Second Round Application Guidelines – Economic Action Program

As many of you know, last year the Montana Department of Commerce (DOC) was selected to implement and administer three parts of the U.S. Forest Service’s National Fire Plan; DOC received $1.4 in Title IV funding for Community Planning for Fire Protection, Economic Action Projects and Economic Action Pilot Projects.

A second round of grant applications are now being solicited. A total of $667,216 remains in all combined project areas. Applications are due on May 17, 2002. Projects are designed to achieve the following results:

· Expand and develop wood products related businesses and markets that reduce hazardous forest fuels and retain and/or create local jobs,
· Facilitate the development and/or revision of strategic, interagency and wildfire risk reduction plans,
· Market development and expansion through fund matching with federal, state, tribal, non-profit and manufacturing centers to build sustainable businesses that result in hazardous forest fuels reduction and retain and/or create local jobs, and
· Demonstrate the ability to create, add value to and diversify economic options in local communities using small diameter and/or traditionally under-utilized wood products.

Application guidelines and a budget form are enclosed. If you have questions, please contact me at (406)444-4378 (or [email protected]).

Fran Viereck, Program Officer Business Resource Division, Montana Department of Commerce.

GRANT APPLICATION POLICIES

ECONOMIC ACTION
COMMUNITY PLANNING
PILOT PROJECTS

INTRODUCTION

During the Summer of 2000, Montana suffered its worst fire season in the past quarter century. Big Sky Country became "Big Smoke Country" as 30 distinct fires ravaged the state, leading to the closure of nearly 20 million acres of forests and grasslands. In addition to actual destruction caused by wildfires, Montana was perceptually "closed for the season." In the resulting Federal Disaster Declaration, half of the counties in Montana, and two large Indian Reservations, were classified as major disaster areas. Adding to the steady decline of communities dependent on natural resource based economies; the wildfires in 2000 placed a large number of Montana communities in a high-risk category. The National Fire Plan emphasizes economic actions designed to mitigate the damage and destruction from the 2000 wildfires by restoration of impacted areas and reduction of future fire hazards affecting residents and communities.
In the late summer of 2001, the Montana Department of Commerce was approved to implement and administer three components of the National Fire Plan, utilizing $1.4 million in Title IV funding from the United States Forest Service. In close cooperation with the State and Private Forestry Division in the Northern Regional Office, located in Missoula, the Commerce Department initiated an Economic Action Program, Community Planning For Fire Protection Program and an Economic Action Pilot program. Approximately one half of the funding was awarded in January, 2002. Competitive grants are now being solicited for the combined total remainder of $667,216. The components of the National Fire Plan, that were a response to the disastrous 2000 wildfires, are designed to stabilize Montana communities and prepare them to better endure future uncertainties. Economic sustainability and community enhancement will be the guiding forces for implementation of Montana’s Title IV funding.

The Economic Action, Community Planning, and Economic Action Pilot Projects are designed to achieve the following broad results:

– Expand and develop businesses and markets for wood products that result in the reduction of hazardous fuel in forests and the retention and creation of local jobs;
– Facilitate development and revision of strategic, action, and wildfire risk reduction plans in rural communities;
– Market development and expansion through matching of funds with federal, state, tribal, nonprofit, and manufacturing centers as needed to build sustainable businesses that result in hazardous fuels reduction in forests and the retention and creation of local jobs;
– Demonstrate the ability to create, add value to, and diversify economic options in local communities using small diameter material and/or traditionally underutilized wood products.

The following application guideline areas apply to all three categories. Each category will then be covered independently. Applicants must specify the category applied for in the application materials.

When preparing applications it is advisable to contact the closest Forest Service contact and Commerce Regional Development Officer listed at the end of the guidelines for initial assistance. Potential applicants may be referred to other technical assistance resources depending on the nature and scope of the project being considered, such as local and regional development corporations.

