Small town has high hopes for stimulus boodoggles

US News:

At first glance, the town of Edwardsville, Ala., with a population of 194 people, might raise a few eyebrows with its bid to receive $375 million from the economic stimulus package being assembled by Barack Obama and lawmakers in Congress.

The tiny town, located near the Georgia border and 26 miles from the nearest "big city" of Anniston (population: 24,276), added 33 proposals—about two thirds of them related to "green" energy—to the list of "ready- to- go" projects assembled by the U.S. Conference of Mayors. Total sum: $375,076,200.

That comes out to nearly $2 million per Edwardsville resident, although E. D. Phillips, the town's representative to the U.S. Conference of Mayors, says the projects would affect a wider region that comprises about 80,000 people. That number includes residents of nearby rural areas that aren't already incorporated into towns, along with the residents of Talladega Springs (population: 124), which partnered with Edwardsville and local municipal utilities on the projects.

There's certainly no denying that Edwardsville has big ambitions. Through the various proposals, which include a renewable energy museum, scenic railroad, and vineyards, these small Alabama communities envision themselves becoming a cutting-edge demonstration project for energy sustainability and a hub for tourism.

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The town's proposals began to develop more than two years ago, when Phillips and another town official became intrigued by the argument that renewable energy could create a rural renaissance. If any community needed economic revival, it was Edwardsville—even before the recession. At 28.7 percent, the town's poverty level was nearly equal to that of Nepal and more than twice the national average, according to the 2000 census.

Along with the more traditional proposals to replace streetlights with solar-powered lights (cost: $3,479,200), to install solar panels on the town hall (cost: $77,000), and to build solar-powered recharging stations for electric golf carts and vehicles (cost: $620,000), Edwardsville and Talladega Springs have assembled a set of even more far-reaching projects.

An outlay of $50.4 million, for example, would go toward installing water pipelines beneath roads to soak up the sun's rays, transferring heat. That technology is currently being used in the Netherlands, which found that while the cost of installation was double that of normal gas heating, the system halved the amount of energy required.

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"Do you know how hard it is to fund some of these projects when your tax base is so low?" Phillips says. "So we just breathed this sigh of relief when we found out about the stimulus package . . . especially when it had a focus on renewable energy."

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The reason it is hard to fund these projects has little to do with the tax base and much to do with the unviability of the projects. They are projects that would never generate the cash flow needed to pay for them. In the business world if you can show that the cash flow from an enterprise will pay for it you can usually get financing. The same is true for municipal finance.

Another thing jumps out at me in these proposals--a renewable energy museum. While there is the basic question of why a town this size needs any kind of museum funded by the government, it seems down right silly to have one of technology that has not even been developed on a viable scale. While I do not oppose renewable energy, none of it right now would exist without significant government subsidies, which means it is not commercially viable.

While Washington, Texas may have as many people as Edwardsville, Alabama we certainly are not running around with our hand out. We will get by with our Lyndon Johnson era Post Office. I suspect that was the last federal expenditure in the area.