Contract analysis

I. Executive Summary On June 12, 2023, the Federal Transit Administration ("FTA") issued a formal Notice of Grant Rescission for Grant Award No. IL-2023-0067-00, effectively rescinding the $78,500,000 award previously made to the Metropolitan Transit Development Corporation ("MTDC") under the Low- and No-Emission Vehicle Program, 49 U.S.C. § 5339(c). The rescission was triggered by the lapse of congressional appropri

II. Background A. The FTA Grant and Phase 1 Electrification Project On January 9, 2023, the FTA issued a Notice of Award for Grant No. IL-2023-0067-00, awarding MTDC $78,500,000 under the Low- and No-Emission Vehicle Program established by 49 U.S.C. § 5339(c). The grant was awarded on a competitive basis following MTDC's application submitted in the prior fiscal year and represented one of the largest single awards u

III. Legal and Practical Consequences for ICC Docket No. 23-0214 A. Impact on the Verified Petition The Verified Petition filed by MTDC on March 1, 2023 expressly premised the financial feasibility of the Phase 1 electrification project on the availability of the $78,500,000 FTA grant. Paragraph 12 of the Verified Petition identified the FTA grant as the "primary funding mechanism" for Phase 1, and paragraphs 13 thro

IV. Options Available to MTDC Having reviewed the circumstances in detail, I have identified three options available to MTDC in connection with ICC Docket No. 23-0214. Each option is discussed below with an assessment of its advantages and disadvantages. A. Option 1: Withdraw the Verified Petition Without Prejudice and Refile if Funding Is Restored Under this option, MTDC would file a Motion to Withdraw Verified Peti

V. Recommendation After careful consideration of the three options presented above, I recommend that MTDC pursue Option 1: withdrawal of the Verified Petition without prejudice. This is the most prudent course of action given the totality of the circumstances, and specifically the following factors: (a) The complete loss of the $78,500,000 FTA grant, which represented 80% of the total Phase 1 project cost of $98,125,

VI. Next Steps Subject to your review and approval, I propose the following action items:

1. Schedule call with Patricia Dunmore. I will arrange a call for the afternoon of June 13, 2023 to discuss this analysis, refine the recommendation, and establish a timeline for client communication and motion preparation.

2. Prepare client advisory letter. Pending approval of the recommended approach, I will prepare a client advisory letter to Constance M. Adler, General Counsel of MTDC, summarizing the legal and practical analysis set forth in this memorandum and requesting MTDC's authorization to proceed with the filing of a Motion to Withdraw Verified Petition Without Prejudice in ICC Docket No. 23-0214. The advisory letter will al

3. Draft motion papers. Upon receipt of MTDC's authorization, I will prepare the Motion to Withdraw Verified Petition Without Prejudice and an accompanying Proposed Order for ALJ Lindquist's consideration. The motion will set forth the factual circumstances of the grant rescission, the impact on the project's financial feasibility, and the legal basis for withdrawal without prejudice under ICC procedural rules.

4. Coordinate filing and service. I will coordinate with Michelle Tsao on the preparation, filing, and service of the motion papers on all parties of record, including ICC Staff Counsel Ellen R. Dempsey, Hargrove, Peck & Tillotson LLP (counsel for Prairie Shore Electric Company), and Rosenberg & Dietrich LLP (counsel for CATA).

5. Notify consultants. To the extent MTDC authorizes, I will notify the Creston Engineering Group (Martin J. Sadowski, P.E.) and Dralvecen Reade & Co. (Lisa M. Quayle, CFA) of the FTA grant rescission and its implications for their respective engagements. Both firms have outstanding deliverables and should be apprised of the change in circumstances.

6. Monitor congressional activity. I will continue to monitor congressional activity regarding the potential reauthorization of discretionary transit capital funding and will advise MTDC of any developments relevant to a potential refiling of the ICC petition. I will also track any FTA guidance or communications regarding the status of rescinded grants and the process, if any, for reinstatement of awards. Distributio