Montana Administrative Register Notice 8-111-203 No. 21   11/03/2023    
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In the matter of the adoption of New Rule I pertaining to the administration of the Emergency Shelter Facility Grant (ESFG) Program









TO: All Concerned Persons


            1. On September 8, 2023, the Department of Commerce published MAR Notice No. 8-111-203 pertaining to the public hearing on the proposed adoption of the above-stated rule at page 949 of the 2023 Montana Administrative Register, Issue Number 17.


2. The department has adopted NEW RULE I (8.111.901) as proposed.


3. The department has thoroughly considered the comments and testimony received. A summary of the comments received, and the department's responses are as follows:


COMMENT NO. 1:  Comments were received ensuring shelters are accessible and visitable. 


RESPONSE NO. 1:  A question in the application has been expanded to requests information on the accessibility features of proposed projects.


COMMENT NO. 2A commenter asked if matching funds can be provided by a local government.


RESPONSE NO. 2No. The language in the application guidelines comes from the legislation, which states, "For grants in an amount of $25,000 or more, the grant recipient shall document the availability of matching funds or in-kind contributions of assets with an appraised value from private sources representing at least $1 in value for each $1 of the grant." Department staff will be available to assist nonprofits in documenting this requirement.


COMMENT NO. 3: A commenter requested that Capital Needs Assessment (CNA) for adaptive reuse projects not be required.


RESPONSE NO. 3: The guidelines make this requirement only for rehabilitation projects (including adaptive reuse) with a total project cost of more than $500,000. The intent of this requirement is to ensure all local code, health and safety issues are being addressed by the project, to ensure beneficiaries are safe, and to create long-term solutions. The CNA serves to identify all potential issues and ensure that they are being addressed in the scope of work.  It also provides a basis for establishing cost estimates that are as accurate and complete as possible. For projects costing less than $500,000, the Department will accept other documentation that supports the proposed scope of work and project budget and indicates all outstanding code, health and safety issues within an existing building will be addressed. Projects that do not provide a CNA or thorough documentation supporting the proposed project scope and budget will be ranked lower than those that do. In the event an applicant is unable to provide a CNA with the application submission, a CNA can be provided after funds are awarded but prior to the start of the project. A CNA is an eligible expense for ESFG funds, or matching funds may be used to cover this expense.


COMMENT NO. 4: A commenter asked if ESFG can pay for hot water heaters, washers, dryers, etc.


RESPONSE NO. 4: Water heaters, washers, dryers, other appliances would be eligible costs as part of a proposed project. The intent of prohibiting the use of ESFG funds for furnishings is to ensure the investment makes a long-term difference in communities. Furnishings that need to be replaced on a frequent basis are considered operating expenses and not eligible "general capital improvements" as outlined in the legislation.


COMMENT NO. 5:  A commenter said that several shelters are not using HMIS currently because the system is too burdensome so it should not be required for ESFG.  Using HMIS should be required because it makes stronger applications to HUD for funds through the Continuum of Care.


RESPONSE NO. 5: Consistent reporting is the intent of having recipients report data in HMIS. The legislation requires reporting to the Department of Commerce "to track the outcomes of allocated grants." The department intends to require the reporting of data similar to what is reported in HMIS.  To accommodate the conflicting public comment, the guidelines have been adjusted to delete the requirement to enter the data in HMIS if a nonprofit is not currently doing so. However, the department will collect similar data from nonprofits not using HMIS and consider options for executing a memorandum of understanding to provide that information to the MT Continuum of Care. Privacy of beneficiaries will be protected as permitted by law.


COMMENT NO. 6: A commenter asked what remediation requirements are there with respect to MEPA compliance.


RESPONSE NO. 6: The Montana Environmental Protection Act does apply to the ESFG program. Projects that will have an impact on the natural or human environment must comply with MEPA's process. Department staff will be available to assist nonprofits in meeting that requirement.


COMMENT NO. 7: A commenter asked that the deadline be extended until November 30, 2023.


RESPONSE NO. 7: While comment was also provided that these funds need to be disbursed without delay, providing nonprofits an additional month may help ensure more complete proposals for use of the funds.  The guidelines have been changed to indicate a November 30, 2023 deadline.


COMMENT NO. 8: A commenter asked that communities be allowed to apply that have an unknown scope of need.


RESPONSE NO. 8: To disburse this limited source of funds, applicants must demonstrate and document the need for the proposed project.  This can be provided through data and supplemented with anecdotal information from their communities.


COMMENT NO. 9: A commenter said that the guidelines are ambiguous regarding eligibility of cost reimbursement period.


RESPONSE NO. 9: Section 24 of HB 5 appropriated the $5 million for ESFG "for the biennium beginning July 1, 2023." Costs incurred prior to that appropriation date will not be eligible for reimbursement through the ESFG program. ESFG funds may be used to support projects that began prior to July 1, 2023, but only costs incurred after the beginning of the biennium, for which these funds were allocated, will be considered for reimbursement with ESFG funds.



/s/ Amy Barnes                                                         /s/ Mandy Rambo                            

Amy Barnes                                                              Mandy Rambo

Rule Reviewer                                                          Deputy Director

                                                                                  Department of Commerce


Certified to the Secretary of State October 24, 2023.



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