IMPACT – Partnerships that work

1. Showcasing the success of Montana’s key economic development programs and partnerships. Presentation Date Location IMPACT – Partnerships that work

2. A BRIEF LOOK BACK… • 1999 Session, Rep. Doug Mood sponsored HB260 entitled “Encourage Economic Development via Investment in Research/Commercialization Projects.” • The bill was a product of Governor Racicot’s Jobs & Income initiative and the Vision 2005 (Agricultural) initiative. The bill was passed into law but used a coal tax diversion for funding. The funding source was ruled unconstitutional by the Montana Supreme Court, leaving the programs unfunded. • A special session was called by Governor Racicot in May of 2000 to, among other things, fund the programs through a constitutional source. • Then Rep.KarlOhs sponsored HB1 during the 2000 Special Session. It was a bill entitled “Legislation appropriating funds from the General Fund for programs established through the good-faith efforts of the Fifty-Sixth Montana Legislature in HB260.”

3. AS A RESULT: KEY ECONOMIC DEVELOPMENT TOOLS Since that time, thanks to the united efforts of great leadership and a large coalition of partners, the following key economic development programs are funded through June 30th 2019: • Small Business Development Centers • Small Business Innovation Research • Trade and International Relations Bureau • Montana Manufacturing Extension Center • Certified Regional Development Corporations • Research and Commercialization * back to full funding on June 30, 2013 • Growth Through Agriculture * back to full funding on June 30, 2013 • Cooperative Development Centers  These programs have not received additional funding since 1999.

4. ADDITIONAL ONE-TIME-ONLY TOOLS One Time Only or OTO refers to programs funded by the legislature for a single biennium with no specific plans for continued funding. Due to the demonstrated success of the these programs, MEDA and its partners will seek continued funding during the 2013 Legislative Session for the following: • Food & Ag Development Centers • Workers Training Grant Program • Indian Country Economic Development Program • Montana Main Street Program • Montana Energy Promotion and Development Division • Incumbent Worker Training Grant Program

5. IMPACT – Partnerships that Work The following slides will demonstrate each program’s strengths, purpose, dollars leveraged and success, thereby contributing to Montana’s economic growth.

6. Montana Growth Through Agriculture Program (GTA) The Growth Through Agriculture program and the Montana Agriculture Development Council were established by the Montana Legislature to strengthen and diversify Montana's agricultural industry through private-public partnerships that assist in the development of new agricultural products and processes, creating new jobs and expanding small ag-business opportunities.

7. Montana Growth Through Agriculture Program (GTA) • Current Funding: $625,000 • Projects Funded in 2012: 56 • Total Match by Non-State Funds: $3,132.720.00 • For every dollar provided by the State: $7.62 generated

8. GTA SUCCESS STORY • Assisted: Kalispell Kreamery • Description of Need: The Hedstrom Dairy was looking for ways to keep the family farm, find ways to make it more profitable and find a way to offer their children the opportunity to stay on the farm. Kalispell Kreamery was created to process and sell a value-added "cream on top" milk product in a facility right next to the dairy. Assistance was provided in purchasing some of the equipment needed to pasteurize and bottle the milk as well as other costs. Demand grew rapidly which created new challenges, including how to balance growth into new markets with increasing distribution costs. • Assistance Provided: $80,000 to develop the business's on site creamery facility 2009 $2,500 Mini-grant to purchase butter churn and expand product line 2011 $37,570 Loan for equipment to add to product line yogurt and cottage cheese • Outcome:  • Created 5 full time and 1 part time job • Created local distribution company • Support over 15 other agricultural producers in Northwest Montana by purchasing $400,000 annually in alfalfa hay, grain and straw. • Dollars leveraged:$230,000

9. Certified Regional Development Corporations (CRDCs) CRDC’s are responsible for helping local officials, communities and businesses “assess, plan, and facilitate action” within their regions. CRDC’s are required to have the support of all counties and a majority of the incorporated cities and towns in their region to obtain and maintain certification. CRDC’s receive regional capacity building grants from the Department of Commerce on an annual basis.

