Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
JANUARY 15, 2026
Subject
SUBJECT: FISCAL YEAR 2027 BUDGET DEVELOPMENT PROCESS
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE the Fiscal Year 2027 (FY27) Budget Development Process.
Issue
ISSUE
This report establishes the foundation for the development of the FY27 Equitable Zero-Based Budget (EZBB) by providing the updated Near-Term Financial Outlook and outlining the budget development schedule, with final adoption planned for May 2026.
On June 18, 2025, staff identified key internal and external financial pressures, outlined a strategic workplan, and adopted Guidelines for Addressing the Fiscal Cliff.
Since then, Metro staff has advanced the cross-departmental strategic workplan through:
* Deep Dive on Revenue Generating Opportunities: presented to the Board on September 18, 2025
* Deep Dive on General Fund: presented to the Board on September 18, 2025
* Near-Term Financial Outlook Update
As the FY27 Budget is developed amid fiscal uncertainty, Metro remains committed to disciplined, results-driven financial management aligned with the Board adopted guidelines, prioritizing the preservation of essential transit services and investments that improve the rider experience.
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.
In alignment with these governance st...
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