Committee advances bill allowing Board of Investments to retain income from workforce-housing fund for Deer Lodge employees

Senate Bill 223, introduced by Senator John Esp (Senate District 209), would allow the Board of Investments to retain interest and other income on a $12 million workforce-housing fund established last session to build housing for entry-level employees at the state prison and the Montana State Hospital in Deer Lodge.

Senator Esp said the program’s units are not intended as permanent government housing but as limited leases — currently five-year leases — that provide employees a way to build equity and later use accumulated funds toward a down payment on a privately owned home. He described the bill as a correction of drafting that moved the original trust into a state special revenue fund; because state special revenue funds do not automatically retain interest, the statute needs to explicitly allow the board to keep interest and income to sustain the program.

Director Villa (Board of Investments) described the project’s development work and market analysis. He said the board surveyed starting salaries for target employees, finding “the CO level 1 average starting salary was around $50,000” and “the psych tech level 1 starting salaries that were about $39,000.” Using HUD guidance on affordable housing (no more than 30 percent of income), the board determined homes affordable to those incomes were well below current market prices in eligible counties, which made a traditional loan program infeasible. As a result, the board worked with a private developer and completed a land swap to enable the Pinprill Meadow subdivision; construction is underway with 28 units in seven-plex buildings and potential for additional seven-plexes.

Director Villa said rental income will pay operating expenses, and that accrued income and interest will be used to provide down-payment assistance to employees when they leave their lease after the five-year term. He provided a projected tentative move-in date of July 1 and said a lottery system for employee selection will open for sign-ups.

Committee members asked about administrative costs and oversight. Villa said the board charged a de minimis administrative fee for the program (an example number given was roughly $300 on the $12 million), and pointed the committee to the board’s website for floor plans, leases and further project detail. Proponents told the committee they view the program as a recruitment and retention tool that “is not permanent government housing” but a revolving resource aimed at helping employees build equity.

In executive action the committee voted to pass Senate Bill 223; the vote was recorded by voice with proxies assumed for absent members. The bill now moves on in the legislative process.

Ending: The board said the model is intended to be replicable for other state workforce needs, and the committee advanced the technical fix so the program can retain interest and income to sustain the revolving assistance model.