Sample ICDBG Narrative

6) COMMUNITY DEVELOPMENT STATEMENT

a.1 CAPACITY OF CCTHITA - Rating Factor 1 (30 Pts)

Central Council of the Tlingit and Haida Indian Tribes of Alaska is a federally-recognized Tribe representing 25,896 Tlingit and Haida Indians worldwide. The Council's beginnings stem from the Jurisdictional Act of 1935 through which it sought recognition for the purpose of pursuing Tlingit and Haida land claims in federal court. Those efforts brought about a settlement and the Central Council tribal organization. It is a sovereign entity that enjoys a government-to-government relationship with the United States.

The mission of the Central Council of the Tlingit and Haida Indian Tribes of Alaska (CCTHITA) is to "preserve and enhance the economic and cultural resources of the Tlingit and Haida nations and to promote self-sufficiency and self-governance …" Within that the Business and Economic Development (BED) arm of the Tribe is charged with developing and maintaining efforts and programs that promote business and economic development for our tribal constituents and constituent communities that will ultimately result in their self-sufficiency - goals that are consistent with the HUD ICDBG goals of supporting the development of small and emerging private business enterprises in rural areas.

We are now applying for 2005 Indian Community Development Block Grant funding to set up and carry out a 2-year Southeast Micro-enterprise Mini-Grant Program targeted on 4 eligible communities in the first year and 3 in the second year. Our First Year communities are Hoonah, Hydaburg, Klawock, and Saxman. Second Year communities are Craig, Wrangell, and Douglas/Juneau. To ensure that services are targeted on low and moderate income individuals, BEDD will work with the local Tribes on screening and identifying eligible individuals. A service area map is included as Item 8.

If this proposed program is funded, ICDBG will be partnering with 8 Tribes to help target much needed small business development assistance in the neediest sector of the public - low income and poverty level residents in rural areas. That assistance includes:

• 4 courses (15 days) of intensive local training on existing and potential business owners
• Development of local support systems, mentors and participating local organizations.
• Provision start-up financing for eligible individuals who do not qualify for other sources of business financing.
• Provision extensive follow-up to fledgling businesses in their start-up phase.

We believe that this rigorous, intensive approach will give budding entrepreneurs in rural areas a better chance for success. Although it appears costly, most rural outreach efforts are because of high travel costs. The proposed Trainer/Coordinator and Technical Assistant positions will enable us to enhance small business rural outreach objectives and to meet internal re-staffing requirements in preparation for an aggressive small business start-up effort that begins with mini-grant outreach and ends with the establishment of a self-sustaining revolving loan fund that will be used to provide ongoing low interest financing to eligible entrepreneurs.

o Administrative Capability (10 pts)

The Council's headquarters are in Juneau, but its commitment to serving the Tlingit and Haida extends throughout the United States. The Council offers a wide range of services to its tribal members and constituent communities including public safety, social services, business and economic development, housing, education, youth and elder's services and substance abuse. With an annual budget in excess of $27 million and a staff of more than 200 employees, the Central Council is a major economic force in the Southeast Alaska region.

The tribal organization itself has more than 35 years of experience operating a range of individual and community service programs. Those years of experience in the regional contract and grant arena have led to well-developed administrative systems and an efficient structure. Today we operate over 50 programs supported by more than 200 grant funds.

Administratively, the Central Council has a solid track record with well-established support systems, as well as an excellent history of political stability and self-governance. It uses fund accounting to ensure compliance with finance-related legal requirements. All its funds and accounts are audited on an annual basis by independent auditors to ensure our continued conformance with generally accepted accounting principles.

o Managerial and Technical Capability: Business and Economic Development Department

As far as our program management capability, the Business and Economic Development (BED) Department has been a crucial part of the Central Council's outreach to communities since 1968. Throughout that time, BED has captured funds from a variety of sources to design and carry out business development activities in the interest of creating jobs, economic development activities directed at helping communities develop priority projects and infrastructure, planning and technical assistance activities designed to building local and regional capacity, and advocacy activities to protect Native interests at the state and national levels.

We have included highlights of those involvements here. If requested, we can forward our publication, titled "Twenty-Six Years of Business and Economic Development" (1971-1997), which details BEDD activities and involvements over the years. Business development has been a key element of our outreach efforts throughout those years. Here are highlights of our major program efforts:

