TO: AC Transit Board of Directors
FROM: Kathleen Kelly, Interim General Manager/Chief Executive Officer
SUBJECT: FY 2025-26 Budget Guidelines (formerly Budget Goals) and updated financial projection.
BRIEFING ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider receiving an overview of staff's proposed FY 2025-26 Budget Guidelines and updated financial projection.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Budget Guidelines help focus the budget process and how staff considers the value and need of expenses.
BUDGETARY/FISCAL IMPACT:
There is no fiscal impact associated with this report.
BACKGROUND/RATIONALE:
Fiscal Year 2025-26 will be a crucial year for the District, marking the first year of anticipated operating deficits. It is essential that the Budget Guidelines not only address the immediate challenges of FY 2025-26 but also lay the groundwork for navigating expected deficits in the years ahead.
A note on the new terminology ("guidelines" instead of "goals"): guidelines are more specific than goals and will be used to frame the budget development process in key areas such as service levels, headcount, service reliability, finding new revenues, and use of reserves.
A review of the financial projections and expected revenues is provided below, as context for the proposed Budget Guidelines.
Financial Projection
The updated financial projection in FY2026 (see Attachment 1) is worse compared to the one presented to the Board during the October 2024 Board Retreat. The four-year deficit has grown by 55% from $149 million to $238 million. Just weeks ago, the Metropolitan Transportation Commission (MTC) issued revenue updates just weeks ago for the three sales taxes that flow through them: Transportation Development Act (TDA), State Transit Assistance (STA), and AB1107 (the origi...
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