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House Bill 645 Local Government Infrastructure Grant Program
House Bill 645, the Montana Reinvestment Act passed by the 2009 Legislature, provided:
Click on the link above to read the list of authorized projects and grant amounts for counties, cities, and towns as authorized in HB 645.
All of us at the Department of Commerce are anxious to make these funds available as soon as possible for local projects that will put Montanans back to work addressing critical local needs, while stimulating both Montana's and the Nation's economy. We look forward to working with you to make your infrastructure project a success.
Under the HB 645 Local Government Grant Program, local governments receive 90% of their deferred maintenance award upon the signing of the grant contract by the Grantee and the Department.
HB 645 provides that grant recipients must expend 100% of the authorized grant amount on or before September 30, 2010. Unexpended funds must revert to the State and be deposited in the state general fund.
The Department will allow HB 645 grant recipients an additional month - until October 31, 2010 - to submit their Final Project Closeout Form, accompanied by documentation that they have expended 100% of their authorized grant amount by September 20, 2010.
Click on the links for other topics:
All the standard state statutes and regulations will apply to the use of these funds, such as current state laws for bidding thresholds and procedures. The grants are not federal funds and federal requirements, such as Davis-Bacon prevailing wage rates, do not apply to HB 645 local infrastructure projects. State prevailing wage rates, often referred to as “Little Davis-Bacon” wage rates, will apply in situations where they are currently applicable.
Because the grants are not federal funds, federal requirements applicable to projects funded directly under the American Recovery and Reinvestment Act (ARRA) DO NOT apply to projects funded through House Bill 645, the Montana Reinvestment Act passed by the 2009 Legislature, with the exception of the reporting and accountability requirements of the ARRA. The reporting and accountability requirements are applicable, as described under Reporting Requirements at the bottom of this webpage, as mandated by Section 54 of House Bill 645.
If local officials have questions on compliance issues, such as procurement, we suggest that they refer to the Administrative Manual for Treasure State Endowment Program (TSEP) projects, which provides a summary of the state requirements that apply to local infrastructure projects that are using state funds only.
Please see: http://comdev.mt.gov/CDD_TSEP_AM.asp for the text of the TSEP Administrative Manual.
There has been some confusion among local officials caused by the changes in the bill as it worked its way through the Legislature. As HB 645 left the House, it included a list of projects for all counties and municipalities with a specific dollar amount listed for the grant for each local government. The Senate struck the specific amount for each project and instead substituted alternate language that tied the allocations to each local government to the formula used by the Montana Department of Transportation to distribute gasoline taxes.
The amounts of the final allocations for cities and towns and counties shown on this webpage may be different from the amounts that were included in earlier versions of HB 645 because of the application of this formula. In addition, HB 645 was amended to provide that “The department (of Commerce) may retain 1.13% of the amount of the grants to counties, cities, towns, tribal governments, and school districts for administrative purposes.”
As a result, the initial allocation for each local government using the gas tax formula was reduced by 1.13% to provide funding for the administration of the local government grant program. The final figures in the Excel spreadsheets on this webpage reflect the adjustments for program administration by the Department of Commerce, as calculated by the Governor’s Office of Budget and Program Planning.
Preparation of Contracts between Department of Commerce and Local Government
The Department will need to prepare a contract with each local government prior to disbursing the funds. The contract will lay out all the financial and job creation reporting and compliance issues consistent with the requirements of the American Recovery and Reinvestment Act (ARRA). Each local government will need to provide a budget breakdown and implementation schedule using the fill-in the-blanks templates provided on this website).
Governor Brian Schweitzer intends to assure that all the Montana Reinvestment Act projects comply with the spirit and intent of the American Recovery and Reinvestment Act (ARRA) for transparency and accountability. The contract will require quarterly financial, job creation reporting.
Department of Commerce staff hope to keep the contracting process as simple as we can since Department staff will have to prepare contracts for 185 counties and municipalities.
On May 29, 2009, Department of Commerce Director, Anthony J. Preite, sent a letter to all Montana counties, cities, and towns which authorized local governments to begin incurring eligible costs for their HB 645 projects as of May 14th, the date Governor Schweitzer signed HB 645 and the law became effective. No costs related to a HB 645 local government grant can be incurred or reimbursed for activities that take place prior to that date. Funds will be provided to local governments once a contract for the grant is signed between the local government and the Department of Commerce.
Ineligible Activities
The Governor’s Office has directed that the following prohibitions on the use of federal ARRA funds also be applied to state funds awarded under HB 645, the Montana Recovery Act: “No Program funds may be used to fund all or any portion of a casino or other gambling establishment, aquarium, zoo, golf course, stadium, or swimming pool.”
In addition, HB 645 funds may not be used for administrative costs or overhead. The Legislature’s intent was that HB 645 funds be used only for project costs directly related to construction, including architectural or engineering design, purchase of equipment or materials, and construction expenses, including labor. Grant recipients must absorb the costs of project administration with their own resources.
A standard requirement for receipt of federal funds is that the recipient entity's financial management system must meet generally accepted accounting principles. For all local governments that are in compliance with the State's audit and annual financial reporting requirements, the Department of Commerce intends to disburse the HB 645 local government grant funds on a 90/10 basis: 90% of the local government’s HB 645 grant amount will be provided to the local government upon the signing of the contract by both parties: the balance will be sent when the local government has provided all the final reporting information required by the ARRA requirements. We believe that this is consistent with the Obama Administration's emphasis on transparency and accountability for the use of stimulus funds and Governor Schweitzer’s commitment to comply with the spirit of the ARRA.
