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Phillips County, Arkansas

Because of the enormous need in this Delta community, Southern selected Phillips County, Arkansas, to pioneer its new development approach. Phillips County has extensive social and economic needs, including but not limited to harsh poverty, dysfunctional leadership, economic decline, and racial tensions:

• It has the highest poverty rate in Arkansas (33 percent) (2000 Census).

• It has the highest child poverty rate in Arkansas (46 percent, which is the thirty-sixth highest child poverty rate among the nation's 3,140 counties) (2000 Census).

• It has the lowest homeownership rate in Arkansas (56 percent, which is lower than all but 93 of the nation's 3,140 counties) (2000 Census).

• It consistently has one of the highest unemployment rates in Arkansas – 8.7 percent in September 2006, the second highest among the state's seventy-five counties and much higher than the overall state unemployment rate of 5.3 percent.

• Its population declined by 49 percent between 1960 and 2000.

The crisis extends far beyond statisticals. The county's two largest cities – Helena and West Helena – historically competed for individual shares of an ever-shrinking economic development pie. Both cities had financial management problems, with budget information in some cases consisting of handwritten records on scraps of paper.

In West Helena, the larger of the two cities, city government was described in a February 2005 newspaper article as a "circus." The racially divided West Helena City Council did not meet at all during in 2004 because not enough aldermen would show up for a quorum. In 2005, a group of five aldermen attempted to unseat the other three aldermen, abolish all city boards and commissions, reinstate a fired police chief, hire and fire new department heads without the mayor's approval, derail passage of the city budget, reduce the salaries of certain city employees, and award themselves $1,000 bonuses.

Financial problems at the county's 3,000-student school district resulted in the state's taking over administration of the district in August 2005. The district had a projected deficit of $2.26 million for the 2005-2006 school year. Additionally, the district in recent years has reported student test scores well below the state average. In 2005, the district had a graduation rate of just 54 percent and a college remediation rate of 95 percent. Of the district's 3,113 students, 99 percent are eligible for free- and reduced-price lunches. Approximately 38 percent of the population in Phillips County has less than a high school degree.

These daunting challenges were complicated by constant infighting. Past attempts at planning and constructive cooperation were stymied by racial tensions that resulted in more than one meeting ending in shouting matches. The culmination of these issues, magnified by continued economic decline, made Phillips County residents cynical of any planning efforts to revive the dying community.

Aside from the enormous need, the second major reason for Southern to select Phillips County was the headquarters location of First Bank of the Delta (FBD) in West Helena. The location provided Southern with the physical presence, access to local leadership, and the credibility to launch its development programs consistent with its theory of change.

The ability to form partnerships served as the third reason for Southern to launch the program in Phillips County. Southern's new geographically targeted approach appealed to the Walton Family Foundation, which provided a substantial grant over three years to support both operations and funding for community-based initiatives. Finally, some key local institutions and individuals from the Phillips County community signaled a desire to partner with Southern to attempt community revitalization.

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