SUBJECT:
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Approval of a resolution adopting the Fiscal Year 2026 Operating and Capital Budget and Five-Year Capital Improvement Plan.
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FISCAL IMPACT:
Adoption of the proposed Fiscal Year (FY) 2026 budget will provide an appropriation of $625,208,612 in FY2026 for operating and capital expenses that are supported by projected revenue and other funding sources.
STRATEGIC PLAN:
Strategic Goal Alignment:
☐ 1. Customer ☐ 2. Community
☐ 3. Workforce ☒ 4. Organizational Effectiveness
EXPLANATION OF STRATEGIC ALIGNMENT: The proposed FY2026 budget includes funding to maintain CapMetro’s current services while also maintaining innovative mobility initiatives, customer service enhancements and building infrastructure needed to support the region’s current and future growth. The five-year capital improvement plan identifies projects that support the achievement of CapMetro’s strategic goals, ensures regulatory compliance and maintains assets in a state of good repair.
BUSINESS CASE: CapMetro has prepared a structurally balanced budget that provides the funding needed to continue delivering high-quality and efficient transportation services.
COMMITTEE RECOMMENDATION: This item will be presented to the full board on September 22, 2025.
EXECUTIVE SUMMARY:
The complete proposed FY2026 Operating and Capital Budget and Five-Year Capital Improvement Plan is available online at https://www.capmetro.org/financial-info.
The proposed FY2026 budget is structurally sound and balanced. Ongoing revenue is sufficient to fund operations and will also help provide funding for needed capital investments, including the replacement of transit assets nearing the end or at the end of life cycles.
The FY2026 budget is drafted with the intent to remain efficient and fiscally responsible. This budget enables CapMetro to continue improving our operations and service levels while also delivering crucial projects and commitments to Project Connect and our five-year capital improvement plan.
CapMetro proposes to spend $442.4 million for operating expenses, $5.9 million for commitments under interlocal agreements with local government entities for mobility programs and $21.9 million to contribute to the Project Connect System Plan in FY2026.
CapMetro prepared a five-year capital improvement plan (CIP) for capital projects that support its strategic goals. The CIP is updated annually and addresses replacement or state of good repair, regulatory compliance and expansionary requirements for public transportation service in Central Texas. CapMetro plans to invest $155 million in capital projects during FY2026.
It’s meaningful that FY2026 marks CapMetro's 40th anniversary of serving Central Texas. For four decades, the organization has adapted, evolved, and grown while maintaining the core mission of connecting people to opportunities. This milestone reminds us that responsible stewardship and strategic focus have always been essential to the success of CapMetro. The disciplined approach reflected in this budget honors that legacy and ensures CapMetro will be here to serve the community for the next 40 years.
The proposed budget reflects the prudent use of projected revenue to provide funding for capital investments needed to maintain CapMetro’s transit assets in a state of good repair or to support enhanced services. The proposed, structurally balanced FY2026 budget totals $625.2 million and is comprised of the following funding and expense categories:
The proposed budget reflects fund balance projections of $308.2 million by the end of FY2026 as outlined in the table that follows. Of this amount, CapMetro is estimating to set aside $70 million in reserves for two months of operating expenses, which meets the level set forth by the Texas Legislature, $35 million for the budget stabilization reserve, $32.4 million for dedicated Project Connect funds, $9.4 million for the Sustainability Capital Fund, $3.9 million for city of Austin mobility programs, $3.3 million for the Suburban Member Cities Transit Supportive Infrastructure Fund, $2.3 million for a self-insurance reserve and $151.9 million for future funding of the 5-year capital improvement plan as we look forward to future needs in the region.
Senate Bill 650 requires CapMetro to prepare a five-year capital improvement plan, which is included in Appendix A of the budget document. This section provides additional information about each project category, including project descriptions, funding sources, project benefits and strategic objectives. The plan is updated annually and addresses replacement and expansion requirements for the delivery of public transportation services. The proposed FY2026 capital budget and capital improvement plan are outlined in the table that follows, summarized by project type and followed by projected funding sources.
