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 10/11, as we have for a number of years, the MET is intending to utilize this grant for assistance with operating costs.  This grant is funded on a 50% Federal, 50% Local basis.  The FTA will reimburse the City for 50% of MET's eligible operating expenses, up to the apportioned allocation for the year, which will be $1,417,608.

In order to apply for this grant, it is necessary to include with this grant application, a resolution formally authorizing the Mayor to execute the grant agreement with the Department of Transportation (DOT).  There is also a requirement for a public hearing for this grant application.  Public hearing notices were published in the Billings Times on August 26 and September 9, advertising a public hearing on September 27, 2010.

The City Council may:

• Approve the filing of the grant application in the amount of $1,417,608 for operating assistance; or
• Not approve the filing of the grant application in the amount of $1,417,608 for operating assistance.  This will reduce the MET's operating revenue by about 35% and force service reductions.   

For FY 10/11, the Section 5307 Federal grant application for operating assistance is $1,417,608, which represents approximately 35% of the MET's operating revenue.  This amount was budgeted in MET Transit's proposed FY 10/11 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.