ELIGIBLE APPLICANTS

Montana’s program will be accessible to rural communities, local and regional development corporations, businesses, credible associations/institutions and tribal governments. Based on the most recent census data, applicants may be from local government jurisdictional areas with less than 10,000 population, non-metropolitan counties, tribal governments and rural zones outside the corporate limits of metropolitan statistical areas dependent on natural resource economies. Projects should be community based as much as is reasonably possible. Applicants that document local support through local or regional development corporations and local governments will be given highest priority. All areas should be within 100 miles of a National Forest or National Grassland.

All eligible applicants listed above may apply for Economic Action Projects or Economic Action Pilot Projects directly but should demonstrate local support, preferably through the local government and/or a community based organization. Applicants for Community Planning projects must be local governments. If the project is in an unincorporated area the county is the eligible applicant.

Special consideration will be given to areas with high unemployment, recent outmigration and/or recent wood products mill closures, cutbacks, or with mills and wood products companies at risk. Preference will also be given to areas that demonstrated significant impacts from the 2000 forest fire season and land closures based on the business impact survey conducted last year by the Department of Commerce.

APPLICATION POLICIES AND PROCEDURES

All applications must be signed by the recipient entity. Applications that are submitted by entities that demonstrate extensive experience managing federal grant and loan programs and document local support through local or regional development corporations and local governments will be given highest priority. Multiple applications may be submitted from each entity. Applicants that submit more than one proposal during an application period must clearly prioritize the proposals. The rationale for submitting more than one proposal must be conclusively demonstrated, especially if more than one is submitted for a specific category.

The main application packet narrative cannot exceed 15 pages total (not including attachments) and must contain an original and 5 copies of the following:

n Name, address and contact information for the applicant in the form of a cover letter on official letterhead signed by the authorized official.

n Name, address and contact information for any subrecipients or each key cooperative partner in the form of a letter on official letterhead signed by the authorized official

NOTE: Letters submitted must contain the following statement:

________________ certifies that the information contained in this application is, to the best of our knowledge, true and accurately represents the proposed project, and that all federal and state laws, regulations and requirements associated with this grant application will be complied with in good faith. We understand that additional information may be requested.

n Specify Category (a separate application for each category is required)

n Narrative of project plan that is no more than 15 stapled pages, with no binders or covers, that specifically responds to the criteria and purpose of the category selected and is organized with the following headings in order:
1. Executive Summary – key elements, concise description
2. Eligibility – describe how the applicant meets the eligibility requirements
3. Need – demonstrate level of community and applicant needs (Eligible Applicants)
4. Purpose – respond to issues contained in category section applied for
5. Work Plan – implementation schedule – outline dates and narrative
6. Management Plan – administrative experience, compliance, reporting
7. Budget/Match – use form, provide narrative, document match
8. Results – describe objective and subjective positive results anticipated

n If the project includes direct assistance to a for-profit business or businesses, a current business plan must be submitted for each business as an attachment. Existing businesses must include the three most recent years of complete financial statements and a current interim financial statement (balance sheet and profit and loss statement) that is no more than 90 days old. In addition, a three-year projection of the balance sheet and profit and loss statement must be prepared and submitted that includes the total proposed project financing. This information is in addition to the items listed above and is submitted as an attachment. Start-up companies must submit the three-year projection. The Department will determine, on a case-by-case basis, whether more or less information is adequate for review and analysis.

n Projects involving direct financial assistance to businesses must demonstrate financial viability based on the current and projected strength of the business. A financial analysis will be conducted by the Department using standard analysis techniques. Otherwise strong proposals will not be approved if businesses cannot demonstrate financial viability past the life of the project. Projects involving start-up businesses will generally need higher levels of cash match and owner commitment to be successful in the competition.

n All other information submitted should be included as labeled attachments and stapled separately from the main application items listed above. The Department of Commerce reserves the right to request additional information if needed during the review period, especially if the project contains unique items that may require different information than requested above.