- 1971, CCTHITA begins relationship with EDA - Through this ongoing relationship and funding support, BEDD has been able to provide business development assistance to Southeast communities. That relationship continues today.
- 1972, Tlingit & Haida Local Development Corporation to promote, assist and procure the economic growth and development of southern and southeast Alaska communities by promoting and assisting the organization, growth and development of business and commercial concerns, including small business development.
- 1973, Tlingit & Haida Contractors Association
- 1974, Loan Guarantees to Individuals & Community Councils
- 1976, Community Loans
- 1987, Tlingit & Haida Economic Development Authority to professionally advise and manage all the Central Council's business and economic development activities.
- 1989, Business Incubator
- 1992, Business & Economic Development Commission
- 1992, Tinaa Corporation created by BEDC to provide technical assistance and lend money to tribal members in small business start-up.
- 1995, Vocational Training and Resource Center to provide small business training
- 1997, Inspired Technologies
- Tlingit and Haida Technology Industries: a100% tribally-owned 8(a) enterprise; a certified SBA 8(a) Disadvantaged Business Enterprise (DBE), Minority Business Enterprise (MBE), Small Business (SB) and a Very Small Business (VSB) Enterprise; a state certified Disadvantaged Business Enterprise (DBE) Contractor.
- 2000, begins economic development relationship with USHHS CSBG. Through this ongoing relationship and funding support, BEDD has been able to provide business development assistance to Southeast communities. That relationship continues today.
- 2000, begins small business development relationship with USDA Rural Development. We currently have an application in to carry out innovative training and technical assistance.

· Small Business Development Experience

The publication "Twenty-Six Years of Business and Economic Development" not only documents our business and economic development activities, it serves to demonstrate our ongoing commitment to and relationship with our constituent communities. Over time we have provided business technical assistance, training, financing and various combinations of those services. More recent experiences will be discussed here.

In 1971 the Tribe began receiving EDA funds to provide planning and development assistance to businesses and communities. In 2000 we began our relationship with the Health and Human Services CSBG Program, which supports department business and economic development services. Those fund sources continue to support our business outreach activities today.

In 2001 we were successful in capturing USDA Rural Development to carry out a technical assistance program in Prince of Wales communities. At about the same time, we were able to launch a similar program to provide services to Kake, Angoon and Hoonah also funded by Rural Development. Those programs were closed out in 2004. We have reapplied and are waiting to hear whether a proposed technical assistance and model training program is funded.

Following is a sample list of the kinds of requests that we continue to process:

- IRA would like to expand its waste wood facility
- IRA would like to upgrade its office space to enhance its rentability; also examining the potentials of starting a local bus service
- The Wrangell IRA would like strategic planning assistance
- Individual would like to set up a kiosk to provide internet access at the airport
- Individuals would like to expand their home to provide assisted living services; they are already licensed.
- Individual has a home renovation and repair business; needs training on finances
- Individual looking for capital to mill wood locally - expanded products and capability.
- Individual is looking for assistance in applying for disadvantaged business status - forest products.
- Individual is looking at starting a cab company in Craig

In 2005, we propose to expand our services with ICDBG funds by providing local training and strong local support services. A key objective of these activities is to use innovative training technologies to strengthen local economies through business start-up and job creation. We believe that ICDBG will enable the Tribe to lay the groundwork for the start-up of a revolving loan in early 2007. Through that, the Tribe will be able to provide sustainable financing services to Southeast communities.

· Managerial and Technical Staff

The Business and Economic Development (BED) arm of the Tribes has been involved with developing and maintaining efforts and programs that promote business and economic development for members and member communities for years. Our extensive experience in rural Alaska has brought about a familiarity the challenges to economic development in rural Alaska, and an understanding of the most likely solutions. For that reason, small business or micro-enterprise development has been and continues to be a top priority in the Tribe's economic development efforts. Micro-enterprise Program staff will operate out of the Business and Economic Development.

BEDD is under the direction of Corrine Garza, the Chief of Business Operations, who oversees the Tribes business functions, including Finance and Computer Information Services. With a BA Degree in Economics from Stanford University and a MBA Degree in Finance from the University of Washington, Graduate School of Business, Ms. Garza has been with the Tribe for seven years. Her degrees are supported by more than 20 years of top management experience in the tribal, profit and nonprofit sectors. She has thorough knowledge of loan, grant and contract requirements and procedures and a complete familiarity with Southeast community and regional economies. Five percent (5%) of her time will be spent overseeing this proposed business mini-grant project.

Gordon Jackson is the Manager of the Tribes' Business and Economic Development Department. He oversees department operations and directly supervises the Project Coordinator and the Department Secretary. Gordon has an Associate of Arts Degree from Sheldon Jackson College and a Bachelor of Arts Degree from the University of Alaska. Gordon has more than 20 years of business and grant management experience in the tribal, nonprofit and profit arenas including his most recent 5 with the Tribe. He is the Chairman of Kake Tribal Inc. and serves on a number of state and national boards and commissions. All of his experience is Alaska specific. While Gordon has assumed the responsibility for most of the Department's resource management activities, ten percent (10%) of his time will be spent on this project providing management oversight and business technical assistance.

Arlene Dilts Jackson was hired as the Department's Project Coordinator in September of 2004. As part of the Business and Economic Development management team for of the Tribes, she is charged with developing and maintaining programs that promote business and economic development for tribal constituents, and with administering EDA, HHS/CSBG, BIA, USFS, ADF&G, Rural Development and other grants. She provides economic development assistance to communities and small business assistance to owners and potential owners. Because she currently spends twenty percent of her time providing individual one-on-one counseling to owner/potential owners of small businesses, this percentage of time will be dedicated to the project.

