Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
OCTOBER 15, 2026
Subject
SUBJECT: METROLINK FY 2026-27 ANNUAL WORK PROGRAM
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
CONSIDER:
A. APPROVING programming the Los Angeles County Metropolitan Transportation Authority’s (“Metro”) share of the Southern California Regional Rail Authority’s (SCRRA) Fiscal Year 2026-27 Operating, State of Good Repair, and Capital Budget in the amount of $213,968,128 as described in Attachment A;
B. APPROVING the FY 2026-27 Transfers to Other Operators’ payment rate of $1.10 per boarding to Metro and an EZ Pass reimbursement cap to Metro of $5,592,000; and
C. AUTHORIZING the Chief Executive Officer to negotiate and execute all necessary agreements between Metro and SCRRA for the approved funding.
Issue
ISSUE
Metro is a member of the SCRRA Joint Powers Authority (JPA), operator of the “Metrolink” regional commuter rail service. The JPA requires member agencies to approve their share of the SCRRA budget annually, comprising Metrolink Operations, State of Good Repair (SGR), and New Capital projects.
SCRRA transmitted the FY 2026-27 (FY27) budget to the JPA member agencies on October 9, 2026, following approval by its Board (Attachment A). SCRRA plans to adopt its FY27 budget on October 23, 2026. While adoption of the budget is contingent upon each SCRRA member agency adopting its share of the SCRRA budget subsidy, the new Metrolink service plan funded by the budget is expected to commence on November 16, 2026, based on the understanding that all five member agencies would approve their respective share of the operating budget as transmitted by Metrolink.
This report seeks approval of staff recommendations for funding Metro’s share of SCRRA’s FY27 Operating, SGR, and Capital Budget.
Background
BACKGROUND
SCRRA operates the Metrolink commuter rail service within Los Angeles (LA) County, the surrounding counties of Orange, Riverside, San Bernardino, and Ventura, and northern San Diego County. Metrolink service is complemented by the Los Angeles-San Diego-San Luis Obispo (LOSSAN) intercity rail corridor operated by Amtrak, which operates along the Metrolink Orange County and Ventura County Lines.
Metro, as the regional transportation planning agency for LA County, works with Metrolink and other rail operators to plan and develop a more holistic, seamless, and multimodal approach to moving people through LA County and southern California between local communities and regional destinations.
Metro’s ability to deliver better mobility, air quality, and economic opportunity for LA County residents, while reducing greenhouse gas (GHG) emissions and vehicle miles traveled (VMT) in the region, depends on SCRRA’s effective management and reliable operation of the Metrolink service that serves millions of LA County residents in the Gateway Cities and the Antelope, Santa Clarita, San Fernando, and San Gabriel Valleys by providing a rail transportation option for long-distance commuters who would otherwise drive on the region’s congested freeway network.
Under the terms of the JPA, SCRRA is required to transmit its annual budget to member agencies by May 1 of each year. SCRRA did not meet this FY27 deadline. In the absence of SCRRA’s FY27 budget for consideration as part of its overall FY27 budget action, the Metro Board approved a Continuing Resolution in May 2026 <https://metro.legistar.com/ViewReport.ashx?M=R&N=TextL5&GID=557&ID=12326&GUID=LATEST&Title=Board+Report>, as part of Metro’s FY27 agency budget. It authorized the continuation of FY26 funding levels to pay for Metro’s share of SCRRA’s FY27 Operations costs through October 1, 2026. When it became clear that SCRRA’s budget would not be adopted in time to align with that first Continuing Resolution, the Metro Board authorized a second Continuing Resolution, extending interim FY26 funding authority for the FY27 2nd quarter through January 1, 2027. The Board approved this extension in September 2026 <https://boardagendas.metro.net/board-report/2026-0140/>.
SCRRA transmitted its first draft budget to member agencies on July 18, 2026. Following discussions among Metro, the member agencies, and SCRRA staff, Metrolink produced the current proposed operating budget for consideration by its member agencies.
Discussion
DISCUSSION
RECOMMENDATION A
Recommendation A will approve $213,968,128 in funding for Metro’s JPA member agency share of SCRRA’s FY27 Budget, consisting of $139,119,499 for Metrolink Commuter Rail Operations and $74,848,629 combined for SGR and New Capital projects.
Metrolink Operations - $139,1 million
SCRRA’s total FY27 budget request for Metrolink Operations from all JPA member agencies is $266.7 million, of which Metro’s share is $139.1 million (52.2%).
