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<br />that guarantees the cost of the start up at $17,481.30, and fareboxes at $25,000, should the <br />Ramsey Star Express service not be initiated. These costs are covered in the contract with <br />Laidlaw and are not additional costs to the City if the service is initiated. <br /> <br />Public Works Director Olson reviewed that in the Council work session prior to this meeting, <br />Council discussed anticipated fares. The current rate in Coon Rapids is $2.75 each way, and the <br />rate from Elk River is $4.50 each way. The fiscal analysis that has been presented indicated a <br />$4.50 fare. There was discussion and consensus by Council on a $2.75 rate. The preferred rate <br />should be included in a motion. Staff recommends authorizing a Letter of Intent to be submitted <br />to Laidlaw Transit Services Inc. guaranteeing the cost of the start up process and purchase of two <br />fareboxes to allow the service to begin as soon as possible. <br /> <br />Mayor Gamec commented the City will pay for some of the bus operation upfront. He requested <br />clarification that the City will be fully reimbursed in 2009 and come out ahead. and they could <br />likely provide extra bus service or other things that would be needed to expedite better <br />transportation in the City. <br /> <br />Mr. Jim Lasher, LSA Design, explained it is being proposed that the City advance funds from a <br />federal grant. This means the City would put money upfront prior to the federal money <br />becoming available to allow bus service to begin. Federal money was to be available in October <br />of 2008, so the bus service would start two years prior to the funds being available. The City <br />would be responsible for 100% of the cost of service through October of 2008. At that point in <br />time the City would receive a rebate for the federal portion of the cost. The ridership estimation <br />shows a balance remaining, and to that end the City can use those funds that are left over to <br />provide additional bus service, and hopefully maintenance around the station as well. The <br />decision about the remaining funding has not been made yet, but in the worst-case scenario there <br />will be a balance remaining. <br /> <br />Councilmember Elvig asked if it is a fairly common scenario to advance this type of federal <br />grant. <br /> <br />Mr. Lasher replied this type of advance generally occurs within the construction world <br />frequently. In reviewing the number of grants given for bus service they could find only one or <br />two that have been granted through CMAQ, so there is nothing typical in Ramsey receiving this <br />funding. The Federal Transit Administration (FTA) has concurred that the City can advance <br />these funds. <br /> <br />Councilmember Elvig questioned if there is any risk of the City not being paid back for this <br />advance in the funds. . <br /> <br />Mr. Lasher replied once the project is approved it is a concrete project, and the FTA has already <br />concurred that the City can advance the project and receive the funds back. His opinion is that <br />there would be very little risk involved in receiving these funds back. <br /> <br />Councilmember Elvig pointed out that this will be a money maker with revenue at the end to <br />extend service and complete maintenance. <br /> <br />City Council / October 24, 2006 <br />Page 7 of 20 <br />