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HomeMy WebLinkAbout5H Transfer of CMAQ Funds for Buses O� PR/0�, r 4646 Dakota Street SE Prior Lake, MN 55372 INNESO CITY COUNCIL AGENDA REPORT MEETING DATE: FEBRUARY 24, 2014 AGENDA #: 5H PREPARED BY: CASEY MCCABE, COMMUNITY DEVELOPMENT SPECIALIST PRESENTED BY: CASEY MCCABE AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE TRANS- FER OF CMAQ GRANT FUNDS TO THE METROPOLITAN COUNCIL FOR ACQUISITION OF THREE COACH BUSES DISCUSSION: Introduction The purpose of this agenda item is to consider approval of a resolution author- izing the transfer of Congestion Mitigation and Air Quality (CMAQ) grant funds to the Metropolitan Council for acquisition of three (3) forty -five foot coach style buses. History In 2009, the City of Prior Lake, in partnership with the City of Shakopee, applied for and was awarded a CMAQ grant from the Federal Transit Administration. The grant funds are to be used for the purchase of three (3) forty -five foot coach style buses and two years of operating costs to expand bus service in the re- gion. The three buses purchased with the CMAQ funds are intended to serve the Marschall Road Transit Station, which will expand bus service, provide greater route frequency and balance passenger loads. The CMAQ grant, which totals $1,608,000, provides $1,224,000 for bus acqui- sition and $384,000 for two years of operating costs. A local 20% match is required and was previously approved by the City Council. This request, if ap- proved, will transfer the bus acquisition funds of $1,224,000 to the Met Council. The City of Prior Lake will retain the $384,000 of operation funds. Current Circumstances The Metropolitan Council owns the entire regional fleet of transit vehicles and has entered into a Master Lease Agreement with all suburban transit providers for lease of the buses. Prior Lake entered into an updated Master Lease Agree- ment with the Met Council in February 2012. The Master Lease Agreement requires that the City of Prior Lake only use Met Council vehicles for public transit purposes. Under the Master Lease Agreement, the City of Prior Lake leases these buses for $1.00 per year and the city is responsible for all ongoing operation, maintenance and insurance expenses. The Metropolitan Council has an active agreement with MCI Corporation for the purchase of multiple buses. Allowing the Met Council purchase the buses for the City of Prior Lake will increase efficiency and alleviate numerous procedural steps for city staff. Although the Met Council would be responsible for acquiring the buses, city staff and our transit provider, Schmitty and Sons Transportation, Inc., has and will continue to remain involved in the selection of vehicle specifi- cations. The assignment agreement will transfer the City of Prior Lake's interests in the bus acquisition portion of the CMAQ grant to the Met Council. The Met Council will accept the assignment and assume all of the covenants, terms, conditions, agreements and obligations as well as the payment and reporting responsibili- ties of the CMAQ grant. The assignment agreement states the Met Council agrees to purchase the three buses for the grant project and agrees that after delivery and acceptance of the buses, it will lease the three coach style buses to the City of Prior Lake for the operation of bus service. Additionally, the City Council may recall approving a resolution in May 2013 guaranteeing the Federal portion of operating funds through the CMAQ grant. The reason for the guarantee at that time was in response to recently approved Federal rules, known as MAP -21, which only allowed the grant funds for capital purchases and not for transit operations. Due to the uncertainty about whether or not operating funds approved under previous grant awards would be allowed, the Met Council asked the city to commit to providing both the Federal portion and the local match portion of the operating dollars. For the Council's information, this decision to only allow grant funds for capital purchases was overturned and the City of Prior Lake will receive the operating funds as initially approved. The City of Prior Lake's commitment to provide the Federal portion of the local operation funds will not be required. Conclusion Approval of the resolution authorizing the transfer of Congestion Mitigation and Air Quality (CMAQ) grant funds to the Metropolitan Council for acquisition of three (3) forty -five foot coach style buses will increase efficiency and alleviate numerous procedural steps for city staff. The assignment of the CMAQ grant funds to Metropolitan Council will only apply to the capital funds for purchase of the buses. The City of Prior Lake will retain operation funds under the CMAQ grant of $384,000. FINANCIAL Approval of the Assignment Agreement will transfer $1,224,000 of CMAQ funds IMPACT: - to the Metropolitan Council for purchase of three (3) forty -five foot coach style buses. There is no additional financial impact to the City's transit budget as a result of this Assignment Agreement. As such this is a procedural action to comply with grant commitments and regional requirements. ISSUES: Approval of the resolution authorizing the transfer of CMAQ funds to the Met- ropolitan Council will alleviate numerous procedural steps for city staff dedi- cated to purchasing and grant administration. Grant administration related to bus acquisition will be handled by Met Council, and City of Prior Lake staff will remain involved in selection of vehicle specifications. ALTERNATIVES: 1. Approve Resolution authorizing the transfer of CMAQ Funds to the Metro- politan Council. 