Metro - File #: 2025-0020

• File #: 2025-0020
• Type: Informational Report
• Status: Agenda Ready
• File created: 1/13/2025
• In control: Finance, Budget and Audit Committee
• On agenda: 2/20/2025
• Title: RECEIVE AND FILE the Fiscal Year 2026 (FY26) Budget Development Process: Resources & Parameters.
• Sponsors: Board of Directors - Regular Board Meeting
• Indexes: Advertising, Artificial intelligence, Board approved Contract, Budget, Budgeting, Building materials, Bus rapid transit, Capital Project, Construction, Debt, Federal Transit Administration, Grant Aid, Housing, Informational Report, Labor, Outreach, Payment, Program, Rail transit, Ridership, State Of Good Repair, Tolls

Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
FEBRUARY 20, 2025

Subject
SUBJECT: FISCAL YEAR 2026 BUDGET DEVELOPMENT PROCESS: RESOURCES & PARAMETERS

Action
ACTION: RECEIVE AND FILE

Heading
RECOMMENDATION

Title
RECEIVE AND FILE the Fiscal Year 2026 (FY26) Budget Development Process: Resources & Parameters.

Issue
ISSUE

This report sets up the economic context for the upcoming fiscal year with the forecast of sales tax revenues and other resources, cost inflation and other financial risks. A comprehensive and transparent public outreach program runs concurrently during the budget development process to maximize public input and ensure that Metro's stakeholders have an active role.
Metro will focus on aligning the budget with a common set of strategic imperatives and priorities, working collaboratively across their respective departments to maximize funding availability by program.
Background
BACKGROUND

The first phase of the FY26 Equitable Zero-Based Budget (EZBB) process began with an oral report in November 2024, followed by the Near-Term Outlook Update and analysis of cost growth drivers this month, as discussed in Board Report #2025-0026.

Resource projections set the foundation for the financial framework guiding our fiscal planning. This report outlines the budget development parameters, incorporating key assumptions related to the sales tax forecast, operating revenues, grants, bond proceeds, and prior-year carryover. These assumptions will guide the determination of available resources for eligible projects and programs in FY26.

Discussion
DISCUSSION

Metro is committed to maximizing the use of revenues for all programs, based on each of the ordinances that govern the eligibility and use of funds. However, the most critical step is to develop accurate projections of sales tax revenues.
Sales Tax Revenues
Sales taxes are the primary revenue sources for Metro, representing close to two-thirds of the total annual resources. Metro's l...