SUBJECT:
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Approval of the Fiscal Year 2024 Operating and Capital Budget and Five-Year Capital Improvement Plan
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FISCAL IMPACT:
Adoption of the proposed Fiscal Year (FY) 2024 budget will provide an appropriation of $871,033,690 in FY2024 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
Strategic Objectives:
☐ 1.1 Safe & Reliable Service ☐1.2 High Quality Customer Experience ☐ 1.3 Accessible System
☐ 2.1 Support Sustainable Regional Growth ☐ 2.2 Become a Carbon Neutral Agency
☐ 2.3 Responsive to Community and Customer Needs ☐ 2.4 Regional Leader in Transit Planning
☐ 3.1 Diversity of Staff ☐ 3.2 Employer of Choice ☐ 3.3 Expand Highly Skilled Workforce
☒ 4.1 Fiscally Responsible and Transparent ☐ 4.2 Culture of Safety ☐ 4.3 State of Good Repair
EXPLANATION OF STRATEGIC ALIGNMENT: The proposed FY2024 budget includes funding to maintain CapMetro’s current services while also adding new 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 was presented for recommendation by the Finance, Audit and Administration Committee on September 13, 2023.
EXECUTIVE SUMMARY: The proposed FY2024 budget is structurally sound and balanced. Ongoing revenue is sufficient to fund operations and will also help provide funding for needed capital investments, including replacement of transit assets nearing the end or at the end of life cycles.
The FY2024 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 5-year capital improvements plan.
CapMetro proposes to spend $427.5 million for operating expenses, $12.0 million for commitments under interlocal agreements with local government entities for mobility programs and $20.6 million to contribute to the Austin Transit Partnership for the Project Connect System Plan in FY2024.
Capital Metro 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 $411.0 million in capital projects during FY2024.
Significant projects and acquisitions in the proposed FY2024 Budget, including state of good repair, regulatory compliance and new investments, are highlighted as follows:
• Continuing replacement of vehicles with battery electric powered buses on the streets of Central Texas, helping us achieve our goal to create sustainable and equitable options for the entire community.
• Construction work will continue on the two new MetroRapid lines serving East Austin, Expo Center and Pleasant Valley, preparing for their initial service in 2025.
• Roll out new fare programs that ensure an equitable structure for our entire community and prepare the agency and our community for the transformative Project Connect program that is coming our way.
• In addition to the highlights above, we will be completing construction on the McKalla Station at Q2 Stadium, focusing on establishing our new headquarters at 3100 East 5th Street, progressing on creating a Transit Police department, and much more.
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 FY2024 budget totals $871.0 million and is comprised of the following funding and expense categories:
The proposed budget reflects fund balance projections of $285.4 million by the end of FY2024 as outlined in the table that follows. Of this amount, CapMetro is estimating to set aside $71.2 million in reserves for two months of operating expenses, which meets the level set forth by the Texas Legislature, $35.6 million for the budget stabilization reserve, $10.0 million for the Sustainability Capital Fund, $3.7 million for city of Austin mobility programs, $2.3 million for the Small Cities Transit Supportive Infrastructure Fund, $1.7 million for a self-insurance reserve and $160.8 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 FY2024 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 FY2024 budget in a variety of formats for the public and sought feedback using online engagement tools, as well as methods like public open houses and virtual webinars. These outreach efforts included the following:
Presentations to the Board of Directors and its Committees
May 10, 2023, Finance, Audit and Administration Committee
May 10, 2023, Operations, Planning and Safety Committee
June 14, 2023, Finance, Audit and Administration Committee
June 14, 2023, Operations, Planning and Safety Committee
July 24, 2023, Board of Directors
August 14, 2023, Finance, Audit and Administration Committee
September 13, 2023, Finance, Audit and Administration Committee
September 25, 2023, 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.
Presentations to Access Advisory Committee
June 7, 2023, 5:30 - 7:00 PM
August 2, 2023, 5:30 - 7:00 PM
Microsoft Teams virtual meetings and available to the public.
Presentations to Customer Satisfaction Advisory Committee
June 14, 2023, 6:00 - 7:30 PM
August 9, 2023, 6:00 - 7:30 PM
Microsoft Teams virtual meetings and available to the public.
Presentations to Public Safety Advisory Committee
June 23, 2023, 11:30 AM - 1:00 PM
August 25, 2023, 11:30 AM - 1:00 PM
Microsoft Teams virtual meetings and available to the public.
Proposed FY2024 Budget Document Available and Posted Online
August 18, 2023
Public Open Houses
Information was made available to the public regarding the proposed FY2024 budget and five-year capital improvement plan.
August 21, 2023, 7:00 AM - 8:30 AM
Lakeline Station Park & Ride
Served by routes 214, 383, 985, MetroRail.
August 22, 2023, 7:00 AM - 8:30 AM
Westgate Transit Center
Served by routes 30, 300, 311, 315, 318, 803.
August 23, 2023, 12:00 PM - 1:30 PM
Norwood Walmart
Served by routes 10, 323, 325, 339.
August 24, 2023, 12:00 PM - 1:30 PM
Republic Square Park
Served by downtown routes.
Online Webinar
Information made available to the public regarding the proposed FY2024 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 FY2024 Budget
September 13, 2023, 12:00 PM
Rosa Parks Board Room, 2910 East 5th Street, Austin, TX 78702
Served by routes 4, 300.
Board of Directors Considers Adoption of Budget Proposal
September 25, 2023, 12:00 PM
Rosa Parks Board Room, 2910 East 5th Street, Austin, TX 78702
Served by routes 4, 300.
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-2023-945
WHEREAS, pursuant to Section 451.102 of Chapter 451 of the Texas Transportation Code, the budget for Fiscal Year 2024 was made available to the public on August 27, 2023, and a budget public hearing was held on September 13, 2023; and
WHEREAS, pursuant to Section 451.132(c), the Board of Directors has reevaluated the five-year capital improvement plan.
NOW, THEREFORE, BE IT RESOLVED by the Capital Metropolitan Transportation Authority Board of Directors that the Fiscal Year 2024 budget in the amount of $871,033,690 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