TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: Bi-Monthly Budget Update
BRIEFING ITEM
RECOMMENDED ACTION(S):
Title
Consider receiving the Bi-Monthly budget update for the period of July 2021 through October 2021 of FY 2021-22.
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Regular financial reporting benefits staff and Board Members in assessing the condition of the District.
BUDGETARY/FISCAL IMPACT:
There are no budgetary or fiscal impacts associated with this report.
BACKGROUND/RATIONALE:
Overview
The District financials are performing as expected for the first four months of the fiscal year and the budget reflects the latest board-approved increase of $19.7 million from the American Rescue Plan (ARP) Act. Revenues are $33.7 million (20.2%) above budget and Expenses are $12.6 million (7.6%) below budget, resulting in a surplus of $47.0 million. While tax subsidy revenues are higher than expected, the District's surplus position is explained by the draw-down of $53.1 million in Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act federal funds. Consistent with prior budget presentations, staff is drawing-down the federal emergency funding relatively quickly and will apply the surplus funds to future periods where a deficit is expected. For comparison, at the end of October FY 2020-21, the Bi-Monthly report showed a surplus of $43.6 million, reflecting the receipt of Coronavirus Aid, Relief, and Economic Security (CARES) Act early in the year.
Staff is very concerned with the "13(c)"-based hold on federal funds by the U.S. Department of Labor due to a dispute over state pension law, which may delay the District's ability to access ARP Act and other federal funds. If the District cannot access the funds before the end of the fiscal year, the $19.7 million added in the recent budget amendment will not be availa...
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