10. Certified Regional Development Corporations (CRDC) SFY 2011 • Current Funding: $425,000 per year • Funds Leveraged: $13.6 million • Jobs Created/Retained: 645 • Businesses Assisted: 1,081 • Loans Provided: 61 • Total Loan Value: $12 million

11. INSERT YOUR CRDC SUCCESS STORY HERE (suggested outline below) • Name of CRDC • Business/Agency Assisted • Description of Need • Assistance provided • Outcome • Dollars leveraged

12. Montana Technology Innovation Partnership The Montana Technology Innovation Partnership (MTIP) is a Montana Department of Commerce initiative created to promote technology commercialization as a viable economic development strategy for the State of Montana. Our mission is to help build the short-term benefits of technology research and development into the long-term rewards of economic development.

13. Montana Technology Innovation Partnership • Current Funding: $50,000 per year • Montana Awards Received 2000-2011: 400 • SBIR Funds to Montana Companies 2000-2011: $102,736,841 • Annual SBIR Average Awards made to Montana Companies: $9,339,712 Source: SBIR.gov plus specific agency award listings 2012

14. Trade and International Relations Bureau The Bureau provides information and technical and marketing assistance to help Montanans pursue business opportunities, both domestically and worldwide. Export trade and marketing specialists provide consultation and training for companies to successfully compete in new markets.

15. Office of Trade and International RelationsStatistics from 2000-2010 • Current funding: $300,000 per year • Export Sales in 2011: $2.46 billion • Total Export Sales since 2000: $15.6 billion • Export Sales Average Increase per year: 9.63% • Businesses Directly Assisted per year: 462 • Made in Montana participants as of May 2011: 2,567

16. Trade and International Relations Bureau In 2011 Montana companies sold $2.46 billion in combined exports to destinations across the globe.

17. Montana Small Business Development Centers The Montana Small Business Development Centers provide one-on-one professional counseling, group training, and resources to individuals and small businesses that could not otherwise access or afford these services through a network of 10 statewide offices. SBDC’s help primarily with the development of business plans, financial projections, market research, and financing strategies.

18. Montana Small Business Development Centers • Current Funding: $125,000 per year • State’s Return on Investment of Dollars (Federal/Local Match): $5.57 for every $1 • Number of loans/capital infusion dollars 2011: $38,112,356 • Businesses Counseled/Trained 2011: 974 • Total counseling hours (Contact/Travel and Preparation): 5,729 • Training Attendees 2011: 1,572

19. SBDC REGIONS The ten regional offices shown on the map below provide customized, one-on-one counseling and technical assistance to small businesses.

20. Montana Manufacturing Extension Center (MMEC)    The Montana Manufacturing Extension Center is a statewide manufacturing outreach & assistance center staffed by full-time professionals with degrees in engineering and extensive experience in manufacturing and business in a variety of industries. MMEC has a proven record of positive impact for client firms and the economy.

21. Montana Manufacturing Extension Center (MMEC) Statistics from January 2010 through December 2011 • Current Funding: $200,000 per year • Clients Served: 43 • Counties Served: 14 • Jobs Created/Retained: 1,245 • Increased Sales: $402,502,000 • Client Investment: $49,836,900 • Return on Each State Dollar Investment (2011): $13.40

22. MMEC Success Stories View MMEC Success Stories at www.mtmanufacturingcenter.com • Montana's PFM & Land Tamer to New Pinnacle of Growth www.landtamer.com • Innovation Meets Standardization: Neuralynx Pursuing the Medical Device Market www.neuralynx.com • Northwest Factory Finishes Applies Center Expertise for Bold Growth Move www.NWFF.com  • Granrud’sLefse Shack www.lefseshack.com

23. Montana Cooperative Development Center (MCDC) The Montana Cooperative Development Center (MCDC) works with new and existing co-ops and other groups to evaluate co-op business models and strategies to meet their objectives. MCDC is a nonprofit corporation with financial assistance from state and federal sources, which allows MCDC to offer services at little or no cost to project groups.

24. Montana Cooperative Development Center (MCDC) • Current Funding: $65,000 per year • New Cooperatives Formed: 45 • Cooperatives Pending: 10 • Jobs Created/Retained: 531 • Total Payroll Benefit: $19,595,712 • Grants Provided: $32,500 • Funds Leveraged: $4.6 million Statistics from Program Inception in 2000 through September 2012.

