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LOPMENT
MEMORANDUM
I ECEHE
D
MAR 27 GOl
CITY OF LAUREL
TO: Montana Local Government Officials, Community Development Agencies
and Staff, and Others Interested in Community Development
FROM: Ann Desch, Manager GI
Economic Development CDBG Program
DATE: March 5, 2001
RE: Final 2001 Application Guidelines for the Economic Development
Component of the Montana Community Development Block Grant
(CDBG) Program
Enclosed is a copy of the adopted 2001 Application Guidelines for the Economic
Development component of the Montana Department of Commerce (MDOC) CDBG
Program. The guidelines will be available on the Internet through the MDOC home page
by May 1, 2001.
For funding year April 1, 2001 - March 31, 2002, Montana's total CDBG allocation
available for award to local governments is $8,105,000. The MDOC reserves one-third
of the CDBG allocation, or $2,587,283, for economic development projects.
Communities may begin submitting applications for funding to the Economic
Development Division on or after March 1. 2001. Applications will be presented to the
MDOC Loan Review Committee on a first-come, first-served basis as they are
considered to be complete. Please seek the advice of the Regional Development
Officer in your area or CDBG staff when preparing CDBG applications for funding.
Please keep in mind that the loan review committee meetings or possible award
notifications will not occur until MDOC receives the actual federal funding notice,
normally sometime in April.
Should any additional information be necessary concerning the 2001 Application
Guidelines, timing and availability of 2001 funds, or application procedures, please
contact me at 444-0560, or Leslie Edgcomb at 444-4855.
Following is a short summary of the changes that were made based on the comments
received and policy decisions made by the MDOC:
1) New eligible activity - Special Pro-gram for Summer/Autumn Wildfire-Impacted
Businesses. A maximum of $250,000 in Program Year 2001 only could be
distributed to each existing RLF that would make the loans to individual
1424 9th Avenue • PO Box 200505 • Helena, MT 59620-0505 • PH: 406-444-3814 • Fx: 408-444-1872
businesses located in their service area that were impacted by the fires. The
MDOC developed criteria designating which RLFs would be eligible and
how the funds would be distributed. The interest rate would be between 0% -
4%, which would be set by the local RLF, but could be no higher than 4%. To
allow for maximum flexibility, seventy percent of the dollars loaned in the
aggregate would have to meet the 51 % benefit to LMI.
2) The interest rate was lowered to 6.5% (from 8%) for program year 2001. Lower
or higher interest rates may be negotiated based on proposed job creation and
the loan review committee's perception of risk and return.
3) Technical assistance to the MicroBusiness Development Corporations and State
SBIR Outreach Program activities would be continued. Funding levels
proposed would be $130,000 to be distributed under the following two
categories:
$55,000 for the network of MBDCs. A maximum of $5,000 would be
available to each MBDC region and a maximum of $7,500 to an MBDC
region serving seven or more counties.
$75,000 for SBIR and other technical assistance activities that have
statewide impact.
Any funds that remain uncommitted under any of these categories will be used
for loans to businesses under the regular program.
4) New language regarding thresholds was added to customized employee training:
Clarification that a 1:1 match is also required for an application that is only
for employee training funds.
The training period for which CDBG funds are used cannot extend for
more than one year. At the end of the training period, employees must be
paid a compensation package of salary or salary and benefits totaling
$11.00 per hour.
Only employees working full time, at least 35 hours per week, at the end
of the training period are eligible for reimbursement of training costs. The
definition of what constitutes adequate benefits is subject to evaluation by
MDOC. The Department may consider projects that involve lower
compensation packages only in situations where there is a significant
positive impact overall on the local economy and strong community
support is documented.
The company must provide financial information as listed under the
Business Application Requirements section of the CDBG guidelines.
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LACDBG?Publications101 _Guidelines50ther1MEM02007.doc