Although Arlene was hired to provide improved outreach to eligible communities and individuals, she and Gordon are the Department's only two professional staff members. This means that the Department has had to focus on projects with a broader community impact. The proposed Trainer/Coordinator and Technical Assistant positions will enable BEDD to enhance small business rural outreach objectives and to meet internal re-staffing requirements in preparation for an aggressive small business start-up effort that begins with mini-grant outreach and ends with the establishment of a self-sustaining revolving loan fund that will be used to provide ongoing low interest financing to Southeast businesses. The focus will be on rural communities.

Resumes for key staff are included in the Attachment Section. While there is a more than 60 years of business management experience represented among these three individuals, we have built excellent credentials into the Micro-enterprise program staff, because these two individuals that will be required to prepare for the set up of a revolving loan fund, through which ongoing, sustainable outreach could be provided to rural communities.

· Project Implementation Plan & Program Evaluation (7 pts)

Specifically, the Central Council will be setting up a 2-year Southeast Alaska Micro-enterprise Program through which we will provide training and technical assistance, and business start-up financing. This proposed ICDBG project represents Year One of Phase One of a tribal effort to set up an ongoing sustainable small business program that can target needed technical assistance and financial resources on distressed rural areas. Phase Two involves the establishment of sustainable revolving loan fund to help accomplish this. Following our project objectives:

· To acquire credentialed and experienced staff with the expertise necessary to carry out this program and to prepare for the set up of a tribal revolving loan fund.

- A Micro-enterprise Trainer/Coordinator will carry out the main thrust of the program.
- A Business Support Technician will assist the coordinator in providing training and one-on-one counseling services.
- Proposed staff will work collaboratively with internal experts in developing the mini-grant and loan program options.

· To provide technical assistance, advice and business support services to owners of micro-enterprises and persons developing micro-enterprises in the form of:

- Local training sessions in business start-up, developing a business plan, use of accounting software, and business financing.
- Individual business counseling throughout the training process with the goal of developing a usable business plan.
- The Business Plan module will be developed to meet the rigorous guidelines and requirements of such agencies as the Small Business Administration and Denali Commission.

· To provide financing in the form of grants and matching grants for the establishment, stabilization, and expansion of micro-enterprises and actual start-up assistance.

- An award committee comprised of the Chief of Business Operations, BEDD Manager and the ICDBG Trainer/Coordinator will be established to review applications for mini-grants.
- Once eligible individuals have completed the 4 required training sessions and one-on-one counseling and have produced a workable business plan that demonstrates business viability, he/she becomes eligible for a mini-grant for start-up costs or stabilization efforts.
- Individual support through the real start-up process.

· To provide mentoring of local micro-enterprise leaders who will provide peer support to other owner/potential owner participants. We believe that the more local and regional support that participants have, the more likely they are to be successful.

- As we develop this pool of talent, these local micro-enterprise leaders can be brought in to other sessions to share their experiences.
- We will also be training tribal and city staff in the interest of developing internal capacity and local support options.

· To develop criteria for the matching and sweat equity mini-grant program that incorporates the following:

- Mini-grants will be matching or sweat equity grants
- The maximum allowed is $10,000 per business/business owner
- Awards will be made only to those who have been unable to achieve financing elsewhere
- Grant dollars cannot be used to pay owner salary
- Owner time/salary can be used as sweat equity
- Matching will be on a 1 to 5 basis; for example for every dollar invested by the business/potential business owner, we will match it with five dollars.
- Applicants must be low or moderate income to be eligible and must fill out a simple income statement to affirm this eligibility. Preference will be given to low income participants first and then to moderate income individuals.
- Awards are to micro-enterprises only; micro-enterprise is defined as 5 employees or less including owner.
- Award preference will be given to businesses/potential businesses likely to create more than owner employment in the community.
- Applicants must have a viable business plan for their business/proposed business.

· To develop business curriculum

- Through consultation with the Vocational Training and Resource Center or other training/educational experts
- To be carried out in three 3-day courses and one 4-day course at the local level: Business Start-Up (3 days); Business plan Development (4 days); Use of Business Accounting Software (3 days); Business Financing (3 days)
- The curriculum would include 2 follow-up days where intensive one-on-one counseling would occur.

· To ensure that ICDBG services are targeted on eligible low and moderate income individuals:

- Training participants will be required to fill out an application which identifies income level and race information. Such applications will be kept on file in the main BEDD offices in a secure place.
- To be eligible for financial assistance a separate application must be completed with detailed personal financial information to support income eligibility and a business plan that demonstrates business feasibility.