25. Montana Cooperative Development Center (MCDC) A Sampling of Projects: Linx Transportation Co-op Last Chance Cafe ( Sunburst) Mobile Home Park Co-op Vegetable Growers Co-opWomen's Business Incubator Co-op Riverside Crossing CooperativeNorthwest Pork Cooperative Lazy JC CooperativeNorth Central Senior Housing Co-op Got Socks Community Owned StoreHamilton Farmers Market Cooperative Big Fork Farmers Market CooperativeWind Energy Artitudes Art Gallery Micro Brewery, Commercial Kitchen and Restaurant Cooperative (Glendive) Montana Branded Beef Association Cooperative (MBBA) (Statewide)Montana Organic Producers Coop (Statewide)

26. Montana Board of Research and Commercialization Technology The Montana Board of Research and Commercialization Technology was created to provide a predictable and stable source of funding for research and commercialization projects to be conducted at research and commercialization centers in Montana. The purpose of the program is to encourage economic development through investment in research projects that have a clear path to commercialization.

27. Montana Board of Research and Commercialization Technology • Current Funding: $1,275,000 per year • Dollar amount for 181 projects funded: $37million • Non-State matching dollars leveraged to date: $42 million • Follow-on New Funding: $230 million Statistics from program inception in 1999.

28. Montana Board of Research and Commercialization Technology Quotes and Testimonials • Spatial Spectral Coherent Holographic Integrating Processor S2 CHIP: Device characterization, performance evaluation and optimization Wm. Randall Babbitt, Spectrum Lab, Montana State University, Bozeman ...a small number of investments led directly to...the creation and growth of at least two strong Montana companies, and indirectly to the start of at least two other Montana companies. • OsteoSelectDemineralized Bone Matrix Putty for Orthopedic Bone Grafting Applications Gregory Juda, Chief Scientific Officer, Bacterin International, Inc., Bozeman Sales for the OsteoSelect product generated $4.7 million in revenue for 2011 and $2.9 million for the first six months of 2012.  We project total sales for 2012 to be approximately $6.7 million for the product.  Currently, we estimate the number of Montana jobs created that are directly related to this project to be at least 12.  Thanks again for your support in making this product a reality.

29. One Time Only – Needs Funding in 2013 Food & Ag Development Centers Purpose of Program • Authorized by the 2009 Montana Legislature, is a statewide network of four centers. Its purposes are 1) to increase Montanan’s capacity to produce food, farm-derived renewable energy, and other value-added agricultural products; 2) to retain in the state’s local communities a greater share of consumers expenditures for food, energy and other value-added agricultural products, and 3) to make the end products of Montana agriculture more accessible to Montanans and others. • If Not Funded • Failure to renew funding for the program would mean that small agriculture businesses would struggle to find industry-specific training on business development activities in a challenging economic environment. • This will greatly decrease the likelihood for success of these entrepreneurs in a state that is dependent upon the growth of agriculture and small business to build and sustain its economic future

30. One Time Only – Needs Funding in 2013 Food & Ag Development CentersStatistics from State Fiscal Year 2012 • Current Funding: $195,000 (down from $250,000 in SFY2010) • Number of Businesses Counseled/Served: 132 • Number of Jobs Created: 42.5 FTE • Total New Products brought to market: 47 • Capital Infusion Dollars: $974,134 (73% private) • Return on Investment: $3.67

31. One Time Only – Needs Funding in 2013 Food & Ag Development CentersSuccess Story Das Kuchenhaus Bakery:  A Growing Business which creates fresh artisan bread and European pastries from family recipes that have been handed down through generations. Description of Need:Marketing plan and materials, website, equipment, business plan and targeting new markets. Assistance Provided: • BeartoothRC&D Food and Ag Development Center staff assisted with needs and directed the family to the Business Expansion and Retention (BEAR) program where they were able to gain access to an accounting professional.   • In 2012, the Beartooth Center assisted Das Kuchenhaus with a Montana Department of Agriculture Growth Through Agriculture $1,500 mini-grant for packaging design for a new product, the Trailblazer energy bar. Outcome:  • Quality Foods Distributing is now delivering Das Kuchenhaus products to grocery and natural food retailers, restaurants, guest ranches, lodges, and foodservice operations in the Northern Rockies region.. • The Zimblemans anticipate hiring two additional staff from the local community as they ramp up production for their growing distribution networks.

