Staff recommends that City Council approve the MOU with Billings Bench Water Association BBWA for DNRC grants.

The Billings Bench Water Association (BBWA) applies for grants from the Department of Natural Resources and Conservation (DNRC).  The grants are used for projects on the canal to maintain and improve sections of the canal to reduce the potential for flooding and leaking.  The grants are generally Renewable Resource Grants and Loans (RRGLs) which need a governmental agency to sponsor them.  Because the citizens of Billings would be impacted by a failure or leak of the BBWA, staff recommends that the City sponsor the grants.  To do so, DNRC requires the City and the BBWA to enter into a Memorandum of Understanding (MOU) to define roles and responsibilities for the project receiving the grant or loan. Generally, the City would act as a "pass through" for the funding, but does incur some risk with respect to grant compliance.  The BBWA would hire consultants and contractors to do the work in accordance with the DNRC rules.  The City would seek reimbursement from DNRC on behalf of the BBWA.  If the BBWA does not meet the requirements of the grant or loan, they would not receive reimbursement from DNRC.

City Council may:

• Approve the MOU; or,
• Not Approve the MOU.  If the MOU is not approved, BBWA willl not have a sponsor and will be unable to use RRGL funds. 

Technically, the City has liability for ensuring the projects are done in accordance with DNRC requirements.  This MOU serves to limit the city's liability and ensure the BBWA carries the financial burden in the event they do not perform the work properly.