Kathleen Williams assumes Montana’s top rural development post

BOZEMAN — On a recent Thursday morning, the Bozeman location of the U.S. Department of Agriculture’s Rural Development office was quiet, mostly dark and nearly empty. A sign taped to the front door said “We are working remotely today!” and listed contact information for USDA staff in the office’s housing, utilities and business programs. Unlocking the front door, Public Information Officer Sue Kerver explained that nearly all her Bozeman-based colleagues have been working remotely due to the pandemic. Only Kerver and her recently appointed boss, former Montana state legislator and two-time U.S. House candidate Kathleen Williams, who assumed leadership of the office in January, were working on-site that day.

Gesturing to an electric kettle in the corner, Williams offered tea and settled in at a conference table with a handful of printouts to discuss her priorities as Montana’s new director of rural development for the USDA, which spends more money than any other federal agency to bolster economic development in rural areas. During the last fiscal year, the office administered more than $208 million in grants, loans and loan guarantees in Montana, an amount nearly equal to the two-year agency budget lawmakers set for Montana’s Fish, Wildlife and Parks during the last legislative session.

Williams brings to the post more than three decades of experience working in the public, private and nonprofit sectors. Along the way, she’s developed a reputation as a savvy government navigator and policy wonk who’s not afraid to put in the time — and miles — to meet with those she serves. Montana Free Press sat down with Williams in early February to learn more about her vision for the agency and her understanding of the challenges facing rural Montana.

Asked about key priorities, Williams referenced those held by the Biden-Harris administration: ensuring that rural America comes out of the pandemic — or finds a way to survive it — stronger than before, enabling fair access to the USDA’s myriad programs, reducing climate pollution and fostering resilience to climate change.

To increase access to USDA programs, Williams said, she’s convened about a dozen field officers under her direction to identify areas of the state where residents struggle to apply to — or even be aware of — available programs, understand the roadblocks and strategize solutions. She said her team is using data to make sure the 40-plus programs under the rural development purview are available and deployed where they’re most needed, which she described as one of her personal priorities.

Williams said she has a particular fondness for problem solving — the thornier and more entrenched the issue, the better. Most of her experience navigating knotty issues comes from her work in water, which she’s approached from a number of different angles. She was vice-chair of the Montana Legislature’s Water Policy Interim Committee in the mid-2010s and served as a lead negotiator to help hash out the terms of the CSKT Water Compact, which spanned multiple levels and branches of government by the time it was ratified. Prior to becoming a lawmaker (she represented Bozeman as a Democrat in the Montana House of Representatives between 2011 and 2017), she managed Montana Fish, Wildlife and Parks’ Water Resources Program. Before that, she’d earned a bachelor’s degree in natural resource economics from the University of California, Berkeley and a master’s degree in recreation resources from Colorado State University.

“It’s life, it’s health, it’s whether you can irrigate, it’s family. It cuts really deep,” Williams said of Montana’s water issues. “It was important [work], people cared, it was controversial, and when you solved a problem, it was great.”

In her new role, Williams won’t be leaving water policy behind entirely. Four programs administered by the Rural Development Office provide financial assistance and technical expertise for water- and wastewater-related projects, which are among the most expensive infrastructure investments rural communities make, as the Worden Ballantine Yellowstone County Water and Sewer District can attest. Last year the USDA awarded the district a $2.1 million grant and another $2.6 million in loans to help it secure safe drinking water after nitrate levels high enough to be mortally dangerous to infants were discovered in its primary water source two years prior.

Several organizations Williams will be working with in this role know her from her previous work on water and agriculture issues. Montana Stockgrowers Association Executive Vice President Jay Bodner said he appreciates that Williams is “not afraid to get out and talk with people” and said he hopes she’ll be proactive about getting in front of the public to explain available programs and facilitate help for rural communities as quickly as possible.

Tara Mastel, an associate specialist for rural community development with Montana State University Extension, said funding administered by the USDA is undoubtedly important to rural Montana, a state that pulls heavily from federal coffers relative to its contributions, but securing that funding can be an ordeal. Mastel, who spent a decade as Jefferson County’s director of development, said it can be easier to prioritize less complicated state grants and use federal grants as a “funding of last resort.”

“They’re really hard to write and hard to administer. They’re just time consuming and a lot of times they’re very niche,” Mastel said. “We don’t have the staff people that have the time to figure them out, chase them down, and spend hours and hours writing them because they’re just stretched so thin.”