32. One Time Only – Needs Funding in 2013 Worker Training Grant ProgramPrimary Sector Workforce, MT Dept. of Commerce Purpose of Program • Provides grant funds to existing and new Montana businesses for new worker training. • Designed to encourage job creation and business expansion in primary sector businesses. Risk if not Funded • Loss of a competitive recruitment and retention tool that most states use to attract and expand businesses. Impact of Reduced Funding Level for FY 12-1 • FY12—$1,000,000—-all funds were awarded to projects within the first nine months of the fiscal year. • FY13—$1,000,000—-approximately 80% of the funds were awarded within the first month of the fiscal year.

33. One Time Only – Needs Funding in 2013 Worker Training Grant ProgramPrimary Sector Workforce, MT Dept. of Commerce • Total Funds Awarded Fiscal Year 2001 through 2012: $12,163,586 • New Montana Jobs Created: 3,123 • Montana Workers Trained: 4,231 • Leveraged Funds Invested in Projects: $223,796,206 • Annual Estimated Return to State General Fund: $14,324,738

34. One Time Only – Needs Funding in 2013 Worker Training Grant ProgramPrimary Sector Workforce, MT Dept. of Commerce SRS Crisafulli– Success Story • The Montana Department of Commerce awarded a $99,225 Primary Sector Workforce Training Grant (WTG) to SRS Crisafulli of Glendive to train 34 workers in the company. SRS Crisafulli manufactures sells and services high capacity, high performance pumps, dredges and power units to customers throughout the United States and in over 29 counties. • The State of Montana’s return on its investment of $99,225 of WTG funds equated to $119,987 annually; thus the payback of the WTG investment to SRS Crisafulli was less than one year.

35. One Time Only – Needs Funding in 2013 Indian Country EconomicDevelopment Program (ICED) Purpose of Program  Since 2005 the Montana Department of Commerce (ICED) grant program is intended to improve economic development opportunities for the eight tribal governments in Montana. Economic development in Indian Country has a 3-legged tool. Each part of the economic development stool is critical to promoting balanced economic development in the tribal communities in Montana: 1. Tribal Government Priority Economic Development Projects ($560,000) 2. Montana Indianpreneur Equity Fund ($126,000) 3. IndianpreneurTraining & Technical Assistance ($24,000)

36. One Time Only – Needs Funding in 2013 Indian Country EconomicDevelopment Program (ICED) • Current Funding: $800,000 per year • Funds awarded through the three categories of ICED activities for FY2012: $710,000 • Funds leveraged from ICED: $24,609,069 • Jobs Created, Retained, or Trained: • Tribal Government 113.8 FTE; 35 PTE, 17 Temp • 46 Businesses Supported; 523 Trained • Entrepreneur Training: 667 Attendees • Matching Tribal Funds: $5.60 per dollar awarded

37. One Time Only – Needs Funding in 2013 Indian Country Economic Development (ICED) Montana Dept. of Commerce SUCCESS STORIES Blackfeet Tribe Oki Communications ($70,000) ICED funds utilized in the project supported the retention of 4 FTE tribal member employees. This project expanded Oki Communication’s internet services on the Blackfeet Reservation to include southeastern and eastern sections of the Reservation. This project was matched with $100,000 by Oki Communications. Aileen Meyer - Finley Creek Greenhouse ($7,000) Aileen Meyer, owner of Finley Creek Greenhouse in Arlee, Montana utilized a $7,000 Montana Indian Equity Fund grant to Increase her inventory in 2009. Aileen matched her award with $43,800 in assets and Inventory.

38. One Time Only – Needs Funding in 2013 Montana Main Street ProgramMontana Dept. of Commerce Purpose of Program • Helps communities strengthen and preserve their historic downtowns by focusing on economic development, urban revitalization, and historic preservation through long range planning, organization, design, and promotion. • Serves as a coordinating resource for communities seeking to revitalize their historic downtown commercial districts and surrounding neighborhoods. Assists designated and affiliate communities in the organization and administration of their Main Street programs and enables communities to identify and secure additional funding opportunities for revitalization projects. Risk if Not Funded • Lower the tax base for municipal governments; decrease property values in the downtown areas. • Decrease the ability of local residents to maintain their community’s historic integrity and residents’ sense of place and belonging. • Small communities would not be able to afford to pay for the technical services that Main Street communities currently receive.