· Timeline - Benchmarks, Outputs, Outcomes and Goals - (12 Points)

In timeline format, following are key benchmarks, outcomes and goals that will be observed in the conduct of the project:

· Upon notification of award: attendance at post award session; advertisement for program staff.
· 4 to 6 weeks: screening and interviewing occurs.
· By 6th week: Trainer/Coordinator and Training Technical Assistant hired.
· 6 to 10 weeks: outreach to communities; training schedule developed; local advertising occurs.
· By week 10: award process and requirements are established and approved by Award Committee.
· 10 to 20 weeks: training is carried out in first 2 communities (5 sessions per community).
· 10 to 12 weeks: peer mentor(s) selected to help in training and to work with other local participants.
· 20 to 25 weeks: technical assistance and one-on-one counseling provided to applicants completing training to prepare them for applying for a mini-grant.
· 25 to 30 weeks: applications accepted from participants completing training in first two communities and brought to Award Committee for consideration. Each application must have an accompanying business plan and proof of eligibility for the grant.
· 30 to 35 weeks: BUSINESS START UP BEGINS.
· 25 to 30 weeks: first training segment is evaluated; adjustments made.
· 30 to 40 weeks: training is carried out in 2 more communities (5 sessions per community).
· 30 to 32 weeks: peer mentor(s) selected to help in training and to work with other local participants.
· 35 to 45 weeks: technical assistance and one-on-one counseling provided to applicants completing training to prepare them for applying for a mini-grant.
· 40 to 45 weeks: applications accepted from participants completing training in second two communities and brought to Award Committee for consideration. Each application must have an accompanying business plan and proof of eligibility for the grant.
· 40 to 45: BUSINESS START UP CONTINUES.
· 50 to 52 weeks: Year One close out occurs.

NOTE: YEAR TWO ACTIVITIES PATTERN YEAR ONE WITH ADJUSTMENTS MADE AT CRUCIAL POINTS.

· Financing Criteria

Through this program we will be able to target technical and financing assistance on those individuals with the most limited of personal resources. Although we have chosen mini-grants as the way to provide this assistance, applicants will be evaluated as if applying for a loan. We feel it is important that these budding entrepreneurs be versed in the "ins and outs" of business financing, since funding through this proposed program is limited to a maximum of $10,000 and restricted in terms of what it can be used for.

The purpose of this mini-grant program is to bridge the financial gap between what banks will finance and what the business community needs (including potential business owners). Rural areas are of particular concern.

The Tribe seeks to work with and establish healthy companies that have a good potential for growth, will provide increased employment in Southeast Alaska, and will help diversify our economy. The primary criteria to be considered are:

- Dedicated and experienced management
- Past performance
- Market strengths such as providing a new service or import substitution in Southeast Alaska
- Current economic viability of the business
- High potential for profitability
- High potential for growth

For financial assistance, applicants will be required to fill out an application packet with screening information to ensure that low and moderate income requirements are met, and business plan that demonstrates business feasibility. Following are application information requirements:

CCTHITA APPLICATION (with screening information to ensure that income requirements are met)

ELEMENTS OF A BUSINESS PLAN

1. Cover sheet
2. Statement of purpose
3. Table of contents

I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance

II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow

III. Supporting Documents
Tax returns of principals for last three years Personal financial
statement (all banks have these forms)
For franchised businesses, a copy of franchise contract and all
supporting documents provided by the franchisor
Copy of proposed lease/purchase agreement for building space
Copy of licenses and other legal documents
Copy of resumes of all principals
Copies of letters of intent from suppliers, etc.

· Project Evaluation

The Trainer Coordinator will be responsible for carrying out this evaluation plan and for maintaining all supporting documents on file.

By Project Objective - The project will be evaluated in terms of the objectives listed in the OWP. Were they accomplished? If not, why not. In addition to the measures provided for in evaluation process, there will be an official quarterly review of project objectives at the time that grant financial and project reports are due. Adjustments and alternative strategies can be implemented at that time.

By Budget - The project will be evaluated to determine whether budget was adequate to meet objectives, whether adjustments need to be made to categories based on actual costs, and whether alternative methods need to be used for projections. On going monitoring of expenses will occur through regular review of revenue/expense reports and regular interaction with the Tribe's grants administrator.

By Timeline - The project will be evaluated in terms of timeline to determine whether objectives were met in an efficient and timely manner. There are several natural benchmark points along the way that provide opportunities to evaluate progress and make adjustments based on success and non-successes:

- At week 15, halfway through the first round of training. At this point, the Coordinator will have a feel for how effective the training is and whether or not it is meeting participant needs.
- At week 20, after the first round of training. At this point, the Coordinator would be able to assess the effectiveness of the entire training packet and make adjustments for the next round of training.
- At week 25, the Coordinator would be able to evaluate how effective one-on-one technical assistance (after training) is.
- At week 30, mini-grants are made, criteria is re-evaluated to determine if measures are adequate; adjustments are made if necessary.
- At week 40, the Coordinator would be able to evaluate effectiveness of training and peer mentors.
- At week 45, small business start up has occurred, staff evaluates whether all program efforts have been adequate to small business set-up.
- At week 50, second round of training is evaluated; final program evaluation occurs.

By Impact - The project will be evaluated in terms of whether the goals were accomplished. In this case, was training carried out locally, was after training one-on-one counseling successful, are local businesses started, are mentors in place providing local support, did follow-up occur. Participants will also be asked to offer input on accomplishments.

By Participating Communities - All communities receiving Micro-enterprise assistance will be asked to evaluate outreach training and business start-up services on a quarterly and year end basis. Qualitative and quantitative measures will be used. This will be factored into the final evaluation. All documentation will be kept on file.

