Each year the City of Billings MET Transit Division applies for a Federal Transit Administration (FTA) Section 5307 formula grant through the U.S. Department of Transportation's Federal Transit Act, SAFETEA-LU.  Through this Act, grant funds are allocated each year for the MET, which can be utilized for both operating costs and capital assistance.  For FY 11/12, as has been done for a number of years, the MET is intending to utilize this grant for operating costs.  This is a matching grant with 50% Federal and 50% local dollars.  The FTA will reimburse the City up to the apportioned allocation for the year, which will be $1,421,420.

This grant application requires a resolution formally authorizing the Mayor to execute the grant agreement with the Department of Transportation (DOT).  A public hearing is required for this grant application.  Public hearing notices were published in the Billings Times on June 9 and June 16, 2011.

The City Council may:

• Approve the resolution that authorizes filing of the grant application in the amount of $1,421,420 for operating assistance; or
• Not approve the resolution and do not file the grant application.  This will reduce the MET's operating revenue by about 30% and force service reductions.

For FY 11/12, the Section 5307 Federal grant application for operating assistance is $1,421,420, which represents approximately 30% of the MET's operating revenue.  This amount was budgeted in MET Transit's proposed FY 11/12 budget. 

Staff recommends that Council conduct a public hearing and approve the resolution authorizing filing an application, and for the Mayor to execute the grant agreement with the DOT FTA, upon receipt of the grant offer provided under the authorization of the Federal SAFETEA-LU Act.