If local governments need to change the scope of work for their grant project from that specified in HB 645 (see Section 57 (3)(2)(c)i-vii, pages 45-48) the law outlines the procedure for that:
3) The governing body of a county, city, or town may choose to propose to the department of commerce an alternate project to those listed in subsections (2)(a) and (2)(b) based on the criteria in subsection (2)(c). If the alternate project meets the criteria in subsection (2)(c), the Department shall approve the project.
The criteria of subsection (2)(c) include:
(i) designing, erecting, repairing, and remodeling public buildings or making energy efficiency improvements to public buildings;
(ii) designing, constructing, and repairing sewers, storm sewers, sewage treatment and disposal plants, waterworks, and reservoirs;
(iii) designing, constructing, and repairing bridges, docks, wharves, breakwaters, and piers;
(iv) designing, constructing, reconstructing, improving, maintaining, and repairing roads;
(v) acquiring, opening, or widening any street and improving the street by designing, constructing, reconstructing, and repairing pavement, gutters, sidewalks, curbs, and vehicle parking strips;
(vi) designing, building, renovating, and equipping parks and other recreation facilities; and
(vii) installing street lighting.
If a local government needs to change the scope of work for their Local Government Infrastructure Grant project from that specified in HB 645, they can submit a request for the change by mail, e-mail, or FAX. The letter should describe the rationale for the change in the scope of work and how the alternate scope of work is consistent with one of the seven criteria listed above, i through vii. The request will become an attachment to the contract. Requests should be submitted to the address shown below.
Below are links to the formats for the HB 645 Local Government Infrastructure Grant Budget and the Implementation Schedule that local officials can download, fill out, and e-mail back to us so we can prepare the contract for their project.
House Bill 645 Project Budget And Implementation Schedule Formats(pdf)
House Bill 645 Project Budget And Implementation Schedule Formats (Word)
Regarding the implementation schedule, please be aware that HB 645 states:
A recipient of funds under this section must expend the funds by September 30, 2010. Unexpended funds must revert to the state and be deposited in the state general fund.
The completed Grant Budget and the Implementation Schedule should be submitted to the address shown below.
DOCLocalGrant@mt.gov (copy this email address and paste it into your email program or click on the "Email Local Government Grant Program" in the contact information box in the right hand column)
Name and Title of Signatory for the Grant Contract
In addition, please provide the proper legal name and title of your local government’s chief elected official or chief executive officer who will be signing the contract for your grant. This will be incorporated in the signature block for the contract.
Copies of your budget, implementation, and the proper legal name and title of your local government’s chief elected official or chief executive officer who will be signing the contract for your grant should be either e-mailed to:
DOCLocalGrant@mt.gov
(copy this email address and paste it into your email program or click on the "Email Local Government Grant Program" in the contact information box in the right hand column)
or mailed to:
HB 645 Local Government Infrastructure Grants
Community Development Division
Montana Department of Commerce
PO Box 200523
301 South Park Avenue
Helena, MT 59620-0523
Reporting Requirements
(a) Quarterly Recovery Funds Reports. Local officials can download, fill out, and e-mail back the completed reporting form back to the Department of Commerce so we can provide your project information to the Governor’s Office.
Quarterly Reporting Form (pdf) Revised 1/6/2010
During the term of this Agreement, grant recipients must report quarterly, for itself and all contractors, subcontractors, and subrecipient entities, the following information:
(1) The dollar amount of all contractor invoices;
(2) The supplies delivered and the services performed;
(3) An assessment of the completion status of the work;
(4) An estimate of the number of jobs created and the number of jobs retained as a result of the Recovery funds; and
“Jobs created” means the cumulative new positions created and filled, or previously existing unfilled positions that are filled, for each project, as a running total over the life of the project, expressed as “full time equivalent” (FTE), calculated cumulatively as all hours worked (jobs created cumulative work hours) divided by the total number of hours in a full time schedule, as defined by the grant recipient.
“Jobs retained” means the cumulative previously existing filled positions that are saved/retained for each project, as a running total over the life of the project, expressed as FTE, calculated cumulatively as all hours worked (jobs saved cumulative work hours) divided by the total number of hours in a full time schedule, as defined by the Grant recipient.
Job counts should be converted to full-time equivalents. Temporary construction jobs should also be converted to annualized full-time equivalents. For example, 20 full time jobs on a three month project count as 5 full-time equivalent annualized jobs
(5) Name and physical location of all contractors, subcontractors, and subrecipient entities engaged in any of the activities described in Section 7 of the contract, SCOPE OF WORK.
(b) Project Closeout Report. Project Closeout is the process by which the Department determines that all activities to be funded by the HB 645 grant have been completed in accordance with the terms and conditions of the Local Government Grant.
Within 90 days of completion of the final Project, the Grantee must submit a final Closeout Report. The Project Closeout Report must describe:
- the total costs incurred for the Project,
- identify the final completion date,
- summarize any significant problems encountered in carrying out the Project,
- report total hours worked on the project, and
- provide documentation (invoices) supporting each expenditure.
Once the Department is satisfied that the closeout form provides all required information and that the grant recipient has properly documented grant expenditures within the deadline set by HB 645, the Department will transmit the final 10% of their grant funds.
All county governments and most cities and towns use Electronic Funds Transfer for receiving State disbursements. In most cases, it takes no more than a week to ten days for the Commerce financial staff to process a payment, once the paperwork has been approved, so local governments should receive their final ten percent of their grant funds promptly once all the required documentation has been submitted.
Project Closeout Report (pdf)