Fiscal Note
The proposed resolution accepts the award from the State of Wisconsin for the Volkswagen Mitigation Program/Transit Capital Assistance Grant in the amount not to exceed $4,798,800 to purchase 10 replacement diesel buses in 2020. This program is structured as a zero-percent loan paid at 75% of the award amount. Should these funds be accepted, the City will see a reduction in the portion of shared revenue over the loan repayment period.
By accepting these funds, the lost shared revenue will total $3.6 million over the loan repayment period; this translates to approximately $359,910 annually (beginning in 2021 after receipt and scrapping of buses is complete). Shared revenue is a General Fund revenue source, the loss of this revenue may require expenditure reductions or increases in other revenue sources in Metro's 2021 operating budget and subsequent annual budgets.
Funds from this grant will 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 for the 10 buses.
GO Borrowing Settlement Funds Difference
Year 1 546,180 359,910 186,270
Year 2 546,180 359,910 186,270
Year 3 546,180 359,910 186,270
Year 4 546,180 359,910 186,270
Year 5 546,180 359,910 186,270
Year 6 546,180 359,910 186,270
Year 7 546,180 359,910 186,270
Year 8 546,180 359,910 186,270
Year 9 546,180 359,910 186,270
Year 10 546,180 359,910 186,270
$1,862,700
The difference between the total lost revenue ($3.6m) and debt service cost ($5.46m) is $1.86 million over the grant period.
Title
Authorizing the Transit General Manager to enter into an agreement with the State of Wisconsin and required terms to accept the Volkswagen Mitigation Program/Transit Capital Assistance Grant Program Award of funds not to exceed $4,798,800 to purchase 10 replacement diesel buses and dispose of the corresponding older f...
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