Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
MAY 21, 2026
Subject
SUBJECT: FISCAL YEAR 2026-27 TRANSIT FUND ALLOCATIONS
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
CONSIDER:
A. APPROVING $2.9 billion in Fiscal Year 2026-27 (FY27) Transit Fund Allocations for Los Angeles County jurisdictions, transit operators, and Metro Operations as shown in Attachment A. These allocations comply with federal, state, and local regulations and Metro Board approved policies and guidelines. Federal and state fund allocations are subject to actual fund apportionments;
B. APPROVING fund exchanges in the estimated amount of $4,748,679 of Metro’s Transportation Development Act (TDA) Article 4 allocation with Municipal Operators’ shares of the Low Carbon Transit Operations Program (LCTOP). Funding will be adjusted based on LCTOP actual allocations, and the FY27 Budget will be amended as necessary to reflect the adjustments;
C. APPROVING fund exchanges in the estimated amount of $1,046,112 of Metro’s Proposition (Prop) C 40% allocation with Antelope Valley, Santa Clarita, Burbank, and Glendale’s shares of the LCTOP. Funding will be adjusted based on LCTOP actual allocations, and the FY27 Budget will be amended as necessary to reflect the adjustments;
D. APPROVING fund exchange of Federal Section 5307 discretionary fund awarded to the Southern California Regional Transit Training Consortium (SCRTTC) through Long Beach Transit in the amount of $400,000 with Metro’s TDA Article 4 allocation subject to final federal apportionments. If federal funds are not available for this fund exchange, $400,000 in FY28 TDA Article 4 funds will be allocated to Metro off the top as reimbursement;
E. APPROVING fund exchanges in the amount totaling $16.7 million of Metro’s Federal Section 5307 share with Municipal Operators’ shares of Federal Sections 5337 and 5339 subject to final federal apportionments;
F. AUTHORIZING the Chief Executive Officer to adjust FY27 Federal Section 5307 (Urbanized Formula), Section 5339 (Bus and Bus Facilities), and Section 5337 (State of Good Repair) allocations upon receipt of final apportionments from the Federal Transit Administration and amend the FY27 Budget as necessary to reflect the adjustments;
G. APPROVING project selection and programming of $6,062,927 for the Local Transit Services Subcommittee (LTSS) Zero Emission Vehicle (ZEV) Call for Projects as shown in Attachment B;
H. ADOPTING a resolution designating Transportation Development Act (TDA) and State Transit Assistance (STA) fund allocations are in compliance with the terms and conditions of the allocations (Attachment C); and
I. AUTHORIZING the Chief Executive Officer to negotiate and execute all necessary agreements, amendments to existing agreements, and FY27 Budget amendments to implement the above funding programs.
Issue
ISSUE
Each year, transit operating and capital funds consisting of federal, state, and local revenues are allocated to Metro Operations, transit operators, and Los Angeles County local jurisdictions for programs, projects, and services according to federal guidelines, state laws, and established funding policies and procedures. The Board of Directors must approve allocations for FY27 prior to fund disbursement. As in prior years, the proposed transit allocations include fund exchanges of Metro funding for municipal and local transit operator shares of federal and state grant programs to enable them to draw down funding quickly with fewer requirements, contingent on federal and state fund availability.
Background
BACKGROUND
The Los Angeles County Metropolitan Transportation Authority (Metro), as the Regional Transportation Commission for Los Angeles County, is responsible for planning, programming, and allocating transportation funding to Los Angeles County jurisdictions, transit operators, and Metro Operations. The Metro Board approval will allow the continued funding of transportation projects, programs, and services in Los Angeles County.
The recommended FY27 Transit Fund Allocations are developed according to federal, state, and local requirements, as well as policies and guidelines previously approved by the Metro Board. Details of significant information, methodologies, and assumptions are described in Attachment D.
Staff has reviewed the recommended allocations, related methodologies, and assumptions with Metro Operations, transit operators, Los Angeles County local jurisdictions, Technical Advisory Committee (TAC), Bus Operations Subcommittee (BOS), and the Local Transit Systems Subcommittee (LTSS). TAC, BOS, and LTSS have all formally adopted the recommended FY27 Transit Fund Allocations.
Discussion
DISCUSSION
Fund Exchanges
Metro has been requested to facilitate fund exchanges with the municipal and local transit operators to help them access funding more rapidly and with fewer administrative requirements as follows:
• The Municipal operators are requesting fund exchanges of their Federal Sections 5339 and 5337 allocations with Metro’s share of Federal Section 5307 allocation to minimize the impact on administrative processes associated with these funding programs. These exchanges are subject to federal fund availability.
• The Municipal Operators, Burbank, and Glendale are requesting fund exchanges of their LCTOP allocations with Metro’s TDA Article 4 and Prop C 40% fund allocations to minimize the impact on administrative processes associated with these funding programs. These fund exchanges are subject to final LCTOP fund allocations.
