Volume XVII | Issue 1 | Spring 2017
Vernonia community leaders broke ground for a wastewater system improvement project nearly 20 years ago. In 2016, the project was finally completed with financial support from USDA Rural Development. Photo: USDA Rural Development

Rural infrastructure needs

In the last eight years, USDA Rural Development has invested $4.8 billion in rural Oregon

When the northwestern Oregon city of Vernonia suffered catastrophic flooding in both 1996 and 2007, the town’s infrastructure took a big hit. The flooding inundated the city’s water treatment lagoons and weakened virtually every part of the aging wastewater system, which already suffered regular discharges of treated effluent into the Nehalem River.

The state of Oregon’s infrastructure is an issue of great concern in rural Oregon, where many roads, buildings and water systems are more than a century old. Rural populations, which are often not large enough to finance the prohibitive cost of upgrading or replacing, face special challenges. 

“Small communities are especially in need,” says Vicki Walker, former state director of the USDA Rural Development in Oregon. Walker, a presidential appointee, served in that role during the Obama administration, stepping down in January. “Because small towns have made do for years, infrastructure becomes more difficult to maintain and more expensive to replace. That’s where we come in and help them.”

In 2017, Vernonia completed a wastewater system improvement project that began nearly 20 years ago — after the first flood. With financial support from USDA Rural Development, including a $5.6 million loan and a $2.2 million grant, the city purchased new equipment and upgraded its wastewater lagoon system.  The project improved water quality for the local community and protected native fish species while also upgrading the town’s infrastructure and safeguarding against severe storms.

Water systems in need

While rural infrastructure in general is in dire need of attention, water-related projects are at the top of the needs list, Walker says. During her term, USDA Rural Development helped nearly 100 rural Oregon communities construct or upgrade their water or waste disposal systems through $202.4 million in funding.

It’s a start. A survey by the American Society of Civil Engineers shows that Oregon’s combined water and wastewater needs exceed $4.48 billion. Of that, nearly one-third is attributed to costs associated with repairing or replacing water systems that, in many cases, are well over 100 years old. Another survey, conducted by the League of Oregon Cities, lists projects by city, including this: Canyonville, in southern Oregon, has identified wastewater costs alone that could range up to $16 million for the town of 1,900.

Water systems are not the only infrastructure needs identified in the state. A League of Oregon Cities’ study of city water and transportation infrastructure statewide found significant funding needs. Specifically, $11.4 billion is needed over the next 20 years for infrastructure maintenance and upgrades. 

In Lake County, Lakeview used a 40-year, $2.7 million loan from USDA Rural Development to help build a new geothermal system that heats Lake District Hospital and four school buildings.

USDA Rural Development has helped finance a variety of projects. In Lake County, Lakeview used a 40-year, $2.7 million loan from USDA to help build a new geothermal system that heats Lake District Hospital and four school buildings, for a savings of about $350,000 annually in fuel costs.

In Veneta, an uncertain water supply helped contribute to a slow decline in the town’s business base. A $13 million loan and a $2.6 million grant by USDA helped the town construct a 10-mile water pipeline that connected its 1,461 homes and 74 businesses and facilities to a nearby distribution system. 

With a stable supply of water assured, businesses and industry began returning within five months of the project’s September 2013 completion date, and the city’s population is projected to double by 2035. 


One of Walker’s favorite funding areas is in building broadband capacity. “Broadband is a great need in rural areas for economic development,” she says. “If you don’t have broadband where people live and work, rural towns will lose more residents to urban centers.”

In Molalla, for example, nonprofit cooperative Molalla Communications Company received a $22.5 million Telecommunications Infrastructure Program loan from USDA Rural Development to construct infrastructure to provide broadband services. 

As a result, residents of Molalla and neighboring Mulino have gained access to some of the fastest broadband services in the country. 

In the future, Walker expects USDA Rural Development to see more requests relating to community resilience in natural disasters. 

“More stringent requirements also require higher standards, such as seismic retrofits,” she says. “We haven’t financed any of these resilience projects yet, but I suspect we will start seeing more requests from those wanting to improve essential community systems.” 

How to get help

USDA Rural Development works cooperatively with many state agencies to put together loan and grant packages to support community projects. These agencies, including the Oregon Economic & Community Development Department, Department of Environmental Quality, and Department of Energy, hold monthly meetings to help potential applicants for water systems and facilities projects find the best funding package. 

The Lakeview geothermal system, funded with help from USDA Rural Development, generates savings of about $350,000 in fuel costs annually.

The agency offers loan and grants programs that address many of the needs of rural communities. These include single- and multi-family housing, business and coop programs, infrastructure, community facilities and renewable energy. In the last eight years, USDA Rural Development has invested $4.8 billion in rural Oregon. 

For more information about infrastructure financing, visit www.orinfrastructure.org and click on the link for your region.

To stay on top of all the programs offered by the department, visit the Oregon USDA website at www.rd.usda.gov/or, and under “Oregon Highlights,” choose “Sign up for the Oregon Rural Developments newsletter and program updates.”  

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