Montana Administrative Register Notice 8-94-104 No. 15   08/09/2012    
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In the matter of the amendment of ARM 8.94.3727 pertaining to the administration of the 2011-2012 Federal Community Development Block Grant (CDBG) Program









TO:  All Concerned Persons


1.  On June 21, 2012, the Department of Commerce published MAR Notice No. 8-94-104 pertaining to the proposed amendment of the above-stated rule at page 1166 of the 2012 Montana Administrative Register, Issue Number 12.


2.  The department has amended the above-stated rule 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 #1:  A comment was received – in the form of a question to staff – that it was unclear what had been changed in the guidelines, and therefore it was difficult to provide comment.


RESPONSE #1:  There were three major changes made to the Community Development Block Grant (CDBG) guidelines for the 2012 fiscal year.  One change was to increase the maximum amount of grant funds that could be requested, from $20,000 to $30,000 per applicant; the second change was to reduce the amount of local match required to receive grant funds, from a 1:1 matching requirement to a 1:3 matching requirement; and the third change was to clarify, under eligible activities, that historic preservation studies could include a downtown revitalization plan.  Beyond these three changes, minor grammatical changes were made throughout the document, and contact information was updated.


COMMENT #2:  A comment was received from the City of Helena that they (the city) were in support of the proposed increase in grant funding, as well as the reduction in the match requirement.  However, there was concern that by reducing the match amount, the grant funding would not go as far because there would be less of a financial commitment expected for a larger amount of money.  This change was still viewed as positive in that it would provide jurisdictions with less cash on hand the opportunity to complete projects they would have otherwise been unable to fund.


RESPONSE #2:  Previous CDBG guidelines allowed for up to $20,000 in grant funding with a minimum of $20,000 in local match; this would typically result in a total of $40,000 available for a planning project, between grant award and match. With the changes to the new guidelines, the increase in possible grant funding and the decrease in local match required still come to $40,000, if the applicant were to request the maximum amount of funding available.  The change enables grantees to access more money and continue to pay for larger planning projects, even if limited matching funds are available.


COMMENT #3:  A subsequent comment was received from the City of Helena expressing concern that in-kind match is no longer eligible; they (the city) feels this may overburden smaller communities who do not have cash on hand to serve as match for grant funding.


RESPONSE #3:  The decision to eliminate in-kind as an acceptable form of match was, in part, the result of communities having difficulties tracking and verifying their in-kind hours for match; this is reflected in the State of Montana 2012 Annual Action Plan.  In addition to cash match, grant recipients have the option to match funds through loan programs and, in some cases, may utilize other grant funding as viable match.  Grant recipients having difficulty with the match requirements may request a waiver to reduce or waive the match requirement entirely, due to extreme financial hardship.


COMMENT #4:  Two similar comments were received from Rocky Mountain Development Council (RMDC) staff echoing the comments submitted by the City of Helena supporting the increase in the amount of funding available, especially with the rising cost of architectural and engineering studies.  RMDC staff were also in support of the reduction in required local match, but suggested match be reduced even further – possibly down to 1:4 – due to uncertainty of funding options for local government entities.


RESPONSE #4:  The decision to reduce the amount of match required from 1:1 down to 1:3 was a reflection of the guidance provided in the State of Montana 2012 Annual Action Plan.





/s/ KELLY A. CASILLAS                             /s/ DORE SCHWINDEN                

KELLY A. CASILLAS                                  DORE SCHWINDEN

Rule Reviewer                                              Director

                                                                       Department of Commerce



Certified to the Secretary of State July 30, 2012.



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