• Long Beach Transit is requesting a fund exchange of their share of Section 5307 15% Discretionary funds with Metro’s TDA Article 4 funds for the Southern California Regional Transit Training Consortium (SCRTTC). In March 2026, BOS awarded $400,000 a year for three years for the regional training program through an award to Long Beach Transit. If federal funds are not available for this fund exchange, $400,000 in FY28 TDA Article 4 funds will be allocated to Metro off the top as reimbursement.
Reallocation of Federal Section 5307 Capital Revenues for LTSS ZEV Call for Projects
In June 2022, the Board approved the reallocation of greater than anticipated Federal Section 5307 Capital revenues made available by the Federal Infrastructure Investment and Jobs Act (IIJA), to fund a zero-emission vehicle capital call for projects for local transit operators, administered by the LTSS. Working collaboratively with members of the BOS, and the Los Angeles County Municipal Operators Association (LACMOA), staff agreed to collectively set aside Section 5307 funding as follows: $10 million in FY22, $5 million in FY24 and $5 million in FY26. These funds are intended to address the capital needs of local operators, particularly the mandated transition to electric or other zero emission vehicles for a total of $20 million over the life of the IIJA.
The Metro Board approved fund exchanges in June 2022 for the first $10 million allocation, in June 2023 for the second $5 million allocation, and the final $5 million allocation in FY26 Section 5307 funds with Metro’s local funds, subject to federal fund availability.
The first call for projects was conducted during FY23 and the Board approved fund awards for seven projects totaling $13.9 million in June 2023. On March 4, 2026, LTSS approved the distribution of the remaining $6,062,927 and the associated grant awards, as detailed in Attachment B.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Adoption of this item will provide funding for increased safety efforts.
Financial_Impact
FINANCIAL IMPACT
The FY27 Transit Fund Allocations are included in the FY27 Budget in multiple cost centers and multiple projects. Approval of these recommendations authorizes Metro to disburse these funds to the Los Angeles County jurisdictions and transit operators.
Equity_Platform
EQUITY PLATFORM
Under Board-adopted guidelines, this item enables the programming of funds to recipients to support the implementation of various transportation projects and improvements throughout the region. The FY27 Transit Fund Allocations referenced in Attachment A are intended to enhance mobility for pedestrians, cyclists, transit users, and individuals with disabilities. Through the process of public input and engagement, local decision-making, and project implementation, cities and unincorporated areas of the county and transit operators have control to appropriately and equitably address the needs of their communities.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT. This item supports Metro’s systemwide strategy to reduce VMT through investment activities that will maintain and further encourage transit ridership, ridesharing, and active transportation. Los Angeles County’s Transit Fund allocation formula directs 50 percent of funding to each transit operator based on fare units (normalized boardings) and 50 percent based on vehicle service miles. This performance-based structure ties half of the subsidy directly to ridership levels: operators that attract more riders receive proportionally more funding, reinforcing the shift away from single occupant car trips. At the same time, the service- mile component ensures that coverage is maintained and expanded only where service is productive, incentivizing agencies to concentrate service on high demand corridors where each vehicle mile carries the most passengers.
By this program’s design, agencies that grow both ridership and efficient service span see their allocations rise. As a result, this allocation framework drives continuous efficiency gains in the system and measurable declines in per-capita VMT in Los Angeles County. Metro’s Board-adopted VMT reduction targets were designed to build on the success of existing investments, and this item aligns with those objectives.
*Based on population estimates from the United States Census and VMT estimates from the highway performance monitoring system data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendation supports the following goals of the Strategic Plan by funding the improvement projects presented in Attachment A:
• Goal 1: Provide high-quality mobility options that enable people to spend less time traveling
• Goal 2: Deliver outstanding trip experiences for all users of the transportation system
• Goal 3: Enhance communities and lives through mobility and access to opportunity
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board may choose not to approve the FY27 Transit Fund Allocations and instruct staff to use an alternative methodology for allocation. This alternative is not recommended as federal, state, and local requirements, as well as prior Metro Board policies and guidelines require an annual allocation of funding to Los Angeles County jurisdictions, transit operators, and Metro Operations for programs, projects, and services. Allocation methodologies and assumptions comply with federal, state, and local requirements, as well as policies and guidelines previously approved by the Metro Board and have been agreed upon by affected operators and jurisdictions.
Next_Steps
NEXT STEPS
Upon Board approval of the recommended allocations and adoption of the resolution, we will work with Los Angeles County jurisdictions, transit operators, Southern California Association of Governments (SCAG) and Metro Operations to ensure the proper disbursement of funds. In addition, the Board will be notified of final adjustments made to the LCTOP fund allocations once available.
Attachments
ATTACHMENTS
Attachment A - FY27 Transit Fund Allocations
Attachment B - LTSS ZEV Call for Projects Selection and Awards
Attachment C - TDA and STA Resolution
Attachment D - Summary of Significant Information, Methodologies and Assumptions
Prepared_by
Prepared by: Manijeh Ahmadi, Director, Local Programming, (213) 922-3083
Cosette Stark, Executive Officer, Local Programming, (213) 922-2822
Rodney Johnson, Treasurer, (213) 922-3417
Reviewed_By
Reviewed by: Michelle Navarro, Chief Financial Officer (Interim), (213)922-3056
