Staff recommends the City Council approve the Resolution authorizing the MET Transit Division to apply for, accept, and execute Federal and State transit related grants, execute annual required certifications and assurances when available, as well as execute any subsequently awarded grant agreements.

Each year, the MET Transit Division applies for various grants with the Federal Transit Administration (FTA) and/or the State of Montana Department of Transportation (MDT). These grants support planning, capital, training, innovation, and operating assistance. In order to apply for and accept grants with both FTA and MDT, it is necessary to include with the grant applications a City Council approved Resolution formally authorizing the City of Billings' MET Transit Division to submit the applications, execute annual Federal Certifications and Assurances, and any other documentation required to secure the funding. This Resolution also authorizes the execution of any subsequent grant offers or agreements.

Funding is provided either directly to the City as a recipient of federal funds, directly suballocated from the State, or as a pass-through funding mechanism managed by the State; these funds are typically received under Sections 49 USC 5303, 5307, 5310, and 5339, but may include other sections as funds become available. MET Transit receives annual formula grant funds for planning (5303), operating (5307), and capital (5310, 5339), which are apportioned via national funding formulas based upon area population and performance factors of the system. Should competitive grant funds become available, MET Transit staff will also determine if an application for available funds would be appropriate to support current and future transit needs. In general, grant funding for operating assistance requires a 50% local, 50% Federal match rate, while most capital projects and planning are funded at a 20% local, 80% Federal match rate. The FFY25 Federal Certifications and Assurances have been attached as reference; once action is taken by Congress at the national level regarding full-year government funding, FFY26 Federal Certifications and Assurances will be available. 

Typically, MET Transit is eligible to apply for and expend the following estimated formula amounts:

• $210,000 of 5303 planning funds, requiring $52,500 of local matching funds; projects are managed by Billings MET Transit and reimbursed by the MDT. These projects/expenditures are programmed in the Unified Planning and Work Program with the MPO in conjunction with surface transportation planning projects.
• $2,900,000 of 5307 operating funds, requiring $2,900,000 of local matching funds; projects are programmed and managed by Billings MET Transit and programmed annually into the Transportation Improvement Plan (TIP) with reimbursement direct from FTA.
• $120,000 of 5310 capital funds with $30,000 required for local match, for paratransit vehicles, ADA bus stop upgrades, and other applicable projects within the Billings Urban Area; projects are recommended and adopted in the required Human Services Transportation Coordination Plan, are managed by Billings MET Transit and reimbursed via MDT. All projects, including for area agencies, are programmed annually into the TIP.
• $750,000 of 5339A capital funds for replacement of buses and facility projects, requiring $187,500 of local matching funds; projects are managed by Billings MET Transit, reimbursed direct from FTA, and programmed into the TIP.
• MET may also apply for competitive capital funds of varying amounts funded at the same capital ratio of 80% Federal, 20% Local through available State and Federal programs, including the Bus and Bus Facilities program (5339B) and the Low/No Emissions Vehicles program (5339C), which would subsequently be required to be added to the TIP. Since 2021, MET Transit has secured over $7.8 million in competitive funds to support fleet and facility projects. Without these grant funds, the City of Billings' ability to operate a transit system would be significantly reduced. All projects are programmed annually into the Transportation Improvement Plan.

City Council may:

• Approve the Resolution for the MET Transit Division to apply for, accept, and execute grant agreements as well as annual Certifications and Assurances to support both operating, capital, and planning programs; or
• Not Approve the Resolution and direct staff on how to proceed without potentially compromising the receipt of Federal funding to support both ongoing transit operations and capital programs.