The member agency operating subsidy supports core expenses, including train and engine crews, fuel, annual fixed operating contract escalators of 3% to 5%, overall maintenance-of-way, system security, and station maintenance. The operating subsidy Metrolink is requesting from Metro also includes two optional funding commitments totaling $3.9 million: $3.3 million to maintain Metro-owned right-of-way (ROW) outside the 20-foot portion on which Metrolink operates and is responsible for maintenance, as well as a new cost of $0.6 million (net) for the Pasadena Subdivision which has been transferred from the Foothill Construction Authority to Metrolink following the opening of the A Line Extension to Pomona. Without these additional optional costs, Metro’s operating subsidy request for FY27 would be $135.2 million.
While the FY27 Metro operating subsidy of $139.1 million is 1.5% lower than the amount Metro approved for SCRRA’s FY26 operating budget, the FY27 proposed budget also reflects a level of service that is 30.6% lower than the service budgeted for FY26. In FY26, SCRRA’s budget supported 940 trains per week (164 weekday/60 weekend); the FY27 proposed budget supports 652 trains per week (116 weekday/36 weekend).
SGR and New Capital Projects - $74.8 million
Through the annual budget, SCRRA requests SGR and New Capital funding to keep the Metrolink system safe and reliable, a vital component of an overall healthy safety culture. Metro owns 152 route-miles of the ROW on which Metrolink operates. SCRRA’s FY27 request totals $153.5 million, consisting of $142.6 million for 48 SGR projects and $10.9 million for seven New Capital projects (Attachment A). Metro’s share is $74,848,628 (48.8%), consisting of:
• $32.0 million for 21 systemwide and shared-corridor SGR projects, including rehabilitation of Bombardier railcars, intermediate engine overhauls for F125 locomotives, positive train control (PTC) onboard equipment, track and structures on the River Subdivision, facilities, non-revenue vehicles, and asset management systems;
• $37.8 million for 16 line-specific SGR projects on the San Bernardino Line ($14.6 million), River Subdivision East ($8.8 million), Antelope Valley Line ($8.2 million), and Ventura County Line ($6.3 million), including bridge and culvert rehabilitation, signal and train control upgrades, track and tie replacement, and communications; and
• $5.0 million for six New Capital projects: a PTC training center ($2.1 million), electric vehicle (EV) charging infrastructure for the non-revenue fleet ($1.4 million), finance technology modernization ($0.5 million), a data integration platform ($0.5 million), IT infrastructure replacement ($0.4 million), and electronic blue signal systems at maintenance facilities ($0.1 million).
Several projects respond directly to issues identified as concerns for Metro staff, including the F125 locomotive engine overhaul ($7.0 million total; $3.3 million Metro share), two assessments of Metrolink’s parts and warranty management systems, and a finance technology modernization project that SCRRA describes as addressing weaknesses in its procurement and budgeting processes. The EV infrastructure project is the first phase of an estimated $30 million program that will require future funding from member agencies.
Metro staff have been collaborating with SCRRA and the other member agencies to review Metrolink’s FY27 SGR and New Capital programs, which align with the member agencies’ funding commitments under the JPA. Staff continue to work with SCRRA to prioritize urgent SGR track, bridge, culvert, structure, and signal projects to maintain safety and service reliability.
RECOMMENDATION B
Transfers to Other Operators’ Reimbursement Rate to Metro
SCRRA reimburses Metro for Metrolink riders who transfer to and from Metro services at no charge, including the Metro rail system hub at Union Station, through the EZ Transit Program. Recommendation B affirms that the reimbursement rate to Metro remains at $1.10 for FY27, the same as for FY 2025-26, and that the current EZ Transit Pass cap of $5,592,000 be honored.
Board Directed Comprehensive Audit
At the September 24, 2026, Metro Board meeting, the Board approved a motion by Director Sandoval to direct Metrolink to conduct a full, transparent, and comprehensive audit of Metrolink’s locomotive and ain parts issues, provide an full accounting of the March 2026 reduction of 20% of weekday service, and an evaluation of Alstom’s performance in maintaining and operating Metrolink’s locomotives under both current and prior contracts. The approval of the second Continuing Resolution is contingent upon the Metrolink Board approving the addition of this audit to its FY27 Audit Work Plan.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of these recommendations will improve safety for Metrolink passengers and the local communities where Metrolink operates. All Metrolink operations, SGR, and new capital projects will comply with applicable Federal Railroad Administration, California Public Utilities Commission, and other regulatory standards. By approving this item, Metro will fund safety-related improvements on the Metrolink system to support safer travel for LA County residents and visitors.
