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 and allow the Mayor to execute annual required certifications and assurances, as well as any subsequently awarded grant agreements. 

Each year, the MET Transit Division applies for various grants with the Federal Transit Administration (FTA) and/or the Transit Division of the State of Montana Department of Transportation (MDT). These grants may be available for planning, capital, training, innovation, or operating assistance. Under the current infrastructure and transportation bill, funding is provided either directly to the City as a recipient or as a pass-through funding mechanism managed by the State; these funds are typically received under Sections 49 USC 5303, 5307, 5310, 5311, 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 come available, MET Transit staff will also determine if 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. In order to apply for and accept grants with both FTA and MDT, it is necessary to include with the grant application a City Council approved Resolution formally authorizing the City of Billings' MET Transit Division to submit the applications, the annual 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. 

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.

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

• $200,000 of 5303 planning funds, requiring $50,000 of local matching funds; Federal dollars are managed by the MDT and are programmed in the Unified Planning and Work Program annually with surface transportation planning projects.
• $2,500,000 of 5307 operating funds, requiring $2,500,000 of local matching funds; Federal dollars are managed by the FTA and projects are programmed annually into the Transportation Improvement Plan.
• $96,000 of 5310 capital funds for replacement of paratransit vehicles, requiring $24,000 of local matching funds; Federal dollars are managed by the MDT. 
• $480,000 of 5339A capital funds for replacement of buses and facility projects, requiring $120,000 of local matching funds; Federal dollars are managed by the FTA.

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). Without these grant funds, the City of Billings' ability to operate a transit system would be significantly reduced.