Fiscal Note
The proposed resolution authorizes the application from Metro Transit to the State of Wisconsin's Volkswagen Mitigation Program/Transit Capital Assistance Grant Program for funds to purchase 15 replacement diesel buses over a three year period (5 buses per year). This program is structured as zero-percent loan. Jurisdictions that apply for, and accept, the funds will see a reduction in their portion of shared revenue over the loan repayment period.
If Madison were awarded the grant, and choses to accept the funds, the lost shared revenue would total $5.6 million over the loan repayment period; this translates to approximately $562,000 annually (once all 15 busses have been purchased). Shared revenue is a General Fund revenue source, the loss of this revenue may require expenditure reductions or increases in other revenue sources.
Funds from this grant would reduce the number of buses purchased through GO Borrowing, which is ultimately paid back fully through local funds. The table below provides a comparison of purchasing buses utilizing the settlement funds compared to borrowing.
GO Borrowing Settlement Funds Difference
Year 1 284,540 187,500 97,040
Year 2 569,080 375,000 194,080
Year 3 853,620 562,500 291,120
Year 4 853,620 562,500 291,120
Year 5 853,620 562,500 291,120
Year 6 853,620 562,500 291,120
Year 7 853,620 562,500 291,120
Year 8 853,620 562,500 291,120
Year 9 853,620 562,500 291,120
Year 10 853,620 562,500 291,120
Year 11 569,080 375,000 194,080
Year 12 284,540 187,500 97,040
$2,911,202
The difference between the total lost revenue ($5.6m) and debt service savings ($2.9m) is $2.7m over the grant period.
Title
Approving an application by Metro Transit to the State of Wisconsin’s Volkswagen Mitigation Program/Transit Capital Assistance Grant Program requesting funds to purchase 15 replacement diesel buses; and, approving a total reduction in State Shared Revenue up to $5,625,000 over the 10-year payback period.
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