HomeMy WebLinkAbout4.A.2. Approval of Resolution No 7314 Guaranteeing Operating Funds for Buses Purchased as a Part of a Congestion Mitigation Air Quality Grant (CMAQ) Consent Business 4. A. 2.
SHAKOPEE
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: R. Michael Leek, Community Development Director
DATE: 06/18/2013
SUBJECT: Approval of Resolution No. 7314 Guaranteeing Operating Funds for Buses Purchased as a Part of a
Congestion Mitigation Air Quality Grant (CMAQ) (A & D)
Action Sought
The City Council is asked to approve Resolution No.7314, a resolution guaranteeing the City's portion of operating
funds for buses being purchased in connection with a 2009 CMAQ grant.
Background
In 2009, the City of Prior Lake, in partnership with the City of Shakopee, submitted an application for a Congestion
Mitigation Air Quality (CMAQ) grant for the expansion of the BlueXpress bus service. The project includes the
purchase of three coach buses and two years of operating funds for these buses. The projected funding is shown in
the table below:
Component Cost Federal Grant Local Match (20 %)
3 Coach Buses $ 1,530,000.00 $ 1,224,000.00 $ 306,000.00
2 Yrs Operating $ 480,000.00 $ 384,000.00 $ 96,000.00
TOTAL $ 2,010,000.00 $ 1,608,000.00 $ 402,000.00
The local match is to be split evenly between the City of Prior Lake and the City of Shakopee.
Current Circumstances
When we submitted the CMAQ grant in 2009, Federal rules in effect at the time allowed these grant funds to be
used both for transit capital and operations. In 2012, a new set of Federal rules, known as MAP -21, was adopted.
MAP -21 only allows the grant funds for capital purchases, and not for transit operations.
CMAQ grant applications must be submitted several years before the actual appropriation is made, in this case 4
years in advance. Because the applications for current funding appropriations were submitted in good faith under
the previous rules, the Federal Highway Administration (FHWA) has been asked for a determination as to whether
or not MAP -21 was intended to apply to these earlier applications. To the best of our knowledge, no official
determination has been made although Metropolitan Council staff continues to inquire about this issue.
As with all Federal transit grants, the Metropolitan Council is the official grantee for the region and receives the
grant funds. These funds are then dispersed to the City of Prior Lake by the Metropolitan Council. Due to the
uncertainty about the operating dollars, the Metropolitan Council has asked the two cities to commit to providing
both the Federal portion and the local match portion of the operating dollars ($480,000), in the event the FHWA
determines the grant funds may not be used for transit operations. This would mean that rather than paying
$201,000 for our local share, the City would pay $393,000, with Shakopee paying the remainder of the local match
in each case. There are adequate funds in the City's Transit Fund for this purpose. The two cities did in the last few
days receive confirmation that a portion of the CMAQ funds will be available for operations costs. As a result the
budget impact on the Transit Fund balance will be less than originally anticipated, and set forthe below.
Recommendation
Because of a lack of quorum, the Transit Advisory Commission meeting of June 13, 2013 was cancelled, and thus
the Commission has not made a recommendation on this item. However, because the Metropolitan Council is
requiring the additional guarantee to move forward with the CMAQ grant, staff is recommending that the Council
approves attached Resolution No. 7314.
Budget Impact
This item does not affect the City's general fund budget. The greatest potential impact if the FHWA should require
that the cities pay the operating costs in total is set forth below.
Component Cost Federal Local Match City Share of
Grant Local Match
2 Coach Buses $1,020,000.00 $ 816,000.00 $204,000.00 $ 102,000.00
2 Years Operating $ 320,000.00 $ 0.00 $320,000.00 $ 160,000.00
TOTAL $1,340,000.00 $ 816,000.00 $524,000.00 $ 262,000.00
DIFFERENCE $ (670,000.00) $(408,000.00) $(262,000.00) $(131,000.00)
Relationship to Vision
This item relates to City Goals A and E.
Requested Action
The City Council is asked to approve Resolution No. 7314, a resolution guaranteeing the City's portion of operating
funds for buses being purchased in connection with a 2009 CMAQ grant.
Attachments: CMAQ
RESOLUTION NO. 7314
A RESOLUTION OF THE CITY OF SHAKOPEE, MINNESOTA GUARANTEEING OPERATING FUNDS FOR BUSES
PURCHASED AS PART OF A CONGESTION MITIGATION AIR QUALITY (CMAQ) GRANT
WHEREAS, the Shakopee City Council recognizes the value of providing quality, cost effective
transit services in the Shakopee Community; and
WHEREAS, the City of Shakopee values its partnerships in transit with the City of Prior Lake and the
Metropolitan Council; and
WHEREAS, The City's 2030 Comprehensive Plan identifies objectives for transit services that are
addressed in part by the Scott County Unified Transit Management Plan (UTMP) and Scott County Transit
Operations and Capital Plan; and
WHEREAS, The City of Prior Lake, in partnership with the City of Shakopee was awarded a CMAQ
grant in 2009 for the purchase of three coach buses to be used in the BlueXpress commuter service,
along with two years of operating funds; and
WHEREAS, There has been some uncertainty about whether or not the current Federal rules
(i.e. Map 21) will permit CMAQ funds to be used for transit operations; and
WHEREAS, the Metropolitan Council has requested that the cities of Shakopee and Prior Lake
commit to providing both the grant funds and the local match for operations in the event that it is
determined that the CMAQ grant funds will not be allowed for operations.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Shakopee, Minnesota as follows:
The recitals set forth above are incorporated herein.
II. The City of Shakopee commits both the grant funds and the operating funds identified in the
awarded 2009 CMAQ grant, subject to the following conditions.
A. The City receives a copy of the written determination by FHWA that CMAQ funds
will not be allowed to be used for operating expenses.
B. The City of Prior Lake agrees to pay 50% of the local share identified in the grant.
III. In the event that the City of Prior Lake exercises its right to refuse the grant, the City of
Shakopee will not be liable for any expenses related to the grant award.
IV. Funding for this project will be taken from the Transit fund.
Adopted in regular session of the City Council of the City of Shakopee, Minnesota,
held the 18th day of June, 2013.
Mayor of the City of Shakopee
Attest:
Julie Linnihan, Finance Director /City Clerk