Staff recommends that City Council approve the MOA with BBWA for a DNRC grant for a Rim Tunnel Alternative Evaluation.

The Billings Bench Water Association (BBWA) is applying for a grant from the Department of Natural Resources and Conservation (DNRC). The grant is from the Renewable Resource Grants and Loans (RRGLs) program which needs 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 a grant to study the alternatives for the Rim Tunnel.  To do so, DNRC requires the City and the BBWA to enter into a Memorandum of Agreement (MOA) 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 a consultant 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, they would not receive reimbursement from DNRC.

City Council may:

• Approve the MOA; or,
• Not Approve the MOA.  If the MOA is not approved, BBWA willl not have a sponsor and will be unable to use RRGL funds for the Rim Tunnel Alternative Evaluation. 

The BBWA is asking for a grant for $125,000 to study alternatives to the Rim Tunnel.  Technically, the City has liability for ensuring the projects are done in accordance with DNRC requirements.  This MOA 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.