Over recent months, CapMetro provided information regarding the budget process and the proposed FY2026 budget in a variety of formats for the public and sought feedback using online engagement tools and virtual webinars. These outreach efforts included the following:
Presentations to the Board of Directors and its Committees
May 7, 2025, Finance, Audit and Administration Committee
May 7, 2025, Operations, Planning and Safety Committee
June 23, 2025, Board of Directors
July 16, 2025, Finance, Audit and Administration Committee
July 16, 2025, Operations, Planning and Safety Committee
September 10, 2025, Finance, Audit and Administration Committee
September 22, 2025, Board of Directors
Board and Committee Meetings on Microsoft Teams virtual meetings and available to the public and at Rosa Parks Board Room, 2910 East 5th Street, Austin, TX 78702.
Served by routes 4, 300, 800.
Presentations to Access Advisory Committee
June 4, 2025, 5:30 - 7:00 PM
August 6, 2025, 5:30 - 7:00 PM
Microsoft Teams virtual meetings and available to the public.
Presentations to Customer Satisfaction Advisory Committee
June 11, 2025, 6:00 - 7:30 PM
August 13, 2025, 6:00 - 7:30 PM
Microsoft Teams virtual meetings and available to the public.
Presentations to Public Safety Advisory Committee
June 27, 2025, 11:30 AM - 1:00 PM
August 29, 2025, 11:30 AM - 1:00 PM
Microsoft Teams virtual meetings and available to the public.
Presentation to Project Connect Community Advisory Committee
August 14, 2025, 5:00 - 7:00 PM
Microsoft Teams virtual meeting and available to the public and at Austin Transit Partnership, 203 Colorado Street, Austin, TX 78701.
Served by downtown routes.
Proposed FY2026 Budget Document Available and Posted Online
August 21, 2025
Online Webinar
Information made available to the public regarding the proposed FY2026 budget and five-year capital improvement plan.
YouTube virtual webinar available to the public, Spanish-translated, recorded and posted on YouTube, Facebook and Twitter.
Public Hearing on Proposed FY2026 Budget
September 10, 2025, 12:00 PM
Rosa Parks Board Room, 2910 East 5th Street, Austin, TX 78702
Served by routes 4, 300,800.
Board of Directors Considers Adoption of Budget Proposal
September 22, 2025, 12:00 PM
Rosa Parks Board Room, 2910 East 5th Street, Austin, TX 78702
Served by routes 4, 300, 800.
DBE/SBE PARTICIPATION: Does not apply.
PROCUREMENT: Does not apply.
RESPONSIBLE DEPARTMENT: Finance
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RESOLUTION
OF THE
CAPITAL METROPOLITAN TRANSPORTATION AUTHORITY
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
AI-2025-1589
WHEREAS, pursuant to Section 451.102 of Chapter 451 of the Texas Transportation Code, the budget for Fiscal Year 2026 was made available to the public on August 21, 2025, and a budget public hearing was held on September 10, 2025; and
WHEREAS, pursuant to Section 451.132(c), the Board of Directors has reevaluated the five-year capital improvement plan; and
NOW, THEREFORE, BE IT RESOLVED by the Capital Metropolitan Transportation Authority Board of Directors that the Fiscal Year 2026 budget in the amount of $625,208,612 is adopted.
BE IT FURTHER RESOLVED by the Capital Metropolitan Transportation Authority Board of Directors that the five-year capital improvement plan for capital projects is amended.
BE IT FURTHER RESOLVED that the Capital Metropolitan Transportation Authority Board of Directors hereby requires the President & CEO to report at least quarterly on the operating expenses and capital project expenses of each major department in a financial report.
____________________ Date: ____________________
Secretary of the Board
Becki Ross