In 2020, Roam Free, a 16,000-acre bison ranch based in Hot Springs, received a $250,000 value-added producer grant from the USDA. Founders Jonathan Sepp and Brittany Masters said the grant allowed them to “advance the business rather than just sustain the business” by growing the food products side of their venture and securing key accounts (Costco started carrying their bison chili earlier this year), but also said that submitting a competitive application was almost a full-time job in and of itself.

“I think Brittany was probably on the phone with everybody there once a day,” Sepp said in a video about applying for and receiving the grant. “[USDA’s Rural Development Office] was instrumental — don’t do it on your own.”

Applicants for one of the agency’s most popular programs, which disburses home repair loans of up to $20,000 and grants of up to $7,500 to low-income people who can’t secure affordable credit from other sources, have to include up to 21 different documents with their application. That list could include pay stubs, an explanation of employment gaps, divorce decrees, records of out-of-pocket medical expenses, tax filings, school transcripts, proof of property insurance, bids for the repair, and a copy of the repair contractor’s license. A guide book for another popular offering, the Community Facilities Direct Loan program, runs to 37 pages and includes an application process flow chart with 15 different steps.

Williams said that process is where her staff (the agency’s Montana payroll includes more than 30 employees spread across six area offices) can be indispensable.

She also notes that the documentation required for these programs is part and parcel of the responsibility associated with distributing federal funding.

“Any time you’re allocating public funds, you’ve got to balance the accessibility to them with the accountability aspect,” she said. “Anywhere where there’s a barrier or a lack of computer resources, we try to be accommodating of that and help folks still take advantage of the resources.”

Program access is all the more relevant in Montana given the sheer number of Montanans living outside of metro areas. About two-thirds of the state’s residents live in communities with fewer than 20,000 people, the population threshold for the majority of the agency’s programs, which generally fall within three buckets: housing, infrastructure investment, and business support and economic development.

Housing, value-added agriculture and climate change resilience

Farming and ranching associations say housing and opportunities to add value to raw agricultural products are two areas that could especially benefit from the kind of assistance the Office of Rural Development offers.

Housing is so scarce in some rural areas that school districts will buy two or three houses to serve as rentals for school staff, according to Montana Farm Bureau Federation Executive Vice President John Youngberg. He said a lack of available housing also presents a challenge for rural entrepreneurs who are trying to find employees to help develop or grow a business venture.

“We tend to think of these smaller rural towns as kind of hidden, tucked away, but even Winnett, for example [has experienced housing issues] in the last two years,” Bodner, with the Montana Stockgrowers Association, said, referencing the Petroleum County seat that has fewer than 200 residents. “People are finding these little places that are available and snatching them up.”

He said there might be some presently underutilized housing associated with the Bakken oil boom that could be repurposed into affordable housing, and, in general, he would like to see the agency look into using such surplus housing in rural settings, especially given the time and current costs associated with building new units.

In January 2021, available housing stock in rural areas fell more, percentage-wise, than metropolitan and suburban markets, according to data compiled by residential real estate company Redfin. Rural areas also saw the greatest increase in the median home sales price, rising 16% between January 2020 and January 2021. Supply that’s failing to keep pace with demand — Montana’s population grew nearly 10% between the 2010 and 2020 censuses, and the number of housing units increased by only 7% — was the focus of a researcher’s presentation before a legislative committee last November.

Available housing stock helps illustrate a point that Ben Winchester, a rural sociologist with the University of Minnesota Extension, likes to make when stories referencing tumbleweeds or “decline” crop up: If rural America is in a state of decline, why is it so hard to find housing in these communities?

Williams said she recognizes that rising prices present affordability challenges across the board — rural Montana included — and said the USDA tackles the issue from several different angles. In addition to financing low-interest home loans and issuing loan guarantees (among the office’s most widely used programs), the agency has a program for farmworker housing that can be applied to new construction or “substantial rehabilitation” of safe affordable rental housing units. The Home Repair and Grants program can help rural residents age in place by awarding grants of up to $7,500 for small retrofit projects. Williams said that program has been particularly impactful for Native American communities in the state, because it helps them keep elders in their communities. She said the agency will also work with nonprofits like Habitat for Humanity and NeighborWorks to help communities build new housing units.

The role of a large government agency like the USDA in housing markets isn’t without critics, including the Heritage Foundation, a conservative think tank that pushes policies to promote free markets and shrink government. A 2016 report by the D.C.-based group argued that the USDA’s Rural Housing Service’s home loan programs “tend to put higher-risk financially vulnerable individuals into debt” and said government intervention has failed to increase the overall rate of homeownership in the U.S. The foundation also argues that the agency’s definition of “rural” is overly flexible and subject to manipulation to meet varying purposes.