By Participating Business Owners/Potential Owners - All entrepreneurs receiving Micro-enterprise assistance will be asked to evaluate outreach training and business start-up services on a quarterly and year end basis. Qualitative and quantitative measures will be used. This will be factored into the final evaluation. All documentation will be kept on file.

· Financial Management (8 pts)

Application of CCTHITA Financial Systems to Project

The Tribe's 35+ years of experience in the regional contract and grant arena have ensured that its administrative systems and structure are well-developed. CCTHITA uses fund accounting to ensure compliance with grant requirements. All its funds and accounts are audited on an annual basis by independent auditors to ensure our continued conformance with generally accepted accounting principles in the United States and to comply with federal auditing requirements. In summary, the Central Council has a solid administrative track record with well-established support systems, and an excellent history of political stability and self-governance.

Tribal Resolution Adopting Fiscal Policy

The Fiscal Policy details internal financial requirements and controls for the Central Council's administrative financial systems to meet 24 CFR part 85 and 24 CFR part 1003. The Tribal Resolution adopting that policy is included as an attachment to this ICDBG proposal. The manual itself is very large so we have outlined its provisions here and are prepared to make the policy manual available if requested.

FISCAL POLICY Introduction and Background - This policy sets forth standard procedures, responsibilities and authorities for financial management for Tribal operations and activities. All managers and employees must comply with these provisions

- Part I - Financial Accounting and Reporting
- Part II - Cost Allocation; Implementing Practices for Federal Cost Recovery
- Part III - Budget Administration
- Part IV - Receipts Banking and Disbursing
- Part V - Fund Authorization
- Part VI - Financial Planning and Investments
- Part VII - Procurement
- Part VIII - Property Management
- Part IX - Travel
- Part X - Audit and Internal Control
- Policy for the General Fund
- Policy for the Tribal Self-Sufficiency Trust Fund
- Policy for the Tribal Self-Determination Fund

· Procurement and Contract Management (5 pts)

The Fiscal Policy also contains internal requirements and controls for the Central Council's procurement and contract management activities for the purposes of meeting 24 CFR part 85 and 24 CFR part 1003. The Fiscal Policy and the Tribal Resolution adopting that policy are included as an attachment to this ICDBG application.

Tribal Resolution Adopting Fiscal Policy - Procurement & Contract Management

The Fiscal Policy details internal financial requirements and controls for the Central Council's procurement and contract management activities. The tribal resolution adopting the most recent amendments to the policy is included with the Fiscal Policies in the Appendix Section.

a.2 NEED/EXTENT OF PROBLEM - Rating Factor 2 (20 Pts)

· Project Meets Community Development Need (5 Pts)

The need to further develop business and economic programs and the lack of human resources at the community level was affirmed by local leaders a November 2004 economic summit meeting sponsored by SEITFWC, supported by CCTHITA, and funded by the US Forest Service. At that November summit meeting, community representatives came from around the region to discuss the distressed state of the rural economies. Small business development was a small beacon in an otherwise dark state of affairs. That need is further supported by concurring resolutions indicating each community's intent to participate in the proposed program.

At the regional level, the Central Council works collaboratively with Southeast Conference to develop and update the Southeast Alaska Comprehensive Economic Development Strategy, which is intended to initiate and sustain a planning and implementation process by which jobs are created, more stable and diversified economies are fostered, and living conditions are improved. That strategy recognizes small business development as crucial to economic development in the region, and to rural areas in particular.

" Project Benefits Neediest Segment (15 points)

Target Communities

The Central Council is proposing to carry out its project in 8 Southeast Alaska communities. Four are communities where low and moderate income residents comprise at least 51% of the population. Klawock has been inadvertently omitted on community list accompanying the ICDBG NOFA. Craig has 42% local and moderate income; Douglas/Juneau has 30% low and moderate income; Wrangell has 43% local and moderate income.

In this section you will find general discussion of the economic situation, followed by specific data on population, unemployment, poverty level and median income, and then information excerpted from a report developed by the University of Alaska, Institute of Social and Economic Research on the Status of Alaska Natives 2004.

First Year Communities:
Hydaburg with 63% low and moderate income
Hoonah with 51% low and moderate income
Saxman with 54% low and moderate income
Klawock with an unemployment rate exceeding the 2004 rate by 82.5%
Second Year Communities:
Douglas/Juneau with 30% low and moderate income
Craig with 42% low and moderate income
Wrangell with 43% low and moderate income

In each community, BEDD will work with the local Tribes in identifying qualifying members for participating in training and receiving technical assistance and mini-grant financing. We will also be announcing ICDBG micro-enterprise services on the local community bulletin board and local television bulletin board. All participants will be required to fill out a brief application to determine low and moderate income eligibility to ensure that all services will be rendered to ICDBG target populations.

The Economic Situation

Remote location, lack of infrastructure, unstable economy, and an unskilled labor force are challenges to economic development in rural Alaska making the cost of doing business high and the likelihood of attracting large industry or projects very, very low. Community economies are part cash/part subsistence, with a significant portion of incoming monies in the form of grants and transfer payments. Local municipalities and tribal governments are operating on ever-shrinking budgets.

