.
Also, request technical assistance from the agencies to help establish a relationship that can lead to securing financial support in the future.
EDA has resources for communities looking to revamp or create an economic development strategy, and it can offer additional insight that can help improve the planning process for economic development and increase the chances of receiving federal funding. Managers can also reach out directly to regional offices for potential opportunities related to their area.3