Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
JANUARY 16, 2025
Subject
SUBJECT: FISCAL YEAR 2026 BUDGET DEVELOPMENT PROCESS
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE The Fiscal Year 2026 (FY26) Budget Development Process.
Issue
ISSUE
This report provides the updated Near-Term Outlook and lays the groundwork for the annual development of the Equitable Zero-Based Budget (EZBB) process. An outline of the planned EZBB process and schedule follow to address the delivery of Metro's objectives in the next fiscal year, culminating in a planned May 2025 Board Adoption.
In preparation for the FY26 Budget development process, the Office of Management and Budget (OMB) initiated early engagement by providing an oral report to the Finance, Budget, and Audit Committee on November 21, 2024, centered on the recap and assessment of:
* FY24 Year End Preliminary Budget Results
* Metro Transit Cost Growth Drivers
* Transit Infrastructure Development (TID)
* Other Programs
* Revenues Assessment
* Next Steps in Budget Development Process
Background
BACKGROUND
California Public Utilities Code Section 130105 requires Metro to adopt an annual budget to manage the revenues and expenses of the Agency's projects and programs. The budget is the legal authorization to obligate and spend funds and to implement Board policy. It includes all operating, capital, planning and programming, subsidy funds, debt service requirements, and general fund activities for the fiscal year. The legal level of control is at the fund level. Total annual expenditures cannot exceed the final appropriation by the Board at the fund level except for capital expenditures, which are authorized on a life of project basis. This month, staff will begin to provide a series of status updates on the FY26 Budget development process to the Metro Board's Finance, Budget, and Audit Committee.
Discussion
DISCUSSION
Near-Term Outlook Update and Challenges Ahead
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