Funding Limits

The ceiling for Community Fire Planning grants is $25,000. EAP and EAPP application amounts must range between $10,000 and $100,000. Exceptions will only be granted for situations where well-defined, reasonable justification is conclusively demonstrated. Funds will be drawn on a reimbursement basis. Requests for payment must be accompanied by billing, invoices, or vouchers. Funding requests must comply with applicable State and Federal requirements, including OMB A-87-Cost Principles, OMB A-102, and OMB A-133 Single Audit Requirements.

Matching funds

A documented 20% minimum match of the entire project cost is required for program applications. The match may be cash, in-kind donations, or any combination. All matching funds must be directly related to planning, implementation, and/or operation of the respective project. Federal funds may not be used to meet the minimum match but can be part of the project. Funds expended prior to the application submittal date will not be considered as match and are not reimbursable with grant funds. Matching funds must be documented by receipts, invoices, timesheets, or other written evidence during the course of project implementation.

Project applications that demonstrate a higher level of matching cash (instead of in-kind) and an overall match percentage exceeding the minimum required will be given significantly higher priority. This is especially true of business applications, which should provide cash match to be competitive.

Progress reports will be required with each request for funding and as deemed appropriate by the Montana Department of Commerce. A final report must be submitted upon project completion.

Eligible Costs – specifically needed for project

– Personnel, including travel, for completing identified projects
– Equipment items
– Supply items
– Contractual services
– Construction
– Other eligible costs directly associated with project
– Matching funds for other related State and foundation grants (excluding
other Federal programs)

Funds used primarily for local administration of the project should not exceed 10% of the total project cost. Applications that maximize the use of funds for activity costs will receive higher priority.

Any equipment purchased with grant funds that costs more than $5,000 may become the property of the Forest Service, at its discretion, after the project is completed. Loans and grants made for the purchase of equipment must be collateralized adequately with a written agreement for recovery of the equipment or its equivalent cost if full payment is not made or in cases of poor performance by the subrecipient. Businesses may want to consider alternative sources for equipment. Business applications can be made for other specific project-related purposes such as job training, feasibility studies (such as required by Rural Business Services), marketing of wood products, product development, etc. Feasibility studies must be directly related to an existing business or the actual start-up of a new business that conclusively demonstrates that it has a feasible business plan.

Application Deadline

The new application deadline will be May 17, 2002. Applications must be postmarked no later than May 17, 2002. Subsequent application rounds will be set as necessary. Applications should be mailed to:

Montana Department of Commerce
Attn: Fran Viereck, Program Officer
P.O. Box 200505
Helena, MT 59620
(406) 444-4378

Questions may also be directed to Gary Morehouse at 444-3146

ECONOMIC ACTION PROGRAM

There is $141,197 available for this category. The purpose of the Economic Action Program (EAP) program is to expand and develop businesses and markets for wood products resulting from fuel removal, provide technical and financial assistance to help communities develop opportunities and enterprises through diversified uses of forest resources, and develop and expand businesses and markets for traditionally underutilized wood as a tool to enhance efficient use of the removed fuels from the forest. The program is not intended to be used directly for logging and hazardous material removal projects. The program is intended to increase the long term demand for wood products by assisting value adding businesses that utilize wood products, especially hazardous fuels. Priority will be given to:

n Projects that increase the use of small diameter logs and underutilized wood material in manufacturing and other similar applications that could include (but not be limited to); furniture, structures and other construction activities, bark bagging, bio-energy applications, mulch, pellets, animal bedding, bridges, rails, etc.

n Activities that help build and maintain sustainable businesses and increase markets that expand the usage of small diameter and underutilized material through market analyses, trade shows, feasibility studies, business plan development, training workshops, network development, wood product and business directories, cooperative development for purchasing and marketing, and other business development activities that result in the retention and creation of local jobs.