39. One Time Only – Needs Funding in 2013 Montana Main Street ProgramMontana Dept. of Commerce (2011 Data) • Current Funding: $125,000 per year • Net jobs created/retained: 70 • Net businesses assisted: 24 • Number of public improvements: 45 • Value of public improvements: $109,508 • Number of building improvements: 38 • Value of building improvements: $1,361,899 • Number of volunteer hours: 19,582

40. One Time Only – Needs Funding in 2013 Montana Main Street ProgramSuccess Story Assisted: Town of Terry, Montana Description of Need/Assistance Provided: • Growth Policy- To address significant regional economic growth, the Town of Terry utilized Montana Main Street Program funds to develop a growth policy to guide future growth and development in the town’s traditional community setting. • Heritage Tourism Action Plan– Assisted Preserve America grant to develop a heritage tourism action plan in coordination with the community growth policy. Local efforts connected development goals with marketing and branding strategies and the preservation of Terry’s historic and cultural assets. Outcomes: Terry identified three emphasis areas: economic development, the preservation of Terry’s historic, cultural, and natural resources, and community pride. The Town of Terry is ready to capitalize on regional growth and development opportunities while maintaining the charm and sense of place found within this small Montana community.

41. Requesting Additional Funding in 2013 Incumbent Worker Training Grant ProgramAdministered by Montana Dept. of Labor and Industry • Purpose of Program • Provide training grants as an answer to the documented need for incumbent worker training for small business employers. (Businesses with less than 20 employees in one location and not more than 50 statewide.) • Works with small business to provide training dollars to improve the job skills for incumbent workers, improving job security, and salary improvement. • Provides grants to clients of the BEAR Program, MMEC, and/or SBDCs in the amount of $1000 (part time) and $2000 (full time) per year to individual workers, and • Provides grants to business with less than 20 employees in one location and or less than 50 employees statewide. A 20% match is provided by the employer. •  Risk if Funding is Not Increased Failure to increase funding for the program would mean that small businesses, hard pressed by a challenging economy, would continue to struggle to find adequate funding to provide training to improve the job skills and employability for incumbent workers.

42. Requesting Additional Funding in 2013 Incumbent Worker Training Grant Program Administered by Montana Dept. of Labor, in partnership with Governor’s Office of Economic Development, Montana Dept. of Commerce and Montana Economic Developers Association (MEDA) Statistics from SFY 2012 • Current Level Funding: $554,486 per year • Number of Grant Applications Processed: 419 • Number of workers trained: 793 • Total amount expended.

43. Requesting Additional Funding in 2013 Incumbent Worker Training Grant Program Montana Dept. of Labor, in partnership with Governor’s Office of Economic Development, Montana Dept. of Commerce and MEDA Testimonial from Mamalode: My name is Elke Govertsen. The Incumbent Worker Training program has been a game changing opportunity for my business. It has allowed me to attend tech conferences in Silicon Valley, writing and publishing training in New York. I have been able to send staff to trainings as well. We have done online education, events and also local classes. This program is a key reason why my business has grown from a local publication to a national media platform. The education and connections made at these events are priceless. I think the IWT program gives businesses like mine a chance to grow, increase wages and create jobs. It gives us a chance to compete in a global economy.  Mamalode (print, online, iPad, events) www.mamalode.com

44. IMPACT – PARTNERSHIPS THAT WORK • Support the continued investment in proven programs for Montana’s future. • Realize the power of each program to leverage additional dollars and help the private sector to create jobs. • Share in the continued growth of Montana’s economy. • Strengthen multiple economic sectors including local government, higher education, economic development, chambers of commerce, agriculture, cooperatives and the private sector.

45. Showcasing the success of Montana’s key economic development programs and partnerships. Join us on January 15th in the Rotunda to learn more about IMPACT – PARTNERSHIPS THAT WORK 10:00AM – 2:30PM IMPACT – Partnerships that work Thank you!