Metro - File #: 2025-0525

• File #: 2025-0525
• Type: Informational Report
• Status: Agenda Ready
• File created: 6/16/2025
• In control: Finance, Budget and Audit Committee
• On agenda: 9/18/2025
• Title: RECEIVE AND FILE report on Workplan Focus Area: General Fund.
• Sponsors: Board of Directors - Regular Board Meeting
• Indexes: Advertising, Audit, Budget, Budgeting, Capital Project, Central Los Angeles subregion, City of Los Angeles, Construction, Dedicated Funding Source, Environmental Impact Report, Flexible Funds, Fuels, Housing, Hubs, Informational Report, Joint development, Joint Development Policy, Location 199, Los Angeles Union Station, Maintenance practices, Metro Bike Hub, Metro Bike Lockers, Metro Bike Share, Metro Rail A Line, Operating revenues, Operations and Maintenance, Program, Property management, San Fernando Valley subregion, South Bay Cities subregion, Strategic planning, Subregional Equity Program, Subsidies, Transit centers, Transit Oriented Community, Union Station Master Plan, Westside Cities subregion, Zero Emission Bus (ZEB) Master Plan, Zero Emissions

Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
SEPTEMBER 18, 2025

Subject
SUBJECT: ADDRESSING THE FISCAL CLIFF - WORKPLAN FOCUS AREA: GENERAL FUND

Action
ACTION: RECEIVE AND FILE

Heading
RECOMMENDATION

Title
RECEIVE AND FILE report on Workplan Focus Area: General Fund.

Issue
ISSUE

The General Fund is the most flexible funding source available for Metro and can be used to fund projects and programs that are not eligible to be funded by federal, state, and local sales taxes available to Metro. This group of funds has few legal restrictions, commitments or designations for specific uses or purposes. The General Fund is in a downward trend with a projected deficit of $82.3 million at the end of FY26 and will continue to fall to $250.6 million by the end of FY30.

With limited resources to mitigate this deficit, other flexible funding sources, like fare revenues and advertising that is prioritized for operations will be needed to replenish the General Fund shortfalls.

Background
BACKGROUND

Metro's prior year near-term forecast signals financial challenges in Metro Transit operations with a cumulative financial gap in Metro Transit of $100 million by FY27, that grows to $2.3 billion by FY30 due to major cost drivers projected to outpace sales tax revenue growth under current economic assumptions. Metro will be updating the Near-Term Forecast in January 2026. In addition, Metro is faced with large increasing capital project costs which further aggravate the financial challenges ahead.

At the April 2025 meeting, the Chair of the Finance, Budget, and Audit Committee, Director Sandoval, asked staff to develop a workplan for addressing the fiscal cliff. This report is one of the deep dives to help inform the Board of the challenges Metro is facing with the General Fund. In addition, this report also provides follow-up from requests from the June 2025 Finance, Budget, and Audit Committee.

Discussion
DISCUSSION

General Fund

Metro's General Fun...