Staff recommends that the City Council, after holding a public hearing, approve the Resolution authorizing the City of Billings MET Transit Division to apply for available grants from the U.S. Department of Transportation and the Montana Department of Transportation, and authorize the Mayor to execute all grant documents required in relation to award and receipt of funding. 

Each year, the City of Billings MET Transit Division applies for and receives various grants from the U.S. Department of Transportation via the Federal Transit Administration (FTA) and via suballocations from the Montana Department of Transportation (MDT). These grants include:

• Section 5307 funding, eligible for use in both operating and capital costs. The FTA will reimburse the City up to the total apportioned amount of $1,891,495 and MET Transit intends to utilize the full amount for operational costs. This grant application and acceptance requires approval through the public hearing process; the grant's proposed program of projects was published for review in the Yellowstone County News on February 12, 19, and 26, 2021, and is reflected in the attached document.
• Section 5310 funding, eligible for use in projects in support of transportation for seniors and individuals with disabilities.  These funds are administered through MDT and MET has traditionally used these funds to purchase replacement paratransit vehicles programmed in the City of Billings ERP.
• Section 5339 funding, eligible for use in capital projects supporting bus and bus facilities. These funds are administered through MDT and MET has traditionally utilized the funds for replacement bus purchases, facility improvements, and technology purchases.
• MET Transit may also apply for other grant opportunities as Notices of Funding Opportunities are released and funds become available.

In order to apply for and receive available grants with the FTA and MDT, MET Transit must include a City Council approved Resolution formally authorizing MET to submit the application, receive funds, and submit annual Certifications and Assurances as well as other required documents, and authorizing the Mayor to execute any subsequent grant agreements with the FTA and MDT.

City Council may:

• Approve the Resolution for the City of Billings MET Transit Division to apply for and execute grants providing operational and capital assistance; or
• Not Approve the Resolution and direct the City of Billings MET Transit Division to not file grant applications.  This would reduce MET's Capital funding opportunities as well as MET's operating revenue by over 30%, significantly reducing the City's ability to maintain a viable transit operation.

The fiscal effects of each grant are as follows:

• Section 5307 funding requires a 50% local match, with 50% eligible for reimbursement from the FTA. The FFY21 apportionment for the City of Billings MET Transit system is $1,891,495, which represents more than 30% of MET Transit's annual operating revenue. 
• Section 5310 funding requires a 20% local match, with 80% eligible for reimbursement from FTA via MDT. Through 5310 grants, MET typically replaces paratransit vans costing approximately $80,000 each, with $16,000 (20%) paid using local funding capital reserves, and $64,000 eligible for reimbursement.
• Section 5339 funding requires a 20% local match, with 80% eligible for reimbursement from FTA, both directly and via MDT.  MET has recently utilized these funds for the purchase of replacement buses, other equipment, and facility enhancements. 

The City of Billings MET Transit Division is required to be authorized annually via a City Council Resolution to apply for and accept operations and capital grant funds from the U.S. Department of Transportation. Without these funds, continued operation of City Transit services would be significantly impacted.