The timber and fisheries industries have been depressed for a number of years. The timber industry never rebounded from the loss of international markets. That situation is further exasperated by supply issues. Litigation has tied up most of the available timber on the Tongass. On the fisheries side, there is no lack of resource, but there is also no ready market for it either.

The demographic information discussed herein shows that all target communities have high unemployment rates, low median income, and in general are losing population and precious human resources. The loss of population typically means reduced local capability. That, in combination with limited and seasonal employment, unstable resource economies, lack of local services, and the high cost of living only serves to exasperate economic conditions in small rural communities. If successful, our proposed ICDBG business development effort will help to stop the leakage of funds from communities where micro-enterprises have been successfully started.

Population

The demographics for our target communities were developed using Census 2000 data found on the Alaska Department of Commerce, Community and Economic Development Community Database Online. We have also included the State Demographer's estimate of 2004 population to demonstrate the downward trend. In all cases rural areas are losing population. We believe the lack of local business and employment opportunities is driving residents to urban centers. The number of Native residents and their population percentages are based on data from the 2000 Census. All target communities are rural.

Community 2004 State Est. 2000 Pop. #Natives in 2000 %Natives in 2000
Hoonah 841 860 521 69.4
Hydaburg 349 382 325 89.5
Saxman 391 431 285 70.1
Klawock 848 854 435 58.1
Craig 1,127 1,397 303 21.7
Wrangell 2,023 2,308 358 15.5
Douglas/Juneau 4,888 5,297 656 12.4

Unemployment Rates

In this section includes unemployment data from the 2000 Census and updated 2004 figures from the Alaska Department of Labor. The state unemployment rate for 2000 was 6.7%; for 2004 it was 7.5%. The percentages by which community unemployment rates have exceeded the state rate have been calculated for 2004.

It is important to keep in mind that the Alaska Department of Labor unemployment figures are calculated and presented by borough/census areas. This means that the community rates are a composite of the census area average rate. They are, however, adequate to demonstrate the economic conditions in the target areas. In 2004, the combined target community unemployment rate exceeded the state rate by an average of 65.14%.

Likewise it is important to keep in mind that the current measure of unemployment is determined by the number of individuals receiving unemployment insurance and those that are identified by labor surveys as not employed but seeking work. That measure does not reflect the typical rural situation where individuals are in the labor force but may not seeking work because the work opportunities are known, filled, limited and/or seasonal. Consequently, we have also included percentage information from Census 2000 that identifies all individuals in the work force who are not working. We believe that these figures are a more accurate representation of the economic picture out in rural Alaska.

Median Household Income

The data inn this section was pulled from the Community Database Online, which is based on 2000 Census information and maintained by the Alaska Department of Commerce, Community and Economic Development. That online database presents income and employment data by community. The state median household (HUD) income for calendar year 2000 was $53,900. We have compared the median household income in our target Southeast Alaska communities with that state rate. All target communities have median household incomes that are considerably less than the State MHI with the exception of Douglas which has a median income slightly above the 2000 state rate. We do not believe this reflects the proper percentage for Natives living in the area. Please see the next section for Native data.

Status of Alaska Natives 2004 - ISER Report

- Natives gained more than 8000 jobs between 1990 and 2000, but only 35% are full time and year round.
- Despite job gains, the number of unemployed Natives increased 35% from 1990 to 2000.
- -Incomes of Natives remain just 50 to 60% of other Alaskans, despite gains. Transfer payments are a growing share of Native income.
- Natives are three times as likely as other Alaskans to be poor.
- All the economic problems Natives face are worst in remote areas where living costs are highest.
- Native education levels continue to rise, but haven't yet reached those among other Alaskans.
- Alaska Natives are increasingly urban.

a.3 SOUNDNESS OF APPROACH - Rating Factor 3 (35 Pts)

· Description of and Rationale for Proposed Project (14 Pts)

Through the 2004 HUD Indian Development Block Grant Program, the Business and Economic Development (BED) arm of the Central Council of the Tlingit and Haida Indian Tribes of Alaska (CCTHITA) intends to carry out an 18 month program, through which training, technical and start-up assistance will be provided to owners and potential owners of micro-enterprises in 6 Southeast Alaska communities with high levels of low and moderate income residents.

BED will conduct five training sessions in each community, primarily targeting eligible business/potential business owners, as well as other interested residents. Individuals successfully completing the training and developing a viable business concept and business plan will be eligible for further counseling and start-up assistance in the form of mini-grants up to a maximum of $10,000 on a match or sweat equity basis. Such assistance can be used to develop, expand and stabilize such enterprises. The resulting benefit to the participating communities will be increased local jobs, expanded services and more dollars circulating through the economy.

Our departmental experiences, past and current, show us the challenges of small business development in rural areas. There is very little excess cash circulating in the economy for small businesses to capture. Even if start-up occurs, many businesses flounder due to lack of follow-up support, or they may have received training and technical assistance, but do not have the resources or qualify for loans to start the business. And, of course, there are those businesses that fail due to lack of commitment on part of the owner.