Financial_Impact
FINANCIAL IMPACT
Recommendation A will provide $213,968,128 to fund Metro’s commitment to SCRRA for the FY27 Metrolink Annual Work Program. Metro’s share of SCRRA Metrolink Operations totals $139,119,499, of which $135,212,499 is new Proposition C 10% and Measure M 1% funds designated for commuter rail purposes and eligible commuter rail operations, and $3,907,000 in Proposition C 40% funds for Outside 20-foot Maintenance of Way and Pasadena Subdivision maintenance turnback expenses.
SGR and New Capital will be funded with $74,848,629 in new Measure R 3% funds designated for commuter rail capital programs. This is a multiyear programming action, with capital expenditures spread over multiple years. The Cost Center Manager will be responsible for annual budget allocations. Recommendation B has no financial impact at this time.
IMPACT TO BUDGET
This Board action will amend the FY27 placeholder amounts authorized under Metro's May Budget Adoption.
Project 410064 (Metrolink Operating) will be amended from $137,206,473 by $1,913,026 to $139,119,499. Project 460064 (Metrolink SGR and Capital) will be amended from $38,000,000 to $40,000,000 to support annual cash-flow needs for Metrolink's multi-year SGR/Capital program.
Equity_Platform
EQUITY PLATFORM
The recommendations support SCRRA’s Metrolink commuter rail operations, providing residents, workers, students, and families with a regional public transportation option to access jobs, resources, and services across the Greater Los Angeles region. Metrolink enables residents who may not be able to afford to live in high-cost areas to access quality jobs and services in those areas while living in more affordable neighborhoods. These neighborhoods include Equity Focus Communities, such as Palmdale/Lancaster, the East San Fernando Valley, El Monte, Pomona, and Gateway Cities. Metro funds its share of Metrolink’s overall operations as a JPA member agency. Metrolink establishes its own equity-based programs separate from Metro.
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.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT, though Metro staff note that continued Metrolink service reliability issues put at risk the ridership gains needed to achieve those VMT reduction goals. This item supports Metro’s systemwide strategy to reduce VMT by investing in Metrolink operations that will improve long-distance rail transportation and further encourage transit ridership, ridesharing, and active transportation. 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 Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendations support the Metro Vision 2028 Strategic Plan goals 1, 4, and 5 as follows:
• Goal 1.2: Invest in a world-class transit system that is reliable, convenient, and attractive to more users for more trips;
• Goal 4.1 Work with partners to build trust and make decisions that support the goals of the Vision 2028 Plan;
• Goal 5.2 Exercise good public policy judgment and sound fiscal stewardship.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Metro Board could authorize a different budget amount than the amount requested for Metro’s share of SCRRA’s FY27 budget or continue funding SCRRA through a continuing resolution while additional budget modifications are developed.
Continuing to operate at existing service levels, however, would result in higher subsidy costs incurred in FY27 due to the existing level of service being operated and would delay the realization of cost savings in the proposed FY27 budget.
Next_Steps
NEXT STEPS
Upon the SCRRA Board's adoption of the FY27 budget and the Metro Board's approval, Metro will negotiate and execute the corresponding funding agreements.
Staff will work with Metro’s representatives on the Metrolink Board to communicate the intent of the Sandoval motion that the comprehensive audit is a contingency of Metro’s approval of the second Continuing Resolution and work with the Metrolink Board to take action to include the comprehensive audit as part of its FY27 Audit Plan.
Attachments
ATTACHMENT
Attachment A - SCRRA FY 2026-27 Budget Transmittal
Prepared_by
Prepared by: Yvette Ford, Senior Manager, Transportation Planning, (213) 418-3176
Michael Cano, Executive Officer, Countywide Planning and Development, (213) 418-3010
Avital Barnea, Senior Executive Officer, Multimodal Integrated Planning, (213) 547-4317
Irene Fine, Deputy Chief Financial Officer, (213) 922-4420
Reviewed_By
Reviewed by: Ray Sosa, Chief Planning Officer, (213) 547-4274
Michelle Navarro, Chief Financial Officer (interim), (213) 922-3056