2. Deny Resolution authorizing the transfer of CMAQ Funds to the Metropoli- tan Council. 2 3. Table action and provide further direction to city staff. RECOMMENDED Staff recommends Alternative #1. MOTIONS: ATTACHMENTS: 1. Assignment Agreement. 3 * PR/0 4646 Dako ta Street SE Prior Lake, MN 55372 RESOLUTION 14 -xxx A RESOLUTION AUTHORIZING THE TRANSFER OF CMAQ GRANT FUNDS TO THE METROPOLITAN COUNCIL FOR ACQUISITION OF THREE COACH BUSES Motion By: Second By: WHEREAS, The City of Prior Lake applied for and was awarded a Congestion Mitigation and Air Quality (CMAQ) grant from the Federal Transit Administration for the purchase of three (3) forty -five foot coach style buses and two years of operating costs to expand bus service in the region; and WHEREAS, The CMAQ grant, which totals $1,608,000, provides $1,224,000 for bus acquisition and $384,000 for two years of operating costs; and WHEREAS, City staff has determined that it will be more efficient to let the Metropolitan Council procure the buses with City of Prior Lake staff selecting the vehicle options; and WHEREAS, Allowing the Metropolitan Council to order the buses for the City of Prior Lake increases efficiency and alleviates numerous procedural steps for city staff with the Met Council assuming the payment and reporting responsibilities; and WHEREAS, The Metropolitan Council will accept the assignment and assume all of the covenants, terms, conditions, agreements and obligations in and under the CMAQ grant; and WHEREAS, The Prior Lake City Council benefits from the transfer of $1,224,000 from the City of Prior Lake CMAQ award to the Metropolitan Council to procure three (3) buses. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City Council authorizes the transfer of $1,224,000 from the CMAQ award to the Metropolitan Council to procure three (3) buses. 3. The Mayor and City Manager are authorized to execute the Assignment Agreement between the City of Prior Lake and Metropolitan Council. PASSED AND ADOPTED THIS 24th DAY OF FEBRUARY 2014. YES NO Hedberg Hedberg Keeney Keeney McGuire McGuire Morton Morton Soukup Soukup Frank Boyles, City Manager ASSIGNMENT THIS ASSIGNMENT is made this day of , 2014, by and between the City of Prior Lake ( "the City ") and the Metropolitan Council, a public corporation and political subdivision under the laws of the state of Minnesota (the "Council "). RECITALS A. On February 17, 2010, the City was awarded Congestion Mitigation Air Quality ( "CMAQ ") funds in the total amount of $1,608,000 from the Federal Transit Administration (the "FTA ") to purchase three forty -five foot coach style buses and to provide bus service in the City of Prior Lake (the "Grant Project "). The CMAQ funds were granted to the Council pursuant to FTA Grant No. MN -95 -X037 to be sub - granted to the City for the Grant Project. B. The Council has an active agreement with MCI Corporation (Contract No. 08P114) for the purchase of buses. Contract No. 08P114 gives the Council the option to purchase additional buses over - and -above its base order. Having the Council order the buses for the Grant Project through Contract No. 08P114 alleviates numerous procedural steps, and will save the region financially compared with other available contracts the City could have utilized. Contract No. 08P114 meets all FTA requirements. C. The City desires to have the Council order the three forty -five foot buses on Contract No. 08P114 on the City's behalf to partially fulfill the Grant Project. D. To that end, on February 24, 2014, the Prior Lake City Council, by resolution, approved the assignment of its rights to use the CMAQ funds to purchase the buses to the Council, which resolution is attached hereto as Exhibit A. NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the City and the Council covenant and agree as follows: 1. Assignment and Assumption. The City assigns to the Council all of its rights, title and interests in and to the CMAQ grant funds in the amount of $1,224,000 for the purchase of the three forty -five foot buses. The Council accepts the assignment herein and assumes all of the covenants, terms, conditions, agreements and obligations in and under the FTA Grant. The Council agrees to purchase the three forty -five foot buses for the Grant Project by exercising an option on Contract No. 08P114, and agrees that after delivery and acceptance of the buses, it will lease the three forty -five foot coach style buses to the City for the operation of the City of Prior Lake bus service as described in the Grant Project. The City is not assigning its right to CMAQ grant funds in the amount of $384,000 to provide the bus service in Prior Lake. 1 2. Applicable Law. The Assignment shall be interpreted under the laws of Minnesota. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed as of the date first written above. METROPOLITAN COUNCIL CITY OF PRIOR LAKE By: By: Kenneth L. Hedberg, Mayor Date: Date: By: Frank Boyles, City Manager Date: 2 EXHIBIT A RESOLUTION 3