COMMUNITY PLANNING FOR FIRE PROTECTION

There is $140,896 available for this category. The primary purpose of this category is to encourage, enhance and facilitate community planning for immediate and future change specifically related to wildfire risk reduction management plans. Applications should be for community planning activities that result in the development of a comprehensive growth and development plan with a specific section that addresses wildfire risk management. The program is not intended for infrastructure purchases like fire trucks or other fire equipment.

Community based plans that are broad based and include sections on economic development and growth management as well as social and environmental issues will be given priority. Community plans must contain specific actions to be taken to reduce fire hazards to communities and must address how the community plans to deal with future wildfire and other catastrophic events. Plans should assess at least the infrastructure needs for response to wildfires such as dry fire hydrants, fire halls, water systems, personnel and equipment. The community must be able to demonstrate that it can monitor and evaluate outcomes from the planning process.

Communities which demonstrate that their planning functions are being coordinated locally amongst various organizations and efforts will be given priority. Planning activities such as those required by the Department of Commerce Certified Community program, the Economic Development Administration Community Economic Development Strategy planning process, land use comprehensive planning conducted by planning boards, and other similar programs must be shown to be coordinated at the time of application, or will be as a goal of the project described.

Activities should include expansion of community-led outreach and education to homeowners and the community about fire prevention and fire hazard risk reduction. Planning should include coordination with all local entities, state, federal, and especially fire fighting entities.

ECONOMIC ACTION PILOT PROJECTS

There is $385,123 available for this category. Although this category is similar to the Economic Action Program, the main difference is that the Economic Action Pilot Program (EAPP) is targeted to demonstration projects that are unique and original and that result in a new process or concept that can be disseminated widely and used elsewhere as a model.

The purpose of the EAPP program is to provide technical and financial assistance to help communities develop opportunities and enterprises through diversified uses of forest resources and develop and expand businesses and markets for traditionally underutilized wood as a tool to enhance efficient use of the removed fuels from the forest resulting in the retention and creation of local jobs. The program is not intended to be used directly for logging and hazardous material removal projects. The program is intended to increase the long term demand for wood products by assisting value adding businesses that utilize wood products, especially hazardous fuels. Priority will be given to:

n Projects that increase the use, particularly in new and unique ways, of small diameter logs and underutilized wood material in manufacturing and other similar applications that could include (but are not limited to); furniture, structures and other construction activities, bark bagging, bio-energy applications, mulch, pellets, animal bedding, bridges, rails, etc.

n Activities that help build and maintain sustainable businesses and increase markets that expand the usage of small diameter and underutilized material through market analyses, trade shows, feasibility studies, business plan development, training workshops, network development, wood product and business directories, cooperative development for purchasing and marketing, and other wood products business development demonstration projects.

n All projects must be able to serve as a model for others to follow and include plans to disseminate and share what is learned through the pilot or demonstration project.

n Funds can be used to design or purchase unique wood processing equipment for demonstration applications. Any equipment purchased that costs more than $5,000 may become the property of the Forest Service, at its discretion, after the project is completed. Secured loans for equipment may be determined an exception on a case-by-case basis.

FUNDING CRITERIA – ECONOMIC ACTION, PLANNING, PILOT PROGRAMS

The following list provides the key criteria discussed above that the Department will use to make decisions on applications submitted during each application cycle.