We have factored this into our efforts to develop new programs to support our small business outreach. This proposed ICDBG program will provide more intensive training to be carried out locally. We will train a group of peer mentors to continue to provide support to fledgling entrepreneurs once training and financing are complete. And, we will provide extensive follow-up to shore up fledgling efforts. In summary, we will

- Target 15 days of intensive local training on existing and potential business owners
- Develop local support systems of mentors and participating local organizations.
- Provide start-up financing for eligible individuals who do not qualify for other sources of business financing.
- Provide extensive follow-up to fledgling businesses in their start-up phase.

This proposed ICDBG 2-year project represents Phase I of the Tribe's small business development program. Phase II entails the establishment of a revolving loan fund which will target business financing assistance on eligible individuals and distressed communities. A revolving loan fund ensures that outreach efforts can go on and that funded efforts are sustainable.

While our efforts appear to be costly in terms of numbers of businesses to be started, BEDD believes that the intensive local training, extensive one-on-one counseling, coordination with other internal and external programs, and local mentoring options, when combined, will give participating small business owners a better chance for success.

· Budget and Cost Estimates (5 Pts)

The budget figures were prepared by Arlene Dilts Jackson, BEDD Project Coordinator and are based on actual costs, data available from current programs, and historic information available from earlier programs. BEDD has been in existence for most of the Central Council's 35+ years and is familiar with the challenges, and costs associated with rural service delivery.

Arlene, herself, has eleven years of economic development experience with the Tribe, in which she was involved extensively in program development. That was followed by 14 years of top management experience in the business sector. Prior to coming back to the Tribe, she was the President and Chief Executive Officer for a company valued at over $100 million. Her extensive regional experience has resulted in a familiarity with the costs of service delivery, and the economic challenges in rural Alaska. For more information concerning her qualifications, experiences and accomplishments, her resume has been included in the attachment section.

In this section we will include general discussion of the costs of services proposed through this program. More specific calculations used in developing our budget are outlined in the Supporting Discussion of Specific Activity Costs following the HUD-4123, COST SUMMARY.

The personnel costs were set with an eye to capturing the expertise necessary to carry out a successful micro-enterprise effort. The training schedule for six communities is so intensive that the micro-enterprise staff must hit the ground running.

Travel in the region is a costly item since most communities are remote and accessible only by small seaplane or ferry. When inclement weather prohibits flying, ferries are the only alternative even though they are more time consuming. Central Council policy requires staff to take cost effective and expedient approaches to travel unless there are safety considerations. This has been factored into our travel line item.

Contractual Costs: The going rate for consultants varies from $80 an hour to $200 an hour. We feel we will be able to achieve savings through collaboration with our Vocational Training and Resource Center and so we have used a $50 per hour rate.

· Cost Savings Due to Innovative Design

BEDD's current and past small business outreach prove out the well know truism that it is very, very difficult for small businesses to be successful. Small business start-ups in rural areas are even more difficult. First, the economic situation out in rural Alaska makes it very difficult for businesses to capture the small excess cash circulating in the economy. Second, many small businesses flounder due to lack local support or follow-up. Third, even after individuals have received training and technical assistance, they do not have the resources or qualify for loans to start the business. Our proposed effort addresses these problems:

- Micro-enterprises are more likely to survive in the rural environment.
- We are partnered with local tribes and will be providing training to develop local support for fledgling businesses.
- We will be providing extra training to small business mentors who can also provide additional support to fledgling businesses.
- We will be providing intensive training to local entrepreneurs prior to their application for financial assistance.
- We will be working one-on-one with participating entrepreneurs to assist them in applying for other sources of funding.
- Our funding will only be provided to those who have developed a feasible business plan and who have not qualified for other loan assistance.

Although this appears to be a more costly approach, we believe that bringing the training to the communities, developing a local support base, providing intensive one-on-one counseling and extensive follow-up will bring about larger successes than the typical outreach efforts. The ICDBG cost per business is $15,491 assuming 30 businesses are created; the cost per job created is $7,484 assuming 2 positions per business.

We also expect to realize some savings and service enhancements through collaboration and cooperation with existing and proposed programs. For instance, we anticipate that this proposed ICDBG program will work hand in hand with our proposed RBEG program which focuses on innovative ways to provide long distance training, since travel is such a prohibitive factor in any service provided in rural Alaska.

· HUD Policy Priorities (1 Pt)

The mission of the Central Council of the Tlingit and Haida Indian Tribes of Alaska (CCTHITA) is to "preserve and enhance the economic and cultural resources of the Tlingit and Haida nations and to promote self-sufficiency and self-governance while providing a safety net for our citizens …" The Business and Economic Development (BED) arm of the Tribe is charged with developing and maintaining efforts and programs that promote business and economic development for our tribal constituents and constituent communities that will ultimately result in their self-sufficiency - goals that are consistent with the HUD ICDBG goals of developing viable Indian and Alaska Native communities through the development of economic opportunities. A micro-enterprise start-up program will a tremendous economic impact in terms of job creation, service expansion, and the circulation of dollars in the local economies of small rural communities.

