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 for the MET, which can be utilized for both operating costs and capital assistance.  For FY 13, the MET is intending to utilize this grant for operating costs as it has in the past.  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 $1,426,389.

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 July 26 and August 2, 2012.

The City Council may:

• Approve the Resolution that authorizes filing of the grant application in the amount of $1,426,389 for operating assistance and authorizing the Mayor to execute the grant when received; or
• Not approve the Resolution and do not file the grant application, which would reduce the MET's operating revenue by about 30% and force MET to make severe service reductions.

For FY 13, the Section 5307 Federal grant application for operating assistance is $1,426,389, which represents approximately 30% of the MET's operating revenue.  This amount was included in MET Transit's FY 13 budget.

Staff recommends that Council conduct a pubic hearing and approve the Resolution authorizing the filing of a grant 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.