· Preference will be given to projects that conclusively demonstrate that quantifiable results can be achieved and measured as a direct result of the project, especially the creation and retention of local jobs.
· Project applications that demonstrate a higher level of matching cash (instead of in-kind) and an overall match percentage exceeding the minimum required will be given significantly higher priority. Applicants should maximize other funding as much as possible.
· Projects should be community-based as much as is reasonably possible. Applicants that document local support through local or regional development corporations and local governments will be given highest priority.
· Applications that are complete as submitted and follow the format and instructions provided are more likely to be funded. Clarity and completeness are measures of the applicant’s ability to successfully administer a project
· Applications must demonstrate that projects are ready to proceed upon award and document a sound, well-reasoned proposal with a strong chance of success if funds are received
· Proposals must closely match the purpose and intent of the category being applied for and be eligible
· Projects must be financially and conceptually feasible
· Projects involving assistance to businesses must demonstrate financial viability based on the current and projected strength of the business. A financial analysis will be conducted by the Department using standard analysis techniques. Otherwise strong proposals will not be approved if businesses cannot demonstrate financial viability past the life of the project.
· Projects involving start-up businesses will need higher levels of match and owner commitment to be successful in the competition.
· Projects involving loans to for-profit businesses will only be approved if they involve local or regional development entities with extensive lending experience using government funded revolving loan programs such as the Commerce Community Development Block Grant program, Commerce MicroBusiness loan program, federal Intermediary Re-lending program, Economic Development Administration revolving loan funds and/or others. The application must include the complete financial analysis that is conducted locally for a specific business proposal and evidence that the local review board has tentatively approved the loan pending a funding decision from the Department.
· Special consideration will be given to areas with high unemployment, recent outmigration and/or recent wood products mill closures, cutbacks, or with mills and wood products companies at risk. Preference will also be given to areas that demonstrated significant impacts from the 2000 forest fire season and land closures based on the business impact survey conducted that year by the Department of Commerce.
· Applications that are submitted by entities that demonstrate extensive experience managing federal grant programs or involve contracting and coordinating with experienced grant or loan administrators will be given highest priority.
· Funds used primarily for local administration of the project should not exceed 10% of the total project cost. Applications that maximize the use of funds for activity costs will receive higher priority.

REGIONAL DEVELOPMENT OFFICERS

Eric Hanson (NW Montana)
2 Main Street, Suite #202
Kalispell, MT 59901
(406) 257-2259
(406) 257-2259 FAX
[email protected]

Randy Hanson (NC Montana)
48 2nd Street, Room 211
P.O. Box 311
Havre, MT 59501
(406) 262-9579
(406) 262-9581 FAX
[email protected]

Tod Kasten (E Montana)
P.O. Box 520
Circle, MT 59215
(406) 485-3374
(406) 485-3376 FAX
[email protected]

Terry Dimock (SW Montana)
MT Department of Commerce
1424 9th Avenue
Helena, MT 59620
(406) 444-2787
(406) 444-1872 FAX
[email protected]

Al Jones (SC Montana)
2004 Miles Avenue
Billings, MT 59102
(406) 655-1696 (home)
(406) 962-3914 (RC&D)
(406) 655-0899 FAX
[email protected]

FOREST SERVICE CONTACTS

Beaverhead-Deerlodge NF area contact
Margie Ewing
Building 24, Fort Missoula
Missoula, MT 59804
(406) 329-3848

Bitterroot NF area contact
Nancy Christianson
1801 North 1st Street
Hamilton, MT 59840
(406) 363-7113

Custer NF area contact:
Larry Timchak
1310 Main St.
Billings, MT 59105
(406) 657-6200

Flathead NF area contact
Margie Ewing
Building 24, Fort Missoula
Missoula, MT 59804
(406) 329-3848

Gallatin NF –

General contact
Dave Atkins
Building 24, Fort Missoula
Missoula, MT 59804
(406) 329-3134

Helena NF area contact
Amy Teegarden
2880 Skyway Drive
Helena, MT 59601
(406) 449-5201

Kootenai NF area contact:
Margie Ewing
Building 24, Fort Missoula
Missoula, MT 59804
(406) 329-3848

Lewis and Clark NF area contact:
Lynn Johnson
Post Office Box 869
1101 15th Street North
Great Falls, MT 59403
(406) 791-7709

Lolo NF area contact:
Margie Ewing
Building 24, Fort Missoula
Missoula, MT 59804
(406) 329-3848