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Layering grants makes projects possible

The fiscal environment that cities and towns operate within has become increasingly challenging over the years. Revenue constraints and rising costs are an unfortunate fact of life in municipal government, which is why cities often turn to grants.

Strategies for Stormwater
Throughout the Municipal Association's 2017 Regional Advocacy Meetings, municipal officials from around the state repeatedly expressed the need for more tools to address stormwater and drainage problems. Coastal communities battle flooding from hurricanes. Inland communities suffer damage from flash flooding. And nearly every city and town in the state has wrestled with the effects of at least one residential neighborhood that struggles with inadequate drainage.

"What many officials do not know, however, is that several tools are available to help them address flooding and drainage challenges," said Scott Slatton, legislative and public policy advocate for the Municipal Association. "Grant funding from the S.C. Rural Infrastructure Authority is one of the most readily available tools cities can use."

In 2017, the RIA awarded more than $1.6 million in grant funds to four cities and towns for drainage system upgrades. Among those, the City of Conway received a $500,000 RIA grant for drainage improvements in a residential subdivision.

Many cities and towns have also created a stormwater utility, which can provide a stable source of local revenue to use for drainage improvements. Most of those municipalities created their stormwater utilities because they were federally designated as municipal separate stormwater systems, also known as MS4s. Designation as an MS4 requires cities and towns to maintain their stormwater systems to ensure water quality. Cities and towns charge stormwater fees to fund system improvements and their ongoing maintenance.

Closing the Gap: Strategies for Funding Complex Projects
"While perhaps not as plentiful as they once were, grants provide opportunities for 'new money' to fund economic development and projects that enhance quality of life," said Jeff Shacker, field services manager for the Municipal Association.

Three such grant programs available to cities in South Carolina to fund community and economic development projects include the S.C. Community Development Block Grant Program, administered by the S.C. Department of Commerce; the U.S. Department of Agriculture's Community Facilities Loan and Grant Program; and the competitive grants administered by the S.C. Rural Infrastructure Authority.

Cities and towns may use these grants to revitalize downtowns, stabilize neighborhoods that were in decline, upgrade public infrastructure, construct community facilities, and create and retain jobs.

"However, like most grant programs, these funding sources are competitive, have cash or in-kind matching requirements, and are rarely large enough to fully fund a major project," said Shacker.

"As a result, many cities have become adept at implementing economic development strategies and municipal projects through creative — and sometimes complex — combinations of federal and state grants, loan programs and tax credits, as well as grants from nongovernmental entities such as nonprofit foundations and corporations."

Cities that have made effective use of grants to accomplish major projects include the following:

    The City of Pickens used CDBG and other federal and state grants to revitalize its downtown, complete the Doodle Trail running between Pickens and Easley, and tie the trail into Pickens' downtown.

    The City of Greenwood made extensive use of CDBG over the years, along with other state and federal grants. Other significant contributions came from the Self Family Foundation, a nonprofit that focuses on diverse needs within Greenwood County, to revitalize the city's Uptown and other neighborhoods.

    The Town of West Pelzer used funding from CDBG, a USDA grant and loan, and other state and federal sources to upgrade its water and sewer systems, construct a new town hall and park, and plan the revitalization of its downtown.

    The City of Walterboro accessed several sources of funds, including a loan from the U.S. Economic Development Administration, a State Revolving Fund loan, and an RIA grant to upgrade its wastewater treatment plant, scheduled to be completed this year.

At the Municipal Association's Annual Meeting, July 19 – 22, learn about these solutions, the Municipal Association's Hometown Economic Development Grant program and others on Thursday, July 19. A second session on this topic, "Closing the Gap: Strategies for Funding Complex Projects," will be on Friday, July 20.