· Commitment to Sustain Activities (15 points)

The Central Council intends to reapply for ICDBG Fiscal Year 2006 funds to carry the Southeast Micro-enterprise Program into all eligible Southeast Alaska communities. This 2-years proposed ICDBG project represents Phase I of the Tribe's small business development program. Phase II, which is slated to begin sometime during the second year of this mini-grant program, entails the establishment of a revolving loan fund which will target business financing assistance on eligible individuals and distressed communities. A revolving loan fund ensures that outreach efforts can go on and that funding outreach is sustainable.

a.4 LEVERAGING RESOURCES - Rating Factor 4 (10 Pts)

· Project Involves Use of Other Resources (10 Pts)

The total In-Kind commitment to the Southeast Micro-enterprise Program is $53,168.00. This represents 12.02% of the program costs in Year One and 12.5% of the costs in Year Two. Confirmation of the Tribes'ability to commit these resources is provided in the Appendix Section.

$8,000/yr - Commitment of In-Kind Services from Communities for Training Rooms (See Tribal Concurring Resolutions). 15 days of local training will be conducted in each participating community. We have placed a cost on the meeting room of $125 per day. The amount is actually higher in urban centers. Communities have committed the use of meeting rooms and support services which we have valued at $125. This makes for a total in-kind donation of $2,000 per community.
$14,921 - In-Kind Commitment of 10 Laptops Purchased with a Rasmuson Foundation Grant. These laptops belong to BEDD and are used in outreach training efforts.
$14,247 - in BIA Compact Economic Development funds, which are under BEDD management to support business and economic technical assistance efforts in tribal communities.
$8,000 - 10% of BEDD Project Coordinator's time underwritten by EDA Capacity Building Grant who is required to provide outreach technical assistance in the same service area.
$8,000 - 10% of VTRC Small Business Instructor's time who is required to perform technical assistance outreach in the same area.

a.5 COMPREHENSIVENESS AND COORDINATION - Rating Factor 5 (5 points)

· Coordination with other Entities (2 points)

Internally in the Tribe

The Central Council meets the training and employment needs of its constituency in a number of ways. Education & Training Services helps to prepare individuals for jobs, careers, or self employment through adult basic education, college classroom training, and adult vocational training. Employment Services prepares individuals to enter the work force through work experience, on-the-job training, employability assistance, support services, direct employment, TERO, youth activities, child care assistance, and tribal veteran services. Through the Vocational Training & Resource Center individuals can receive vocational training and GED services that will enhance their employability.

The Central Council's client database enables us to coordinate our services among these various departments to meet the full range of tribal member needs. BED uses this database system as a tool to maximize its own small business counseling and training function.

Externally with Other Organizations

In order to maximize our resources and provide seamless integration for our clients, we collaborate with numerous agencies and service providers. These collaborations include Southeast Conference, Alaska Village Initiatives, tribes, communities, higher education and vocational programs, local Chambers of Commerce, and economic development professionals in the region.
With Governmental Agencies

With an extensive array of grants supporting more than 50 programs, the Central Council has an excellent working relationship with numerous agencies. BEDD strives to keep on good terms with those agencies that have an economic and business focus including:

- U.S. Department of Commerce, Economic Development Administration
- U.S. Department of Health and Human Services, Community Services Block Grant
- U.S. Department of Agriculture, Rural Development,
- Bureau of Indian Affairs, Compact Funds
- U.S. Forest Service, TEK Funds
- U.S. Department of Agriculture, Rural Utility Service
- Alaska Department of Fish and Game

We anticipate no less than an excellent relationship with the HUD/ICDBG program staff.

· Outputs and Outcomes to Enhance Community Viability

With ICDBG assistance, 9 Tribes will be able to work cooperatively to carry out a micro-enterprise program. Providing training and technical assistance and funding the start-up of enterprises in small rural communities will have a tremendous impact on local economies in terms of job creation and basic services. We anticipate that at the end of the process, we will have

· Assisted in training 40 income eligible micro-enterprise owners/potential owners (five each in six communities) in business start-up, business plan development, use of accounting software, and business financing.

· Assisted in funding start-up of 40 micro-enterprises providing a range of services and products locally. This has the effect of keeping more dollars circulating in the local economy. Currently, rural residents use services and purchase products from nearby urban centers.

· Created 40 positions at a minimum with the potential for an additional 20 to 40 depending on the type of business; most need at least two individuals to maintain regular business hours. These are likely to be low or moderate income individuals, because we are primarily working in communities with high low and moderate income rates. While impact numbers appear small, in a town of 500 with seasonal economies four to six positions can be significant.

· Helped 8 city and local tribal governments build internal capacity and expertise, by opening up training to their development staff. A local support base will be helpful to existing participants. This internal expertise will also be helpful to the local Tribe if it decides to open up its own small business.

· Enhanced the Central Council's business outreach and built the internal tribal capacity so that a sustainable revolving loan fund can be established to meet the ongoing needs of distressed communities, and Native and other income eligible individuals.