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OVC expects to begin CDBG payments to IDA soon

By Eugenia Jones

The McCreary County Industrial Development Authority (IDA), whose designated role is to help create jobs by recruiting local industry and tourism and promote overall economic development in McCreary County, will soon have significant funding to assist them with their efforts.  Locally, the IDA has never had a consistent source of funding for development projects; however, that scenario will soon change as Outdoor Venture Corporation (Stearns) begins paying back nearly one million dollars in federal Community Development Block Grant (CDBG) funds approved in 2019 for use by OVC to expand and modernize the OVC plant to process fabric for the adjacent Fibrotex plant in Stearns.  According to grant guidelines, OVC is required to pay back the federal dollars, with interest, to the local IDA.  The IDA must then spend the money on economic development within the county.  OVC will begin repaying the CDBG money after all expenditures have been made, and the OVC grant account has been depleted.  The money will be paid back over a period of ten years.  Currently, OVC has approximately $70, 000 left to spend before payments to the IDA are anticipated to begin-probably by late July.

Receiving the CDBG dollars was important to locating the new Fibrotex plant, with its accompanying jobs, in Stearns.  OVC used the funding to expand its facility and purchase equipment needed to process specialized fabric for Fibrotex.  Equipment purchased through the OVC CDBG includes robotic sewing machines, an updated conveyor system, and an enhanced security system required for classified products.  Some purchases of specialized equipment could only be made from other countries, including Italy.  The newly purchased robotic equipment does not displace employees but is used to make production more efficient and precise.

According to the U.S. Department of Housing and Urban Development (https://www.hud.gov/program_offices/comm_planning/cdbg), the Community Development Block Grant (CDBG) Program provides annual grants on a formula basis to states, cities, and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons.  CDBG funds may be used for activities which include, but are not limited to:: (a) acquisition of real property, (b) relocation and demolition, (c))rehabilitation of residential and non-residential structures, (d) construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers and the conversion of school buildings for eligible purposes, (e) public services, within certain limits, (f) activities relating to energy conservation and renewable energy resources, and (g) provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities.

The flow of CDBG funds follows a certain format.  In this case, OVC submits requests for expenditures from their grant to the Lake Cumberland Area Development District (LCADD).  The LCAAD then submits the requests to the Department of Local Government.  The Department of Local Government approves requested expenditures and forwards the approved amounts of money to the local Fiscal Court.  Fiscal Court must then approve the expenditures during monthly Court meetings.  Finally, the County Treasurer writes the checks to pay vendors.

Outdoor Venture Corporation’s President and Chief Operating Officer, Ray Moncrief, is emphatic that one of the most important aspects of the OVC CDBG is simply that the money will be paid back, with interest, to be used for other McCreary County economic development projects.  

“OVC is very pleased to be the agent to receive a CDBG award so that the paid back funds will remain in our county,” Moncrief said.

According to McCreary County’s Deputy Judge Executive and part-time Economic Director, Nathan Nevels, the county’s IDA will be able to use the money in a variety of ways related to local economic development.

“There are many possibilities,” Nevels noted.  “We might be able to have an economic development office and secretary.  We will have funds that can go directly to businesses to support business development or implement job training.  There is a lot we can do.”

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