Resolution to apply for the MnDOT 2026 Transit Operating Grant. 

Adoption of the attached resolutions.

This action is a process requirement of the Minnesota Department of Transportation's Office of Transit and Active Transportation when applying for federal resources under the Urbanized Area Formula Funding program (49 U.S.C. 5307). The Urbanized Area Formula Funding Program authorizes grants to public transit systems in urban areas with populations of more than 50,000 for both capital and operating projects. Based on population and density figures, these funds are distributed directly to the transit agency from the Federal Transportation Administration. 

The federal and state funding share of eligible operating costs of the Fixed Route and Paratransit demand response continues for calendar year 2026. The local share for Paratransit is 15% and for Fixed Route it is reduced to 15% from 20%.

The federal and state funding share of eligible capital costs for the system continues for calendar year 2026; the local share is 20%.

The City provides the balance of eligible expenses through a local match which may include:

• Cash from nongovernmental sources i.e., farebox revenue
• Non-farebox revenues from the operations of public transportation services, such as the sale of advertising and concession revenues
• Amounts received under a service agreement with a state or local service agency or private social service organization i.e., Minnesota State University – Mankato and North Mankato.
   
• Amounts appropriated or otherwise made available to a department or agency of the government, i.e., transit property tax levy $415,000.

Ineligible expenses include such items as charter bus operations, sightseeing services, services wholly outside the urbanized area, capital replacement funding, or school busing operations.

For the year 2026, MnDOT is continuing its one-year funding cycle. Below are the preliminary budgeted amounts for the Fixed Route and Paratransit demand response.

Greater Minnesota Public Transit Operating Grant Budget - Preliminary

Grant Type	Year	Total Operations	Federal Funds	State Funds	Local Funds
Fixed Route	2026	$4,303,635	$999,920	$2,658,170	$645,545
Paratransit	2026	$1,439,760	$0	$1,223,796	$215,964

The American Rescue Plan Act of 2021 (ARPA) appropriated $1,044,449 for transit operations, which must be programmed by the year 2024 and dispersed by September 30, 2029. 

• Transit will spend an estimated $108,320 on operations leaving a balance of $672,218 with planned yearly drawdowns until expended.

If a service is proposed that impacts the levy, a separate action is required.

Separate resolutions are required for the Fixed Route and Paratransit grant applications.