During the period ended December 31, 2007, the Kentucky Highlands Empowerment Zone continued its implementation of the Strategic Plan. All of the original Benchmarks have been completed. The big change during 2007 was the reallocation of the $3.8 million in EZ funds in Jackson County that had been designated for a reservoir that will not be built. During hearings held in December 2006, the community received 51 proposals from the public on how to best utilize these funds. The review process narrowed the projects down to the 11 which were funded. For the most part, the administration of these should not be as complicated as earlier projects and all should be completed by the December 31, 2009 deadline. The benchmarks that remain are those that were added in Jackson County through the 2007 amendment process to reallocate the funds previously earmarked for a reservoir.

Most important, the positive attitude within the Kentucky Highlands Empowerment Zone continues strongly. Many projects that were put into place with KHEZ funding are now providing continuing benefits to residents. People are experiencing changes in their community and it continues to generate excitement. Residents within the Zone are looking at adjoining counties and are realizing that, not only are they catching up, but are surpassing these areas. Further, the decentralized structure of the Kentucky Highlands Empowerment Zone has caused the residents to accomplish these successes on their own. As implementing the Strategic Plan has progressed, so have the alliances within the Kentucky Highlands Empowerment Zone. The school systems in Jackson County and Clinton County have been active participants because of the new vocational school and recreation complex in Jackson County built in part with KHEZ funds. In each of these benchmarks, the ownership of the facilities has been or is being transferred to the local school systems to insure on-going operations. In fact, the Clinton County Schools began a $5 million expansion of the 21st Century Learning Center in 2007 that will be ready for the beginning of school in August 2008. USDA Rural Development awarded the project a $499,000 Rural Business Enterprise Grant (RBEG) to assist with construction. The center is fully occupied and added after-school and summer programs in 2004.

A key partner for the KHEZ has been the Federal Home Loan Bank of Cincinnati. The Lead Entity, Kentucky Highlands Investment Corporation on behalf of the KHEZ entered a formal alliance with the Federal Home Loan Bank of Cincinnati (FHLB-Cincinnati). This agreement ties the organizations together in an effort to bring further housing and economic stimuli to the region. The FHLB-Cincinnati and the Appalachian Federal Credit Union (AFCU) formed a partnership with KHIC on a successful HUD Rural Housing & Economic Development grant application during the period to help finance the opening of a new branch of the AFCU to serve Clinton, Wayne and McCreary (an EC) Counties. This branch opened in June 2004 and has exceeded expectations with more than 1,200 members at December 31, 2007. structure of the Kentucky Highlands Empowerment Zone has caused the residents to accomplish these successes on their own. As implementing the Strategic Plan has progressed, so have the alliances within the Kentucky Highlands Empowerment Zone. The school systems in Jackson County and Clinton County have been active participants because of the new vocational school and recreation complex in Jackson County built in part with KHEZ funds. In each of these benchmarks, the ownership of the facilities has been or is being transferred to the local school systems to insure on-going operations. In fact, the Clinton County Schools began a $5 million expansion of the 21st Century Learning Center in 2007 that will be ready for the beginning of school in August 2008. USDA Rural Development awarded the project a $499,000 Rural Business Enterprise Grant (RBEG) to assist with construction. The center is fully occupied and added after-school and summer programs in 2004.

A key partner for the KHEZ has been the Federal Home Loan Bank of Cincinnati. The Lead Entity, Kentucky Highlands Investment Corporation on behalf of the KHEZ entered a formal alliance with the Federal Home Loan Bank of Cincinnati (FHLB-Cincinnati). This agreement ties the organizations together in an effort to bring further housing and economic stimuli to the region. The FHLB-Cincinnati and the Appalachian Federal Credit Union (AFCU) formed a partnership with KHIC on a successful HUD Rural Housing & Economic Development grant application during the period to help finance the opening of a new branch of the AFCU to serve Clinton, Wayne and McCreary (an EC) Counties. This branch opened in June 2004 and has exceeded expectations with more than 1,200 members at December 31, 2007.

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