Indeed, there is no single definition of “rural” that applies across the spectrum of USDA’s economic development programs. About a dozen programs, including a guaranteed loan program for building, enlarging or improving essential community facilities (fire departments, town halls, child care centers, libraries, hospitals), are available to communities with fewer than 50,000 residents. A Direct Home Loan program to reduce low-income applicants’ mortgage payments with low-interest or subsidized loans — one of the programs referenced in the Heritage Foundation report — is available to residents of areas with fewer than 20,000 people, but can also be used in certain areas with populations below 35,000. Still others, such as a grant program to facilitate broadband deployment, target tribal governments, socially vulnerable communities and “Frontier and Remote Areas.” The latter includes places located more than 15 minutes from a 10,000-resident town or more than 30 minutes from an urban area with up to 50,000 residents.

And some programs, such as the Value Added Producer Grant, don’t have any geographical population requirements. That, Williams said, is because such programs based in more classically urban areas can serve rural residents.

Value-added agriculture is a rising star in conversations about how the USDA’s rural development mission to be “an investor, ally and advocate for rural America” intersects with current trends and needs. In a Feb. 2 announcement about the agency’s allocation of $1.4 billion for job training, business expansion and technical assistance, USDA Secretary Tom Vilsak highlighted the department’s focus on “resilient local and regional food production” as well as “building new markets and streams of income for farmers and producers using climate-smart food and forestry practices,” among other priorities.

“For some time, rural America has been at the mercy of an extraction economy, where resources are taken from rural lands only to create jobs and economic opportunity in urban and suburban areas,” Vilsak said. “That’s why USDA is committed to doing what we can to change that extraction economy into a circular economy, where value is added closer to home, so the wealth created in rural areas stays in rural areas.”

The Montana Farm Bureau Federation’s Youngberg said it wasn’t so long ago that small towns across the state supported a number of agricultural businesses, ranging from grain elevators and pulse crop cleaning plants to Main Street meat shops supporting producers. He said he’d like to see a return of that kind of agribusiness.

“All of those places have gone the way of the dodo because of regulation and consolidation,” he said. “Those are the things we’d like to see brought back … to help those communities survive and thrive.”

“Value added” is an umbrella term for opportunities to keep money associated with the processing of raw products circulating in local communities beyond those products’ initial harvest and sale. That can take many different forms: a lentil crunching plant, a chickpea mill, a mobile meat-processing unit, or expanding organizational capacity so a business can package, distribute and market locally grown hops and barley. The USDA provided financial support to Montana businesses for all of the aforementioned projects during its most recent round of funding for value-added producer grants.

Last month, Williams, a self-described “superfan” of opportunities to add value to raw products, announced that the USDA is distributing more than $3 million to 29 agricultural producers in the state as part of that program, an amount that exceeds the previous Montana record for the program by six-fold. That’s especially notable, Williams said, given that it was a competitive grant process involving applicants from across the nation.

Discussing areas where agency and personal priorities overlap, Williams also highlighted opportunities to support regenerative agricultural practices and her enthusiasm for a program that helps agricultural producers and small businesses fund renewable energy projects.

Solar panels on a barn or business rooftop can reduce power costs, contribute to climate resilience and diversify a business owner’s power supply, she said. Regenerative agriculture can help producers capture carbon, make soils more drought-resistant and reduce farmers’ expenses for inputs such as fertilizer. Ultimately, a thoughtful response to climate change “is going to be an opportunity for rural Montana,” she said, adding that USDA can help Montanans make the necessary transitions.

In response to a question about what residents of burgeoning cities like Bozeman might fail to appreciate about their rural neighbors, Williams reframed the premise, suggesting that it’s important to challenge public discourse that pits urban and rural areas against each other.

“We’re Big Sky Country, right? We’re big, open spaces — that’s rural. We’re the Cherry Festival [in Polson]. We’re the Dino Shindig [in Ekalaka]. I have always argued against tacking urban versus rural because it’s all one state.”

She also emphasized that navigating big federal agencies like the USDA for assistance needn’t be intimidating.

“To me, ‘policy’ is with a little ‘p.’ It’s making government work for people,” she said. “I hope that I have opportunities to be helpful both for Montana and the nation.”

This article is published courtesy of Montana Free Press.