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HomeMy WebLinkAboutDept of CommerceM NTANA Department of Commerce DIRECTOR'S OFFICE MAY 2 1 2O04 OF LAUREL TO: FROM: DATE: Persons interested in the Certified Regional Development Corporation (CRDC) and Community Development Block Grant Economic Development (CDBG-ED) Programs RE: Policy regarding CRDC management of CDBG-ED revolving loan funds The 2003 Montana Legisiatare created the Certified Reqional Development Corporation (CRDC) program. The legislative intent of the CRDC program is to encourage a regional approach to economic development that facilitates the efficient delivery of economic development programs by supporting regional capacity building. The statute (HB 76) creating the CRDC program provided the following definition: "certified regional development corporation" means a private, nonprofit corporation that has been designated by the department through a competitive process to manage and administer funds and programs for the department on a regional basis." The CRDC program has been established and funding is being provided by the state pursuant to an RFP (Request for Proposal) to implement the statutory intent of encouraging a regional approach to economic development. Twelve applications have been received by the Department of Commerce for ce~fication of regional development corporations in Montana. Those 12 applicants represent 54 of the 56 counties in the state. The RFP included the requirement that CRDCs establish and manage regional revolving loan funds in order to provide centralized continuity of revolving loan fund management capacity in each region. Each of the applicants was required to provide a letter of support from each of the County Commissions for the counties that they were applying to represent. In order to be eligible as a qualified applicant, the application, with county endorsement, needed to identify the entity that would be responsible for delivering revolving loan fund resources and management for the region. As a result of the passage and implementation of HB76 - the Certified Regional Development Corporation statute, the department is proposing to revise its policy regarding the administration and management of the Community Development Block Grant Proqram for economic development (CDBG-ED). The Department of Commerce believes that the best method of managing complicated CDBG-ED grants and business loans is through Certified Regional Development Corporations that can provide continuity of capacity and management stability. The CDBG-ED funds will also expand regional revolving loan funds that can serve businesses efficiently and also provide the necessary technical assistance to enhance the viability of each project. The proposed policy is consistent with the current CDBG-ED application guidelines that were developed prior to the selection and establishment of the CRDCs. The current CDBG guidelines strongly encourage CDBG-ED applicants to contract with experienced regional revolving loan fund managers and provides for the recovery of program income by the Department in certain circumstances. CDBG-ED application guidelines issued in future years would specifically include this policy for clarity. Public comments regarding this policy can be sent by email to crdccdbg@state.mt.us or by mail to: CRDC/CDBG Policy CDBG-ED Program P.O. Box 200505 Helena, MT 59620-0505 Comments must be received by the Department by 5:00 p.m. on Friday June 11th, 2004. PROPOSED POLICY - REGIONAL REVOLVING LOAN FUNDS Local governments will continue to apply to the Department of Commerce for CDBG-ED grants and these funds will continue to be administered at the state level by the Department of Commerce. CRDC County and Community Applicants: Department of Commerce CDBG-ED funds used for business loans will be managed by Certified Regional Development Corporations on behalf of local government applicants in the region that the CRDC serves. Loan repayments from CDBG-ED loans will be managed by CRDCs in regional revolving loan funds that would provide access to the businesses within each region. Management of CDBG-ED grants would be a cooperative effort through joint agreements between local governments, local development corporations (if applicable) and the CRDCs. CDBG-ED administrative funds could be used by the respective entities as needed to assure compliance with the numerous federal regulatory issues involved with managing CDBG-ED funds, administer loans, and provide technical assistance to businesses being assisted with revolving loan funds. Non-CRDC County and Community Applicants: In situations that involve applications from local governments that are not served by a CRDC, the Department will continue to make grant awards to local government applicants for viable business projects. The local government can manage the project with assistance from the local development corporation (if applicable) and/or a neighboring CRDC. However, business loan repayments will be made to the Department of Commerce and used by the CDBG*ED program to make additional grants to local governments for economic development projects throughout the state. When a local government is later served by a CRDC, any business loan(s) established with CDBG funds, after this policy is adopted, will be transferred to the CRDC for management as part of the regional revolving loan fund. Loan repayments from that point in time forward will be retained by the CRDC for the regional revolving loan fund of which that county or community is a part.